20.03[4]a Example 2: Nondisturbance Provision Structured Within the Context of a Subordination Clause (Tenant Friendly)
Section 6.01. This Lease, and all rights of Tenant hereunder, are and shall be
subject and subordinate in all respects to all present and future ground leases,
overriding leases or underlying leases and/or grants of term of the Land and/or
the Building or the portion thereof in which the Demised Premises are located in
whole or in part now or hereafter existing and to all mortgages and building
loan agreements, including leasehold mortgages and building loan agreements,
which may now or hereafter affect the Land and/or the Building and/or any of
such leases, whether or not such mortgages shall also cover other lands and/or
buildings, to each and every advance made or hereafter to be made under such
mortgages, and to all renewals, modifications, replacements and extensions of
such leases and such mortgages and spreaders, consolidations and correlations of
such mortgages. This Section shall be self-operative and no further instrument
of subordination shall be required. In confirmation of such subordination,
Tenant shall promptly execute and deliver at its own cost and expense any
instrument, in recordable form if required, that Landlord, the lessor of any
such lease or the holder of any such mortgage or any of their respective
successors in interest may reasonably request to evidence such subordination,
and Tenant hereby constitutes and appoints Landlord attorney-in-fact for Tenant
to execute any such instrument for and on behalf of Tenant. The leases to which
this Lease is, and at time referred to, subject and subordinate pursuant to this
Article are hereinafter sometimes called "superior leases" and the mortgages to
which this lease is, at the time referred to, subject and subordinate are
hereinafter sometimes called "superior mortgages" (such superior leases and
superior mortgages in effect as of the date hereof are more particularly
described on Exhibit F of this Lease) and the lessor of a superior lease or its
successor in interest at the time referred to is hereinafter sometimes called a "lessor."
Section 6.02. It is agreed that the subjection of this Lease to the
subordination referred to in Section 6.01 is and shall remain subject to the
express condition that Landlord shall (i) request that each superior mortgagee
and each superior lessor (hereinafter defined) as of the date hereof and (ii)
have all subsequent superior lessors and superior mortgagees (including any
refinancing or other increase in the principal amount under the existing
superior mortgage), execute and deliver to Tenant an agreement in recordable
form to the effect that, so long as this Lease shall be in full force and
effect, Tenant shall not be joined as a party defendant in any foreclosure
action or proceeding which may be instituted or taken by the mortgagee under any
superior mortgage (herein referred to as "superior mortgagee") or in any action
or proceeding which may be instituted or taken by the lessor or grantor (that
is, any party whose right or title to the Land or Building is or shall be
paramount to that of Landlord, such party herein referred to as "superior
lessor") of any superior lease or grant of term, to which this Lease is or shall
be subject and subordinate, for the purpose of terminating such superior lease
or grant of term, by reason of any default under any such superior mortgage or
superior lease or grant of term, nor, so long as this Lease is in full force and
effect, shall Tenant be evicted from the Demised Premises, nor shall its
leasehold estate hereunder be terminated or disturbed, nor shall any of Tenant's
rights under Lease be affected in any way, by reason of any default under any
superior mortgage or superior lease or grant of term (any such agreement, or
agreement of similar import, from a superior mortgagee or a superior lessor, as
the cause may be, being hereinafter called a "Nondisturbance Agreement").
Landlord and Tenant agree to share equally all costs incurred in connection with
obtaining any Nondisturbance Agreement from the existing superior lessors or
superior mortgagees. Any superior mortgagee may elect that this Lease shall have
priority over the superior mortgage that it holds and, upon notification to
Tenant by such superior mortgagee, this Lease shall be deemed to have priority
over such superior mortgage, whether this Lease is dated prior to or subsequent
to the date of such superior mortgage. Any Nondisturbance Agreement may be made
on the condition that, as long as such superior mortgagee or superior lessor
shall not be owned by the then defaulting landlord or the then defaulting
landlord shall not have a majority interest in such superior mortgagee or
superior lessor, neither the superior mortgagee nor the superior lessor, as the
case may be, nor anyone claiming by, through or under such superior mortgagee or
superior lessor, as the case may be, including a purchaser at a foreclosure
sale, shall be:(i) liable for any act or omission of any prior landlord (including,
without limitation, the then defaulting landlord), or
(ii) subject to any defense, counterclaim, set-off or offsets which Tenant
may have against any prior landlord (including, without limitation, the then
defaulting landlord), or
(iii) bound by any payment of more than one periodic installment of Rents
which Tenant might have paid to any prior landlord (including, without
limitation, the then defaulting landlord), or
(iv) bound by any obligation to make any payment to Tenant which was
required to be made prior to the time such superior mortgagee or superior lessor
succeeded to any prior landlord's interest, or
(v) bound by any obligation to perform any work or to make improvements to
the Demised Premises, except for (w) Landlord's Work, (x) repairs and
maintenance pursuant to the provisions of Article 14, (y) repairs to the Demised
Premises or any part thereof as a result of damage by fire or other casualty
pursuant to Article 21, but only to the extent that such repairs can be
reasonably made from the net proceeds of any insurance actually made available
to such superior lessor or superior mortgagee, and (z) repairs to the Demised
Premises as a result of a partial condemnation pursuant to Article 22, but only
to the extent that such repairs can be reasonably made from the net proceeds of
any award made available to such superior lessor or superior mortgagee.
Notwithstanding anything contained herein to the contrary, Tenant shall
have the right to set-off against the payment of Fixed Rent the cost and
expenses actually incurred by Tenant to perform Landlord's Work in either the
Demised Premises or, when and if available, the Additional Demised Premises, in
the event any superior lessor, superior mortgagee or purchaser at a foreclosure
sale (collectively, "Subsequent Owner") is unwilling or otherwise fails to
perform Landlord's Work in either the Demised Premises or when and if available,
the Additional Demised Premises.
If required by any superior mortgagee or superior lessor, Tenant promptly
shall join in any Nondisturbance Agreement to indicate its concurrence with the
provisions thereof and its agreement set forth in Section 6.04 to attorn to such
superior mortgagee or superior lessor, as the case may be, as Tenant's landlord
hereunder. Any such Nondisturbance Agreement may also contain other terms and
conditions as may otherwise be required by such superior mortgagee or superior
lessor, as the case may be, which do not increase the obligations of Tenant
hereunder or adversely affect to a material degree Tenant's leasehold interest
hereby created.
Section 6.03. Landlord hereby notifies Tenant that this Lease may not be
modified or amended so as to reduce the Rents, shorten the Term, or adversely
affect in any other respect to any material extent the rights of the Landlord
hereunder, or be canceled or surrendered without the prior written consent of
each superior lessor in each instance, except that said consent shall not be
required for the institution or prosecution of any action or proceedings against
Tenant by reason of a default on the part of tenant under the terms of this Lease.
Section 6.04. This Lease shall not terminate or be terminable by Tenant by
reason of any termination of any superior lease, by summary proceedings, or
otherwise, unless the superior lessor under the terminated superior lease shall
elect in connection therewith to terminate this Lease and the right of Tenant to
possession of the Demised Premises or such superior lessor has refused to enter
into a Nondisturbance Agreement with Tenant. Tenant agrees, without further
instruments of attornment in such case, to attorn to such lessor that shall have
delivered a Nondisturbance Agreement to Tenant, to waive the provisions of any
statute or rule of law now or hereafter in effect which may give or purport to
give Tenant any right of election to terminate this Lease or to surrender
possession of the Demised Premises in the event such superior lease is
terminated, this Lease shall not be affected in any way whatsoever by any such
proceeding or termination, and Tenant shall take no steps to terminate this
Lease without giving written notice to such lessor, and a reasonable opportunity
to cure (without such lessor being obligated to cure), any default on the part
of the Landlord under this Lease.
Section 6.05. Landlord warrants and represents that the granting of this Lease
is not in contravention of the ground lease and superior mortgages and superior
leases existing at the date of this Lease, as of the date of the execution and
delivery of this Lease, no notices of default under the ground lease, superior
mortgages or superior leases have issued as would subject this Lease to any
adverse proceedings on the part of lessor under the ground lease or the said
mortgagee or mortgagees under the superior mortgages or the said lessor or
lessors under the superior leases and further warrants and represents that
Landlord is the owner of the lessee's interest under the ground lease covering
the Land or the fee interest in the Land and has the power and proper corporate
authority to enter into this Lease and grant to Tenant all the rights and powers
granted hereunder.
Section 6.06. Subject to the terms of Section 6.02 hereof, if the holder of any
superior mortgage, or anyone claiming by, through or under such holder, shall
become the ground lessee under the ground lease as a result of foreclosure of
the superior mortgage, or by reason of an assignment of the present ground
lessee's interest under the ground lease and the giving of a deed to the
Building in lieu of foreclosure, there shall be no obligation on the part of
such person succeeding to the interest of the present ground lessee under the
ground lease to comply with, observe or perform any obligations as sublessee,
tenant or landlord under any superior lease.
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