1
EXHIBIT 10.7
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
This SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (the
"Agreement") is made as of the ___ day of _________, 1998, among ▇▇▇▇▇▇ BROTHERS
REALTY CORPORATION, a Delaware corporation having a place of business at Three
World Financial Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
its successors and assigns ("Lender"), ARDEN REALTY FINANCE __________, L.L.C.,
a Delaware limited liability company, with its principal office at ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ____, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Landlord" or
"Borrower"), and ______________________, a ______________ corporation having a
place of business at ________________________________ ("Tenant").
INTRODUCTORY PROVISIONS
WHEREAS, Lender has made or is making a loan in the amount of
________________________________ ($______________) (the "Loan") to Borrower
pursuant to a Loan Agreement entered into between Borrower and Lender on or
about June __, 1998 (the "Loan Agreement");
WHEREAS, Borrower's obligation to repay the Loan is or will be secured,
in part, by first priority mortgage liens on ___________ (____) office and
industrial properties owned or to be owned by Borrower, including, without
limitation, the office property commonly known as _________________, (the
"Property") pursuant to a certain Deed of Trust, Assignment of Rents and Leases,
Security Agreement and Fixture Filing by Borrower to the trustee named therein
for the benefit of Lender and recorded or to be recorded in the land records of
[__________ COUNTY, CALIFORNIA] (the "Deed of Trust");
WHEREAS, Borrower's obligation to repay the Loan will be further
secured by an Assignment of Leases and Rents by Borrower to Lender recorded or
to be recorded among said land records (the "Assignment");
WHEREAS, Tenant is the tenant under that certain lease ("Lease") dated
___________, 19_____ made with Landlord, covering certain premises ("Premises")
at the Property as more particularly described in the Lease;
WHEREAS, Lender requires, as a condition to the making of the Loan,
that the Deed of Trust be and remain superior to the Lease and that its rights
under the Assignment be recognized;
WHEREAS, Tenant requires as a condition to the Lease being subordinate
to the Deed of Trust that its rights under the Lease be recognized; and
WHEREAS, Lender, Landlord, and Tenant desire to confirm their
understanding with respect to the Deed of Trust and the Lease.
2
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements contained herein, and other valuable consideration, the receipt
and adequacy of which are hereby acknowledged, and with the understanding by
Tenant that Lender shall rely hereon in making and maintaining the Loan, Lender,
Landlord, and Tenant agree as follows:
1. Subordination. The Lease and the rights of Tenant thereunder are
subordinate and inferior to the Deed of Trust and any amendment, renewal,
substitution, extension or replacement thereof and each advance made thereunder
as though the Deed of Trust, and each such amendment, renewal, substitution,
extension or replacement were executed and recorded, and the advance made,
before the execution of the Lease.
2. Non-Disturbance. So long as Tenant is not in default (beyond any
period expressed in the Lease within which Tenant may cure such default) in the
payment of rent or in the performance or observance of any of the terms,
covenants or conditions of the Lease on Tenant's part to be performed or
observed, (i) Tenant's occupancy of the Premises shall not be disturbed by
Lender in the exercise of any of its rights under the Deed of Trust during the
term of the Lease, or any extension or renewal thereof made in accordance with
the terms of the Lease, and (ii) Lender will not join Tenant as a party
defendant in any action or proceeding for the purpose of terminating of Tenant's
interest and estate under the Lease because of any default under the Deed of
Trust.
3. Attornment and Certificates. In the event Lender succeeds to the
interest of Borrower as Landlord under the Lease, or if the Property or the
Premises are sold pursuant to the power of sale under the Deed of Trust or
otherwise pursuant to the exercise of remedies under the Deed of Trust, Tenant
shall attorn to Lender, or a purchaser upon any such foreclosure sale, and shall
recognize Lender, or such purchaser, thereafter as the Landlord under the Lease.
Such attornment shall be effective and self-operative without the execution of
any further instrument. Tenant agrees, however, to execute and deliver at any
time and from time to time, upon the request of any holder(s) of any of the
indebtedness or other obligations secured by the Deed of Trust, or upon request
of any such purchaser, (a) any instrument or certificate which, in the
reasonable judgment of such holder(s), or such purchaser, may be necessary or
appropriate in any such foreclosure proceeding or otherwise to evidence such
attornment, and (b) an instrument or certificate regarding the status of the
Lease, consisting of statements, if true (and if not true, specifying in what
respect), (i) that the Lease is in full force and effect, (ii) the date through
which rentals have been paid, (iii) the duration and date of the commencement of
the term of the Lease, (iv) the nature of any amendments or modifications to the
Lease, (v) that no default, or state of facts, which with the passage of time,
or notice, or both, would constitute a default, exists on the part of either
party to the Lease, (vi) the dates on which payments of additional rent, if any,
are due under the Lease and (vii) such other matters as such holder(s) or such
purchaser shall reasonably request.
4. Limitations. If Lender exercises any of its rights under the
Assignment or the Deed of Trust, or if Lender shall succeed to the interest of
Landlord under the Lease in any manner, or if any purchaser acquires the
Property, or the Premises, upon or after any foreclosure
-2-
3
of the Deed of Trust, or any deed in lieu thereof, Lender or such purchaser, as
the case may be, shall have the same remedies by entry, action or otherwise in
the event of any default by Tenant (beyond any period expressed in the Lease
within which Tenant may cure such default) in the payment of rent or in the
performance or observance of any of the terms, covenants and conditions of the
Lease on Tenant's part to be paid, performed or observed that the Landlord had
or would have had if Lender or such purchaser had not succeeded to the interest
of the present Landlord. From and after any such attornment, Lender or such
purchaser shall be bound to Tenant under all the terms, covenants and conditions
of the Lease and Tenant shall, from and after such attornment to Lender, or to
such purchaser, have the same remedies against Lender, or such purchaser, for
the breach of an agreement contained in the Lease that Tenant might have had
under the Lease against Landlord, if Lender or such purchaser had not succeeded
to the interest of Landlord. Provided, however, that Lender or such purchaser
shall only be bound during the period of its ownership, and that in the case of
the exercise by Lender of its rights under the Deed of Trust, or the Assignment,
or any combination thereof, or a foreclosure, or deed in lieu of foreclosure,
all Tenant claims shall be satisfied only out of the interest, if any, of
Lender, or such purchaser in the Property, and Lender and such purchaser shall
not be (a) liable for any act or omission of any prior landlord (including the
Landlord); or (b) liable for or incur any obligation with respect to the
construction of the Property or any improvements of the Premises or the
Property; or (c) subject to any offsets or defenses which Tenant might have
against any prior landlord (including the Landlord); or (d) bound by any rent or
additional rent which Tenant might have paid for more than the then current
rental period to any prior landlord (including the Landlord); or (e) bound by
any amendment or modification of the Lease, or any consent to any assignment or
sublet, made without Lender's prior written consent; or (f) bound by or
responsible for any security deposit not actually received by Lender; or (g)
liable for or incur any obligation with respect to any breach of warranties or
representations of any nature under the Lease or otherwise including without
limitation any warranties or representations expecting use, compliance with
zoning, landlord's title, landlord's authority, habitability and/or fitness for
any purpose, or possession; or (h) liable for consequential damages.
5. Rights Reserved. Nothing herein contained is intended, nor shall it
be construed, to abridge or adversely affect any right or remedy of: (a) the
Landlord under the Lease, or any subsequent Landlord, against the Tenant in the
event of any default by Tenant (beyond any period expressed in the Lease within
which Tenant may cure such default) in the payment of rent or in the performance
or observance of any of the terms, covenants or conditions of the Lease on
Tenant's part to be performed or observed; or (b) the Tenant under the Lease
against the original or any prior Landlord in the event of any default by the
original Landlord to pursue claims against such original or prior Landlord
whether or not such claim is barred against Lender or a subsequent purchaser.
6. Notice and Right to Cure. Tenant agrees to provide Lender with a
copy of each notice of default given to Landlord under the Lease, at the same
time as such notice of default is given to the Landlord, and that in the event
of any default by the Landlord under the Lease, Tenant will take no action to
terminate the Lease (a) if the default is not curable by Lender (so long as the
default does not interfere with Tenant's use and occupation of the premises), or
(b) if the default is curable by Lender, unless the default remains uncured for
a period of thirty (30)
-3-
4
days after written notice thereof shall have been given, postage prepaid, to
Landlord at Landlord's address, and to Lender, at the address provided in
Section 7 below; provided, however, that if any such default is such that it
reasonably cannot be cured within such thirty (30) day period, such period shall
be extended for such additional period of time as shall be reasonably necessary
(including, without limitation, a reasonable period of time to obtain possession
of the Property and to foreclose the Deed of Trust), if Lender gives Tenant
written notice within such thirty (30) day period of Lender's election to
undertake the cure of the default and if curative action (including, without
limitation, action to obtain possession and foreclose) is instituted within a
reasonable period of time and is thereafter diligently pursued. Lender shall
have no obligation to cure any default under the Lease.
7. Notices. Any notice or communication required or permitted hereunder
shall be in writing, and shall be given or delivered: (i) by United States mail,
registered or certified, postage fully prepaid, return receipt requested, or
(ii) by recognized courier service or recognized overnight delivery service; and
in any event addressed to the party for which it is intended at its address set
forth below:
To Lender: ▇▇▇▇▇▇ Brothers Realty Corporation
Three World Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
To Tenant: _______________________________________
_______________________________________
_______________________________________
_______________________________________
or such other address as such party may have previously specified by notice
given or delivered in accordance with the foregoing. Any such notice shall be
deemed to have been given and received on the date delivered or tendered for
delivery during normal business hours as herein provided.
8. No Oral Change. This Agreement may not be modified orally or in any
manner than by an agreement in writing signed by the parties hereto or their
respective successors in interest.
9. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, their respective heirs, personal
representatives, successors and assigns, and any purchaser or purchasers at
foreclosure of the Property or any portion thereof, and their respective heirs,
personal representatives, successors and assigns.
10. Payment of Rent to Lender. Tenant acknowledges that it has notice
that the Lease and the rent and all sums due thereunder have been assigned to
Lender as part of the security for the obligations secured by the Deed of Trust.
In the event Lender notifies Tenant and demands that Tenant pay its rent and all
other sums due under the Lease to Lender, Tenant agrees that it
-4-
5
will honor such demand and pay its rent and all other sums due under the Lease
to Lender, or Lender's designated agent, until otherwise notified in writing by
Lender. Borrower unconditionally authorizes and directs Tenant to make rental
payments directly to Lender following receipt of such notice and further agrees
that Tenant may rely upon such notice without any obligation to further inquire
as to whether or not any default exists under the Deed of Trust or the
Assignment, and that Borrower shall have no right or claim against Tenant for or
by reason of any payments of rent or other charges made by Tenant to Lender
following receipt of such notice.
11. No Amendment or Cancellation of Lease. So long as the Deed of Trust
remains undischarged of record, Tenant shall not amend, modify, cancel or
terminate the Lease, or agree to subordinate the Lease to any other mortgage,
without Lender's prior written consent in each instance.
12. Options. With respect to any options for additional space provided
to Tenant under the Lease, Lender agrees to recognize the same if Tenant is
entitled thereto under the Lease after the date on which Lender succeeds as
Landlord under the Lease by virtue of foreclosure or deed in lieu of foreclosure
or Lender takes possession of the Premises; provided, however, Lender shall not
be responsible for any acts of any prior landlord under the lease, or the act of
any tenant, subtenant or other party which prevents Lender from complying with
the provisions hereof and Tenant shall have no right to cancel the Lease or to
make any claims against Lender on account thereof.
13. Cautions. Captions and headings of sections are not parts of this
Agreement and shall not be deemed to affect the meaning or construction of any
of the provisions of this Agreement.
14. Counterparts. This Agreement may be executed in several
counterparts each of which when executed and delivered is an original, but all
of which together shall constitute one instrument.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of ___________________.
16. Parties Bound. The provisions of this Agreement shall be binding
upon and inure to the benefit of Tenant, Lender and Borrower and their
respective successors and assigns; provided, however, reference to successors
and assigns of Tenant shall not constitute a consent by Landlord or Borrower to
an assignment or sublet by Tenant, but has reference only to those instances in
which such consent is not required pursuant to the Lease or for which such
consent has been given.
-5-
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
LENDER:
▇▇▇▇▇▇ BROTHERS REALTY CORPORATION
By:___________________________________
Name:______________________________
Title:_____________________________
Date executed by Lender:______________
TENANT:
______________________________________
By:___________________________________
Name:______________________________
Title:_____________________________
Date executed by Tenant:______________
STATE OF ________________
COUNTY OF ______________
On the ___ day of ___________, 1998, before me, a notary public
personally appeared _______________________, a ______________, of ▇▇▇▇▇▇
Brothers Realty Corporation personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument he person(s), or the entity upon which the person(s) acted,
executed this instrument.
WITNESS my hand and official seal.
_________________________________________
Notary Public
My commission expires:
-6-
7
STATE OF ________________
COUNTY OF ______________
On the ___ day of ___________, 1998, before me, a notary public
personally appeared _______________________, a ______________, of , personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument he
person(s), or the entity upon which the person(s) acted, executed this
instrument.
WITNESS my hand and official seal.
_________________________________________
Notary Public
My commission expires:
-7-
8
AGREEMENT OF BORROWER
Arden Realty Finance _____________, L.L.C., as Landlord under the
Lease, and Borrower under the Loan Agreement, the Deed of Trust and the other
Loan Documents, agrees for itself and its successors and assigns that:
1. The above agreement does not (a) constitute a waiver by Lender of
any of its rights under the Deed of Trust or any of the other Loan Documents; or
(b) in any way release Borrower from its obligations to comply with the terms,
provisions, conditions, covenants and agreements and clauses of the Deed of
Trust and other Loan Documents;
2. The provisions of the Deed of Trust remain in full force and effect
and must be complied with by Borrower;
3. Tenant shall have the right to rely on any notice or request from
Lender which directs Tenant to pay rent to Lender without any obligation to
inquire as to whether or not a default exists and notwithstanding any notice
from or claim of Borrower to the contrary. Borrower shall have no right or claim
against Tenant for rent paid to Lender after Lender so notifies Tenant to make
payment of rent to Lender; and
4. The Borrower shall be bound by all of the terms, conditions and
provisions of the foregoing Agreement in all respects.
Executed and delivered as a sealed instrument as of the __ day of
_____________, 1998.
BORROWER:
ARDEN REALTY FINANCE ___________,
L.L.C.
By:_____________________________________
Name:________________________________
Title:_______________________________
Date executed by Borrower:___________
-8-
9
STATE OF ________________
COUNTY OF ______________
On the ___ day of ___________, 1998, before me, a notary public
personally appeared _______________________, a ______________, of Arden Realty
________, III, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument he person(s), or the entity upon which the person(s) acted,
executed this instrument.
WITNESS my hand and official seal.
_________________________________________
Notary Public
My commission expires:
-9-
