Nondisturbance And Attornment Agreement: Definition & Sample

A nondisturbance and attornment agreement is a legal document signed by both parties that states the business will not disturb another party's lease. It also stipulates that the new tenant will acknowledge all of the previous tenant’s lease terms. This agreement is often used in property management to ensure no issues when transitioning between tenants.

If necessary, a nondisturbance and attornment agreement may also be included as part of an eviction process. This agreement outlines the rights and responsibilities of landlords and tenants during the course of the contract.

Common Sections in Nondisturbance And Attornment Agreements

Below is a list of common sections included in Nondisturbance And Attornment Agreements. These sections are linked to the below sample agreement for you to explore.

Nondisturbance And Attornment Agreement Sample

After Recording Mail To:

KeyBank National Association

Real Estate Capital

601 - 108th Avenue N.E., 3rd Floor

Bellevue, WA 98004

Attn: Regan Frick

AND ATTORNMENT AGREEMENT

AND ESTOPPEL CERTIFICATE

KORRY ELECTRONICS CO., a Delaware corporation KEYBANK NATIONAL ASSOCIATION, a national banking association Ptn of SE 1 / 4 , 22-28N-04E, and Ptn NE 1 / 4 27-28N-04E The complete legal description is on Exhibit A.

280422-004-003-00; 280427-001-001-00

THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT AND ESTOPPEL CERTIFICATE is made this 30 th day of July, 2008, between KEYBANK NATIONAL ASSOCIATION, a national banking association ( “Lender” ) and KORRY ELECTRONICS CO., a Delaware corporation ( “Tenant” ).

CAPSTONE PF LLC, a Washington limited liability company ( “Landlord” ) is the ground lessee of real property ( “Property” ) located in Snohomish County, Washington, and legally described on Exhibit A. Tenant is leasing the Property from Landlord under that certain Building Lease and Sublease dated March 26, 2008, as amended by First Amendment to Building Lease and Sublease dated June 25, 2008, and by Second Amendment to Building Lease and Sublease dated July 30, 2008 (the “Lease” ). Lender has agreed to make a loan ( “Loan” ) to Landlord, secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing and an Assignment of Rents and Leases (together, the “Security Instruments” ) encumbering Landlord’s

-1-	Lease Subordination

leasehold interest in the Property. The Security Instruments constitute an assignment to Lender of all right, title, and interest of Landlord under the Lease as security for the Loan. The Security Instruments were recorded on July , 2008 under Snohomish County Recording Nos. and . Lender’s agreement to make the Loan is conditioned on Tenant’s subordination of the Lease to the Security Instruments, and Tenant’s agreement to attorn to Lender if Lender obtains title to the Property by foreclosure or deed in lieu of foreclosure. Tenant is willing to do so in consideration of the benefits to Tenant from the Loan and the Lease and Lender’s agreement not to disturb Tenant’s possession of the Property under the Lease, and Landlord is also executing this Agreement to indicate its consent and agreement to the terms contained herein.

NOW, THEREFORE, Lender and Tenant agree as provided below.

1.	Subordination . Tenant hereby subordinates the Lease and all of its rights thereunder to the Security Instruments and all of Lender’s rights thereunder, including any and all renewals, modifications and extensions thereof.

Nondisturbance . Lender agrees that if Lender obtains title to the Property by foreclosure or deed in lieu of foreclosure, Lender shall be bound to Tenant under all the terms and conditions of the Lease (except as provided in this Agreement), the Lease shall continue in full force and effect as a direct lease in accordance with its terms (except as provided in this Agreement) between Lender and Tenant. Tenant’s possession of the Property under the Lease shall not be disturbed by Lender during the term of the Lease and Lender shall not join Tenant in any action or proceeding for the purpose of terminating the Lease, except upon the occurrence of a default by Tenant under the Lease and the continuance of such default beyond any cure period given to Tenant under the Lease. Lender agrees that all condemnation awards and insurance proceeds payable to Landlord or Lender with respect to the Property shall be paid and applied to restoration of the Property in accordance with the provisions for condemnation and casualty under the Lease provided that, with respect to any casualty, Tenant ratifies its obligations under the Lease including, without limitation, its obligation to repair and replace any “Tenant Improvements” (as defined in the Lease) damaged or destroyed by such casualty.

Attornment . If Lender obtains title to the Property by foreclosure or deed in lieu of foreclosure, Tenant shall attorn to Lender and recognize Lender as the landlord under the Lease for the unexpired term of the Lease. Such attornment shall be effective without Lender being (a) subject to any offsets or defenses arising out of any prior act or omission of Landlord (but the foregoing shall not limit either (i) Tenant’s right to exercise against Lender any offset rights otherwise available to Tenant under the Lease because of events occurring after the date of attornment, or (ii) Lender’s obligation to correct any conditions that existed as of the date of attornment and violated Lender’s obligations as successor landlord under the Lease), (b) liable for any prior act or

-2-	Lease Subordination

omission of Landlord, (c) bound by any amendment, modification, or waiver of any of the provisions of the Lease, or by any separate agreement between Landlord and Tenant relating to the Property, unless any such action was taken with the prior written consent of Lender, (d) liable for the return of any security or other deposit unless the deposit has been paid to Lender, or (e) bound by any payment of rent or other monthly payment under the Lease made by Tenant more than one month in advance of the due date, unless the same was paid to, and received by, Lender. Lender and Tenant specifically agree that the right of first offer contained in Section 10.5 of the Lease shall not be triggered by or eliminated by any foreclosure or deed in lieu of foreclosure, that such right of first offer will not terminate upon Lender obtaining title to the Property by foreclosure or deed in lieu of foreclosure, and that such right of first offer shall continue to be recognized after foreclosure or deed in lieu of foreclosure. Lender and Tenant specifically agree that the option to purchase contained in Section 10.6 of the Lease shall not be triggered by or eliminated by any foreclosure or deed in lieu of foreclosure, that such option to purchase will not terminate upon Lender obtaining title to the Property by foreclosure or deed in lieu of foreclosure, and that such option to purchase shall continue to be recognized after foreclosure or deed in lieu of foreclosure. Lender’s obligations as landlord under the Lease after obtaining title to the Property by foreclosure or deed in lieu of foreclosure shall terminate upon Lender’s subsequent transfer of its interest in the Property.

Termination of Lease . If Lender obtains title to the Property by foreclosure or deed in lieu of foreclosure and Landlord’s obligation under the Lease to construct the “Base Building Improvements” has not been substantially completed, Lender will cause the Base Building Improvements to be completed as soon as reasonably possible thereafter but only if the undisbursed proceeds of the Loan are sufficient to pay all of the costs of completion. If Lender reasonably determines that the undisbursed proceeds of the Loan are not sufficient, it will give notice thereof to Tenant and the Lease will terminate unless, within thirty (30) days after the date of such notice, Tenant agrees to pay the excess costs and provides assurances of payment reasonably acceptable to Lender.

5.	Covenants of Tenant . Tenant covenants and agrees with Lender as follows:

5.1

Upon written demand from Lender which is also sent to Landlord, Tenant shall pay to Lender all rent and other payments otherwise payable to Landlord under the Lease. The consent and approval of Landlord to this Agreement shall constitute an express authorization for Tenant to make such payments to Lender and a release and discharge of all liability of Tenant to Landlord for any such payments made to Lender, and Landlord agrees that Tenant shall have the right to rely on any such notice from Lender without incurring any obligation or liability to Landlord, and Tenant is hereby instructed to disregard any notice to the contrary received from Landlord or any third party. All such payments made by Tenant to Lender shall be credited to installments of rent otherwise payable to Landlord under the Lease.

-3-	Lease Subordination

5.2	Tenant shall enter into no material amendment or modification of the Lease without Lender’s prior written consent.

5.3	Tenant shall not subordinate its rights under the Lease to any other mortgage, deed of trust or other security instrument without the prior written consent of Lender.

5.4	If the Lease is rejected or deemed rejected in any bankruptcy proceeding with respect to Landlord, Tenant shall not exercise its option to treat the Lease as terminated under 11 U.S.C. § 365(h), as amended.

5.5	Tenant shall not accept any waiver or release of Tenant’s obligations under the Lease by Landlord, or any termination of the Lease by Landlord, without Lender’s prior written consent.

5.6

Tenant shall promptly deliver written notice to Lender of any default by Landlord under the Lease. Lender shall have the right to cure such default within thirty (30) days after the receipt of such notice. Tenant further agrees not to invoke any of its remedies under the Lease until the thirty (30) days have elapsed, or during any period that Lender is proceeding to cure the default with due diligence, or is attempting to obtain the right to obtain the Property and cure the default.

Effect of Assignment . Notwithstanding that Landlord has assigned its rights under the Lease to Lender as security for the Loan, Lender shall not be liable for any of the obligations of Landlord to Tenant under the Lease until Landlord has obtained title to the Property by foreclosure or deed in lieu of foreclosure, and then only to the extent provided in Section 3 above and this Section 6. Notwithstanding any provision in the Lease to the contrary, if Lender has obtained title to the Property, its liability under the Lease shall be limited to Lender’s interest in the Property and any proceeds therefrom, and any judgment against Lender will be enforceable solely against Lender’s interest in the Property and any proceeds therefrom.

7.	Estoppel Certifications . Tenant hereby certifies to Lender as provided below.

7.1	The Lease constitutes the entire agreement between Landlord and Tenant relating to the Property.

7.2	The Lease is in full force and effect, and has not been amended, modified, or assigned by Tenant.

7.3	Tenant has no present claim, offset or defense under the Lease, and Tenant has no knowledge of any uncured default by Landlord under the Lease.

-4-	Lease Subordination

7.4	Tenant has no knowledge of any prior sale, transfer, assignment, hypothecation or pledge of Landlord’s interest under the Lease or of the rents due under the Lease.

7.5	Except as otherwise provided in the Lease, Tenant has made no agreements with Landlord concerning free rent, partial rent, rebate of rental payments, setoff, or any other type of rental concession.

7.6	Except as set out in the Lease, Tenant has no options or rights of first refusal with respect to acquiring the Property.

Costs and Attorneys’ Fees . In the event of any claim or dispute arising out of this Agreement, the party that substantially prevails shall be awarded, in addition to all other relief, all attorneys’ fees and other costs and expenses incurred in connection with such claim or dispute; including without limitation those fees, costs, and expenses incurred before or after suit, and in any arbitration, and any appeal, any proceedings under any present or future bankruptcy act or state receivership, and any post-judgment proceedings.

Notices . All notices to be given under this Agreement shall be in writing and personally delivered or mailed, postage prepaid, certified or registered mail, return receipt requested, to Lender at the address indicated on the first page of this Agreement, and to Tenant at its address indicated below. All mailed notices shall be deemed given three days after the postmark. Either party may change its address by notice to the other.

10.

Miscellaneous . This Agreement may not be modified except in writing and executed by the parties hereto or their successors in interest. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their successors and assigns. As used herein, “Landlord” shall include Landlord’s predecessors and successors in interest under the Lease, and “Lender” shall include any purchaser of the Property at any foreclosure sale and any grantee under any deed in lieu of foreclosure of the Security Instruments. If any provision of this Agreement is determined to be invalid, illegal or unenforceable, such provision shall be considered severed from the rest of this Agreement and the remaining provisions shall continue in full force and effect as if such provision had not been included. This Agreement shall be governed by the laws of the State of Washington.