Subordination and Offset Clause Samples
The Subordination and Offset clause establishes the priority of certain debts or obligations and allows parties to offset mutual debts against each other. In practice, this means that if one party owes money to the other, but is also owed money in return, the amounts can be netted so that only the balance is paid. Additionally, the clause may specify that some obligations are subordinate, meaning they are paid only after other specified debts are satisfied. This clause helps clarify the order of payments and reduces the risk of double payment or disputes over who is owed what, ensuring efficient settlement of mutual obligations.
POPULAR SAMPLE Copied 1 times
Subordination and Offset. Tenant agrees that this lease shall be subject to any mortgage, trust deed, or encumbrance hereafter placed upon said property by Landlord or its successors in interest to secure the payment of monies loaned, interest thereon, and other obligations. Tenant also agrees to execute, acknowledge and deliver to Landlord, from time to time upon request, an offset statement or estoppel certificate containing such facts pertaining to this lease as a purchaser or lender may require, provided such facts are within the knowledge of or are available to Tenant.
Subordination and Offset. Each Guarantor hereby subordinates and makes inferior to the Obligations any and all indebtedness now or at any time hereafter owed by the Borrower to such Guarantor. Each Guarantor agrees that after the occurrence of any Default or Event of Default it will neither permit the Borrower to repay such indebtedness or any part thereof nor accept payment from the Borrower of such indebtedness or any part thereof without the prior written consent of each Lender Party. If any Guarantor receives any such payment without the prior written consent of the Administrative Agent, the amount so paid shall be held in trust for the benefit of the Lender Parties, shall be segregated from the other funds of such Guarantor, and shall forthwith be paid over to the Administrative Agent to be held by the Administrative Agent as collateral for, or then or at any time thereafter applied in whole or in part by the Administrative Agent against, all or any portions of the Obligations, whether matured or unmatured, in such order as the Administrative Agent shall elect. Each Guarantor hereby grants to each Lender Party a right of offset, executable as set forth in the immediately succeeding sentence, to secure the payment of the Obligations and such Guarantor’s obligations and liabilities hereunder, which right of offset shall be upon any and all monies, securities and other property (and the proceeds therefrom) of such Guarantor now or hereafter held or received by or in transit to any Lender Party from or for the account of such Guarantor, whether for safekeeping, custody, pledge, transmission, collection or otherwise, and also upon any and all deposits (general or special), credits and claims of such Guarantor at any time existing against any Lender Party. Upon the occurrence of any Event of Default, each Lender Party is hereby authorized at any time and from time to time, without notice to any Guarantor, to offset, appropriate and apply any and all items hereinabove referred to against the Obligations and the Guarantors’ obligations and liabilities hereunder irrespective of whether or not such Lender Party shall have made any demand under this Guaranty and although such obligations and liabilities may be contingent or unmatured. Each Lender Party agrees promptly to notify the applicable Guarantor after any such offset and application made by such Lender Party, provided that the failure to give such notice shall not affect the validity of such offset and application. The rights of e...