Assignment of Rents As Collateral
1. Parties. This Agreement is made this [date] between [name], a corporation having its principal office at [address] (Purchaser), and [name], a [state] corporation having its principal office at [address] (Seller).
2. Indebtedness. Purchaser has purchased from Seller a parcel of land and its improvements located at [address] (Property). In connection with that sale, Purchaser is indebted to Seller in the sum of ........ dollars ($........), as evidenced by a Promissory Note (Note) from Purchaser to Seller of [date] (Indebtedness).
3. Collateral. Purchaser is the holder of Landlord's interest in the Leases to the Property identified in Exhibit A (Leases) [omitted].
4. Assignment. To secure payment of the Indebtedness, Purchaser assigns to Seller all rents payable to Landlord under the Leases and all of Purchaser's rights under the Leases, which are related to such rents.
5. Subordination. This Assignment is subject and subordinate to any existing mortgage or security agreement encumbering the Property and all modifications, extensions, and renewals of such mortgage or security agreement. Nothing in this Agreement shall be construed as permitting Purchaser or Seller to perform any act in violation of the terms of such mortgage or security agreement.
6. Right to Collect Rents. Unless and until Purchaser is in default in payment of the Indebtedness, Purchaser has the right (a) to receive all rents payable under the Leases and all of the other benefits accruing to Landlord under the Leases and (b) to enforce all of the rights available to Landlord under the Leases or at law.
If Purchaser is in default in payment (as required by the terms of the Note) of the Indebtedness and such default continues, in whole or in part, for [number] days after Seller has mailed to Purchaser a notice of default, then Seller may, at Seller's option and without further notice, exercise all of Landlord's rights to collect and receive all rents payable under the Leases. Such rents received will be applied to payment of the Indebtedness. Any excess monies received will be remitted to Purchaser.
7. Purchaser's Obligations. While this Agreement is in effect, Purchaser promises:
a. To abide by faithfully and perform every term and obligation applicable to Landlord under any of the Leases;
b. To appear in, and defend, at Purchaser's sole cost, any action or proceeding connected with the Leases;
c. Not to collect rents payable under the Leases for more than one month in advance;
d. Not to amend, terminate, or accept a surrender of any of the Leases without Seller's prior written consent; and
e. Not to permit any default to exist, or to continue beyond any applicable grace period, under any mortgage or security agreement referred to in Paragraph 5.
8. Direction to Tenants. Purchaser irrevocably directs all tenants under the Leases to pay to Seller all rents accruing under the Leases, on demand from Seller. No tenant is required to determine if such demand is justified, as per Paragraph 6 of this Agreement.
9. Termination. This Agreement, including all of Purchaser's rights under this Agreement, becomes automatically void on payment to Seller, in full, of the Indebtedness.
10. Further Documents. Purchaser agrees to execute financing statements and other instruments that Seller may, from time to time, require to perfect Seller's rights, under this Assignment.