How are the landlord's and the tenant's lenders protected?
A tenant subordinates its lease to the landlord's mortgage only if the mortgagee agrees not to disturb it (an SNDA). The tenant's own lenders need the lease to be assignable as security. Both appear in the filings.
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What the filed contracts say
Contract
What the filed wording says
Applied Digital / CoreWeave lease
Subordination to a mortgage is conditional on an SNDA in the agreed form attached to the lease.
BXDC form lease
Subordination is conditional on an SNDA from existing and future mortgagees in the approved form.
Applied Digital lease assignment
On the move to the SPV, the lease was made collaterally assignable to a financial institution, including on enforcement.
Applied Digital lease assignment
CoreWeave stays liable as the original tenant after assigning to its SPV.
BXDC form lease
Assignment to affiliates on notice; to others only if the assignee meets a credit threshold or the landlord consents.
The filed wording
Notwithstanding and supplementing Section 12.1, as a condition to any such subordination, the Holder must provide Tenant with, and Tenant shall enter into, an SNDA agreeing to recognize this Lease and Tenant’s rights hereunder in the event of a sale or foreclosure under the applicable Security Document or transfer in lieu thereof in substantially the same the form as the form attached hereto as Schedule “Q”, subject to such commercially reasonable changes to such form SNDA as may be required by the applicable Holder but which do not (individually or in the aggregate) materially either increase the obligations of Tenant hereunder or affect the rights of Tenant hereunder.
Each extract is quoted from the contract as filed with the SEC, checked against the filed text when it was added; “…” marks words left out. Filers redact commercial terms, so a [***] or [*] is the filer's, not ours. The summaries describe the wording, not how a court would read it, and each contract's defined terms and other clauses can change the effect. General information drawn from public filings. It is not legal advice on any transaction, and using this page does not create a lawyer-client relationship. Views are personal.
InfraCompute Weekly
The week in compute finance, read from the filings.
Deals, terms and the clauses behind them, for the people financing data centres, GPU clouds and the power behind them. By Randeep Bubbra.
