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Section 3.10 Subordination <br /> (a) In addition to the Lessee's right to encumber its leasehold estate in the Land <br /> and its fee in the Improvements, the Lessor agrees to encumber its fee title in the Land with any <br /> regulatory agreement and any deed of trust from any Lender. Upon written request by the Lessee, <br /> the Lessor agrees to provide the subordination provided in this Section, subject to the conditions <br /> described below, including the following: <br /> (i) The liability of the Lessor under any documents executed in <br /> connection with any Other Loan shall be limited by the express terms of the instrument of <br /> subordination. The limitations shall include: the limitation of the Lessor's liability solely to the <br /> interest or interests subordinated, and the Lessor's right not to execute any instrument which <br /> would obligate Lessor for the paynient of the Other Loan secured by a deed of trust to which the <br /> fee is subordinated. <br /> (ii) The Lessee shall not be in Material Default under the terms of this • <br /> Lease at the time of a request for subordination. "Material Default" shall mean any material <br /> breach by the Lessee under this Lease, including, without limitation, the failure to pay rent then <br /> due and payable, or, the filing of a bankruptcy petition by or against the Lessee. The Lessee shall <br /> not be in Material Default if the Lessee has commenced to cure the Material Default at the time <br /> in question and diligently pursues such cure to completion. <br /> (b) Provided the conditions of this Section are satisfied, the Lessor shall, <br /> within ten (10) days after written request by the Lessee, execute, acknowledge and deliver an <br /> instrument of subordination, together with other documents as may be reasonably required by a <br /> Lender from the Lessor to effectuate the provisions of this Section, without any charge by the <br /> Lessor to the Lessee for execution of such documents, subject to the terms and conditions <br /> contained in Section 3.10(a). The Lessor will immediately pay over to the Lessee proceeds <br /> received by the Lessor, if any, of any Other Loan and the proceeds of any Other Loan received by <br /> Lessor shall be considered a trust fund to be paid to Lessee. The agreement of subordination <br /> contained in this Lease shall be self- operative and no further instrument of subordination shall be <br /> necessary unless it be required by a Lender, or a title insurance company insuring any interest of <br /> a Lender. If any proceeds are made payable to both the Lessor and the Lessee, the Lessor shall <br /> immediately sign any papers necessary to transfer the proceeds to the Lessee. <br /> ARTICLE 4 <br /> Mortgage Loans <br /> Section 4.1 Loan Obligations <br /> Nothing contained in this Lease shall relieve the Lessee of its obligations and <br /> responsibilities under any Other Loans to operate the Project as set forth in the Other Loan • <br /> Documents. Nothing contained in this Lease shall relieve the Lessee of its obligations and <br /> responsibilities under the City Loan to operate the Project as set forth in the City Loan Documents <br /> 144 \105\153233.25 13 <br />