Common use of Cash Security Deposit or Letter of Credit Clause in Contracts

Cash Security Deposit or Letter of Credit. On the Effective Date, Tenant shall deliver to Landlord a cash security deposit in the amount of two months of Base Rent or an unconditional irrevocable letter of credit issued by a commercial bank reasonably acceptable to Landlord payable to Landlord or Landlord’s assigns as “beneficiary” in the amount of two months of Base Rent for the first (1st) year of the Original Term (the “Letter of Credit”) as security for the performance of the Tenant’s covenants and obligations under this Lease for the Term. Provided there is no Event of Default, the cash security deposit or the Letter of Credit, as the case may be, shall reduce by one-third (1/3) at the end of each Lease Year. At the end of the Original Term, the remaining cash security deposit shall be returned to Tenant or the Letter of Credit shall expire, as the case may be. If Tenant fails to pay Base Rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Landlord shall have the right to draw against the Letter of Credit and hold the funds for the payment of any Base Rent or other charge due hereunder, to pay any other sum to which Landlord may become obligated by reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may suffer thereby. If Landlord so uses or applies all or any portion of said Letter of Credit, Tenant shall within ten (10) days after written demand therefor restore the amount of the Letter of Credit drawn so that the Letter of Credit is restored to the amount existing prior to any drawing. On termination of this Lease, the Landlord shall return the Letter of Credit to Tenant. The Letter of Credit shall be assignable to any Mortgagee or purchaser of the Project.

Cash Security Deposit or Letter of Credit. On the Effective DateUpon execution of this Lease, Tenant shall deliver to deposit with Landlord the sum of Two Hundred Thousand Dollars ($200,000) as a cash security deposit to secure Tenant’s obligations hereunder (the “Security Deposit”). In lieu of a cash security deposit, Tenant may deliver or have transferred to Landlord a clean, unconditional, irrevocable, transferable letter of credit in the amount of two months of Base Rent or an unconditional irrevocable letter of credit issued by a commercial bank reasonably acceptable to Landlord payable to Landlord or Landlord’s assigns as “beneficiary” in the amount of two months of Base Rent for the first Two Hundred Thousand Dollars (1st$200,000) year of the Original Term (the “Letter of Credit”), in form and issued by a financial institution (“Issuer”) as security for the performance of the Tenant’s covenants and obligations under this Lease for the Term. Provided there is no Event of Defaultsatisfactory to Landlord in its sole discretion, the cash security deposit or the Letter of Credit, as the case may be, shall reduce by one-third (1/3) at the end of each Lease Year. At the end of the Original Term, the remaining cash security deposit shall be returned to Tenant or the which Letter of Credit (and all sums drawn by Landlord thereunder) shall expire, as constitute the case may beSecurity Deposit hereunder. If Tenant fails hereby grants to pay Base Rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Landlord shall have the right to draw against a security interest in the Letter of Credit and hold all proceeds, replacements and modifications thereof to secure Tenant’s obligations herein, including without limitation, the funds for the payment of any Base Rent or other charge due hereunder, obligation to pay any other sum Rent, construct the Initial Improvements, perform its insurance and indemnity obligation and to which Landlord may become obligated by reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may suffer thereby. If Landlord so uses or applies all or any portion of said Letter of Credit, Tenant shall within ten (10) days after written demand therefor maintain and restore the amount of the Letter of Credit drawn so that the Letter of Credit is restored to the amount existing prior to any drawing. On termination of this Lease, the Landlord shall return the Letter of Credit to TenantPremises. The Letter of Credit shall permit partial draws, and provide that draws thereunder will be assignable to any Mortgagee honored upon receipt by Issuer (at its offices in Denver, Colorado or purchaser such other location that Landlord shall approve in its sole discretion) of the Projectoriginal or a certified copy of the Letter of Credit accompanied by a written statement signed by Landlord or its authorized agent stating that Landlord is entitled to draw on the Letter of Credit pursuant to the terms of the Lease. The Letter of Credit shall have an expiration period of one (1) year from the Commencement Date but shall provide that it will automatically renew by its terms to a date which is sixty (60) days following the Expiration Date unless affirmatively cancelled by Issuer following not less than sixty (60) days prior written notice of such expiration or cancellation from Issuer to Landlord. Landlord shall be entitled to draw the Letter of Credit in part or in full.