Common use of Landlord’s Right to Draw on Letter of Credit Security Clause in Contracts

Landlord’s Right to Draw on Letter of Credit Security. The Letter of Credit Security shall be held by Landlord as security for the faithful performance by Tenant of all of the terms, covenants, and conditions this Lease applicable to Tenant. Landlord shall have the immediate right to draw upon the Letter of Credit Security, in whole or in part and without prior notice to Tenant, other than as required under this Lease or by Law, at any time and from time to time: (i) if a default occurs under this Lease which remains uncured after any applicable notice and cure period, or (ii) Tenant either files a voluntary bankruptcy petition or an involuntary bankruptcy petition is filed against Tenant by an entity or entities other than Landlord, under 11 U.S.C. §101 et seq., or Tenant executes an assignment for the benefit of creditors, or (iii) Tenant fails to extend the Letter of Credit Security for a period of at least one (1) year or deliver a replacement Letter of Credit Security, in either case not later than thirty (30) days prior to the then current expiration date of the Letter of Credit Security; provided, however, that in the case of any default by Tenant with respect to which the amount due to or recoverable by Landlord is a specific or liquidated amount, Landlord may only draw upon the Letter of Credit Security in an amount up to such specific or liquidated amount. No condition or term of this Lease shall be deemed to render the Letter of Credit Security conditional, thereby justifying the Issuer of the Letter of Credit Security in failing to honor a drawing upon such Letter of Credit Security in a timely manner. The Letter of Credit Security and its proceeds shall constitute Landlord’s sole and separate property (and not Tenant’s property or, in the event of a bankruptcy filing by or against Tenant, property of Tenant’s bankruptcy estate) and Landlord may in its sole discretion (but shall not be required to) immediately upon any draw (and without notice to Tenant) apply or offset the proceeds of the Letter of Credit Security against: (A) any amounts payable by Tenant under the Lease that are not paid when due, after the expiration of any applicable notice and cure period; (B) all losses and damages that Landlord has suffered or may reasonably estimate that it may suffer as a result of any default (after the expiration of any applicable notice and cure period, unless Landlord is stayed by operation of law from giving such notice and cure period) by Tenant under this Lease, including any damages arising under Section 1951.2 of the California Civil Code for rent due following termination of this Lease; (C) any costs incurred by Landlord in connection with Tenant’s default (after expiration of any applicable notice and cure period, unless Landlord is stayed by operation of law from giving such notice and cure period) under this Lease (including reasonable attorney’s fees); and (D) any other amount that Landlord may spend or become obligated to spend by reason of Tenant’s default under this Lease but in no event in excess of amounts to which the Landlord would be entitled under the law. If any portion of the Letter of Credit Security is so drawn upon or applied, Tenant shall, within five (5) Business Days after written demand therefor, deposit cash with Issuer in an amount sufficient to restore the Letter of Credit Security to its original amount; Tenant’s failure to do so shall be a default by Tenant. It is expressly understood that Landlord shall be relying on Issuer rather than Tenant for the timely payment of proceeds under the Letter of Credit Security and the rights of Landlord pursuant to this Section are in addition to any rights which Landlord may have against Tenant pursuant to Article XII below. Landlord shall not be required to keep the proceeds from the Letter of Credit Security separate from Landlord’s general funds or be deemed a trustee of same.

Landlord’s Right to Draw on Letter of Credit Security. The Letter of Credit Security shall be held by Landlord as security for the faithful performance by Tenant of all of the terms, covenants, and conditions Tenant’s obligations pursuant to this Lease applicable to TenantLease. Landlord shall have the immediate right to draw upon the Letter of Credit Security, in whole or in part and without prior notice to Tenant, other than as required under this Lease or by LawLease, at any time and from time to time: (i1) if a default occurs under this Lease which remains uncured after (beyond any applicable notice and cure period), or (ii2) Tenant either files a voluntary bankruptcy petition or an involuntary bankruptcy petition is filed against Tenant by an entity or entities other than Landlord, under 11 U.S.C. §101 et seq., or Tenant executes an assignment for the benefit of creditors, or (iii) Tenant fails to extend the Letter of Credit Security for a period of at least one (1) year or deliver a replacement Letter of Credit Security, in either case not later than thirty (30) days prior to the then current expiration date of the Letter of Credit Security; provided, however, that in the case of any default by Tenant with respect to which the amount due to or recoverable by Landlord is a specific or liquidated amount, Landlord may only draw upon the Letter of Credit Security in an amount up to such specific or liquidated amount. No condition or term of this Lease shall be deemed to render the Letter of Credit Security conditional, thereby justifying the Issuer of the Letter of Credit Security in failing to honor a drawing upon such Letter of Credit Security in a timely manner. The Letter of Credit Security and its proceeds shall constitute Landlord’s sole and separate property (and not Tenant’s property or, in the event of a bankruptcy filing by or against Tenant, property of Tenant’s bankruptcy estate) and Landlord may in its sole discretion (but shall not be required to) immediately upon any draw (and without notice to Tenant) apply or offset the proceeds of the Letter of Credit Security against: (A) any amounts payable by Tenant under the Lease that are not paid when due, after the expiration of any applicable notice and cure period; (B) all losses and damages that Landlord has suffered or may reasonably estimate that it may suffer as a result of any default (after the expiration of any applicable notice and cure period, unless Landlord is stayed by operation of law from giving such notice and cure period) by Tenant under this Lease, including any damages arising under Section 1951.2 of the California Civil Code for rent due following termination of this Lease; (C) any costs incurred by Landlord in connection with Tenant’s default (after expiration of any applicable notice and cure period, unless Landlord is stayed by operation of law from giving such notice and cure period) under this Lease (including reasonable attorney’s fees); and (D) any other amount that Landlord may spend or become obligated to spend by reason of Tenant’s default under this Lease but in no event in excess of amounts to which the Landlord would be entitled under the law. If any portion of the Letter of Credit Security is so drawn upon or applied, Tenant shall, within five (5) Business Days business days after written demand therefor, deposit cash with Issuer in an amount sufficient to restore the Letter of Credit Security to its original amount; Tenant’s failure to do so shall be a default by Tenant. It is expressly understood that Landlord shall be relying on Issuer rather than Tenant for the timely payment of proceeds under the Letter of Credit Security and the rights of Landlord pursuant to this Section are in addition to any rights which Landlord may have against Tenant pursuant to Article XII below. Landlord shall not be required to keep the proceeds from the Letter of Credit Security separate from Landlord’s general funds or be deemed a trustee of same.

Landlord’s Right to Draw on Letter of Credit Security. The Letter of Credit Security shall be held by Landlord solely as security for the faithful performance repayment by Tenant of all of the terms, covenants, and conditions this Lease applicable to TenantAdditional Tenant Improvement Allowance used by Tenant in accordance with Section 2.04(b) above. Landlord shall have the immediate right to draw upon the Letter of Credit Security, in whole or in part and without prior notice to Tenant, other than as required under this Lease or by LawLease, at any time and from time to time: (i1) if a default occurs under this Lease which remains uncured after Tenant fails to pay any applicable installment of the amortized amount of the Additional Tenant Improvement Allowance when due; provided, however, that such failure to pay shall be subject to the same notice and cure periodperiods applicable to a failure to pay Rent, or (ii2) if Tenant either files a voluntary bankruptcy petition or an involuntary bankruptcy petition is filed against Tenant by an entity or entities other than Landlord, under 11 U.S.C. §101 et seq., or Tenant executes an assignment for the benefit of creditors, or (iii) Tenant fails to extend the Letter of Credit Security for a period of at least one (1) year or deliver a replacement Letter of Credit Security, in either case not later than thirty (30) days prior to the then current expiration date of the Letter of Credit Security; provided, however, that in the case of any default by Tenant with respect to which the amount due to or recoverable by Landlord is a specific or liquidated amount, Landlord may only draw upon the Letter of Credit Security in an amount up to such specific or liquidated amount. No condition or term of this Lease shall be deemed to render the Letter of Credit Security conditional, thereby justifying the Issuer of the Letter of Credit Security in failing to honor a drawing upon such Letter of Credit Security in a timely manner. The Letter of Credit Security and its proceeds shall constitute Landlord’s sole and separate property (and not Tenant’s property or, in the event of a bankruptcy filing by or against Tenant, property of Tenant’s bankruptcy estate) and Landlord may in its sole discretion (but shall not be required to) immediately upon any draw (and and, except as provided above, without notice to Tenant) apply or offset the proceeds of the Letter of Credit Security against: (A) against any amounts payable by installment of the amortized amount of the Additional Tenant under the Lease Improvement Allowance that are is not paid when due, after the expiration of any applicable notice and cure period; (B) all losses and damages that Landlord has suffered or may reasonably estimate that it may suffer as a result of any default (after the expiration of any applicable notice and cure period, unless Landlord is stayed by operation of law from giving such notice and cure period) by Tenant under this Lease, including any damages arising under Section 1951.2 of the California Civil Code for rent due following termination of this Lease; (C) any costs incurred by Landlord in connection with Tenant’s default (after expiration of any applicable notice and cure period, unless Landlord is stayed by operation of law from giving such notice and cure period) under this Lease (including reasonable attorney’s fees); and (D) any other amount that Landlord may spend or become obligated to spend by reason of Tenant’s default under this Lease but in no event in excess of amounts to which the Landlord would be entitled under the law. If any portion of the Letter of Credit Security is so properly drawn upon or and applied, Tenant shall, within five (5) Business Days business days after written demand therefortherefore, deposit cash with Issuer in an amount sufficient to restore the Letter of Credit Security to its original amountthe then unamortized amount of the Additional Tenant Improvement Allowance; Tenant’s failure to do so shall be a default by Tenant. It is expressly understood that Landlord shall be relying on Issuer rather than Tenant for the timely payment of proceeds under the Letter of Credit Security and the rights of Landlord pursuant to this Section are in addition to any rights which Landlord may have against Tenant pursuant to Article XII below. Landlord shall not be required agrees that, at Tenant’s written request, at the end of each fiscal quarter, provided that Tenant pays all of the installments of the monthly amortized amount of the Additional Tenant Improvement Allowance due during such fiscal quarter in accordance with this Lease, Landlord will promptly execute and deliver to keep Tenant, for delivery to the proceeds from Issuer, a reduction certificate providing for the reduction of the Letter of Credit Security separate from Landlord’s general funds or be deemed a trustee of samein an amount equal to the payment(s) made by Tenant during that past fiscal quarter.

Landlord’s Right to Draw on Letter of Credit Security. The Letter of Credit Security shall be held by Landlord as security for the faithful performance by Tenant of all of Tenant’s obligations pursuant to the terms, covenants, and conditions terms of this Lease applicable to TenantLease. Landlord shall have the immediate right to draw upon the Letter of Credit Security, in whole or in part and without prior notice to Tenant, other than as required under this Lease or by LawLease, at any time and from time to time: (i1) if a default occurs under this Lease which remains uncured after (beyond any applicable notice and cure period) as a result of Tenant’s failure to perform any of Tenant’s obligations pursuant to this Lease as and when due, or (ii2) Tenant either files a voluntary bankruptcy petition or an involuntary bankruptcy petition is filed against Tenant by an entity or entities other than Landlord, under 11 U.S.C. §101 et seq., or Tenant executes an assignment for the benefit of creditors, or (iii) Tenant fails to extend the Letter of Credit Security for a period of at least one (1) year or deliver a replacement Letter of Credit Security, in either case not later than thirty (30) days prior to the then current expiration date of the Letter of Credit Security; provided, however, that in the case of any default by Tenant with respect to which the amount due to or recoverable by Landlord is a specific or liquidated amount, Landlord may only draw upon the Letter of Credit Security in an amount up to such specific or liquidated amount. No condition or term of this Lease shall be deemed to render the Letter of Credit Security conditional, thereby justifying the Issuer of the Letter of Credit Security in failing to honor a drawing upon such Letter of Credit Security in a timely manner. The Letter of Credit Security and its proceeds shall constitute Landlord’s sole and separate property (and not Tenant’s property or, in the event of a bankruptcy filing by or against Tenant, property of Tenant’s bankruptcy estate) and Landlord may in its sole discretion (but shall not be required to) immediately upon any draw (and without notice to Tenant) apply or offset the proceeds of the Letter of Credit Security against: (A) any amounts payable by Tenant under the Lease that are not paid when due, after the expiration of any applicable notice and cure period; (B) all losses and damages that Landlord has suffered or may reasonably estimate that it may suffer as a result of any default (after the expiration of any applicable notice and cure period, unless Landlord is stayed by operation of law from giving such notice and cure period) by Tenant under this Lease, including any damages arising under Section 1951.2 of the California Civil Code for rent due following termination of this Lease; (C) any costs incurred by Landlord in connection with Tenant’s default (after expiration of any applicable notice and cure period, unless Landlord is stayed by operation of law from giving such notice and cure period) under this Lease (including reasonable attorney’s fees); and (D) any other amount that Landlord may spend or become obligated to spend by reason of Tenant’s default under this Lease (after expiration of any applicable notice and cure period, unless Landlord is stayed by operation of law from giving such notice and cure period) but in no event in excess of amounts to which the Landlord would be entitled under the law. If any portion of the Letter of Credit Security is so drawn upon or applied, Tenant shall, within five (5) Business Days business days after written demand therefortherefore, deposit cash with Issuer in an amount sufficient to restore the Letter of Credit Security to its original amount; Tenant’s failure to do so shall be a default Default by Tenant. It is expressly understood that Landlord shall be relying on Issuer rather than Tenant for the timely payment of proceeds under the Letter of Credit Security and the rights of Landlord pursuant to this Section are in addition to any rights which Landlord may have against Tenant pursuant to Article XII below. Landlord shall not be required to keep the proceeds from the Letter of Credit Security separate from Landlord’s general funds or be deemed a trustee of same.