Common use of Lease Security Clause in Contracts

Lease Security. As security for the performance by Tenant of -------------- Tenant's obligations hereunder, Tenant shall cause to be delivered to Landlord concurrently with the execution of this Lease by Tenant, an original irrevocable standby letter of credit (the "Letter of Credit") in the amount of Five Hundred Thousand Dollars ($500,000.00), which Landlord may draw upon to cure any default under this Lease or to compensate Landlord for any damage Landlord incurs as a result of Tenant's failure to perform any of its obligations hereunder. Any such draw on the Letter of Credit shall not constitute a waiver of any other rights of Landlord with respect to such default. The Letter of Credit shall be issued by a major commercial bank reasonably acceptable to Landlord with a San Francisco service and claim point for the Letter of Credit, have an expiration date not earlier than the Expiration Date (or, in the alternative, have a term of not less than one (1) year and be automatically renewable for an additional one (1) year period unless notice of non-renewal is given by the issuer to Landlord not later than sixty (60) days prior to the expiration thereof). The Letter of Credit shall provide for payment to Landlord upon the issuer's receipt of a sight draft from Landlord together with Landlord's certificate certifying that the requested sum is due and payable from Tenant and Tenant has failed to pay, and with no other conditions, and otherwise be in form and content satisfactory to Landlord. If the Letter of Credit has an expiration date earlier than the Expiration Date, then throughout the term hereof (including any renewal or extension of the term) Tenant shall provide evidence of renewal of the Letter of Credit to Landlord at least sixty (60) days prior to the date the Letter of Credit expires. If Landlord draws on the Letter of Credit pursuant to the terms hereof, Tenant shall immediately replenish the Letter of Credit or provide Landlord with an additional letter of credit conforming to the requirements of this paragraph so that the amount available to Landlord from the Letter of Credit(s) provided hereunder is $500,000.00 Tenant's failure to deliver any replacement, additional or extension of the Letter of Credit, or evidence of renewal of the Letter of Credit, within the time specified under this Lease shall entitle Landlord to draw upon the full amount of the Letter of Credit then in effect and (a) Landlord shall hold the drawn amount as security for Tenant's obligations under this Lease and no interest shall accrue to Tenant with regard to such sums so held by Landlord, (b) Landlord may (but shall not be required to) use the sums so held or any portion thereof to cure any Event of Default or to compensate Landlord for any damage Landlord incurs as a result of Tenant's failure to perform any of its covenants or obligations hereunder, it being understood that any use of such sums shall not constitute a bar or defense to any of Landlord's remedies under this Lease or at law (and if Landlord so uses all or part of the security deposit, then upon written notice from Landlord to Tenant specifying the amount of the security deposit so utilized by Landlord and the particular purpose for which such amount was applied, Tenant shall immediately deposit with Landlord an amount sufficient to return the security deposit to an amount equal to one hundred percent (100%) of the security deposit held by Landlord prior to such application of the security deposit; and Tenant's failure to make such payment to Landlord within five (5) business days of receipt of Landlord's notice shall constitute an Event of Default, (e) if Tenant is not in default at the expiration or termination of this Lease, Landlord shall return to Tenant the balance of such sums so held by Landlord; provided, however, that in no event shall any such return be construed as an admission by Landlord that Tenant has performed all of its covenants and obligations under the Lease, and (d) no holder of a Superior Interest (as defined in Paragraph 21 below), nor any purchaser at any judicial or private foreclosure sale of the Real Property or any portion thereof, shall be responsible to Tenant for the sums so held by Landlord unless and only to the extent such holder or purchaser shall have actually received the same. Tenant may from time to time during the Lease term (but not more than once during any twelve (12) month period) request that Landlord review Tenant's then current financial statement to determine if Landlord will continue to require the Letter of Credit as security for Tenant's obligations under this Lease. Tenant acknowledges that Landlord shall in no event be required to eliminate the requirement that Tenant provide the Letter of Credit, it being agreed that Landlord's sole obligation under this grammatical paragraph is to review the financial statement submitted by Tenant. If, at any time during the term hereof while the Letter of Credit is in effect, Tenant becomes a publicly held corporation, then Tenant may replace the Letter of Credit with a cash security deposit equal to One Hundred Ten Thousand Three Hundred Seventy-Two Dollars ($110,372.00). Upon Landlord's receipt from Tenant of (i) reasonable documentation evidencing that Tenant has become a publicly held company and (ii) the $110,372.00 security deposit, Landlord shall return to Tenant the Letter of Credit held by Landlord. If Tenant does substitute a cash security deposit for the Letter of Credit, the provisions of (a) through (d) of the second grammatical paragraph of this Paragraph 6 shall apply thereto. Once the Letter of Credit is replaced with the security deposit, the security deposit shall remain in effect throughout the remainder of the Lease term, and Landlord shall be under no further obligation to review Tenant's financial statements.

Lease Security. As On or before the Commencement Date, Tenant shall pay to Landlord the sum of $375,000.00 as and for a security deposit (the "Security Deposit"). The Security Deposit shall be held by Landlord as security for the faithful performance by Tenant of -------------- Tenant's obligations hereunderall the terms, Tenant shall cause to be delivered to Landlord concurrently with the execution covenants, and conditions of this Lease to be kept and performed by Tenant during the Lease Term. Landlord is not required to hold the Security Deposit in trust and may hold and commingle the Security Deposit with other funds of Landlord. Landlord shall not be required to pay to Tenant any interest on the Security Deposit at any time. If Tenant defaults with respect to any provision of this Lease, Landlord may, but shall not be required to, use, apply or retain all or any part of this Security Deposit for the payment of any Rent or any other amount payable by Tenant, an original irrevocable standby letter or for the payment of credit (the "Letter of Credit") in the any amount of Five Hundred Thousand Dollars ($500,000.00), which Landlord may draw upon spend or become obligated to cure any default under this Lease spend by reason of Tenant's default, or to compensate Landlord for any other loss or damage which Landlord incurs may suffer by reason of Tenant's default. If any portion of the Security Deposit is so used or applied, Tenant shall, within five (5) days after written demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount and Tenant's failure to do so shall be a material breach of this Lease. If Landlord terminates this Lease as a result of any default of Tenant, then the Security Deposit shall be applied to the damages suffered by. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit or any balance thereof shall be returned to Tenant or, at Landlord's option, to the last assignee of Tenant's failure interest hereunder, no earlier than thirty (30) days after the expiration of the Lease Term. In the event of termination of Landlord's interest in this Lease, Landlord shall transfer the Security Deposit to perform Landlord's successor in interest and Landlord shall be discharged from all liability in regard thereto. No successor-in-interest to Landlord shall be liable for the return of all or any portion of its obligations hereunder. Any such draw on the Letter of Credit shall not constitute a waiver of any other rights of Landlord with respect Security Deposit to Tenant except to the extent the Security Deposit transferred to such defaultsuccessor-in-interest. The Letter Performance of Credit shall be issued by a major commercial bank reasonably acceptable to Landlord with a San Francisco service and claim point for the Letter of Credit, have an expiration date not earlier than the Expiration Date (or, in the alternative, have a term of not less than one (1) year and be automatically renewable for an additional one (1) year period unless notice of non-renewal is given by the issuer to Landlord not later than sixty (60) days prior to the expiration thereof). The Letter of Credit shall provide for payment to Landlord upon the issuer's receipt of a sight draft from Landlord together with Landlord's certificate certifying that the requested sum is due and payable from Tenant and Tenant has failed to pay, and with no other conditions, and otherwise be in form and content satisfactory to Landlord. If the Letter of Credit has an expiration date earlier than the Expiration Date, then throughout the term hereof (including any renewal or extension of the term) Tenant shall provide evidence of renewal of the Letter of Credit to Landlord at least sixty (60) days prior to the date the Letter of Credit expires. If Landlord draws on the Letter of Credit pursuant to the terms hereof, Tenant shall immediately replenish the Letter of Credit or provide Landlord with an additional letter of credit conforming to the requirements of this paragraph so that the amount available to Landlord from the Letter of Credit(s) provided hereunder is $500,000.00 Tenant's failure to deliver any replacement, additional or extension of the Letter of Credit, or evidence of renewal of the Letter of Credit, within the time specified obligations under this Lease shall entitle Landlord to draw upon also be secured by the full amount Tenant's interests in and possession of the Letter Premises. Upon the occurrence of Credit then any event of default by Tenant, Landlord may terminate Tenant's interests in effect and (a) possession of the Premises in accordance with Section 10 hereof. Performance of Tenant's obligations under this Lease shall also be secured by a statutory lien on all personal property of Tenant at any time located on or at the Premises and Tenant shall execute any and all security agreements and financing statements as Landlord shall hold may require from time to time to evidence and perfect the drawn amount as statutory lien. Neither the Security Deposit, Tenant's interest in and possession of the Premises, Landlord's statutory lien or any other security for Tenant's obligations under this Lease and no interest shall accrue to Tenant with regard to such sums so held by limit or reduce Landlord, (b) Landlord may (but shall not be required to) use the sums so held 's exercise of any or any portion thereof to cure any Event of Default or to compensate Landlord for any damage Landlord incurs as a result of Tenant's failure to perform any all of its covenants or obligations hereunder, it being understood that any use of such sums shall not constitute a bar or defense to any of Landlord's rights and remedies under this Lease or at law (and if Landlord so uses all or part of the security deposit, then upon written notice from Landlord to Tenant specifying the amount of the security deposit so utilized by Landlord and the particular purpose for which such amount was applied, Tenant shall immediately deposit with Landlord an amount sufficient to return the security deposit to an amount equal to one hundred percent (100%) of the security deposit held by Landlord prior to such application of the security deposit; and Tenant's failure to make such payment to Landlord within five (5) business days of receipt of Landlord's notice shall constitute an Event of Default, (e) if Tenant is not in default at the expiration or termination of this Lease, Landlord shall return to Tenant the balance of such sums so held by Landlord; provided, however, that in no event shall any such return be construed as an admission by Landlord that Tenant has performed all of its covenants and obligations under the Lease, and (d) no holder of a Superior Interest (as defined in Paragraph 21 below), nor any purchaser at any judicial or private foreclosure sale of the Real Property or any portion thereof, shall be responsible to Tenant for the sums so held by Landlord unless and only to the extent such holder or purchaser shall have actually received the same. Tenant may from time to time during the Lease term (but not more than once during any twelve (12) month period) request that Landlord review Tenant's then current financial statement to determine if Landlord will continue to require the Letter of Credit as security for Tenant's obligations under this Lease. Tenant acknowledges that Landlord shall in no event be required to eliminate the requirement that Tenant provide the Letter of Credit, it being agreed that Landlord's sole obligation under this grammatical paragraph is to review the financial statement submitted by Tenant. If, at any time during the term hereof while the Letter of Credit is in effect, Tenant becomes a publicly held corporation, then Tenant may replace the Letter of Credit with a cash security deposit equal to One Hundred Ten Thousand Three Hundred Seventy-Two Dollars ($110,372.00). Upon Landlord's receipt from Tenant of (i) reasonable documentation evidencing that Tenant has become a publicly held company and (ii) the $110,372.00 security deposit, Landlord shall return to Tenant the Letter of Credit held by Landlord. If Tenant does substitute a cash security deposit for the Letter of Credit, the provisions of (a) through (d) of the second grammatical paragraph of this Paragraph 6 shall apply thereto. Once the Letter of Credit is replaced with the security deposit, the security deposit shall remain in effect throughout the remainder of the Lease term, and Landlord shall be under no further obligation to review Tenant's financial statements.

Lease Security. As security for Paragraph 5 of Exhibit "C" to the performance by Tenant of -------------- Tenant's obligations hereunderLease is hereby amended to add to the end thereof the following visions: In addition to the aforementioned lease securitization instrument, Tenant shall cause to be delivered provide to Landlord concurrently with the execution of this Lease by Tenant, an original irrevocable standby letter no more than two (2) letters of credit (collectively, the "Letter of CreditAdditional LOC") in the aggregate amount of Five Hundred Thousand Dollars ($500,000.00)800,000.00, which Landlord may draw upon to cure any default under this Lease or to compensate Landlord for any damage Landlord incurs as a result of Tenant's failure to perform any of its obligations hereunder. Any such draw on the Letter of Credit shall not constitute a waiver of any other rights of Landlord with respect to such default. The Letter of Credit shall be issued by a major commercial bank reasonably acceptable to or confirmed by financial institutions approved by Landlord with a San Francisco service (which approval shall not be unreasonably withheld if such institution has an investment grade rating from Standards and claim point for Poors or Xxxxx'x). The Additional LOC shall be automatically renewing over the Letter of Credit, have an expiration date not earlier than the Expiration Date (or, in the alternative, have a primary term of the Lease, shall not less than expire until the expiration of one (1) year and be automatically renewable for an additional one (1) year period unless notice month after the termination of non-renewal is given by the issuer to Landlord not later than sixty (60) days prior to primary term of the expiration thereof). The Letter of Credit shall provide for payment to Landlord upon the issuer's receipt of a sight draft from Landlord together with Landlord's certificate certifying that the requested sum is due and payable from Tenant and Tenant has failed to payLease, and with no other conditions, and shall otherwise be in form and content satisfactory substance acceptable to Landlord in its sole discretion. In addition to any other terms and conditions reasonably required by Landlord. If , the Letter of Credit has an expiration date earlier than the Expiration Date, then throughout the term hereof (including any renewal or extension terms of the termAdditional LOC may provide that, commencing upon the first day to occur following the expiration of eighteen (18) Tenant shall provide evidence months after the "Commencement Date" of renewal this Lease and provided that an Event of Default has not occurred under the terms of the Letter of Credit Lease, the combined credit made available under the Additional LOC shall be reduced from time to time thereafter in accordance with the amortization schedule attached hereto as Schedule 1. The Additional LOC shall further provide that Landlord at least sixty (60) days prior shall be permitted to the date the Letter of Credit expires. If Landlord draws draw on the Letter Additional LOC upon the occurrence of Credit pursuant to an Event of Default under the terms hereof, Lease. Tenant agrees that it shall immediately replenish the Letter of Credit or provide Landlord with an additional replace any letter of credit conforming to comprising the requirements Additional LOC with another letter of this paragraph so that the amount available to credit in favor of Landlord from the Letter of Credit(s) provided hereunder is $500,000.00 Tenant's failure a financial institution reasonably acceptable to deliver any replacement, additional or extension of the Letter of Credit, or evidence of renewal of the Letter of Credit, within the time specified under this Lease shall entitle Landlord to draw upon the full amount of the Letter of Credit then in effect and (a) Landlord shall hold the drawn amount as security for Tenant's obligations under this Lease and no interest shall accrue to Tenant with regard to such sums so held by Landlord, (b) Landlord may (but which shall not be required to) use the sums so held or any portion thereof identical in its terms to cure any Event of Default or to compensate Landlord for any damage Landlord incurs as a result of Tenant's failure to perform any of its covenants or obligations hereunder, it being understood that any use of such sums shall not constitute a bar or defense to any of Landlord's remedies under this Lease or at law (and if Landlord so uses all or part of the security deposit, then upon written notice from Landlord to Tenant specifying in the amount of the security deposit so utilized by Landlord and the particular purpose for which such amount was appliedoriginal letter of credit being replaced, Tenant shall immediately deposit with Landlord an amount sufficient to return the security deposit to an amount equal to one hundred percent within ten (100%) of the security deposit held by Landlord prior to such application of the security deposit; and Tenant's failure to make such payment to Landlord within five (510) business days of receipt the occurrence of Landlordany of the foregoing events: (a) the issuing or confirming bank is placed, voluntarily or involuntarily, into receivership or any appointment of a receiver, trustee or liquidator is made of with respect to such bank or any portion of the assets of the such bank; (b) the issuing or confirming bank reports a loss for two (2) consecutive fiscal quarters; or (c) the issuing or confirming bank's notice shall constitute ratio of reported capital to total assets declines to a ratio of less than 5.0%. Upon the occurrence of an Event of Default, (e) if Tenant is not in default at Default under the expiration Lease or termination under the provisions of this Leaseparagraph 5, Landlord shall return be permitted to draw upon any letters of credit provided to Landlord by Tenant the balance of such sums so held by Landlord; provided, however, that in no event shall any such return be construed as an admission by Landlord that Tenant has performed all of its covenants and obligations under the Lease, and (d) no holder of a Superior Interest (as defined in Paragraph 21 below), nor any purchaser at any judicial or private foreclosure sale of the Real Property or any portion thereof, shall be responsible to Tenant for the sums so held by Landlord unless and only to the extent such holder or purchaser shall have actually received the same. Tenant may from time to time during the Lease term (but not more than once during any twelve (12) month period) request that Landlord review Tenant's then current financial statement to determine if Landlord will continue to require the Letter of Credit as security for Tenant's obligations under this Lease. Tenant acknowledges that Landlord shall in no event be required to eliminate the requirement that Tenant provide the Letter of Credit, it being agreed that Landlord's sole obligation under this grammatical paragraph is to review the financial statement submitted by Tenant. If, at any time during the term hereof while the Letter of Credit is in effect, Tenant becomes a publicly held corporation, then Tenant may replace the Letter of Credit with a cash security deposit equal to One Hundred Ten Thousand Three Hundred Seventy-Two Dollars ($110,372.00). Upon Landlord's receipt from Tenant of (i) reasonable documentation evidencing that Tenant has become a publicly held company and (ii) the $110,372.00 security deposit, Landlord shall return to Tenant the Letter of Credit held by Landlord. If Tenant does substitute a cash security deposit for the Letter of Credit, the provisions of (a) through (d) of the second grammatical paragraph of this Paragraph 6 shall apply thereto. Once the Letter of Credit is replaced accordance with the security deposit, the security deposit shall remain in effect throughout the remainder of the Lease term, terms and Landlord shall be under no further obligation to review Tenant's financial statementsconditions set forth therein.