Common use of Letter of Credit as Security Clause in Contracts

Letter of Credit as Security. Subject to the provisions of this Section 3.1 and Section 16 hereof, Purchaser shall deliver to Sellers, on or prior to the date hereof (as to which date time shall be of the essence), a "clean" unconditional and irrevocable standby letter of credit (the "Letter of Credit") for the account of Purchasers, naming Sellers as the beneficiaries thereunder, for a term of not less than six (6) months, issued by and drawn on a commercial bank that is a member of the New York Clearinghouse Association (a "Qualified Bank"), in the amount of Five Million Dollars ($5,000,000). If the Final Date (as such term is defined in the Settlement Agreement) does not occur on or prior to October 23, 1998, then Purchaser shall have the right to reduce the aforesaid amount of the Letter of Credit to Two Million Five Hundred Thousand Dollars ($2,500,000) until the fifth (5th) day after the date when Purchaser receives notice of the occurrence of the Final Date. If (x) Purchaser so elects to reduce the amount of the Letter of Credit, and (y) Purchaser fails to increase the amount of the Letter of Credit to Five Million Dollars ($5,000,000) on or prior to the fifth (5th) day after the date when Purchaser receives notice of the occurrence of the Final Date, then Purchaser shall be deemed to be in material default in respect of Purchaser's obligations hereunder. If (x) Purchaser so elects to reduce the amount of the Letter of Credit hereunder (and has not thereafter increased the amount of the Letter of Credit to Five Million Dollars ($5,000,000)), (y) Purchaser defaults hereunder, and (z) Sellers elect to terminate this Agreement pursuant to Section 14.1 hereof by reason of such default, then Purchaser shall pay to Sellers, simultaneously with such termination, an amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000), which Sellers shall have the right to retain (in addition to the other amounts to which Sellers are entitled under Section 14.1 hereof). Sellers acknowledge that Xxxxxx Affiliate, acting alone, shall have the right to draw upon the Letter of Credit to the extent that Sellers have the right to do so under this Agreement, in which case Xxxxxx Affiliate shall pay to the other Sellers the proceeds of the Letter of Credit in accordance with the other Sellers' respective shares therein. If Xxxxxx Affiliate so draws upon the Letter of Credit, then Xxxxxx Affiliate shall indemnify the other Sellers, and hold the other Sellers harmless, from and against any and all liability, damage, loss, cost or expense (including, without limitation, reasonable attorneys' fees and expenses) that are incurred by the other Sellers to the extent deriving from Xxxxxx Affiliate's drawing upon the Letter of Credit in violation of this Agreement.

Letter of Credit as Security. Subject to Concurrent with the provisions execution of this Section 3.1 and Section 16 hereof---------------------------- Lease, Purchaser Tenant shall deliver to Sellers, on or prior to Landlord the date hereof Letter of Credit (as to which date time shall be of the essence), a "clean" unconditional and irrevocable standby letter of credit (the "Letter of Credit"defined in Section 4.2 below) for the account of Purchasers, naming Sellers as the beneficiaries thereunder, for a term of not less than six (6) months, issued by and drawn on a commercial bank that is a member of the New York Clearinghouse Association (a "Qualified Bank"), in the amount of Six Hundred Twenty-Five Million Thousand Dollars ($5,000,000625,000), which Letter of Credit shall secure the full and faithful performance of each and every provision and condition of this Lease to be performed by Tenant. If the Final Date (as such term is defined in the Settlement Agreement) does not occur on or prior to October 23, 1998, then Purchaser shall have the right to reduce the aforesaid The amount of the Letter of Credit shall be reduced to Two Million Five Hundred Fifty Thousand Dollars ($2,500,000250,000) until the fifth on February 1, 2002 if Tenant's net worth on such date (5thdetermined in accordance with generally accepted accounting principals ("GAAP")) day after the date when Purchaser receives notice of the occurrence of the Final Date. If exceeds Twenty Million Dollars (x$20,000,000) Purchaser so elects to reduce the amount of the Letter of Credit, and (yii) Purchaser fails to increase the amount of the Letter of Credit shall be further reduced to One Hundred Twenty- Five Thousand Dollars ($125,000) on February 1, 2003 if Tenant's net worth on such date (determined in accordance with GAAP) continues to exceed Twenty Million Dollars ($5,000,000) on or prior to the fifth (5th) day after the date when Purchaser receives notice of the occurrence of the Final Date, then Purchaser 20,000,000). There shall be deemed to be no further reduction in material default in respect of Purchaser's obligations hereunder. If (x) Purchaser so elects to reduce the stated amount of the Letter of Credit hereunder (from and has not thereafter increased the after February 1, 2003. The face amount of the Letter of Credit (as reduced above from time to Five Million Dollars time upon satisfaction of the foregoing conditions) is hereafter referred to as the "Face Amount". Anything contained in this Article 4 to the contrary notwithstanding, the Face Amount of the Letter of Credit shall not be reduced if Tenant has previously committed an uncured default under this Lease. If an Event of Default occurs under this Lease ($5,000,000)including but not limited to an Event of Default with respect to the obligation to pay Rent or to clean and restore the Premises upon termination of the Lease), (y) Purchaser defaults hereunderLandlord may, and (z) Sellers elect to terminate this Agreement pursuant to Section 14.1 hereof by reason of such defaultbut shall not be required to, then Purchaser shall pay to Sellers, simultaneously with such termination, an amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000), which Sellers shall have the right to retain (in addition to the other amounts to which Sellers are entitled under Section 14.1 hereof). Sellers acknowledge that Xxxxxx Affiliate, acting alone, shall have the right to draw upon the Letter of Credit for the payment of any Rent, interest, late charges or any other sum in default, or for the payment of any other amount which Landlord may spend or become obligated to spend by reason of the Event of Default or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of the Event of Default, including, without limitation, costs and reasonable attorneys' fees incurred by Landlord to collect on the Letter of Credit and/or to recover possession of the Premises following an Event of Default by Tenant hereunder. Tenant shall cause the Letter of Credit to remain in effect during the entire Term of this Lease and for an additional period of sixty (60) days following the expiration or earlier termination of this Lease. If Tenant fails to maintain, renew or replace the Letter of Credit in its then Face Amount at least thirty (30) days before its stated expiration date (or if Tenant fails to maintain, renew or replace the letter of credit under Article 4 of the Plymouth Lease in its then face amount at least thirty (30) days before its stated expiration date), then Landlord may, without prejudice to any other right or remedy, draw upon the entire amount of the Letter of Credit. Any amount drawn by Landlord on the Letter of Credit pursuant to this Section 4.1 but not applied by Landlord to satisfy Tenant's obligations hereunder shall be held by Landlord as a security deposit. Landlord may commingle any proceeds from the Letter of Credit with Landlord's general funds and Tenant shall not be entitled to any interest thereon. If Landlord draws on any portion of the Letter of Credit, Tenant shall, within three (3) business days after demand by Landlord, either (a) deposit immediately available funds with Landlord in the amount that when added to the extent that Sellers have remaining amount of the right to do so under this Agreement, in which case Xxxxxx Affiliate shall pay to the other Sellers the proceeds undrawn portion of the Letter of Credit equals its then Face Amount or (b) deliver to Landlord written documentation acceptable to Landlord executed by the Issuing Bank (as defined in accordance with Section 4.2 below) confirming that the other Sellers' respective shares thereinIssuing Bank has reinstated the Letter of Credit to its then full Face Amount; and Tenant's failure to do either (a) or (b) above shall constitute an Event of Default hereunder. If Xxxxxx Affiliate so draws the funds received by Landlord pursuant to a draw on the Letter of Credit exceed the amount applied by Landlord to cure the Event of Default, concurrently with and conditioned upon Tenant's reinstatement of the Letter of Credit to its full Face Amount, Landlord shall return any such excess funds to Tenant. If Tenant shall fully perform each and every provision of this Lease required by Tenant to be performed, the Letter of Credit (and any funds held by Landlord as a security deposit after drawing on the Letter of Credit) shall be returned to Tenant (or, then Xxxxxx Affiliate shall indemnify the other Sellersat Landlord's option, and hold the other Sellers harmless, from and against any and all liability, damage, loss, cost or expense (including, without limitation, reasonable attorneys' fees and expenses) that are incurred by the other Sellers to the extent deriving from Xxxxxx Affiliatelast assignee of Tenant's drawing upon interest hereunder) within sixty (60) days following the later of the expiration of the Term or surrender of possession of the Premises to Landlord. Notwithstanding the foregoing, the Letter of Credit in violation (and any funds held by Landlord as a security deposit after drawing on the Letter of Credit) shall be immediately returned to Tenant upon the termination of this AgreementLease solely by reason of Landlord's material default hereunder. Tenant shall not assign or encumber the Letter of Credit. Any attempt to do so shall be void and Landlord shall not be bound by any such purported assignment or encumbrance. In the event of bankruptcy or other insolvency proceedings filed by or against Tenant, all sums drawn under the Letter of Credit shall be deemed to be applied first to the payment of Rent and other charges due Landlord for all periods prior to the effective date of such proceedings. If Landlord transfers or assigns its interest in the Premises, Landlord may transfer or assign the Letter of Credit to such transferee.

Letter of Credit as Security. Subject to Concurrent with the provisions execution of this Section 3.1 and Section 16 hereof---------------------------- Lease, Purchaser Tenant shall deliver to Sellers, on or prior to Landlord the date hereof Letter of Credit (as to which date time shall be of the essence), a "clean" unconditional and irrevocable standby letter of credit (the "Letter of Credit"defined in Section 4.2 below) for the account of Purchasers, naming Sellers as the beneficiaries thereunder, for a term of not less than six (6) months, issued by and drawn on a commercial bank that is a member of the New York Clearinghouse Association (a "Qualified Bank"), in the amount of One Million Eight Hundred Seventy-Five Million Thousand Dollars ($5,000,0001,875,000), which Letter of Credit shall secure the full and faithful performance of each and every provision and condition of this Lease to be performed by Tenant. If the Final Date (as such term is defined in the Settlement Agreement) does not occur on or prior to October 23, 1998, then Purchaser shall have the right to reduce the aforesaid The amount of the Letter of Credit shall be reduced to Two Million Five Seven Hundred Fifty Thousand Dollars ($2,500,000750,000) until the fifth on February 1, 2002 if Tenant's net worth on such date (5thdetermined in accordance with generally accepted accounting principals ("GAAP")) day after the date when Purchaser receives notice of the occurrence of the Final Date. If exceeds Twenty Million Dollars (x$20,000,000) Purchaser so elects to reduce the amount of the Letter of Credit, and (yii) Purchaser fails to increase the amount of the Letter of Credit shall be further reduced to Three Hundred Seventy-Five Thousand Dollars ($375,000) on February 1, 2003 if Tenant's net worth on such date (determined in accordance with GAAP) continues to exceed Twenty Million Dollars ($5,000,000) on or prior to the fifth (5th) day after the date when Purchaser receives notice of the occurrence of the Final Date, then Purchaser 20,000,000). There shall be deemed to be no further reduction in material default in respect of Purchaser's obligations hereunder. If (x) Purchaser so elects to reduce the stated amount of the Letter of Credit hereunder (from and has not thereafter increased the after February 1, 2003. The face amount of the Letter of Credit (as reduced above from time to Five Million Dollars time upon satisfaction of the foregoing conditions) is hereafter referred to as the "Face Amount". Anything contained in this Article 4 to the contrary notwithstanding, the Face Amount of the Letter of Credit shall not be reduced if Tenant has previously committed an uncured default under this Lease. If an Event of Default occurs under this Lease ($5,000,000)including but not limited to an Event of Default with respect to the obligation to pay Rent or to clean and restore the Premises upon termination of the Lease), (y) Purchaser defaults hereunderLandlord may, and (z) Sellers elect to terminate this Agreement pursuant to Section 14.1 hereof by reason of such defaultbut shall not be required to, then Purchaser shall pay to Sellers, simultaneously with such termination, an amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000), which Sellers shall have the right to retain (in addition to the other amounts to which Sellers are entitled under Section 14.1 hereof). Sellers acknowledge that Xxxxxx Affiliate, acting alone, shall have the right to draw upon the Letter of Credit for the payment of any Rent, interest, late charges or any other sum in default, or for the payment of any other amount which Landlord may spend or become obligated to spend by reason of the Event of Default or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of the Event of Default, including, without limitation, costs and reasonable attorneys' fees incurred by Landlord to collect on the Letter of Credit and/or to recover possession of the Premises following an Event of Default by Tenant hereunder. Tenant shall cause the Letter of Credit to remain in effect during the entire Term of this Lease and for an additional period of sixty (60) days following the expiration or earlier termination of this Lease. If Tenant fails to maintain, renew or replace the Letter of Credit in its then Face Amount at least thirty (30) days before its stated expiration date (or if Tenant fails to maintain, renew or replace the letter of credit under Article 4 of the Xxxxxxx Lease in its then face amount at least thirty (30) days before its stated expiration date), then Landlord may, without prejudice to any other right or remedy, draw upon the entire amount of the Letter of Credit. Any amount drawn by Landlord on the Letter of Credit pursuant to this Section 4.1 but not applied by Landlord to satisfy Tenant's obligations hereunder shall be held by Landlord as a security deposit. Landlord may commingle any proceeds from the Letter of Credit with Landlord's general funds and Tenant shall not be entitled to any interest thereon. If Landlord draws on any portion of the Letter of Credit, Tenant shall, within three (3) business days after demand by Landlord, either (a) deposit immediately available funds with Landlord in the amount that when added to the extent that Sellers have remaining amount of the right to do so under this Agreement, in which case Xxxxxx Affiliate shall pay to the other Sellers the proceeds undrawn portion of the Letter of Credit equals its then Face Amount or (b) deliver to Landlord written documentation acceptable to Landlord executed by the Issuing Bank (as defined in accordance with Section 4.2 below) confirming that the other Sellers' respective shares thereinIssuing Bank has reinstated the Letter of Credit to its then full Face Amount; and Tenant's failure to do either (a) or (b) above shall constitute an Event of Default hereunder. If Xxxxxx Affiliate so draws the funds received by Landlord pursuant to a draw on the Letter of Credit exceed the amount applied by Landlord to cure the Event of Default, concurrently with and conditioned upon Tenant's reinstatement of the Letter of Credit to its full Face Amount, Landlord shall return any such excess funds to Tenant. If Tenant shall fully perform each and every provision of this Lease required by Tenant to be performed, the Letter of Credit (and any funds held by Landlord as a security deposit after drawing on the Letter of Credit) shall be returned to Tenant (or, then Xxxxxx Affiliate shall indemnify the other Sellersat Landlord's option, and hold the other Sellers harmless, from and against any and all liability, damage, loss, cost or expense (including, without limitation, reasonable attorneys' fees and expenses) that are incurred by the other Sellers to the extent deriving from Xxxxxx Affiliatelast assignee of Tenant's drawing upon interest hereunder) within sixty (60) days following the later of the expiration of the Term or surrender of possession of the Premises to Landlord. Notwithstanding the foregoing, the Letter of Credit in violation (and any funds held by Landlord as a security deposit after drawing on the Letter of Credit) shall be immediately returned to Tenant upon the termination of this AgreementLease solely by reason of Landlord's material default hereunder. Tenant shall not assign or encumber the Letter of Credit. Any attempt to do so shall be void and Landlord shall not be bound by any such purported assignment or encumbrance. In the event of bankruptcy or other insolvency proceedings filed by or against Tenant, all sums drawn under the Letter of Credit shall be deemed to be applied first to the payment of Rent and other charges due Landlord for all periods prior to the effective date of such proceedings. If Landlord transfers or assigns its interest in the Premises, Landlord may transfer or assign the Letter of Credit to such transferee.

Letter of Credit as Security. Subject to Simultaneously with the provisions execution of this Section 3.1 and Section 16 hereofLease, Purchaser Tenant shall deliver provide to Sellers, on or prior to the date hereof (as to which date time shall be of the essence), Landlord a "clean" unconditional and irrevocable standby letter of credit pursuant to Section 2.3 (the "“Letter of Credit"”) for the account of Purchasers, naming Sellers as the beneficiaries thereunder, for a term of not less than six (6) months, issued by and drawn on a commercial bank that is a member of the New York Clearinghouse Association (a "Qualified Bank"), in the amount of Nine Million Three Hundred Sixty Five Million Thousand Six Hundred Thirty Three and 36/100 Dollars ($5,000,000)9,365,633.36) (the “Security Deposit Amount”) to secure the prompt performance of Tenant’s obligations hereunder with respect to the Original Premises and Fifth Floor Must-Take Space. If the Final Date (as such term is defined in the Settlement Agreement) does not occur on or prior to October 23, 1998, then Purchaser Landlord shall have the right right, but shall not be obligated, to reduce draw on the aforesaid Letter of Credit and apply all or any portion of the proceeds therefrom to cure any Event of Default, in which event Tenant shall be obligated to deposit with Landlord cash or additional letter(s) of credit in an amount equal to the deficiency necessary to restore the face amount of the Letter of Credit to Two Million Five Hundred Thousand Dollars the Security Deposit Amount within five ($2,500,0005) until Business Days after written notice from Landlord. To the fifth (5th) day after the date when Purchaser receives notice of the occurrence of the Final Date. If (x) Purchaser so elects to reduce the amount of the Letter of Creditextent not forfeited or otherwise used as provided herein, and (y) Purchaser fails to increase provided the amount Premises are vacated in good condition, reasonable wear and tear excepted, as described in Article 23 of this Lease, the Letter of Credit shall be returned to Five Million Dollars Tenant within thirty ($5,000,00030) on or prior to the fifth (5th) day days after the date when Purchaser receives notice termination of the occurrence of the Final Date, then Purchaser this Lease. Landlord shall be deemed to be in material default in respect of Purchaser's obligations hereunder. If (x) Purchaser so elects to reduce the amount of the Letter of Credit hereunder (and has not thereafter increased the amount of the Letter of Credit to Five Million Dollars ($5,000,000)), (y) Purchaser defaults hereunder, and (z) Sellers elect to terminate this Agreement pursuant to Section 14.1 hereof by reason of such default, then Purchaser shall pay to Sellers, simultaneously with such termination, an amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000), which Sellers shall have the right to retain (in addition to the other amounts to which Sellers are entitled under Section 14.1 hereof). Sellers acknowledge that Xxxxxx Affiliate, acting alone, shall have the right to draw upon deliver the Letter of Credit to the extent that Sellers have purchaser or any assignee of Landlord’s interest in the right Premises or the Building, and following written notice thereof to do so under this AgreementTenant, in which case Xxxxxx Affiliate Landlord shall pay be discharged from any further liability with respect to the other Sellers Letter of Credit. This provision shall apply also to any and all subsequent transferors of the Landlord’s interest in this Lease. If the Tenant fails to take possession of the Premises as required by this Lease, the proceeds of the Letter of Credit in accordance with the other Sellers' respective shares therein. If Xxxxxx Affiliate so draws upon the Letter of Credit, then Xxxxxx Affiliate shall indemnify the other Sellers, not be deemed liquidated damages and hold the other Sellers harmless, Landlord’s use thereof pursuant to this Article 2 shall not preclude Landlord from and against any and recovering from Tenant all liability, damage, loss, cost or expense (including, without limitation, reasonable attorneys' fees and expenses) that are additional damages incurred by the other Sellers to the extent deriving from Xxxxxx Affiliate's drawing upon the Letter of Credit in violation of this AgreementLandlord.

Letter of Credit as Security. Subject to 52.1 Letters of Credit. On or before the provisions of this Section 3.1 and Section 16 hereofdate (the "LC Delivery Date") that is ----------------- fourteen days after the Access Delivery Date, Purchaser Lessee shall deliver to Sellers, on or prior to the date hereof (as to which date time shall be of the essence), Lessor a "clean" unconditional and irrevocable standby letter of credit (the "Initial Letter of Credit") for the account of Purchasers, naming Sellers as the beneficiaries thereunder, for a term of not less than six (6) months, issued by and drawn on a commercial bank that is a member of the New York Clearinghouse Association (a "Qualified Bank"), in the amount of Five Million Dollars $1,087,500.00 ($5,000,000the "Letter of Credit Required Amount"). If Lessee's failure to deliver the Final Initial Letter of Credit by the LC Delivery Date (as such term is defined in shall be a default by Lessee under this Lease, without the Settlement Agreement) does not occur on obligation of Lessor to provide any notice or prior opportunity to October 23cure. Without limiting any of Lessor's rights or remedies under this Lease, 1998, then Purchaser Lessor shall have no obligation to disburse any portion of the right Allowance until the Initial Letter of Credit is delivered to reduce Lessor. The Initial Letter of Credit, together with all substitute or replacement letters of credit delivered to Lessor from time to time pursuant to this Paragraph 52, are collectively referred to herein as the aforesaid amount "Letters of Credit"; and the issuer of the Initial Letter of Credit, together with the issuer(s) of all subsequent Letters of Credit, are collectively referred to herein as the "Issuers." Each Letter of Credit shall be an irrevocable, unconditional and transferable letter of credit in the Letter of Credit Required Amount, shall be issued by a financial institution reasonably acceptable to Two Million Five Hundred Thousand Dollars ($2,500,000) until Lessor, shall be substantially in the fifth (5th) day after form of Exhibit "B" hereto and otherwise in form and substance reasonably acceptable to Lessor and, without limiting the date when Purchaser receives notice generality of the occurrence foregoing, shall permit Lessor to draw upon it from time to time upon delivery by Lessor to the Issuer of a statement certifying that either (A) Lessee has failed to pay or perform one or more of its obligations under this Lease and/or the Final Date. If Lease Improvement Note (xas defined below), or (B) Purchaser so elects Lessor is entitled to reduce the amount of the Letter of Credit, and (y) Purchaser fails to increase the amount of make a full drawing under the Letter of Credit as a result of (1) Lessee's failure to Five Million Dollars timely replace such Letter of Credit or ($5,000,0002) on or prior to the fifth (5th) day after the date when Purchaser receives notice termination of the occurrence Lease as a result of the Final Date, then Purchaser shall be deemed to be in material default in respect of PurchaserLessee's obligations hereunderdefault. If (x) Purchaser so elects to reduce the amount of Lessor may draw on the Letter of Credit hereunder (and has not thereafter increased and/or apply the amount of the Letter of Credit to Five Million Dollars ($5,000,000)), (y) Purchaser defaults hereunder, and (z) Sellers elect to terminate this Agreement pursuant to Section 14.1 hereof by reason of such default, then Purchaser shall pay to Sellers, simultaneously with such termination, an amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000), which Sellers shall have the right to retain (Security Deposit in addition to the other amounts to which Sellers are entitled under Section 14.1 hereof). Sellers acknowledge that Xxxxxx Affiliate, acting alone, shall have the right to draw upon the Letter of Credit to the extent that Sellers have the right to do so under this Agreement, in which case Xxxxxx Affiliate shall pay to the other Sellers the proceeds of the Letter of Credit in accordance with the other Sellers' respective shares therein. If Xxxxxx Affiliate so draws upon the Letter of Credit, then Xxxxxx Affiliate shall indemnify the other Sellers, and hold the other Sellers harmless, from and against any and all liability, damage, loss, cost or expense (including, without limitation, reasonable attorneys' fees and expenses) that are incurred by the other Sellers to the extent deriving from Xxxxxx Affiliate's drawing upon the Letter of Credit in violation of this Agreementorder.