Common use of Letter of Credit as Security Clause in Contracts

Letter of Credit as Security. Concurrent with the execution of this ---------------------------- Lease, Tenant shall deliver to Landlord the Letter of Credit (as defined in Section 4.2 below) in the amount of One Million Eight Hundred Seventy-Five Thousand Dollars ($1,875,000), 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. The amount of the Letter of Credit shall be reduced to Seven Hundred Fifty Thousand Dollars ($750,000) on February 1, 2002 if Tenant's net worth on such date (determined in accordance with generally accepted accounting principals ("GAAP")) exceeds Twenty Million Dollars ($20,000,000) and (ii) 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 ($20,000,000). There shall be no further reduction in the stated amount of the Letter of Credit from and after February 1, 2003. The face amount of the Letter of Credit (as reduced above from time to 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 (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), Landlord may, but shall not be required 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 remaining amount of the 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 Section 4.2 below) confirming that the Issuing 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 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, at Landlord's option, to the last assignee of Tenant's 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 (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 Lease 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. Concurrent with the execution of this ---------------------------- Lease, Tenant shall deliver to Landlord the Letter of Credit (as defined in Section 4.2 below) in the amount of One Million Eight Six Hundred SeventyTwenty-Five Thousand Dollars ($1,875,000625,000), 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. The amount of the Letter of Credit shall be reduced to Seven Two Hundred Fifty Thousand Dollars ($750,000250,000) on February 1, 2002 if Tenant's net worth on such date (determined in accordance with generally accepted accounting principals ("GAAP")) exceeds Twenty Million Dollars ($20,000,000) and (ii) the amount of the Letter of Credit shall be further reduced to Three One Hundred Seventy-Twenty- Five Thousand Dollars ($375,000125,000) on February 1, 2003 if Tenant's net worth on such date (determined in accordance with GAAP) continues to exceed Twenty Million Dollars ($20,000,000). There shall be no further reduction in the stated amount of the Letter of Credit from and after February 1, 2003. The face amount of the Letter of Credit (as reduced above from time to 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 (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), Landlord may, but shall not be required 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 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 remaining amount of the 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 Section 4.2 below) confirming that the Issuing 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 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, at Landlord's option, to the last assignee of Tenant's 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 (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 Lease 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. Concurrent with Subject to the execution provisions of this ---------------------------- LeaseSection 3.1 and Section 16 hereof, Tenant Purchaser shall deliver to Landlord 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 Credit") for the account of Purchasers, naming Sellers as the beneficiaries thereunder, for a term of not less than six (as defined in Section 4.2 below6) 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 Five Million Eight Hundred Seventy-Five Thousand Dollars ($1,875,0005,000,000). If the Final Date (as such term is defined in the Settlement Agreement) does not occur on or prior to October 23, which Letter of Credit 1998, then Purchaser shall secure have the full and faithful performance of each and every provision and condition of this Lease right to be performed by Tenant. The reduce the aforesaid amount of the Letter of Credit shall be reduced to Seven Two Million Five Hundred Fifty Thousand Dollars ($750,0002,500,000) on February 1until 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, 2002 if Tenant's net worth on such date (determined in accordance with generally accepted accounting principals ("GAAP")) exceeds Twenty Million Dollars ($20,000,000) and (iiy) 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 ($20,000,000). There 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 no further reduction deemed to be 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 from hereunder (and after February 1, 2003. The face has not thereafter increased the amount of the Letter of Credit to Five Million Dollars (as reduced above from time $5,000,000)), (y) Purchaser defaults hereunder, and (z) Sellers elect to time upon satisfaction 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 foregoing conditions) is hereafter referred right to as the "Face Amount". Anything contained retain (in this Article 4 addition to the contrary notwithstandingother amounts to which Sellers are entitled under Section 14.1 hereof). Sellers acknowledge that Xxxxxx Affiliate, acting alone, shall have 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 (including but not limited right 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), Landlord may, but shall not be required to, draw upon the Letter of Credit for to the payment of any Rentextent that Sellers have the right to do so under this Agreement, interest, late charges or any in which case Xxxxxx Affiliate shall pay to the other sum in default, or for Sellers the payment of any other amount which Landlord may spend or become obligated to spend by reason proceeds of the Event Letter of Default 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 to compensate Landlord for any other loss or damage which Landlord may suffer by reason of the Event of Default, expense (including, without limitation, costs and reasonable attorneys' fees and expenses) that are incurred by Landlord the other Sellers 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 extent deriving from Xxxxxx Affiliate's drawing upon 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 remaining amount of the 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 Section 4.2 below) confirming that the Issuing 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 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 violation 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, at Landlord's option, to the last assignee of Tenant's 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 (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 Lease 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 transfereeAgreement.

Letter of Credit as Security. Concurrent Simultaneously with the execution of this ---------------------------- Lease, Tenant shall deliver provide to Landlord a letter of credit pursuant to Section 2.3 (the “Letter of Credit (as defined in Section 4.2 belowCredit”) in the amount of One Nine Million Eight Three Hundred Seventy-Sixty Five Thousand Six Hundred Thirty Three and 36/100 Dollars ($1,875,000), which Letter of Credit shall 9,365,633.36) (the “Security Deposit Amount”) to secure the full and faithful prompt performance of each Tenant’s obligations hereunder with respect to the Original Premises and every provision and condition of this Lease Fifth Floor Must-Take Space. Landlord shall have the right, but shall not be obligated, to be performed by Tenant. The amount of draw on the 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 reduced obligated to Seven Hundred Fifty Thousand Dollars ($750,000deposit with Landlord cash or additional letter(s) on February 1, 2002 if Tenant's net worth on such date (determined of credit in accordance with generally accepted accounting principals ("GAAP")) exceeds Twenty Million Dollars ($20,000,000) and (ii) an amount equal to the amount of deficiency necessary to restore 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 ($20,000,000). There shall be no further reduction in the stated amount of the Letter of Credit from and after February 1, 2003. The face amount of the Letter of Credit to the Security Deposit Amount within five (5) Business Days after written notice from Landlord. To the extent not forfeited or otherwise used as reduced above provided herein, and provided the 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 Tenant within thirty (30) days after the termination of this Lease. Landlord shall deliver the Letter of Credit to the purchaser or any assignee of Landlord’s interest in the Premises or the Building, and following written notice thereof to Tenant, Landlord shall be discharged from time any further liability with respect to time upon satisfaction the Letter of Credit. This provision shall apply also to any and all subsequent transferors of the foregoing conditions) is hereafter referred to as the "Face Amount". Anything contained Landlord’s interest in this Article 4 Lease. If the Tenant fails to take possession of the contrary notwithstandingPremises as required by this Lease, the Face Amount proceeds 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 (including but not limited to an Event of Default with respect to the obligation to pay Rent or to clean deemed liquidated damages and restore the Premises upon termination of the Lease), Landlord may, but shall not be required 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 Landlord’s use thereof 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 Article 2 shall not be entitled to any interest thereon. If preclude Landlord draws on any portion of the Letter of Credit, from recovering from Tenant shall, within three (3) business days after demand all additional damages incurred by Landlord, either (a) deposit immediately available funds with Landlord in the amount that when added to the remaining amount of the 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 Section 4.2 below) confirming that the Issuing 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 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, at Landlord's option, to the last assignee of Tenant's 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 (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 Lease 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.