Common use of Reduction in Letter of Credit Amount Clause in Contracts

Reduction in Letter of Credit Amount. Notwithstanding the foregoing provisions of this Section 4 to the contrary, if, as of each anniversary of the Commencement Date (each a “Reduction Date”) the Reduction Conditions (defined below) are met, then, upon written request by Subtenant (and provided that the Reduction Conditions remain satisfied as of the date of Subtenant’s delivery of such written request to Sublandlord), the Letter of Credit may be reduced by an amount equal to $836,802.20 as of the later of (x) each such Reduction Date and (y) the date of delivery of Tenant’s request for such a reduction; provided, however, that in no event will the Letter of Credit Amount be reduced below $2,510,462.64. Any such reduction may be accomplished, at Subtenant’s option, by either (i) Subtenant delivering to Sublandlord an amendment to the then-existing Letter of Credit pursuant to which the Letter of Credit Amount is appropriately reduced, such amendment to be in form and substance reasonably satisfactory to Sublandlord, or (ii) by Subtenant’s delivery to Sublandlord of a Replacement Letter of Credit in the appropriately reduced Letter of Credit Amount (in which event, Sublandlord agrees to promptly agree to execute such documentation as may be required by the Issuing Bank to cause the termination of the previously held Letter of Credit). As used herein, the “Reduction Conditions” shall mean that (A) Subtenant is not in default hereunder (after notice and the passage of any applicable cure period) and (B) Subtenant has not previously been in default hereunder (similarly defined) and (C) no notice of default from Sublandlord to Subtenant is then outstanding (regardless of whether the applicable cure period has expired).

Reduction in Letter of Credit Amount. Notwithstanding On the foregoing provisions condition that (a) Tenant is not in default at the time of the applicable reduction, (b) has not been in default of its monetary obligations under this Section 4 Lease more than two times during the Term, (c) Tenant has had a net income for the immediately preceding fiscal year of Tenant prior to the contrary, ifapplicable reduction (the “Profitability Test”), as shown on Tenant’s Consolidated Statement of each anniversary Operations in its most recent audited annual report, and (d) to the extent Tenant is no longer a public company, Tenant provides Landlord with an audited statement reporting satisfaction of the Commencement Date Profitability Test, then the Letter of Credit Amount shall be reduced as follows: (each a “Reduction Date”i) at the Reduction Conditions end of the 2nd Lease Year, by $170,477.00; (defined belowii) are metat the end of the 3rd Lease Year, thenby $170,477.00; and (iii) at the end of the 5th Lease Year, upon written request by Subtenant (and provided that $170,477.00. If Tenant fails to qualify for any reduction in the Reduction Conditions remain satisfied Letter of Credit Amount due solely to Tenant’s inability to satisfy the Profitability Test as of the date of Subtenant’s delivery the applicable reduction, Tenant shall nevertheless be permitted to effect a reduction of such written request $170,477.00 at any time after the stated reduction date once Tenant satisfies the Profitability Test and delivers proof thereof to Sublandlord)Landlord, provided that Tenant otherwise satisfies the remaining conditions listed above in this Section 4.4.9. Any reduction in the Letter of Credit may Amount for which Tenant qualifies after the applicable reduction date shall not diminish or postpone any subsequent reduction. Except as provided above, there shall be reduced by an amount equal to $836,802.20 as no reductions in the Letter of the later of (x) each such Reduction Date and (y) the date of delivery of Tenant’s request for such a reduction; providedCredit Amount, however, it being understood that in at no event will time shall the Letter of Credit Amount be reduced below less than $2,510,462.64511,431.00. Any such reduction may Tenant shall be accomplishedresponsible, at Subtenant’s optionits sole expense, by either (i) Subtenant delivering for taking all necessary steps to Sublandlord an amendment effect a reduction, provided however that Landlord shall reasonably cooperate with Tenant to the then-existing Letter of Credit pursuant to which amend the Letter of Credit Amount is appropriately reduced, such amendment to be in form and substance reasonably satisfactory to Sublandlord, or (ii) by Subtenant’s delivery to Sublandlord of obtain a Replacement Letter of Credit in the appropriately reduced Letter of Credit Amount (in which event, Sublandlord agrees to promptly agree to execute such documentation as may be required by the Issuing Bank to cause the termination of the previously held Substitute Letter of Credit). As used herein, the “Reduction Conditions” shall mean that (A) Subtenant is not in default hereunder (after notice and the passage of any applicable cure period) and (B) Subtenant has not previously been in default hereunder (similarly defined) and (C) as applicable, at no notice of default from Sublandlord cost to Subtenant is then outstanding (regardless of whether the applicable cure period has expired)Landlord.

Reduction in Letter of Credit Amount. Notwithstanding Provided that, during the foregoing provisions of this Section 4 to 12 month period immediately preceding the contrary, if, as of each anniversary of the Commencement Date (each a “Reduction Date”) the Reduction Conditions (defined below) are met, then, upon written request by Subtenant (and provided that the Reduction Conditions remain satisfied as of the effective date of Subtenant’s delivery any reduction of such written request to Sublandlord), the Letter of Credit Credit, Tenant has timely paid all Rent and Tenant has not been in Monetary Default or material non-Monetary Default more than twice in such 12 month period, and any such Monetary Default or material non-Monetary Default has been cured (the “LC Reduction Conditions”), Tenant may be reduced by an amount equal to $836,802.20 as of the later of (x) each such Reduction Date and (y) the date of delivery of Tenant’s request for such a reduction; provided, however, that in no event will reduce the Letter of Credit Amount be so that the reduced below $2,510,462.64. Any such reduction may be accomplished, at Subtenant’s option, by either (i) Subtenant delivering to Sublandlord an amendment to the then-existing Letter of Credit pursuant Amounts will be as follows: (a) $650,000.00 effective as of first day of the 25th full calendar month following the Commencement Date; and (b) $500,000.00 effective as of first day of the 49th full calendar month following the Commencement Date. Notwithstanding the foregoing, the parties agree that in the event that after March 31, 2016 Tenant maintains not less than $40,000,000.00 in cash as shown on Tenant’s balance sheet for a full 6 calendar month period and provides to which Landlord evidence reasonably satisfactory to Landlord, in its reasonable discretion, and Tenant has timely paid all Rent and no Default has occurred under this Lease (“Additional LC Reduction Conditions”), then Tenant may reduce the Letter of Credit Amount is appropriately reduced, such amendment to be in form and substance reasonably satisfactory to Sublandlord, or (ii) by Subtenant’s delivery to Sublandlord of a Replacement Letter of Credit in so that the appropriately reduced Letter of Credit Amount (in shall be $500,000.00 effective as of the date which eventis 30 days after Tenant provides such satisfactory evidence to Landlord. If Tenant is not entitled to reduce the Letter of Credit Amount as of a particular reduction effective date due to Tenant’s failure to satisfy the LC Reduction Conditions described above, Sublandlord agrees then any subsequent reduction(s) Tenant is entitled to promptly agree to execute such documentation as may hereunder shall be required reduced by the Issuing Bank to cause the termination amount of the previously held reduction Tenant would have been entitled to had Tenant satisfied the LC Reduction Conditions necessary for such earlier reduction except to the extent that Tenant satisfies the Additional LL Reduction Conditions. Notwithstanding anything to the contrary contained herein, if Tenant has been in Default under this Lease at any time prior to the effective date of any reduction of the Letter of Credit). As used herein, the “Reduction Conditions” shall mean that (A) Subtenant is not in default hereunder (after notice Credit Amount and the passage of Tenant has failed to cure such Default within any applicable cure period) and (B) Subtenant has not previously been , then Tenant shall have no further right to reduce the Letter of Credit Amount as described herein. Any reduction in default hereunder (similarly defined) and (C) no notice the Letter of default from Sublandlord Credit Amount shall be accomplished by Tenant providing Landlord with a substitute letter of credit in the reduced amount or an amendment to Subtenant is then outstanding (regardless the existing Letter of whether Credit reflecting the applicable cure period has expired)reduced amount.

Reduction in Letter of Credit Amount. Notwithstanding Tenant has represented to Landlord that proximately following the foregoing provisions parties’ execution of this Section 4 Lease, Tenant shall receive interim funding in the approximate amount of $70,000,000.00 (the “Interim Funding”) which Interim Funding shall be replaced and/or supplemented by permanent funding (which permanent funding is referred to herein as the Capital Investment, as more particularly described below) to finance, in part, Tenant’s business operations at the Premises. Within 5 days of Tenant’s receipt of the Interim Funding, Tenant shall evidence to Landlord Tenant’s receipt of the Interim Funding by: (1) delivery to Landlord of a written certification by Tenant’s Chief Financial Officer in the form attached hereto as Schedule 1, and (2) delivery to Landlord of a full set of transaction documents with respect to and reasonably evidencing the closing of the transaction or transactions which conveyed (or with respect to the contraryCapital Investment, if, will convey) to Tenant both the Interim Funding and the Capital Investment (redacted as reasonably appropriate with respect to certain proprietary matters so long as the remaining portion of each anniversary such documentation unequivocally evidences Tenant’s receipt of the Commencement Date (each a “Reduction Date”) Interim Funding and future receipt of the Reduction Conditions (defined below) are metCapital Investment subject only to regulatory approval). Provided no material Default by Tenant has occurred under the Lease and is continuing, then, upon written request by Subtenant (and provided further that Tenant has received the Reduction Conditions remain satisfied Capital Investment (as opposed to the Interim Funding) from its significant shareholders (whether in the form of equity, common stock, preferred stock or other securities, including, without limitation, subordinated debt, the date right of Subtenantrepayment of which is subordinated to Landlord’s delivery right to receive any and all payments due under the terms of such written request this Lease) on an unrestricted basis to Sublandlordfund Tenant’s normal business operations in an aggregate amount equal to no less than $150,000,000.00 (the “Capital Investment”), and Tenant delivers to Landlord a statement from Tenant’s Chief Financial Officer in the form attached hereto as Schedule 1 certifying Tenant’s receipt thereof, Tenant may either: (a) reduce the Letter of Credit may be reduced by Amount to an amount equal to $836,802.20 90,135.94; or (b) at Tenant’s option, Tenant may deposit with Landlord a cash sum in the amount of $90,135.94, to be held by Landlord as a Security Deposit in accordance with Section 6 of the later Lease (in which event under this clause (b), Tenant shall no longer have an obligation to maintain a Letter of (x) each such Reduction Date and (y) the date of delivery of Tenant’s request for such a reduction; provided, however, that Credit under this Paragraph 1). The reduction in no event will the Letter of Credit Amount under clause (a), if it occurs, shall be reduced below $2,510,462.64. Any such reduction may be accomplished, at Subtenant’s option, accomplished by either (i) Subtenant delivering to Sublandlord an amendment to the then-existing Letter of Credit pursuant to which Tenant providing Landlord with a substitute for the Letter of Credit Amount is appropriately reduced, such amendment to be in form and substance reasonably satisfactory to Sublandlord, or (iiwhich complies with all of the terms of this Section 1) by Subtenant’s delivery to Sublandlord of a Replacement Letter of Credit in the appropriately reduced Letter of Credit Amount (in which event, Sublandlord agrees to promptly agree to execute such documentation as may be required by the Issuing Bank to cause the termination of the previously held Letter of Credit). As used herein, the “Reduction Conditions” shall mean that (A) Subtenant is not in default hereunder (after notice and the passage of any applicable cure period) and (B) Subtenant has not previously been in default hereunder (similarly defined) and (C) no notice of default from Sublandlord to Subtenant is then outstanding (regardless of whether the applicable cure period has expired)amount.

Reduction in Letter of Credit Amount. Notwithstanding 1. Provided that Tenant has met Landlord’s “LC Reduction Conditions” as defined in Section II.F.2 below, Tenant shall be entitled to reduce the foregoing provisions Letter of this Section 4 Credit Amount to the contrary, if, as of each anniversary of amounts set forth below on the Commencement Date dates set forth below (each a “Target Reduction Date”) so that the reduced Letter of Credit Amounts will be as follows: (a) $480,000.00 on the first day of the 24th full calendar month of the Term; (b) $360,000.00 on the first day of the 36th full calendar month of the Term; and (c) $240,000.00 on the first day of the 48th full calendar month of the Term. If Tenant is not entitled to reduce the Letter of Credit Amount as of a particular Target Reduction Date due to Tenant’s failure to satisfy the LC Reduction Conditions (defined described below) are met, then, then upon written request by Subtenant (and provided that satisfying the LC Reduction Conditions remain satisfied as of the date of Subtenant’s delivery of such written request to Sublandlord)Conditions, the Letter of Credit may Amount shall be reduced by an the amount equal to $836,802.20 as of the later of (x) each such reduction Tenant would have been entitled to had Tenant satisfied the LC Reduction Date and (y) the date of delivery of Tenant’s request Conditions necessary for such a reduction; provided, however, that . Any reduction in no event will the Letter of Credit Amount shall be accomplished by Tenant providing Landlord with a substitute letter of credit in the reduced below $2,510,462.64. Any such reduction may be accomplished, at Subtenant’s option, by either (i) Subtenant delivering to Sublandlord amount or an amendment to the then-existing Letter of Credit pursuant reflecting the reduced amount. If Tenant is entitled to which reduce the Letter of Credit Amount is appropriately reducedCredit, such amendment to be in form and substance reasonably satisfactory to Sublandlord, or (ii) by Subtenant’s delivery to Sublandlord of a Replacement Letter of Credit in the appropriately reduced Letter of Credit Amount (in which event, Sublandlord Landlord agrees to promptly agree to execute such documentation as may be provide any authorizations required by the Issuing Bank to cause accomplish such reduction upon the termination Bank’s written request to Landlord. In the event Landlord fails to take the required action to provide any such authorizations required by the Bank within ten (10) Business Days from receipt of Tenant’s written notice requesting Landlord’s required action, Tenant shall deliver a second written notice to Landlord requesting Landlord’s required action which notice shall conspicuously state that Landlord’s failure to act will result in a further reduction of the previously held Letter of Credit). As used herein, the “Reduction Conditions” shall mean that (A) Subtenant is not in default hereunder (after notice and the passage of any applicable cure period) and (B) Subtenant has not previously been in default hereunder (similarly defined) and (C) no notice of default from Sublandlord to Subtenant is then outstanding (regardless of whether the applicable cure period has expired).

Reduction in Letter of Credit Amount. Notwithstanding Provided that Subtenant has not previously been in monetary default hereunder (i.e., beyond notice and the foregoing provisions passage of this Section 4 any applicable grace period) prior to the contrary, if, as of each anniversary date of the Commencement Date applicable reduction request and further provided that Subtenant is not in monetary default (each a “Reduction Date”similarly defined) at the Reduction Conditions (defined below) are met, thentime of such request, upon written request by Subtenant (and provided that the Reduction Conditions remain satisfied as of the date of Subtenant’s delivery of such written request to Sublandlord), the Letter of Credit Amount may be reduced by an amount equal as follows: (i) to $836,802.20 as 983,858, at any time after the last day of the later twelfth (12th) full calendar month of (x) each such Reduction Date the Term; and (yii) to $737,893.50, at any time after the date last day of delivery the twenty fourth (24th) full calendar month of Tenantthe Term; and (iii) to $491,929.00, at any time after the last day of the thirty sixth (36th) full calendar month of the Term. Subject to the condition described above, Sublandlord’s request approval for such requested reduction shall not be unreasonably withheld, conditioned or delayed and shall be communicated to Subtenant within ten (10) business days of Subtenant’s request. Any reduction in the Letter of Credit Amount shall be accomplished by Subtenant providing Sublandlord with a reduction; provided, however, that substitute letter of credit or amendment thereto in the reduced amount. In no event will shall the Letter of Credit Amount be reduced below $2,510,462.64491,929.00 during the Term. Any such reduction may be accomplishedNotwithstanding anything to the contrary contained in this Section 4.8, if, at Subtenantany time, Subtenant is in monetary default hereunder, then, at Sublandlord’s option, by either (i) Subtenant delivering shall be obligated to Sublandlord an amendment to reinstate the then-existing face amount of the Letter of Credit pursuant to which the immediately preceding Letter of Credit Amount described in this Section 4.8 above within ten (10) business days following written notice from Sublandlord; Subtenant’s failure to so reinstate the Letter of Credit Amount is appropriately reduced, such amendment to be in form and substance reasonably satisfactory to Sublandlord, or (ii) by Subtenant’s delivery to Sublandlord of will constitute a Replacement Letter of Credit in the appropriately reduced Letter of Credit Amount (in which event, Sublandlord agrees to promptly agree to execute such documentation as may be required by the Issuing Bank to cause the termination of the previously held Letter of Credit). As used herein, the “Reduction Conditions” shall mean that (A) Subtenant is not in material default hereunder (after without the necessity of additional notice and or the passage of any applicable cure period) and (B) Subtenant has not previously been in default hereunder (similarly defined) and (C) no notice of default from Sublandlord to Subtenant is then outstanding (regardless of whether the applicable cure period has expired)additional grace periods.

Reduction in Letter of Credit Amount. Notwithstanding Subject to the foregoing provisions of this Section 4 6.7 and provided the Letter of Credit has been increased by the Additional Letter of Credit Amount in accordance with Section 6.6 of this Lease, and that Tenant is not then in actual Default of any provision of this Lease beyond the applicable notice and cure period, and provided that no event of Default has occurred at any time prior to the contrary, if, as of each anniversary forty-eighth (48th) full calendar month of the Commencement Date Term, Tenant shall then be entitled to reduce the Letter of Credit by the Additional Allowance Letter of Credit Amount on the last day (each a the “Reduction Date”) the Reduction Conditions (defined below) are met, then, upon written request by Subtenant (and provided that the Reduction Conditions remain satisfied as of the date forty-eighth (48th) full calendar month of Subtenant’s delivery of the Term and Landlord shall reasonably cooperate to enable Tenant to effect such written request to Sublandlord)reduction, at which point the Letter of Credit may be reduced by an amount equal to $836,802.20 as shall remain in place in the original Letter of Credit Amount for the remainder of the later of (x) each such Reduction Date and (y) the date of delivery of Tenant’s request for such a reduction; provided, however, that in no event will Term. If Tenant is entitled to reduce the Letter of Credit Amount be reduced below $2,510,462.64. Any such on the Reduction Date, Landlord shall execute any documents reasonably requested by Tenant and the issuing bank to effectuate the applicable reduction of the Letter of Credit (which may be accomplished, at Subtenant’s option, by either (i) Subtenant delivering to Sublandlord an amendment to include cancellation of the then-existing Letter of Credit pursuant to which the Letter of Credit Amount is appropriately reduced, such amendment to be in form and substance reasonably satisfactory to Sublandlord, or (ii) by Subtenant’s delivery to Sublandlord re-issuance of a Replacement new Letter of Credit in the appropriately reduced original Letter of Credit Amount Amount), within fifteen (in which event, Sublandlord agrees 15) days after Tenant submits such documents to promptly agree to execute such documentation as may be required by the Issuing Bank to cause the termination of the previously held Letter of Credit). As used herein, the “Reduction Conditions” shall mean that (A) Subtenant Landlord for execution provided Tenant is not then in default hereunder (after notice and the passage of any applicable cure period) and (B) Subtenant has not previously been in default hereunder (similarly defined) and (C) no notice of default from Sublandlord to Subtenant is then outstanding (regardless of whether the applicable cure period has expired)Default under this Lease.

Reduction in Letter of Credit Amount. Notwithstanding On the foregoing provisions condition that (a) Tenant is not in default at the time of the applicable reduction, (b) has not been in default of its monetary obligations under this Section 4 Lease more than two times during the Term, (c) Tenant has had a net income for the immediately preceding fiscal year of Tenant prior to the contraryapplicable reduction (the “Profitability Test”) as shown on Tenant’s Consolidated Statement of Operations in its most recent annual report, ifand (d) to the extent Tenant is no longer a public company, as of each anniversary Tenant provides Landlord with an audited statement reporting satisfaction of the Commencement Date Profitability Test, then the Letter of Credit Amount shall be reduced as follows: (each a “Reduction Date”i) at the Reduction Conditions end of the 2nd Lease Year, by $23,977.00; (defined belowii) are metat the end of the 3rd Lease Year, thenby $23,977.00; and (iii) at the end of the 5th Lease Year, upon written request by Subtenant (and provided that $23,977.00. If Tenant fails to qualify for any reduction in the Reduction Conditions remain satisfied Letter of Credit Amount due solely to Tenant’s inability to satisfy the Profitability Test as of the date of Subtenant’s delivery the applicable reduction, Tenant shall nevertheless be permitted to effect a reduction of such written request $23,977.00 at any time after the stated reduction date once Tenant satisfies the Profitability Test and delivers proof thereof to Sublandlord)Landlord, provided that Tenant otherwise satisfies the remaining conditions listed above in this Section 4.4.9. Any reduction in the Letter of Credit may Amount for which Tenant qualifies after the applicable reduction date shall not diminish or postpone any subsequent reduction. Except as provided above, there shall be reduced by an amount equal to $836,802.20 as no reductions in the Letter of the later of (x) each such Reduction Date and (y) the date of delivery of Tenant’s request for such a reduction; providedCredit Amount, however, it being understood that in at no event will time shall the Letter of Credit Amount be reduced below less than $2,510,462.6471,935.00. Any such reduction may Tenant shall be accomplishedresponsible, at Subtenant’s optionits sole expense, by either (i) Subtenant delivering for taking all necessary steps to Sublandlord an amendment effect a reduction, provided however that Landlord shall reasonably cooperate with Tenant to the then-existing Letter of Credit pursuant to which amend the Letter of Credit Amount is appropriately reduced, such amendment to be in form and substance reasonably satisfactory to Sublandlord, or (ii) by Subtenant’s delivery to Sublandlord of obtain a Replacement Letter of Credit in the appropriately reduced Letter of Credit Amount (in which event, Sublandlord agrees to promptly agree to execute such documentation as may be required by the Issuing Bank to cause the termination of the previously held Substitute Letter of Credit). As used herein, the “Reduction Conditions” shall mean that (A) Subtenant is not in default hereunder (after notice and the passage of any applicable cure period) and (B) Subtenant has not previously been in default hereunder (similarly defined) and (C) as applicable, at no notice of default from Sublandlord cost to Subtenant is then outstanding (regardless of whether the applicable cure period has expired)Landlord.

Reduction in Letter of Credit Amount. Notwithstanding On the foregoing provisions condition that (a) Tenant is not in default at the time of the applicable reduction, (b) has not been in default of its monetary obligations under this Section 4 Lease more than two times during the Term, (c) Tenant has had a net income for the immediately preceding fiscal year of Tenant prior to the contraryapplicable reduction (the “Profitability Test”) as shown on Tenant’s Consolidated Statement of Operations in its most recent audited annual report, ifand (d) to the extent Tenant is no longer a public company, as of each anniversary Tenant provides Landlord with an audited statement reporting satisfaction of the Commencement Date Profitability Test, then the Letter of Credit Amount shall be reduced as follows: (each a “Reduction Date”i) at the Reduction Conditions end of the 2nd Lease Year, by $233,131.00; (defined belowii) are metat the end of the 3rd Lease Year, thenby $233,131.00; and (iii) at the end of the 5th Lease Year, upon written request by Subtenant (and provided that $233,131.00. If Tenant fails to qualify for any reduction in the Reduction Conditions remain satisfied Letter of Credit Amount due solely to Tenant’s inability to satisfy the Profitability Test as of the date of Subtenant’s delivery the applicable reduction, Tenant shall nevertheless be permitted to effect a reduction of such written request $233,131.00 at any time after the stated reduction date once Tenant satisfies the Profitability Test and delivers proof thereof to Sublandlord)Landlord, provided that Tenant otherwise satisfies the remaining conditions listed above in this Section 4.4.9. Any reduction in the Letter of Credit may Amount for which Tenant qualifies after the applicable reduction date shall not diminish or postpone any subsequent reduction. Except as provided above, there shall be reduced by an amount equal to $836,802.20 as no reductions in the Letter of the later of (x) each such Reduction Date and (y) the date of delivery of Tenant’s request for such a reduction; providedCredit Amount, however, it being understood that in at no event will time shall the Letter of Credit Amount be reduced below less than $2,510,462.64699,395.00. Any such reduction may Tenant shall be accomplishedresponsible, at Subtenant’s optionits sole expense, by either (i) Subtenant delivering for taking all necessary steps to Sublandlord an amendment effect a reduction, provided however that Landlord shall reasonably cooperate with Tenant to the then-existing Letter of Credit pursuant to which amend the Letter of Credit Amount is appropriately reduced, such amendment to be in form and substance reasonably satisfactory to Sublandlord, or (ii) by Subtenant’s delivery to Sublandlord of obtain a Replacement Letter of Credit in the appropriately reduced Letter of Credit Amount (in which event, Sublandlord agrees to promptly agree to execute such documentation as may be required by the Issuing Bank to cause the termination of the previously held Substitute Letter of Credit). As used herein, the “Reduction Conditions” shall mean that (A) Subtenant is not in default hereunder (after notice and the passage of any applicable cure period) and (B) Subtenant has not previously been in default hereunder (similarly defined) and (C) as applicable, at no notice of default from Sublandlord cost to Subtenant is then outstanding (regardless of whether the applicable cure period has expired)Landlord.

Reduction in Letter of Credit Amount. Notwithstanding the foregoing provisions of this Section 4 Provided no more than one (1) Default has occurred hereunder prior to the contrary, if, as of each anniversary effective date of the Commencement Date (each a “Reduction Date”) the Reduction Conditions (defined below) are met, then, upon written applicable reduction request by Subtenant (and further provided that Tenant is not in default at the Reduction Conditions remain satisfied as of the date of Subtenant’s delivery time of such written request, Tenant may request to Sublandlord), in writing that Landlord approve a reduction in the Letter of Credit may be reduced by an amount equal Amount as follows: (i) to $836,802.20 as 168,750.00, at any time after the last day of the later 18th month of (x) each such Reduction Date the Term; and (yii) to $112,500.00, at any time after the last day of the 36th month of the Term. Landlord shall approve such reduction if the foregoing conditions have been met, provided that Tenant provides to Landlord documentation reasonably acceptable to Landlord as set forth in Tenant’s most recent 10-Q statements filed with the Securities and Exchange Commission (or similar documentation reasonably acceptable to Landlord) indicating that for the two (2) fiscal quarters immediately preceding the date upon which Tenant has requested the applicable reduction (i) Tenant’s tangible net worth was at least $100,000,000.00, and (ii) Tenant’s ratio of delivery of current assets to current liabilities was at least 1.20%. Landlord shall respond to Tenant’s request for such within 30 days of Landlord’s receipt of the documentation required in the preceding sentence. Any reduction in the Letter of Credit Amount shall be accomplished by Tenant providing Landlord with a reduction; provided, however, that substitute letter of credit or amendment thereto in the reduced amount. In no event will shall the Letter of Credit Amount be reduced below $2,510,462.64112,500.00 during the initial Term. Any such reduction may be accomplished, at Subtenant’s option, by either (i) Subtenant delivering to Sublandlord an amendment Notwithstanding anything in the foregoing to the then-existing Letter contrary, if Tenant is not entitled to a reduction because more than one (1) Default has occurred, and one or more of Credit pursuant those previous Defaults was a Monetary Default, then up to which a maximum of one (1) previous Monetary Default shall not be counted as a Default solely for purposes of this paragraph 2(f) if Tenant cured such Monetary Default within 5 days after the Letter of Credit Amount is appropriately reduced, such amendment to be in form and substance reasonably satisfactory to Sublandlord, or (ii) by Subtenant’s delivery to Sublandlord of a Replacement Letter of Credit in the appropriately reduced Letter of Credit Amount (in which event, Sublandlord agrees to promptly agree to execute such documentation as may be required by the Issuing Bank to cause the termination expiration of the previously held Letter 5-day cure period set forth in Section 18(a) of Credit). As used hereinthe Lease and Landlord accepted such cure, the “Reduction Conditions” provided that nothing herein shall mean that (A) Subtenant is not in default hereunder (after notice and the passage require Landlord to accept a late cure of any applicable cure period) and (B) Subtenant has not previously been in default hereunder (similarly defined) and (C) no notice of default from Sublandlord to Subtenant is then outstanding (regardless of whether the applicable cure period has expired)Default.