Reduction of Security Deposit. (a) The amount of the Security Deposit shall decrease by One Hundred Twenty Thousand and 00/100 Dollars ($120,000.00) annually for five (5) years beginning with the sixth (6th) Lease Year, provided that a Default does not exist at such time and provided the Threshold Tests are satisfied by Tenant or its guarantor, if applicable, at the time of such determination. If any of the Threshold Tests are not met in any given year, the Security Deposit shall remain unchanged.
(b) If at any time the Threshold Tests (defined below) have been satisfied and Tenant or its guarantor, if applicable, has received a rating equal to or better than: (i) NAIC 2 from the National Association of Insurance Commissioners or (ii) BBB from Standard & Poor’s (or its equivalent from another rating agency) (the “Threshold Rating”), then the requirement for Tenant to maintain the Security Deposit shall be terminated and the Letter of Credit shall be cancelled and promptly be returned by Landlord to Tenant (the “Security Deposit Termination”). Notwithstanding the foregoing, if after a Security Deposit Termination has occurred, Tenant or its guarantor, as applicable, fails to satisfy the Threshold Test or the Threshold Rating, then Tenant’s Security Deposit obligation under this Section 33 shall be reinstated and within thirty (30) calendar days of the rating downgrade or failure to satisfy the Threshold Test, Tenant shall deliver to Landlord a Letter of Credit in an amount equal to the amount of the Security Deposit previously required under the Lease, but taking into account any reductions under Section 33.04(a) above which would have been applicable. Tenant shall pay any and all costs and expenses in connection with the issuance of a new Letter of Credit.
(c) Except with respect to a Security Deposit Termination, the Security Deposit shall not be reduced below Three Hundred Thousand and No/100 Dollars ($300,000.00).
Reduction of Security Deposit. Provided that the Reduction Conditions (as defined below) are satisfied, effective on the last day of the thirty-sixth (36th) month following the Rent Commencement Date (the date of such reduction being the “Reduction Date”). Tenant shall have the right to reduce the Security Deposit to the amount of $2,797,443.00. The reduction of the Security Deposit in accordance with the preceding sentence shall be accomplished by Tenant’s delivery to Landlord of a substitute Letter of Credit that satisfies the requirements for a Letter of Credit stated in Section 4.6.2, at which time Landlord shall surrender the prior letter of credit and execute such reasonable documentation as the issuer thereof may require to effect the termination of such prior letter of credit. The following conditions (the “Reduction Conditions”) must be satisfied on the Reduction Date in order for Tenant reduce the amount of the Security Deposit as set forth above:
(i) no Event of Default has previously occurred during the Term; and
(ii) Tenant has closed its next contemplated round of equity financing that results in aggregate proceeds to Tenant of at least $62,500,000.00 in unrestricted US funds and closes, with all such funds either received by, or committed to, Tenant in exchange for shares of Tenant’s capital stock (or securities convertible into Tenant’s capital stock). The closing of such financing shall be evidenced by Tenant’s delivery of updated financial statements in the form previously provided to Landlord and certified by Tenant’s chief financial officer, together with an updated organizational chart of Tenant and such other information evidencing the closing as Landlord may reasonably request.
Reduction of Security Deposit. (a) Commencing as of the last day of the twelfth (12th) month of the Lease Term and continuing on the last day of each twelve (12) month period thereafter through and including the last day of the sixtieth (60th) month of the Lease Term, the Security Deposit shall be reduced by Two Hundred Seventy-Eight Thousand Five Hundred Five and 56/100 Dollars ($278,505.56), provided that Tenant is not in default hereunder (provided that if there is a default hereunder that has occurred, but the cure period related thereto has not expired, the Security Deposit shall be reduced so long as Tenant does cure such default within such cure period). Following each such reduction in the Security Deposit represented by the Letter of Credit, Landlord shall (at no cost to Landlord) (i) accept from the issuer of the Letter of Credit an amendment to the Letter of Credit reducing the Letter of Credit by Two Hundred Seventy-Eight Thousand Five Hundred Five and 56/100 Dollars ($278,505.56), but which does not otherwise amend or modify the same, and (ii) execute and deliver to the issuer of the Letter of Credit such instruments as may be reasonably required by such issuer to effectuate such reduction. Following each such reduction in the Security Deposit represented by cash, Landlord shall refund to Tenant, at Tenant’s option, by check or wire transfer or credit against the next Monthly Rental Installment(s) due, Two Hundred Seventy-Eight Thousand Five Hundred Five and 56/100 Dollars ($278,505.56).
(b) Notwithstanding the provisions of subsection (a) above, in no event shall the Security Deposit be reduced to an amount less than Two Hundred Seventy-Eight Thousand Five Hundred Five and 58/100 Dollars ($278,505.58).
(c) For illustrative purposes, the table below shows the schedule of Security Deposit reductions pursuant to this Section 4.02 provided Tenant has met all requirements set forth above. Last day of twelfth (12th) month of the Lease Term $ 278,505.56 $ 1,392,527.82 Last day of twenty-fourth (24th) month of the Lease Term $ 278,505.56 $ 1,114,022.26 Last day of thirty-sixth (36th) month of the Lease Term $ 278,505.56 $ 835,516.70 Last day of forty-eight (48th) month of the Lease Term $ 278,505.56 $ 557,011.14 Last day of sixtieth (60th) month of the Lease Term $ 278,505.56 $ 278,505.58
Reduction of Security Deposit. Subject to the terms hereof, provided that as of the first day of the twenty-fifth (25th) full calendar month of the Lease Term (the “First Determination Date”), Tenant has not previously been in default under this Lease beyond all applicable notice and cure periods expressly set forth in this Lease and is then not in default under this Lease beyond all applicable notice and cure periods expressly set forth in this Lease, the Security Deposit shall be reduced to equal $125,333.25, and Landlord shall pay to Tenant the amount of $41,777.75 (the “First Reduction Amount”) within thirty (30) days of the First Determination Date (and failure to pay as required shall entitle Tenant to deduct the First Reduction Amount from the Rent next due). In addition, subject to the terms hereof, provided that as of the first day of the forty-ninth (49th) full calendar month of the Lease Term (the "Second Determination Date"), Tenant has not previously been in default under this Lease beyond all applicable notice and cure periods expressly set forth in this Lease and is then not in default under this Lease beyond all applicable notice and cure periods expressly set forth in this Lease, the Security Deposit shall be further reduced to $83,555.50, and Landlord shall pay to Tenant the amount of $41,777.75 (the “Second Reduction Amount”) within thirty (30) days of the Second Determination Date (and failure to pay as required shall entitle Tenant to deduct the Second Reduction Amount from the Rent next due).
Reduction of Security Deposit. The amount of the required Security Deposit shall be reduced in accordance with the following schedule; provided that the following reductions shall only occur, if at the time of such scheduled reductions in the Security Deposit amount, Tenant is not then in default under the Lease beyond any applicable notice and cure period: Months 1 through 18: $ 250,000 Months 19 through 36 $ 150,000 Months 37 through 62 $ 45,426
Reduction of Security Deposit. Provided that (a) on the date that is thirteen (13) months after the Commencement Date, there exists no uncured Event of Default by Tenant under this Lease or the [***] Lease and (b) not more than one (1) Event of Default shall have occurred under this Lease or the [***] Lease during the first thirteen (13) months of the Initial Term, then the Security Deposit shall be applied toward Base Rent due under this Lease in the thirteenth (13th) and fourteenth (14th) months of the Initial Term.
Reduction of Security Deposit. Provided Tenant is not in default of any terms of this Lease at the time the Security Deposit is to be reduced, after the giving of any required notice and the expiration of any cure periods set forth in this Lease, such Security Deposit will be subject to annual reductions equal to Forty-Two Thousand Five Hundred and No/100 Dollars ($42,500.00), effective upon the first day of the thirteenth (13th), twenty-fifth (25th), and thirty-seventh (37th) months of the Term. Such reductions shall be issued as a credit which Tenant may use against future Rent. Upon the thirty-seventh (37th) month of the Term, the remaining Forty-Two Thousand Five Hundred and No/100 Dollars ($42,500.00) of the Security Deposit shall remain in effect through the balance of the Term and any subsequent Term.
Reduction of Security Deposit. The Security Deposit shall be reduced to Seventy-Four Thousand Seven Hundred Fifty-One and 25/100 Dollars ($74,751.25) at the end of the twenty-fourth (24th) month of the Lease Term, provided that (a) no Default has occurred and is then continuing, and (b) the Letter of Credit is then in full force and effect (i.e. it has not been converted to cash). Following such reduction in the Security Deposit, and provided the conditions set forth in clauses (a) and (b) are satisfied, Landlord shall (at no cost to Landlord) (i) accept from the issuer of the Letter of Credit an amendment to the Letter of Credit reducing the Letter of Credit by $74,751.25, but which does not otherwise amend or modify the same, and (ii) execute and deliver to the issuer of the Letter of Credit such instruments as may be reasonably required by such issuer to effectuate such reduction.
Reduction of Security Deposit. Provided that (a) Tenant has not committed a Default hereunder, and (b) all Rent payments made by Tenant were received by Landlord on or before the due date during the prior eighteen (18) month period, on the commencement of the thirty-seventh (37th) full month of the Term, upon written request of Tenant, Landlord shall return to Tenant Fifty Thousand Dollars ($50,000) (or if a Letter of Credit has been delivered in lieu of a cash Security Deposit, then Tenant may amend the Letter of Credit accordingly), thereby reducing the Security Deposit to One Hundred Fifty Thousand Dollars ($150,000) (or if a Letter of Credit has been delivered in lieu of a cash Security Deposit, then Tenant may amend the Letter of Credit accordingly). Provided that (i) Tenant has not committed a Default hereunder, and (ii) all Rent payments made by Tenant were received by Landlord on or before the due date during the prior eighteen (18) month period, on the commencement of the forty-ninth (49th) full month of the Term, upon written request of Tenant, Landlord shall return to Tenant an additional Fifty Thousand Dollars ($50,000) (or if a Letter of Credit has been delivered in lieu of a cash Security Deposit, then Tenant may amend the Letter of Credit accordingly), thereby reducing the Security Deposit to One Hundred Thousand Dollars ($100,000) (or if a Letter of Credit has been delivered in lieu of a cash Security Deposit, then Tenant may amend the Letter of Credit accordingly).
Reduction of Security Deposit. Notwithstanding Section 21.1 above, effective as of the date (the “Reduction Date”) upon which Tenant delivers the L-C (as that term is defined in Section 30.1 below) to Landlord in accordance with the terms and conditions of Article 30 below, the Security Deposit shall be reduced by One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00) such that the Security Deposit shall equal Twenty-Four Thousand Two Hundred Seventy-Five and 19/100 Dollars ($24,275.19). In connection with the foregoing, within thirty (30) days following the Reduction Date, Landlord shall return the amount of the reduction of the Security Deposit (i.e., $150,000.00) held by Landlord pursuant to the terms of this Article 21 in the form of a check payable to Tenant.
