Common use of Security Deposit and Letter of Credit Clause in Contracts

Security Deposit and Letter of Credit. To secure its obligations under this Lease, Tenant will, within three (3) business days after Tenant's receipt of a fully executed original copy of this Lease, pay Landlord the Security Deposit and deliver to the Letter of Credit (the "Additional Security Deposit"). The effectiveness of this Lease is conditioned upon Tenant's timely delivery of the Security Deposit and the Additional Security Deposit. In the event of Tenant's Default as provided in Paragraph 18 of this Lease, Landlord may, but shall not be required to, use, apply or retain all or any part of the Security Deposit and Additional Security Deposit, to the extent required to satisfy Tenant's obligations hereunder including without limitation the payment of any Base Rent, Additional 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 Tenant's Default or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's Default, including, without limitation, costs and attorneys' fees incurred by Landlord to recover possession of the Premises following a Default by Tenant hereunder, all without prejudice to any other right or remedy Landlord may have against Tenant. If the Security Deposit, Additional Security Deposit or any portions thereof are so used, then Tenant shall within ten (10) business days after its receipt of a written demand from Landlord deposit cash in an amount sufficient to restore the cash Security Deposit to its original sum and deposit cash or a new Letter of Credit in an amount sufficient to restore the Additional Security Deposit. Notwithstanding the foregoing or anything to the contrary contained in this Lease, Landlord shall look to the cash portion of the Security Deposit and Additional Security Deposit, if any, before drawing on any Letter of Credit. If Tenant fails to maintain, renew or replace a Letter of Credit at least thirty (30) days before its expiration, Landlord may, without prejudice to any other right or remedy, draw upon the Letter of Credit. Any amount drawn on by the Landlord but not applied by Landlord to satisfy Tenant's obligations hereunder shall be held by Landlord as part of the Additional Security Deposit. Landlord may commingle the Security Deposit and cash portion of any Additional Security Deposit with Landlord's other funds. In the event of bankruptcy or other insolvency proceedings filed by or against Tenant, the Security Deposit and any cash portion of the Additional Security Deposit 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. The Letter of Credit shall permit full or partial draws by Landlord. Tenant shall pay all expenses, points or fees incurred by Tenant in obtaining, maintaining and renewing the Letter of Credit, provided Landlord shall be responsible for any fees relating to transferring or reissuing the Letter of Credit due to a loan by Landlord or Landlord's sale of the Premises. If Tenant has not been in Default at any time prior to or as of the end of the twenty-fourth (24th) full calendar month of the Term, then Landlord will surrender the existing Letter of Credit to Tenant. At the termination of this Lease, Landlord shall return any remaining Security Deposit and Additional Security Deposit, without interest, upon receipt of Tenant's forwarding address, or as provided by law, whichever is later (but in no event later than thirty (30) days after the date of termination of this Lease). Tenant shall not assign or encumber the Security Deposit or Additional Security Deposit, or attempt to do so, and Landlord shall not be bound by any such assignment or encumbrance. Landlord shall only draw upon the Letter of Credit following a Default and only to the extent required to cure the Default. In the event that Landlord draws upon the Letter of Credit solely due to Tenant's failure to renew the Letter of Credit at least thirty (30) days before its expiration (i) such failure to renew shall not constitute a Default hereunder and (ii) Tenant shall at any time thereafter be entitled to provide Landlord with a replacement Letter of Credit that satisfies the requirements hereunder, at which time Landlord shall return the unapplied cash proceeds of the original Letter of Credit drawn by Landlord.

Security Deposit and Letter of Credit. To secure its obligations under this Lease, Tenant will, within three (3) business days after Tenant's receipt of a fully executed original copy Sublessee shall deposit with ------------------------------------- Sublessor upon execution of this LeaseSublease, pay Landlord the Security Deposit and deliver to the Letter sum of Credit twenty three thousand one hundred ($23,100.00) dollars (the "Additional Security Deposit"). The effectiveness , in cash, as security for the performance by Sublessee of the terms and conditions of this Lease is conditioned upon Tenant's timely delivery of the Security Deposit and the Additional Security DepositSublease. In the event of Tenant's Default as provided in Paragraph 18 If Sublessee fails to pay rent or other charges due hereunder or otherwise defaults with respect to any provision of this LeaseSublease, Landlord may, but shall not be required tothen Sublessor may draw upon, use, apply or retain all or any part portion of the Security Deposit and Additional Security Deposit, to the extent required to satisfy Tenant's obligations hereunder including without limitation for the payment of any Base Rentrent or other charge in default or breach, Additional Rent, interest, late charges or any other sum in Default, or for the payment of any other amount sum which Landlord may spend or Sublessor has become obligated to spend pay by reason of TenantSublessee's Default default, or to compensate Landlord Sublessor for any other loss or damage which Landlord may suffer by reason of Tenant's Default, including, without limitation, costs and attorneys' fees incurred by Landlord to recover possession of the Premises following a Default by Tenant hereunder, all without prejudice to any other right or remedy Landlord may have against TenantSublessor has suffered thereby. If Sublessor so uses or applies all or any portion of the Security Deposit, Additional Security Deposit or any portions thereof are so usedthen Sublessee, then Tenant shall within ten (10) business days after its receipt of a written demand from Landlord therefor, shall deposit cash with Sublessor in an the amount sufficient required to restore the cash Security Deposit to the full amount stated above, and failure by Sublessee to do so shall constitute a default and breach under this Sublease. Sublessor shall not be required to keep the Security Deposit separate form its original sum general accounts, and deposit cash shall have no obligation or a new Letter liability for payment of Credit in an amount sufficient to restore interest on the Additional Security Deposit. Notwithstanding In the foregoing or anything to the contrary contained event Sublessor assigns its interest in this LeaseSublease, Landlord Sublessor shall look deliver to the cash portion its assignee so much of the Security Deposit as is then held by Sublessor. Upon the expiration or earlier termination of this Sublease, if Sublessee is not in default, Sublessor shall return to Sublessee so much of the Security Deposit as has not been applied by Sublessor pursuant to this paragraph, or which is not otherwise required to cure Sublessee's defaults. Additionally, in the event that Sublessee's cash and Additional securities, as reported in Sublessee's quarterly and annual filings with the Securities and Exchange Commission ("SEC") on forms 10-QSB and 10-KSB (the "Forms") respectively, shall fall below one million five hundred thousand ($1,500,000.00) dollars Sublessee shall obtain and keep current throughout the remaining lease term a letter of credit in favor of Sublessor, from a reputable bank or financial institution, in the amount of two hundred thirty-two thousand one hundred thousand ($232,100.00) dollars ("Letter of Credit"), subject to annual review of Sublessee's credit. Sublessee shall provide copies of the Forms to Sublessor within five days (5) days of filing the Forms with the SEC. If after drawing upon the Security Deposit, if any, before drawing on any Letter of Credit. If Tenant Sublessee still fails to maintain, renew pay rent or replace a Letter of Credit at least thirty (30) days before its expiration, Landlord may, without prejudice to any other right or remedy, draw upon the Letter of Credit. Any amount drawn on by the Landlord but not applied by Landlord to satisfy Tenant's obligations hereunder shall be held by Landlord as part of the Additional Security Deposit. Landlord may commingle the Security Deposit and cash portion of any Additional Security Deposit with Landlord's other funds. In the event of bankruptcy or other insolvency proceedings filed by or against Tenant, the Security Deposit and any cash portion of the Additional Security Deposit shall be deemed to be applied first to the payment of Rent and other charges due Landlord for hereunder or otherwise defaults with respect to any provision of this Sublease, then Sublessor may draw upon, use, apply or retain all periods prior to the effective date or any portion of such proceedings. The Letter of Credit shall permit full or partial draws by Landlord. Tenant shall pay all expenses, points or fees incurred by Tenant in obtaining, maintaining and renewing the Letter of Credit, provided Landlord shall be responsible for any fees relating to transferring or reissuing the Letter of Credit due for the payment of any rent or other charge in default or breach, for the payment of any other sum which Sublessor has become obligated to a loan pay by Landlord or Landlordreason of Sublessee's sale of the Premises. If Tenant has not been in Default at any time prior to or as of the end of the twenty-fourth (24th) full calendar month of the Term, then Landlord will surrender the existing Letter of Credit to Tenant. At the termination of this Lease, Landlord shall return any remaining Security Deposit and Additional Security Deposit, without interest, upon receipt of Tenant's forwarding addressdefault, or as provided by law, whichever is later (but in no event later than thirty (30) days after the date of termination of this Lease). Tenant shall not assign to compensate Sublessor for any loss or encumber the Security Deposit or Additional Security Deposit, or attempt to do so, and Landlord shall not be bound by any such assignment or encumbrance. Landlord shall only draw upon the Letter of Credit following a Default and only to the extent required to cure the Default. In the event that Landlord draws upon the Letter of Credit solely due to Tenant's failure to renew the Letter of Credit at least thirty (30) days before its expiration (i) such failure to renew shall not constitute a Default hereunder and (ii) Tenant shall at any time thereafter be entitled to provide Landlord with a replacement Letter of Credit that satisfies the requirements hereunder, at damage which time Landlord shall return the unapplied cash proceeds of the original Letter of Credit drawn by LandlordSublessor has suffered thereby.

Security Deposit and Letter of Credit. To secure its obligations under this Lease, (a) Tenant will, within three (3) business days after Tenant's receipt of a fully executed original copy concurrently with the execution of this Lease, pay has deposited with Landlord the Security Deposit sum set forth in the BASIC LEASE INFORMATION attached hereto, the receipt of which is hereby acknowledged by Landlord as security for the faithful performance by Tenant of all terms, covenants and deliver conditions of this Lease. Tenant agrees that Landlord may apply the security deposit to remedy any failure by Tenant to repair or maintain the Letter of Credit (the "Additional Security Deposit")Premises or to perform any other terms, covenants and conditions contained herein or make any payment owing hereunder. The effectiveness If Xxxxxx has kept and performed all terms, covenants and conditions of this Lease is conditioned upon Tenantduring the Term, Landlord will, within thirty (30) days after the expiration hereof, promptly return the security deposit to Tenant or the last permitted assignee of Xxxxxx's timely delivery interest hereunder. Should Landlord use any portion of the Security Deposit security deposit to cure any default by Tenant hereunder, Tenant shall forthwith replenish the security deposit to the original amount. Landlord shall not be required to keep the security deposit separate from its general funds, and Tenant shall not be entitled to interest on any such deposit. Upon the Additional Security Deposit. In the event occurrence of Tenant's any Events of Default (as provided defined in Paragraph 18 of this Lease) the security deposit shall become due and payable to Landlord to the extent required to compensate Landlord for damages incurred, or to reimburse Landlord as provided herein, in connection with any such Event of Default. (b) Concurrently with execution of this Lease by Xxxxxx, Tenant shall deliver to Landlord as security for the faithful performance of all of its obligations under this Lease an unconditional and irrevocable letter of credit ("Letter of Credit") in the amount of $150,000 for the benefit of Landlord and any successor in interest of Landlord, issued by a financial institution acceptable to Landlord, and providing for partial drawings. All costs incurred in obtaining the Letter of Credit shall be borne by Xxxxxx. Landlord shall be entitled to draw upon the Letter of Credit if an Event of Default shall occur under the Lease, to the extent of the default. Tenant shall maintain the Letter of Credit in effect in accordance with the terms of this paragraph until 60 days after the later of (i) the expiration of the term of the Lease, or (ii) vacation of the Premises by Xxxxxx. If the stated term of the Letter of Credit would expire prior to such time as Tenant is no longer required to maintain the Letter of Credit in effect under the Lease, prior to its stated expiration Tenant shall renew the Letter of Credit for a period of time until Tenant is no longer required to maintain the Letter of Credit or shall deliver to Landlord a new Letter of Credit in accordance with the terms hereof. If Xxxxxx fails either to give Landlord satisfactory evidence confirming such renewal of the Letter of Credit or to deliver a new Letter of Credit to Landlord at least 20 days prior to the stated expiration of the Letter of Credit in effect, Landlord mayshall be entitled to draw down the full amount of the Letter of Credit prior to the expiration thereof, but and the amount so drawn shall be treated in the manner described in below. Any cash proceeds drawn under the Letter of Credit and not applied by Landlord as provided in paragraph above plus such additional amount as shall be required tonecessary to restore the amount so held by Landlord to the amount of the Letter of Credit shall be held by Landlord as security for the faithful performance by Tenant of all of the provisions of the Lease to be performed or observed by Xxxxxx (the "deposit"). If Tenant fails to pay rent or other charges due under the Lease, useor otherwise defaults with respect to any provision of the Lease, Landlord may at its sole option apply or retain all or any part portion of the Security Deposit and Additional Security Deposit, to the extent required to satisfy Tenant's obligations hereunder including without limitation the payment Letter of any Base Rent, Additional Rent, interest, late charges or any other sum in Default, or Credit for the payment of any rent or other amount charges in default or the payment of any other sum to which Landlord may spend or become obligated to spend entitled by reason of TenantXxxxxx's Default default, or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's Default, including, without limitation, costs and attorneys' fees incurred by thereby. If Landlord to recover possession so uses or applies all or any portion of the Premises following a Default by Tenant hereunder, all without prejudice to any other right or remedy Landlord may have against Tenant. If deposit (including draws under the Security Deposit, Additional Security Deposit or any portions thereof are so usedLetter of Credit), then within thirty (30) days after demand therefor Tenant shall within ten (10) business days after its receipt of a written demand from Landlord deposit cash with Landlord in an amount sufficient to restore the cash Security Deposit amount thereof, and Xxxxxx's failure to its original sum and do so shall be a material breach of the Lease. Landlord's application or retention of the deposit cash or shall not constitute a new Letter waiver of Credit in an amount sufficient to restore the Additional Security Deposit. Notwithstanding the foregoing or anything Tenant's default to the contrary contained extent that the deposit does not fully compensate Landlord for all losses or damages incurred by Landlord in this connection with such default and shall not prejudice any other rights or remedies available to Landlord under the Lease or by law. Landlord shall not be required to keep the deposit separate from its general accounts. If Tenant performs all of Tenant's obligations under the Lease, Landlord the deposit, or so much thereof as has not theretofore been applied by Landlord, shall look be returned, without payment of interest or other increment for its use, to Tenant (or, at Landlord's option, to the cash portion of the Security Deposit and Additional Security Depositlast assignee, if any, before drawing on any Letter of Credit. If Tenant fails to maintain, renew or replace a Letter of Credit at least thirty (30) days before its expiration, Landlord may, without prejudice to any other right or remedy, draw upon the Letter of Credit. Any amount drawn on by the Landlord but not applied by Landlord to satisfy Tenant's obligations hereunder shall be held by Landlord as part of the Additional Security Deposit. Landlord may commingle the Security Deposit and cash portion of any Additional Security Deposit with Landlord's other funds. In the event of bankruptcy or other insolvency proceedings filed by or against Tenant, the Security Deposit and any cash portion of the Additional Security Deposit 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. The Letter of Credit shall permit full or partial draws by Landlord. Tenant shall pay all expenses, points or fees incurred by Tenant in obtaining, maintaining and renewing the Letter of Credit, provided Landlord shall be responsible for any fees relating to transferring or reissuing the Letter of Credit due to a loan by Landlord or Landlord's sale of the Premises. If Tenant has not been in Default at any time prior to or as of the end of the twenty-fourth (24th) full calendar month of the Term, then Landlord will surrender the existing Letter of Credit to Tenant. At the termination of this Lease, Landlord shall return any remaining Security Deposit and Additional Security Deposit, without interest, upon receipt of Tenant's forwarding address, or as provided by law, whichever is later (but in no event later than interest under the Lease) within thirty (30) days after the date later of termination of this Lease). Tenant shall not assign or encumber the Security Deposit or Additional Security Deposit, or attempt to do so, and Landlord shall not be bound by any such assignment or encumbrance. Landlord shall only draw upon the Letter of Credit following a Default and only to the extent required to cure the Default. In the event that Landlord draws upon the Letter of Credit solely due to Tenant's failure to renew the Letter of Credit at least thirty (30) days before its expiration (i) such failure to renew shall not constitute a Default hereunder and expiration of the term of the Lease, or (ii) Tenant shall at any time thereafter be entitled to provide Landlord with a replacement Letter of Credit that satisfies the requirements hereunder, at which time Landlord shall return the unapplied cash proceeds vacation of the original Letter of Credit drawn Premises by LandlordTenant. No trust relationship is created herein between Landlord and Tenant with respect to the deposit.

Security Deposit and Letter of Credit. To secure its obligations (a) If any cash security is deposited by Tenant with Landlord as a security deposit under this Lease, such amount shall be retained by Landlord without interest and not in trust or in a separate account as security for the payment by Tenant will, within three (3) business days after Tenant's receipt of a fully executed original copy the rent herein agreed to be paid and for the faithful performance of the covenants contained in this Lease, pay Landlord the Security Deposit and deliver to the Letter of Credit (the "Additional Security Deposit"). The effectiveness of this Lease is conditioned upon Tenant's timely delivery If at any time Tenant shall be in default under any of the Security Deposit and the Additional Security Deposit. In the event of Tenant's Default as provided in Paragraph 18 provisions of this Lease, Landlord mayshall be entitled, but shall not be required to, use, at its sole discretion to apply or retain all or such security deposit (i) to payment of (A) any part of the Security Deposit and Additional Security Deposit, to the extent required to satisfy Tenant's obligations hereunder including without limitation the payment of any Base Rent, Additional Rent, interest, late charges or any other sum in Default, or rent for the payment of which Tenant shall be in default, beyond applicable notice and cure periods as aforesaid, (B) any expense incurred by Landlord in curing any such default, and/or (C) any other amount which sums due to Landlord may spend in connection with such default or become obligated to spend by reason of Tenant's Default or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's Defaultthe curing thereof, including, without limitation, costs and attorneys' fees any damages incurred by Landlord by reason of such default; or (ii) to recover possession retain the same in liquidation of all or part of the damages suffered by Landlord by reason of such default. Any portion of such deposit which shall not be utilized for any such purpose shall be returned to Tenant upon the expiration of this Lease and surrender of the entire Premises following a Default to Landlord. In the event that Landlord shall apply some or all of the security deposit toward one or more of the items referred to in this Article 34 Tenant shall pay to Landlord an amount equal to the sum so applied in replenishment of the security deposit. Such payment shall be made by Tenant hereunder, all without prejudice to any other right or remedy Landlord may have against Tenant. If the Security Deposit, Additional Security Deposit or any portions thereof are so used, then Tenant shall within ten five (105) business days after its receipt Landlord’s request therefor. (b) Tenant shall deliver to Landlord, upon Tenant’s execution of a written demand from Landlord deposit cash in an amount sufficient to restore the cash Security Deposit to its original sum and deposit cash or a new Letter of Credit in an amount sufficient to restore the Additional Security Deposit. Notwithstanding the foregoing or anything to the contrary contained in this Lease, Landlord shall look to the cash portion of the Security Deposit and Additional Security Deposit, if any, before drawing on any Letter of Credit. If Tenant fails to maintain, renew or replace a Letter of Credit at least thirty (30as hereinafter defined) days before its expirationin the amount of one hundred sixty-nine thousand one hundred thirty-three and 25/100 dollars ($169,133.25), Landlord may, without prejudice to any other right or remedy, draw upon as security for the Letter of Credit. Any amount drawn on faithful performance and observance by the Landlord but not applied by Landlord to satisfy Tenant's obligations hereunder shall be held by Landlord as part Tenant of the Additional Security Deposit. Landlord may commingle the Security Deposit terms, covenants and cash portion conditions of any Additional Security Deposit with Landlord's other funds. In the event of bankruptcy or other insolvency proceedings filed by or against Tenant, the Security Deposit and any cash portion of the Additional Security Deposit 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 proceedingsthis Lease. The Letter of Credit shall be in the form of a clean, irrevocable, non-documentary and unconditional letter of credit (the “Letter of Credit”) issued by and drawable upon any commercial bank which is a member of the New York Clearing House Association or other bank satisfactory to Landlord, trust company, national banking association or savings and loan association with offices for banking purposes in the Washington, D.C., metropolitan area or by facsimile (the “Issuing Bank”), which has outstanding unsecured, uninsured and unguaranteed indebtedness, or shall have issued a letter of credit or other credit facility that constitutes the primary security for any outstanding indebtedness (which is otherwise uninsured and unguaranteed), that is then rated, without regard to qualification of such rating by symbols such as “+” or “-” or numerical notation, “Aa” or better by Xxxxx’x Investors Service and “AA” or better by Standard & Poor’s Rating Service, and has combined capital, surplus and undivided profits of not less than $2,000,000,000. Attached hereto as Exhibit “I” is a form of Letter of Credit that is acceptable to Landlord. The Letter of Credit shall (a) name Landlord as beneficiary, (b) have a term of not less than one year, (c) permit full multiple drawings, (d) be fully transferable by Landlord without the payment of any fees or partial draws charges by Landlord, and (e) otherwise be in form and content satisfactory to Landlord. Tenant shall pay all expenses, points or fees incurred by Tenant in obtaining, maintaining and renewing If upon any transfer of the Letter of Credit, provided Landlord any fees or charges shall be responsible for any so imposed, then such fees relating to transferring or reissuing charges shall be payable solely by Tenant and the Letter of Credit due shall so specify. The Letter of Credit shall provide that it shall be deemed automatically renewed, without amendment, for consecutive periods of one year each thereafter during the Term (and in no event shall the Letter of Credit expire prior to a loan the 90th day following the Expiration Date) unless the Issuing Bank sends duplicate notices (the “Non-Renewal Notices”) to Landlord by Landlord or Landlord's sale certified mail, return receipt requested (addressed “Attention: Property Manager”), not less than 60 days next preceding the then expiration date of the PremisesLetter of Credit stating that the Issuing Bank has elected not to renew the Letter of Credit. If Tenant has not been The Issuing Bank shall agree with all drawers, endorsers and bona fide holders that drafts drawn under and in Default compliance with the terms of the Letter of Credit will be duly honored upon presentation to the Issuing Bank at any time an office location in the Washington, D.C., metropolitan area. The Letter of Credit shall be subject in all respects to the International Standby Practices 1998, International Chamber of Commerce Publication No. 590. If, prior to or as of the end of the twenty-fourth (24th) full calendar month second Lease Year, no Tenant default shall have occurred and be continuing under this Lease, then as of the Termfirst day of the third Lease Year the amount of the Letter of Credit shall be reduced to the amount of one hundred twelve thousand seven hundred fifty-five and 50/100 dollars ($112,755.50). If, prior to the end of the third Lease Year, no Tenant default shall have occurred and be continuing under this Lease and Tenant shall not have exercised its right to terminate under Section 44, then as of the first day of the fourth Lease Year the amount of the Letter of Credit shall be reduced to the amount of fifty-six thousand three hundred seventy-seven and 75/100 dollars ($56,377.75). Tenant may then effectuate said reductions by delivering to Landlord will surrender an amendment to the existing Letter of Credit or a replacement Letter of Credit in the reduced amount that otherwise satisfies the requirements in this Section 34(b). In the event the Tenant delivers a new replacement Letter of Credit, the Landlord shall return the existing Letter of Credit to the issuing bank of such existing Letter of Credit within seven (7) business days after the Landlord receives written notice from an authorized representative of such issuing bank confirming the address and the party to whose attention the existing Letter of Credit shall be returned. If at any time Tenant shall be in default under any of the provisions of this Lease or if Landlord receives a Non-Renewal Notice, Landlord shall have the right by sight draft to draw, at its election, all or a portion of the proceeds of the Letter of Credit and thereafter hold, use, apply, or retain the whole or any part of such proceeds, as the case may be: (i) to payment of (A) any rent for the payment of which Tenant shall be in default as aforesaid, (B) any expense incurred by Landlord in curing any such default, and/or (C) any other sums due to Landlord in connection with such default or the curing thereof, including, without limitation, any damages incurred by Landlord by reason of such default; or (ii) or as a cash security deposit, unless and until, in the case of Landlord having received a Non-Renewal Notice, Tenant delivers to Landlord a substitute Letter of Credit which meets the requirements of this Article 34. If Landlord applies or retains any part of the proceeds of the Letter of Credit, or cash security, Tenant, upon demand, shall deposit with Landlord the amount so applied or retained so that Landlord shall have the full amount thereof on hand at all times during the Term. At Landlord shall not be obligated to pay interest on any cash proceeds of the termination security deposit and Landlord shall not be required to keep any cash proceeds of the security deposit segregated from Landlord’s other funds. If Tenant shall comply with all of the terms, covenants and conditions of this Lease, Landlord the Letter of Credit or cash security, as the case may be, shall return any remaining Security Deposit and Additional Security Deposit, without interest, upon receipt of Tenant's forwarding address, be returned to Tenant on or as provided by law, whichever is later (but in no event later than thirty (30) within 10 days after the date 91st day after the Expiration Date and after delivery of termination possession of the Premises to Landlord in the manner required by this Lease). (c) Upon a sale or other transfer of the Property or the Building, or any financing of Landlord’s interest therein, Landlord shall have the right to transfer the Letter of Credit or the cash security to its transferee or lender. With respect to the Letter of Credit, within five business days after notice of such transfer or financing, Tenant, at its sole cost, shall arrange for the transfer of the Letter of Credit to the new landlord or the lender, as designated by Landlord in the foregoing notice or have the Letter of Credit reissued in the name of the new landlord or the lender. Upon such transfer, Tenant shall look solely to the new landlord or lender for the return of the Letter of Credit or such cash security and the provisions hereof shall apply to every transfer or assignment made of the Letter of Credit or such cash security to a new landlord. Tenant shall not assign or encumber the Security Deposit or Additional Security Deposit, or attempt to do so, assign or encumber the Letter of Credit or such cash security and neither Landlord nor its successors or assigns shall not be bound by any such assignment action or attempted assignment, or encumbrance. Landlord shall only draw upon the Letter of Credit following a Default and only to the extent required to cure the Default. In the event that Landlord draws upon the Letter of Credit solely due to Tenant's failure to renew the Letter of Credit at least thirty (30) days before its expiration (i) such failure to renew shall not constitute a Default hereunder and (ii) Tenant shall at any time thereafter be entitled to provide Landlord with a replacement Letter of Credit that satisfies the requirements hereunder, at which time Landlord shall return the unapplied cash proceeds of the original Letter of Credit drawn by Landlord.

Security Deposit and Letter of Credit. To secure its obligations under Concurrent with Xxxxxx's execution of this Lease, Tenant willshall deposit with Landlord a security deposit (the "SECURITY DEPOSIT") in the amount set forth in Section 8 of the Summary. The Security Deposit shall be held by Landlord as security for the faithful performance by Tenant of all the terms, within three (3) business days after Tenant's receipt covenants, and conditions of a fully executed original copy this Lease to be kept and performed by Tenant during the Lease Term. If Tenant defaults with respect to any provisions of this Lease, pay Landlord including, but not limited to, the Security Deposit and deliver provisions relating to the Letter payment of Credit (the "Additional Security Deposit"). The effectiveness of this Lease is conditioned upon Tenant's timely delivery of the Security Deposit and the Additional Security Deposit. In the event of Tenant's Default as provided in Paragraph 18 of this LeaseRent, Landlord may, but shall not be required to, use, apply or retain all or any part of the Security Deposit and Additional Security Deposit, to the extent required to satisfy Tenant's obligations hereunder including without limitation for the payment of any Base Rent, Additional Rent, interest, late charges Rent or any other sum in Defaultdefault, or for the payment of any other amount which that Landlord may spend or become obligated to spend by reason of Tenant's Default default, or to compensate Landlord for any other loss or damage which that Landlord may suffer by reason of Tenant's Default, including, without limitation, costs and attorneys' fees incurred by Landlord to recover possession default. If any portion of the Premises following Security Deposit is so used or applied, Tenant shall, within five (5) days after written demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount, and Xxxxxx's failure to do so shall be a Default by Tenant hereunder, all without prejudice to any other right or remedy Landlord may have against Tenantdefault under this Lease. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit, Additional Security Deposit or any portions thereof are so usedbalance thereof, then shall be returned to Tenant, or, at Landlord's option, to the last assignee of Xxxxxx's interest hereunder, within thirty (30) days following the expiration of the Lease Term. Tenant shall not be entitled to any interest on the Security Deposit. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, and all other provisions of law, now or hereafter in force, which provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the acts or omissions of Tenant or any officer, employee, agent, contractor or invitee of Tenant. In addition to the Security Deposit, Tenant shall deliver to Landlord within ten (10) business days after its receipt Xxxxxx's execution of a written demand from Landlord deposit cash in an amount sufficient to restore the cash Security Deposit to its original sum and deposit cash or a new Letter of Credit in an amount sufficient to restore the Additional Security Deposit. Notwithstanding the foregoing or anything to the contrary contained in this Lease, Landlord shall look to an unconditional, clean, irrevocable demand letter of credit with a term of at least one (1) year (the cash portion "LC") in the amount specified in Section 12 of the Security Deposit Summary of Basic Lease Information (the "ORIGINAL AMOUNT"), which LC shall be issued by a money-center bank (a bank which accepts deposits, maintains accounts, has a local office which will negotiate a letter of credit, and Additional Security Depositwhose deposits are insured by the FDIC) acceptable to Landlord, if anywhich LC shall be in a form and content as set forth in EXHIBIT F, before drawing on attached hereto. Tenant shall pay all expenses, points and/or fees incurred by Tenant in obtaining the LC and in obtaining any Letter replacement LC. The LC shall be transferable by Landlord at Tenant's sole cost and expense. The LC shall be held by Landlord as security for the faithful performance by Tenant of Creditall the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the Term. The LC shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. If Tenant defaults with respect to any provisions of this Lease, including, but not limited to the provisions relating to the payment of Rent, or if Tenant fails to maintain, renew or replace a Letter of Credit the LC at least thirty (30) days before its expiration, Landlord may, without prejudice to any other right or remedybut shall not be required to, draw upon the Letter of Credit. Any amount drawn on by the Landlord but not applied by Landlord to satisfy Tenant's obligations hereunder shall be held by Landlord as part of the Additional Security Deposit. Landlord may commingle the Security Deposit and cash portion of any Additional Security Deposit with Landlord's other funds. In the event of bankruptcy or other insolvency proceedings filed by or against Tenant, the Security Deposit and any cash that portion of the Additional Security Deposit shall be deemed to be applied first to LC necessary for the payment of any Rent and or any other charges due sum in default, or for the payment of any amount that Landlord for all periods prior may spend or may become obligated to the effective date of such proceedings. The Letter of Credit shall permit full or partial draws spend by Landlord. Tenant shall pay all expenses, points or fees incurred by Tenant in obtaining, maintaining and renewing the Letter of Credit, provided Landlord shall be responsible for any fees relating to transferring or reissuing the Letter of Credit due to a loan by Landlord or Landlord's sale of the Premises. If Tenant has not been in Default at any time prior to or as of the end of the twenty-fourth (24th) full calendar month of the Term, then Landlord will surrender the existing Letter of Credit to Tenant. At the termination of this Lease, Landlord shall return any remaining Security Deposit and Additional Security Deposit, without interest, upon receipt reason of Tenant's forwarding addressdefault, or as provided to compensate Landlord for any other loss or damage that Landlord may suffer by lawreason of Tenant's default; provided, whichever is later (but in no event later than thirty (30) days after the date of termination of this Lease). Tenant shall not assign or encumber the Security Deposit or Additional Security Deposithowever, or attempt to do so, and that Landlord shall not be bound by any such assignment or encumbrance. Landlord shall only may draw upon all of the Letter of Credit following a Default and only to the extent required to cure the Default. In LC in the event that Landlord draws upon the Letter of Credit solely due to Tenant's failure Tenant fails to renew the Letter of Credit LC at least thirty (30) days before its expiration expiration; provided further that Tenant may, within ninety (i90) such days of the date upon which Landlord draws upon the LC for the Tenant's failure to timely renew shall not constitute a Default hereunder and (ii) Tenant shall at any time thereafter be entitled to the LC, provide Landlord with a replacement Letter new LC, which LC meets all of Credit that satisfies the requirements hereundercriteria for the LC as set forth in this Paragraph 21, at which time in the amount of the LC then due under the Lease, and upon Landlord's receipt of such new LC, Landlord shall promptly return the unapplied cash proceeds LC to the Tenant. Tenant shall have the right to exchange the LC at any time for a substitute letter of credit, provided that such substitute letter of credit meets all of the criteria for the LC as set forth in this Paragraph 21; provided further that the expiration date of the substitute letter of credit may be different from the expiration date of the LC so long as such substitute letter of credit in no way violates Tenant's obligation to renew the LC at least thirty (30) days before the LC's expiration. Such substitute letter of credit shall thereafter be referred to as the "LC" and, contemporaneously with Xxxxxxxx's receipt of such substitute LC, Landlord shall deliver to Tenant the original Letter LC. The use, application, or retention of Credit the LC, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by law, it being intended that Landlord shall not first be required to proceed against the LC and shall not operate a limitation on any recovery to which Landlord may otherwise be entitled. Any amount of the LC, which is drawn upon by Landlord, but is not used or applied by Landlord, shall be held by Landlord and deemed a security deposit (the "LC SECURITY DEPOSIT"). If any portion of the LC is drawn upon, Tenant shall, within five (5) days after written demand therefor, either (i) deposit cash with Landlord (which cash shall be applied by Landlord to the LC Security Deposit) in an amount sufficient to cause the sum of the LC Security Deposit and the amount of the remaining LC to be equivalent to the amount then required under this Lease or (ii) reinstate the LC to the amount then required under this Lease and Tenant's failure to do so shall be a default under this Lease. If any portion of the LC Security Deposit is used or applied, Tenant shall, within five (5) days after written demand therefor, deposit cash with Landlord (which cash shall be applied by Landlord to the LC Security Deposit) in an amount sufficient to restore the LC Security Deposit to the amount then required under this Lease, and Tenant's failure to do so shall be a default under this Lease. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Real Property and the Building in this Lease and Xxxxxx agrees that in the event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the LC Security Deposit and/or the LC to the transferee or mortgagee, and in the event of such transfer, Tenant shall look solely to such transferee or mortgagee for the return of the LC Security Deposit and/or the LC. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the LC Security Deposit and/or the LC, or any balance thereof, shall be returned to Tenant within thirty (30) days following the expiration of the Term. Tenant shall have the right from time to time during the Term to deliver to Landlord a replacement LC in the Original Amount (less any Annual Reduction [as defined below], if any, theretofore available to Tenant) and otherwise in form and content and by an issuer required by this Exhibit. Contemporaneously with the delivery to Landlord of the replacement LC required by the immediately preceding sentence, Landlord shall deliver to Tenant the LC then held by Landlord.