Common use of Security Letter of Credit Clause in Contracts

Security Letter of Credit. (a) Concurrent with the execution of this Sublease, Subtenant has caused to be issued in favor of Sublandlord a letter of credit (the “Letter of Credit”) in the amount of Three Hundred Five Thousand Nine Hundred Forty Four and 73/100 Dollars ($305,944.73), as security for the faithful performance and observance by Subtenant of the terms, conditions and provisions of this Sublease, including without limitation the surrender of possession of the Premises to Sublandlord as herein provided. It is agreed that in the event Subtenant defaults in respect of any of the monetary terms, provisions and conditions of this Sublease beyond any applicable cure periods, including, but not limited to, the payment of Base Rent and Additional Rent, Sublandlord may draw upon the Letter of Credit, in accordance with its terms, to the extent required for the payment of any Base Rent and Additional Rent or any other sum as to which Subtenant is in default or for any sum which Sublandlord may expend or may be required to expend by reason of Subtenant’s default in respect of any of the terms, covenants and conditions of this Sublease, including but not limited to, any damages or deficiency in the reletting of the Premises, whether such damages or deficiency accrue or accrues before or after summary proceedings or other reentry by Sublandlord. The draw upon the Letter of Credit, or any portion thereof by Sublandlord shall not prevent Sublandlord from exercising any other right or remedy provided by this Sublease or by law and shall not operate as a limitation on any recovery to which Sublandlord may otherwise be entitled. (b) Such Letter of Credit shall be subject to the following terms and conditions. Such Letter of Credit shall: (a) be in form and substance satisfactory to Sublandlord in its reasonable discretion; (b) state on its face that multiple draws are permitted; (c) be issued by a commercial bank acceptable to Sublandlord from time to time and located in the metropolitan Baltimore-Washington, D.C. area for the account of Subtenant, and its permitted successors and assigns under this Sublease; (d) be made payable to, and expressly transferable and assignable at no charge by Sublandlord, which transfer/assignment shall be conditioned only upon the execution of a reasonable and customary written document in connection therewith, whether or not the original account party of the Letter of Credit continues to be the tenant under this Sublease by virtue of a change in name or structure, merger, assignment, transfer or otherwise; (e) be payable at sight upon presentment to a local branch of the issuer of a simple sight draft or certificate stating only that Subtenant is in default under this Sublease and the amount that Sublandlord is owed in connection therewith; (f) be of a term not less than one year, and shall on its face state that the same shall be renewed automatically, without the need for any further written notice or amendment, for successive minimum one-year periods, unless the bank notifies Sublandlord in writing that such bank has elected not to renew the Letter of Credit at least sixty (60) days prior to the expiration date thereof (which will entitle Sublandlord to draw on the Letter of Credit not more than fifteen (15) days before the scheduled expiration date if a replacement Letter of Credit (or substitute acceptable to Sublandlord in its sole and absolute discretion) has not been established and delivered to Sublandlord; provided, however, that the Letter of Credit shall terminate upon the entry of an order authorizing the Sublandlord to reject this Sublease in any proceeding initiated under Title 11 of the United States Code; and (g) at least thirty (30) days prior to the then-current expiration date of such Letter of Credit, either (1) renewed (or automatically and unconditionally extended) from time to time through the ninetieth (90th) day after the expiration of the Term, or (2) replaced with cash in the stated amount. Notwithstanding anything in this Sublease to the contrary, any cure or grace periods set forth in this Sublease for a default shall not apply to any of the foregoing requirements of the Letter of Credit, and, specifically, if any of the aforesaid requirements are not complied with timely, time being of the essence, then an immediate Event of Default shall occur and Sublandlord shall have the right to immediately draw upon the Letter of Credit. If Subtenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Sublease, the Letter of Credit shall be canceled/terminated within thirty (30) days after the expiration date (or sooner termination) of the Sublease and delivery of the entire possession of the Premises to Sublandlord. Notwithstanding anything to the contrary contained herein, in the event Sublandlord draws on any part or all of the Letter of Credit, Subtenant shall, within ten (10) days of such drawing, either restore the Letter of Credit to its original amount, deliver to Sublandlord a substitute letter of credit (complying with the foregoing requirements) or cash in such amount as to equal (with any balance then remaining in the initial Letter of Credit) the original amount of the required security deposit amount stated above.

Security Letter of Credit. (ai) Concurrent Lessee hereby agrees with Lessor that, subject to paragraph (vi) below, Lessee shall deliver to Lessor (or if specified by the execution of this SubleaseBeneficiaries, Subtenant has caused to be issued in favor of Sublandlord a letter of credit (the “Beneficiaries) the duly executed Security Letter of Credit”) in Credit for the amount specified in Exhibit C-1. (ii) The Security Letter of Three Hundred Five Thousand Nine Hundred Forty Four Credit shall remain in full force and 73/100 Dollars ($305,944.73)effect from the date hereof until the date that is three months after the Expiration Date, provided that it may be renewable annually so long as security for Lessor or the faithful performance and observance by Subtenant of the terms, conditions and provisions of this Sublease, including without limitation the surrender of possession of the Premises to Sublandlord as herein provided. It is agreed that in the event Subtenant defaults in respect of any of the monetary terms, provisions and conditions of this Sublease beyond any applicable cure periods, including, but not limited to, the payment of Base Rent and Additional Rent, Sublandlord Beneficiaries may draw upon the Letter of Credit, in accordance with its terms, to the extent required for the payment of any Base Rent and Additional Rent or any other sum as to which Subtenant is in default or for any sum which Sublandlord may expend or may be required to expend by reason of Subtenant’s default in respect of any of the terms, covenants and conditions of this Sublease, including but not limited to, any damages or deficiency in the reletting of the Premises, whether such damages or deficiency accrue or accrues before or after summary proceedings or other reentry by Sublandlord. The draw upon the Letter of Credit, or any portion thereof by Sublandlord shall not prevent Sublandlord from exercising any other right or remedy provided by this Sublease or by law and shall not operate as a limitation on any recovery to which Sublandlord may otherwise be entitled. (b) Such Letter of Credit shall be subject to the following terms and conditions. Such Letter of Credit shall: (a) be in form and substance satisfactory to Sublandlord in its reasonable discretion; (b) state on its face that multiple draws are permitted; (c) be issued by a commercial bank acceptable to Sublandlord from time to time and located in the metropolitan Baltimore-Washington, D.C. area for the account of Subtenant, and its permitted successors and assigns under this Sublease; (d) be made payable to, and expressly transferable and assignable at no charge by Sublandlord, which transfer/assignment shall be conditioned only upon the execution of a reasonable and customary written document in connection therewith, whether or not the original account party of the Letter of Credit continues to be the tenant under this Sublease by virtue of a change in name or structure, merger, assignment, transfer or otherwise; (e) be payable at sight upon presentment to a local branch of the issuer of a simple sight draft or certificate stating only that Subtenant is in default under this Sublease and the amount that Sublandlord is owed in connection therewith; (f) be of a term not less than one year, and shall on its face state that the same shall be renewed automatically, without the need for any further written notice or amendment, for successive minimum one-year periods, unless the bank notifies Sublandlord in writing that such bank has elected not to renew the Security Letter of Credit at least sixty (60) days prior to any time if the expiration date thereof (which will entitle Sublandlord to draw on the Security Letter of Credit is not more than fifteen (15) days renewed on or before the scheduled expiration date if a replacement Letter of Credit (or substitute acceptable to Sublandlord in its sole and absolute discretion) has not been established and delivered to Sublandlord; provided, however, that the Letter of Credit shall terminate upon the entry of an order authorizing the Sublandlord to reject this Sublease in any proceeding initiated under Title 11 of the United States Code; and (g) at least thirty (30) days prior to its stated expiration or if Lessor or a Beneficiary receives a termination notice from the then-current expiration issuing bank or institution. (iii) Lessor or the Beneficiaries may draw upon the Security Letter of Credit upon the occurrence and during the continuation of an Event of Default and apply the proceeds thereof in or towards the satisfaction of any sum or obligation due to Lessor or any Beneficiary by Lessee which either Lessee fails to pay on the due date or, as the case may be, the date of demand or after any applicable grace period permitted for the payment thereof and/or under this Lease or any of the Operative Documents or to compensate Lessor or any Beneficiary for any sum which it may in its discretion advance or expend as a result of the failure of Lessee to comply with any of its obligations under this Lease or any of the Operative Documents or in respect of any Default or Event of Default, in respect of any indemnity payments, in any case by delivering to the issuing bank or institutions a notice in accordance with the terms of the Security Letter of Credit. No such drawing under the Security Letter of Credit shall operate to relieve Lessee of any obligation hereunder or constitute the satisfaction of any such obligation (except to the extent of the proceeds of such payment actually received by Lessor and the Beneficiaries). (iv) Upon any such drawing by Lessor or a Beneficiary, Lessee shall reimburse the issuing bank and or a Beneficiary otherwise take such action as may be necessary in order to restore the amount available for drawing under the Security Letter of Credit to the amount of such Security Letter of Credit specified in Exhibit C-1 promptly (and in any event within five Business Days) after such Lessor's drawing and shall procure promptly that the issuing bank or institutions forward a further letter of credit or guarantee to Lessor evidencing that the amount has so been restored. (v) Provided that no Default, or Event of Default has occurred and is continuing, Lessor shall return the Security Letter of Credit to Lessee for cancellation promptly after the date upon which the Aircraft is redelivered to Lessor in accordance with the terms of this Lease. (vi) Notwithstanding the foregoing provisions of this Section 21(b), Lessee may, on the Delivery Date, in lieu of the delivery to the Beneficiaries of the Security Letter of Credit on the Delivery Date, deposit with the Beneficiaries an amount in cash equal to the amount of the Security Letter of Credit, either as specified in Exhibit C-1 (1) renewed (or automatically and unconditionally extended) from time the "Security Letter of Credit Amount"). If Lessee elects to time through the ninetieth (90th) day after the expiration make such deposit in lieu of the Term, or (2) replaced with cash in the stated amount. Notwithstanding anything in this Sublease to the contrary, any cure or grace periods set forth in this Sublease for a default shall not apply to any delivery of the foregoing requirements of the Security Letter of Credit, then Lessee shall effect such deposit by wire transfer of funds to an account specified by one of the Beneficiaries, and such Security Letter of Credit Amount shall constitute part of the Security Deposit and shall be held by the Beneficiaries as collateral security for the payment and performance by the Lessee of its obligations hereunder and under the other Operative Documents. The Beneficiaries shall have the same rights, and shall be permitted to apply such Security Letter of Credit Amount in the same manner, as is set forth in Sections 18(i) and 21(a) above with respect to the Security Deposit. Following the Delivery Date, Lessee shall have the option of substituting the Security Letter of Credit described above in this Section 21(b) in exchange for the Security Letter of Credit Amount deposited with the Beneficiaries pursuant to this clause (vi). To effect such substitution, Lessee shall deliver the originally issued and executed Security Letter of Credit (in the form and scope and in the amount required by Exhibit C-1) to Lessor, and, specificallypromptly after Lessor's receipt thereof, if any of the aforesaid requirements are not complied with timelyBeneficiaries shall, time being of the essence, then an immediate so long as no Default or Event of Default shall occur have occurred and Sublandlord shall have be continuing, return the right to immediately draw upon the Letter of Credit. If Subtenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Sublease, the Security Letter of Credit shall be canceled/terminated within thirty Amount paid on the Delivery Date pursuant to this clause (30iv) days after to Lessee. If Lessee does not substitute the expiration date (or sooner termination) Security Letter of Credit Amount with the Sublease and delivery of the entire possession of the Premises to Sublandlord. Notwithstanding anything to the contrary contained herein, in the event Sublandlord draws on any part or all of the Security Letter of Credit, Subtenant shallso long as no Default or Event of Default shall have occurred and be continuing, within ten (10) days of such drawing, either restore the Security Letter of Credit Amount will be returned to its original amount, deliver to Sublandlord a substitute letter of credit (complying with Lessee promptly after the foregoing requirements) or cash in such amount as to equal (with any balance then remaining in the initial Letter of Credit) the original amount return of the required security deposit amount stated aboveAircraft pursuant to Section 21(a).

Security Letter of Credit. On or before three (a3) Concurrent with days after the execution date of this SubleaseLease, Subtenant has caused Tenant shall deliver to be issued in favor Landlord the Security Letter of Sublandlord a letter of credit Credit (hereinafter defined) (the “Security Letter of Credit”) Credit and the cash proceeds of which are referred to in this Lease as the amount of Three Hundred Five Thousand Nine Hundred Forty Four and 73/100 Dollars ($305,944.73"Security"), as representing security for the full and faithful performance and observance by Subtenant Tenant of Tenant's covenants and obligations under this Lease. In the terms, conditions and provisions of this Sublease, including without limitation the surrender of possession of the Premises to Sublandlord as herein provided. It is agreed that event Tenant defaults in the event Subtenant defaults in respect full and prompt payment or performance of any of the monetary termsits obligations hereunder, provisions and conditions of Landlord may, without notice to Tenant (except for notices expressly provided for in this Sublease beyond any applicable cure periodsLease), including, but not limited to, the payment of Base Rent and Additional Rent, Sublandlord may draw upon the Security Letter of CreditCredit and use, in accordance with its termsapply, set off or retain the whole or any part of the Security, to the extent required for the payment of any Base Rent and Additional Rent or other sums due or to become due from Tenant under this Lease, in addition to other remedies available to Landlord. In the event Landlord shall so use, apply or retain the whole or any other sum as to which Subtenant is in default or for any sum which Sublandlord may expend or may be required to expend by reason of Subtenant’s default in respect of any part of the termsSecurity, covenants and conditions of this SubleaseTenant shall, including but not limited toupon demand, any damages or deficiency in immediately deliver to Landlord cash equal to the reletting amount so used, which cash shall be part of the Premises, whether such damages or deficiency accrue or accrues before or after summary proceedings or other reentry by SublandlordSecurity. The draw upon drawing of the Security Letter of CreditCredit and use, application or retention of the Security, or any portion thereof thereof, by Sublandlord Landlord shall not prevent Sublandlord Landlord from exercising any other right or remedy provided by this Sublease Lease or by law or in equity (it being intended that Landlord shall not first be required to proceed against the Security) and shall not operate as a limitation on any recovery to which Sublandlord Landlord may otherwise be entitled. (b) Such Letter of Credit shall be subject to the following terms and conditions. Such Letter of Credit shall: (a) be in form and substance satisfactory to Sublandlord in its reasonable discretion; (b) state on its face that multiple draws are permitted; (c) be issued by a commercial bank acceptable to Sublandlord from time to time and located in the metropolitan Baltimore-Washington, D.C. area for the account of Subtenant, and its permitted successors and assigns under this Sublease; (d) be made payable to, and expressly transferable and assignable at no charge by Sublandlord, which transfer/assignment shall be conditioned only upon the execution of a reasonable and customary written document in connection therewith, whether or not the original account party of the Letter of Credit continues to be the tenant under this Sublease by virtue of a change in name or structure, merger, assignment, transfer or otherwise; (e) be payable at sight upon presentment to a local branch of the issuer of a simple sight draft or certificate stating only that Subtenant is in default under this Sublease and the amount that Sublandlord is owed in connection therewith; (f) be of a term not less than one year, and shall on its face state that the same shall be renewed automatically, without the need for any further written notice or amendment, for successive minimum one-year periods, unless the bank notifies Sublandlord in writing that such bank has elected not to renew the Letter of Credit at least sixty (60) days prior to the expiration date thereof (which will entitle Sublandlord to draw on the Letter of Credit not more than fifteen (15) days before the scheduled expiration date if a replacement Letter of Credit (or substitute acceptable to Sublandlord in its sole and absolute discretion) has not been established and delivered to Sublandlord; provided, however, that the Letter of Credit shall terminate upon the entry of an order authorizing the Sublandlord to reject this Sublease in any proceeding initiated under Title 11 of the United States Code; and (g) at least thirty (30) days prior to the then-current expiration date of such Letter of Credit, either (1) renewed (or automatically and unconditionally extended) from time to time through the ninetieth (90th) day after the expiration of the Term, or (2) replaced with cash in the stated amount. Notwithstanding anything in this Sublease to the contrary, any cure or grace periods set forth in this Sublease for a default shall not apply to any of the foregoing requirements of the Letter of Credit, and, specifically, if any of the aforesaid requirements are not complied with timely, time being of the essence, then an immediate Event of Default shall occur and Sublandlord shall have the right to immediately draw upon the Letter of Credit. If Subtenant Tenant shall fully and faithfully comply with all of the terms, provisionscovenants, covenants and conditions of this SubleaseLease, and provided that Tenant has fully satisfied all of the obligations of Tenant under this Lease, the Letter of Credit Security (or any balance thereof) shall be canceled/terminated returned or paid over to Tenant within thirty (30) days after the last to occur of (i) the date on which the Term has expired or is terminated, or (ii) delivery to Landlord of possession of the Premises. It is agreed and understood that the obligations of Tenant to Landlord hereunder that are not performed prior to the expiration date shall be continuing obligations owed by Tenant to Landlord and shall survive the termination of this Lease. Landlord may deliver the Security Letter of Credit and other Security to any purchaser of Landlord's interest in the Premises (or sooner termination) of the Sublease any Successor Landlord , if applicable), and upon delivery of the entire possession Security Letter of the Premises to Sublandlord. Notwithstanding anything Credit and other Security to the contrary contained hereinpurchaser or Successor Landlord, Landlord shall be discharged of and from any further liability with respect to same. "Security Letter of Credit", as used in this Lease, shall mean one (1) letter of credit in the initial face amount of One Hundred Sixty Thousand Dollars ($160,000.00), such letter of credit to be an irrevocable, transferable, and assignable letter of credit obtained by Tenant and issued to Landlord by a United States national bank, having a transactional office in Philadelphia, Pennsylvania , with assets of at least Two Billion Dollars ($2,000,000,000.00), in the event Sublandlord draws on form of Exhibit "Security Letter of Credit" attached hereto and made a part hereof (except, as to any part or all of the substitute Security Letter of Credit, Subtenant shallfor the expiration date which, within ten as to any such substitute Security Letter of Credit, must comply with the next sentence). Tenant shall deliver to Landlord, on or before sixty (1060) days before expiration of such drawingthe then effective Security Letter of Credit, either restore the a substitute Security Letter of Credit expiring no sooner than twelve (12) months after the date of issuance in an amount equal to its original amount, deliver to Sublandlord a substitute letter the amount required by this Rider Section 2. Provided that Tenant is not in default under this Lease at the time of credit request for reduction of the Security Letter of Credit and has not been in default under this Lease more than two (complying with the foregoing requirements2) or cash in such amount as to equal (with any balance then remaining times in the initial twelve (12) months preceding the request for reduction of the Security Letter of Credit, Tenant shall have the right to reduce the Security Letter of Credit from the initial face amount of One Hundred Sixty Thousand Dollars ($160,000.00) to (a) One Hundred Twenty Thousand Dollars ($120,000.00) subject to the original further condition that Tenant shall have maintained an aggregate available cash balance of at least Five Million Dollars ($5,000,000.00), as evidenced by account statements from the financial institutions holding Tenant's funds and including if not otherwise included, the amount of the required security deposit Security Letter of Credit,, for three (3) out of the five (5) consecutive calendar months immediately preceding the request for reduction and (b) Eighty Thousand Dollars ($80,000.00) commencing no sooner than twelve (12) months after the last previous reduction of the Security Letter of Credit, subject to the further condition that Tenant shall have maintained an aggregate available cash balance of at least Five Million Dollars ($5,000,000.00), as evidenced by account statements from the financial institutions holding Tenant's funds and including if not otherwise included, the amount stated aboveof the Security Letter of Credit, for three (3) out of the five (5) consecutive calendar months immediately preceding the request for reduction. Provided that Tenant is not in default under this Lease at the time of request for reduction of the Security Letter of Credit and has not been in default under this Lease more than two (2) times in the twelve (12) months preceding the request for reduction of the Security Letter of Credit, Tenant shall have the right to reduce the Security Letter of Credit from the initial face amount of One Hundred Sixty Thousand Dollars ($160,000.00) to (a) One Hundred Thousand Dollars ($100,000.00) subject to the further condition that Tenant shall have maintained an aggregate available cash balance of at least Seven Million Dollars ($7,000,000.00), as evidenced by account statements from the financial institutions holding Tenant's funds and including if not otherwise included, the amount of the Security Letter of Credit, for three (3) out of the five (5) consecutive calendar months immediately preceding the request for reduction and (b) Sixty Thousand Dollars ($60,000.00) commencing no sooner than twelve (12) months after the last previous reduction of the Security Letter of Credit, subject to the further condition that Tenant shall have maintained an aggregate available cash balance of at least Seven Million Dollars ($7,000,000.00), as evidenced by account statements from the financial institutions holding Tenant's funds and including if not otherwise 16 included, the amount of the Security Letter of Credit, for three (3) out of the five (5) consecutive calendar months immediately preceding the request for reduction. Upon at least five (5) days notice to Tenant and without limitation on Landlord's other rights to draw on the Security Letter of Credit, Landlord shall have the right to draw the full amount of the Security Letter of Credit if Tenant does not deliver to Landlord a substitute Security Letter of Credit on or before sixty (60) days before the expiration of the then effective Security Letter of Credit. All costs associated with the Security Letter of Credit shall be paid by Tenant.