Springing Security Deposit Clause Samples

Springing Security Deposit. Section 3.03 of the Lease is hereby amended and restated in its entirety as follows:

Springing Security Deposit. (a) If at any time during the Lease Term Tenant’s tangible net worth is less than One Hundred Million Dollars ($100,000,000.00), Tenant shall deposit with Landlord a cash security deposit of Six Hundred Thousand Dollars ($600,000.00), in Constant Dollars (the “Springing Security Deposit”). Landlord may apply all or part of the Springing Security Deposit to any unpaid rent or other charges due from Tenant or to cure any other defaults of Tenant, or to fulfill Tenant’s obligations with respect to the Razing Covenant (as defined in Section 6.06 below). If Landlord uses any part of the Springing Security Deposit, Tenant shall restore the Springing Security Deposit to its full amount within ten (10) days after Landlord’s written request. Tenant’s failure to do so shall be a material default under this Lease. No interest shall be paid on the Springing Security Deposit. Landlord shall not be required to keep the Springing Security Deposit separate from its other accounts and no trust relationship is created with respect to the Springing Security Deposit. (b) At Tenant’s election, in lieu of a cash Springing Security Deposit, Tenant may deliver to Landlord (as beneficiary), an irrevocable standby letter of credit (the “Letter of Credit”), substantially in the form of that attached as Exhibit “H” to this Lease. The Letter of Credit shall be, among other things: (i) subject to the Uniform Customs and Practices for Documentary Credits, International Chamber of Commerce Publication No. 600 (2007 Revision) or any subsequent revision; (ii) irrevocable and unconditional; (iii) in the amount of the Springing Security Deposit; (iv) conditioned for payment solely upon presentation of the Letter of Credit, a sight draft, and a written statement from Landlord that the amount to be drawn is due and owing to Landlord under the terms of this Lease; and (v) transferable one or more times by Landlord without the consent of Tenant. Tenant acknowledges and agrees that it shall pay upon Landlord’s demand, as Additional Rent, any and all costs or fees charged in connection with the Letter of Credit that arise due to: (i) Landlord’s sale or transfer of all or a portion of the Property; or (ii) the addition, deletion, or modification of any beneficiaries under the Letter of Credit. The Letter of Credit shall be issued by a commercial bank or trust company reasonably satisfactory to Landlord, having offices (or a confirming bank) at which the Letter of Credit may be drawn upon in Los Ang...

Springing Security Deposit. If at any time during the Lease Term Tenant’s tangible net worth is less than One Hundred Million Dollars ($100,000,000.00), Tenant shall deposit with Landlord a cash security deposit of Six Hundred Thousand Dollars ($600,000.00), in Constant Dollars (the “Springing Security Deposit”). Landlord may apply all or part of the Springing Security Table of Contents Deposit to any unpaid rent or other charges due from Tenant or to cure any other defaults of Tenant, or to fulfill Tenant’s obligations with respect to the Razing Covenant (as defined in Section 6.06 below). If Landlord uses any part of the Springing Security Deposit, Tenant shall restore the Springing Security Deposit to its full amount within ten (10) days after Landlord’s written request. Tenant’s failure to do so shall be a material default under this Lease. No interest shall be paid on the Springing Security Deposit. Landlord shall not be required to keep the Springing Security Deposit separate from its other accounts and no trust relationship is created with respect to the Springing Security Deposit. Any reference to the “Security Deposit” in this Lease shall be deemed to refer to the Springing Security Deposit.

Springing Security Deposit. (a) If at any time during the Lease Term Tenant’s tangible net worth is less than One Hundred Million Dollars ($100,000,000.00), Tenant shall deposit with Landlord a cash security deposit of Six Hundred Thousand Dollars ($600,000.00), in Constant Dollars (the “Springing Security Deposit”). Landlord may apply all or part of the Springing Security Deposit to any unpaid rent or other charges due from Tenant or to cure any other defaults of Tenant, or to fulfill Tenant’s obligations with respect to the Razing Covenant (as defined in Section 6.06 below). If Landlord uses any part of the Springing Security Deposit, Tenant shall restore the Springing Security Deposit to its full amount within ten (10) days after Landlord’s written request. Tenant’s failure to do so shall be a material default under this Lease. No interest shall be paid on the Springing Security Deposit. Landlord shall not be required to keep the Springing Security Deposit separate from its other accounts and no trust relationship is created with respect to the Springing Security Deposit. Any reference to the “Security Deposit” in this Lease shall be deemed to refer to the Springing Security Deposit. (b) At Tenant’s election, in lieu of a cash Springing Security Deposit, Tenant may deliver to Landlord (as beneficiary), an irrevocable standby letter of credit (the “Letter of Credit”), substantially in the form of that attached as Exhibit “H” to this Lease. The Letter of Credit shall be, among other things:

Springing Security Deposit. Within 15 days after the end of each calendar quarter, Tenant shall provide to Landlord an Officer's Certificate in the form of Exhibit C attached hereto to the effect that either (a) the value of Tenant's unrestricted cash and Cash Equivalents at the end of such calendar quarter are equal to or greater than the Cash Threshold (defined below), or (b) the value of the Tenant's unrestricted cash and Cash Equivalents at the end of such calendar quarter are less than the Cash Threshold. As used herein, "Cash Threshold" means the greater of the following: (1) $6,000,000.00 or (2) an amount equal to Tenant's current annual cash burn rate, which shall be evidenced by either (i) a cash flow analysis prepared by Tenant ("Tenant's Cash Flow Analysis") and delivered to Landlord within fifteen (15) days following the end of each calendar quarter showing Tenant's net cash in-flow and out-flow for the immediately preceding twelve (12) month period, or (ii) the Net Cash Used in Operating Activities for the immediately preceding twelve (12) month period as shown on Tenant's Consolidated Statements of Cash Flow. For purposes of calculating the Cash Threshold, Tenant's Cash Flow Analysis and/or Tenant's Consolidated Statements shall exclude one-time cash contributions made by Tenant relating to the acquisition of the Property and the initial build-out of the Improvements per the Work Letter Agreement (i.e., Tenant's TI Contribution, Excess Costs and Development Management Fees (as each of those terms are defined in the Work Letter Agreement)) and one-time cash payments made by Tenant associated with the pay-off or pay-down of its convertible debt. As used herein, "Tenant's Consolidated Statements of Cash Flow" means those consolidated statements of Tenant's cash flow as prepared by Tenant in accordance with GAAP and which are publicly filed with the SEC on a quarterly basis. If the value of Tenant's unrestricted cash and Cash Equivalents drops below the Cash Threshold, or if Tenant fails to deliver to Landlord the required Officer's Certificate within the above 15-day period, Tenant shall, within five (5) days after delivery of such Officer's Certificate (or failure to deliver such Officer's Certificate), deposit with Landlord an additional security deposit in an amount equal to One Million Five Hundred Seventy-Five Thousand and 00/100 Dollars ($1,575,000.00) (i.e., an amount equal to the aggregate sum of Base Annual Rental payable during the first twelve (12) months of the...