Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount. (B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that: (i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn; (ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease; (iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and (iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 2 contracts
Sources: Lease Agreement (Zentalis Pharmaceuticals, Inc.), Lease Agreement (Zentalis Pharmaceuticals, LLC)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT Tenant shall maintain on deposit with OWNER Landlord the sum of $243,109.90 44,000 upon the signing of this lease as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease. It is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including but not limited to, the payment of rent and agrees that OWNER additional rent, Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Leaselease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount end of the Security Deposit. In the event TENANT defaults in the performance Lease and after delivery of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting entire possession of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the demised premises form a part, Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee upon written notice to Tenant and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Landlord solely for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In All interest and/or dividends, if any, accruing on the event that at any time security deposited, whether in cash or otherwise as aforesaid, shall remain Tenant's property* and, provided Tenant is not in default in the performance of the terms, conditions and covenants of this lease, shall be paid to Tenant after each calendar year during the term of this Leaseterm, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subjectprovided, however, to TENANT’s obligation to replace such cash security with that Tenant shall make a new letter written demand therefor no later than January 31st in each year. * Less standard management charge of credit meeting said qualifications1%.
Appears in 2 contracts
Sources: Loft Lease (Younetwork Corp), Lease Agreement (Younetwork Corp)
Security. (Aa) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as As security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as the Borrowing, the Borrower obliges itself to which TENANT is mortgage in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any favor of the termsLender such real property as will be agreed upon by the Lender and the Borrower (the “Collateral”) to ensure the outstanding amount of the Borrowing. It is understood and agreed that all additions and accretions to, covenants or replacements or substitutions of, said Collateral shall be made and conditions subject to the lien of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent mortgage and shall be subject to all held for the security and payment of the remedies for non-payment outstanding amount of fixed rent. the Borrowing including interest, expenses or any such other obligations owing to the Lender under this Agreement.
(b) The security deposit (if held by OWNER Borrower states that it is the sole and not provided in a letter beneficial owner of credit) shall be held in an interest bearing account the Collateral and the one in possession thereof free from any lien, encumbrance or other security interest earned thereonof any other person, less except as otherwise disclosed in writing, or as provided under Section 6.02(d) hereof.
(c) During the maximum annual administrative fee allowable term and existence of this Agreement, the Borrower shall insure or cause to OWNER under lawbe insured at all times and at its own expense the Collateral against loss, shall be deemed a part of fire, theft, pilferage, or otherwise, for the security deposit. Notwithstanding anything full insurance value payable to the contrary contained hereinabove or elsewhere in this Lease, Lender as its interest in the event that TenantCollateral may appear, for a fourth timeand it shall endorse and deliver the policy or policies of insurance to the Lender, is ever and in monetary default or material non-monetary default (beyond any cure period as may apply) of any of thereof, the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNERLender may, at its option, may elect to require TENANT to deposit (or to increase insure the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security Collateral and any and all sums so paid by the Lender for such insurance shall be repayable with interest thereon at the same interest rate as being imposed under this Lease (calculated Agreement and shall be considered covered by herein mortgage. It is clearly understood that the Lender has the right to see and inspect the Collateral to find out their state or condition, upon a prior written notice of at least 24 hours submitted to the then monthly rate of fixed rent payable under this Lease), Borrower and thereafter the amount of security required only to be maintained by Tenant throughout the term of this Lease shall be increased by such amountconducted during regular business hours from 9:00 am to 5:00 pm.
(Bd) Notwithstanding The Borrower shall not, during the foregoingexistence of the mortgage, in lieu of encumber with a cash depositsecond mortgage the Collateral, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank part thereof, without the written consent of the Lender.
(hereinafter referred to as e) The Borrower may sell or dispose of the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) DollarsCollateral, which Letter of Credit may be drawn by facsimile draft (if provided the issuer’s offices are located outside the City of New York), Borrower shall have a term the consent of the Lender (which consent shall not less than one year, be in form unreasonably withheld) and content acceptable to OWNER, be for immediately replace the account Collateral with other real property such that at all times it is maintained that the value of OWNER, and be in the mortgage is the outstanding amount of the Security DepositBorrowing. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Buildingcase, the Letter of Credit shall be transferable, without charge, by OWNER If Borrower undertakes to execute a bankruptcy proceeding is filed by or against TENANT, OWNER shall have new mortgage document to cover the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Creditsubstitute collateral. It is agreed that the provisions hereof Borrower shall apply to every transfer or assignment made furnish all documentary stamps for the new Collateral and pay all fees for the notarization and registration (if required by the Lender) of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. documents connected therewith.
(f) In the event that at the Borrower should fail to pay the Lender the sum of money or Borrowing secured by this mortgage, or any time during part thereof, when due, or is in default within the term meaning of this LeaseAgreement, OWNERthe Lender shall have the right at their election, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) foreclose this mortgage in accordance with the terms thereofApplicable Law, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof of such sale of the mortgaged Collateral shall be held by OWNER applied in accordance with Section 2.07(b).
(g) The Borrower agrees and undertakes to execute and deliver to a Lender such other documents which said Lender may from time to time reasonably request from the Borrower in connection with the mortgage.
(h) Effective upon the breach of any condition of this Leasemortgage and in addition to the remedies herein stipulated, subject, howeverthe Lender are hereby appointed attorneys-in-fact of the Borrower with full powers and authority, to TENANT’s obligation take actual possession of the Collateral, without the necessity of any judicial order or any other permission or power, to replace such cash security with a new letter sell or dispose of credit meeting said qualificationsthe Collateral or take any other legal action that may be deemed necessary, to lease any of the Collateral and collect rents therefor; to execute bills of sale, leases or agreements that may be deemed convenient; to make repairs or improvements to the Collateral and pay the same and perform any other act which the Lender may deem convenient for the proper administration of the Collateral.
Appears in 2 contracts
Sources: Secured Loan Agreement, Secured Loan Agreement (Cannabis-Rx Inc.)
Security. 8.1 Landlord acknowledges receipt of the sum of Seventy One Thousand Six Hundred Twenty Five and 00/100 (A$71,625.00) At all times prior Dollars, which sum is equivalent to two (2) months of Basic Rental and Additional Rental as of the date of the execution of this Lease, which shall be returned to Tenant, without interest, on the day set forth for the expiration of the term of this Leaseherein, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due and faithful payment, as herein provided, of the renthowever, additional rent, charges that Tenant has fully and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of faithfully carried out all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in on its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed part to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedingsperformed, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) which sum shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed by Landlord as a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account full and faithful of OWNER, Tenant to so perform under the conditions and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER Landlord shall have the right to transfer (at no expense require Tenant to OWNER) increase the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return amount of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply deposit to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring reflect the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send current Basic Rental by written notice to TENANT (hereinafter referred Tenant. In addition, Landlord shall have the right to as require Tenant to increase the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with amount of said security deposit, provide a new completion bond or irrevocable letter of credit (hereinafter referred in form satisfactory to as Landlord to financially secure Landlord against the “Replacement L/C”) from an Issuing Bank meeting faithful performance of Tenant's obligation to repair or restore the qualifications described hereinabove. Upon receipt Premises at the termination of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either eventthis Lease under Paragraph 12.2 hereunder, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Leaseamount of said increased security deposit, subject, however, to TENANT’s obligation to replace such cash security with a new completion bond or irrevocable letter of credit meeting to be determined by Landlord in its reasonable commercial judgment. Upon such written notice to Tenant, Tenant shall pay such additional security deposit, provide said qualificationscompletion bond or said irrevocable letter of credit within Thirty (30) days. Landlord may apply security deposit, or so much thereof, or so much thereof as may be necessary, towards the remedying of any damage or condition that is the responsibility of Tenant which an inspection shall disclose. Nothing hereinabove contained shall, in any way, limit the right of Landlord to recover against Tenant for any damage or other condition arising out of the failure of Tenant to so perform. In no event shall Tenant have the right to cause or direct Landlord to apply the security deposit against any monthly rental installment, including the last month's rental installment.
Appears in 2 contracts
Sources: Lease (Memry Corp), Lease (Memry Corp)
Security. (A) At all times prior to Concurrently with the expiration of the term execution of this Lease, TENANT Tenant shall maintain on deposit with OWNER Landlord a sum equal to twice the Total Monthly Rent applicable during the first year of the Lease, i.e., the sum of $243,109.90 117,970.78 (the "Security Deposit"), which sum shall be retained by Landlord as security for the due and faithful payment, as herein provided, payment by Tenant of the rentrents herein agreed to be paid by Tenant and for the faithful performance by Tenant of the terms and covenants of this Lease. It is agreed that Landlord, additional rentat Landlord's option, charges may at any time apply said sum or any part thereof toward the payment of the rents and damages all other sums payable by TENANT Tenant under this Lease, and towards the performance of each and every of Tenant's covenants under this Lease, but such covenants and Tenant's liability under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to shall thereby be kept, observed and performed. TENANT expressly acknowledges and agrees discharged only pro tanto; that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or Tenant shall remain liable for any amounts that such sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by insufficient to pay; that Landlord may exhaust any or all rights and remedies against TENANTTenant before resorting to said sum, but nothing herein contained shall require or its successors or assigns, the security deposit shall be deemed to be applied first require Landlord so to do; that in the event that Landlord does so apply all or part of said Security Deposit, then Tenant shall pay Landlord a sum sufficient to restore the to the payment then-required amount (within 10 days of any rents and/or other charges due OWNER being billed for all periods prior to the institution of such proceedings, and/or, at OWNER’s optionsame); that, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of the event this Security Deposit shall not be utilized for any such application to all or any part of purposes, then such security, the amount of cash so on deposit with OWNER (exclusive of any interest) Security Deposit shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal returned by Landlord to the deficiency Tenant within ten (10) business days next after demandthe expiration of the Term of this Lease. The TENANT’s obligation Landlord shall not be required to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an Tenant any interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security depositon said Security Deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Leaseabove, in the event that Tenant's stockholders equity as reported by any annual report or other public announcement or press release, for a fourth time, is ever in monetary default or material non-monetary default declines below fifty million dollars (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit$50,000,000.00), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees Tenant shall additionally pay Landlord an additional sum as additional security deposit in an amount sufficient to look solely to raise the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit total Security Deposit to a new OWNERsum equal to three (3) times Total Monthly Rental then in effect, as set forth on Schedule "C", attached. TENANT covenants that it will not assign or encumberUpon written request by Landlord, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns Tenant shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes have seven (a7) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting make said qualificationspayment.
Appears in 2 contracts
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Owner the sum of $243,109.90 38,000 as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease; it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Owner may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Owner may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for any including but not limited to, and damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionOwner. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Leaselease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver returned to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than Tenant within sixty (60) days following after the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to fixed as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date end of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT after delivery of entire possession of the demised premises to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTOwner. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the demised premises form a part, Owner shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Owner shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such eventsecurity, TENANT and Tenant agrees to look solely to the new OWNER Owner solely for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNEROwner. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Owner nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this LeaseSee Attached Rider, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.▇▇▇▇▇▇▇▇▇ ▇▇
Appears in 2 contracts
Sources: Lease Agreement (Blue Fish Clothing Inc), Lease Agreement (Blue Fish Clothing Inc)
Security. This Mortgage shall secure not only presently existing obligations under the Deferral Agreement and the other Fund Documents (A) At all times prior including, without limitation, the Guarantee), but also future financial accommodations that constitute Obligations under the Deferral Agreement (whether such accommodations are obligatory or are to be made at the option of Mortgagee, or otherwise), to the expiration same extent and with the same priority as if such future accommodations were made on the date of the term execution of the Original Mortgage, and without regard as to whether or not there is any indebtedness outstanding at the effective date of this LeaseMortgage or at the date any such accommodation is made. [IF IN A MORTGAGE TAX STATE OR A STATE WHERE IT IS CUSTOMARY TO INSERT A MULTIPLE OF THE INDEBTEDNESS AS THE MAXIMUM PRINCIPAL INDEBTEDNESS: Subject to the limitations upon the maximum amount secured hereby, TENANT shall maintain on deposit with OWNER this Mortgage secures all present and future Obligations under the sum of Deferral Agreement, and all other sums from time to time owing to the Funds by Obligors and/or Mortgagor under the Fund Documents. Notwithstanding anything contained in this Mortgage to the contrary, the maximum principal amount which may be secured hereby at any one time is [ ] Dollars ($243,109.90 as security for the due [ ]), plus interest thereon, and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable any disbursements made by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease Mortgagee for the payment of taxes, special assessments, or insurance on the Mortgaged Property, with interest on such disbursements; provided, however, that the foregoing limitation shall apply only to the maximum amount of the lien created by this Mortgage, and it shall not in any rent and additional rent manner limit, affect or impair any grant of a security interest or other sum as to which TENANT is right in default favor of Mortgagee or for any sum which OWNER may expend the Funds under the provisions of the Deferral Agreement or may be required to expend by reason of TENANT’s default in respect of under any of the termsother Fund Documents at any time executed by Obligors or Mortgagor or any Guarantor.] [OR] [This Mortgage secures all present and future Obligations under the Deferral Agreement, covenants and conditions all other sums from time to time owing to the Funds by Obligors and/or Mortgagor under the Fund Documents.] To the fullest extent permitted by applicable law, the lien of this LeaseMortgage, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash sums so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York)owed, shall have a term of not less than one year, be in form priority over all subsequent liens and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Leaseencumbrances, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down statutory liens (excepting solely taxes and assessments levied on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend Mortgaged Property secured by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the LeaseMortgage), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 2 contracts
Sources: Contribution Deferral Agreement, Contribution Deferral Agreement (YRC Worldwide Inc.)
Security. 40.01. Tenant has deposited with Landlord an unconditional irrevocable letter of credit (Aas hereinafter defined) At all times prior to substantially in the expiration of form attached hereto as Schedule H (as the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or same may be required to expend by reason of TENANT’s default modified in respect of any of the terms, covenants and conditions of accordance with this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assignssection, the security deposit shall be deemed to be applied first to the payment "letter of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interestcredit") shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to Two Hundred Forty Thousand and 00/100 Dollars ($240,000), as security for the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent full and shall be subject to punctual performance by Tenant of all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions terms of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT Tenant defaults in the performance of any of the terms of this Lease, including Landlord may draw upon the payment letter of rent, beyond credit in full and any applicable cure period, or amounts not applied as hereinafter provided shall be held by Landlord subject to and in accordance with the event provisions of the filing of a bankruptcy proceeding by or against TENANT, OWNER this Section. Landlord may use, then apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same security so drawn upon to the extent required for the payment of (i) any rent or for (ii) any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms of this Leaseincluding, including without limitation, any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s defaultDemised Premises, whether accruing before or after summary proceedings or other re-entry by OWNERLandlord. In the case of every Upon each such useapplication, application or retention, TENANT Tenant shall, on demand, pay to OWNER Landlord the sum so used, applied or retained in cash which shall be added to the Security Deposit remaining proceeds from the letter of credit so that the same security held by Landlord shall be replenished to its former amount, or, restore the Letter of Credit restored to the original required amountamount first set forth above. The Letter of Credit If Tenant shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount fully and punctually comply with all of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement letter of such Letter credit or the amount of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in deposit, as the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Buildingcase may be, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have returned to Tenant after the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occursLease, OWNER shall have delivery of exclusive possession of the right, exercisable by sight draft, Demised Premises to receive monies represented by Landlord and the Letter payment to Landlord of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges all amounts payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANThereunder. In the event of a sale or lease of OWNER’s interest in the land and the Building, OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash letter of credit or the security or Letter of Credit, as the case may be, deposited hereunder deposit to the vendee or lessee, lessee and OWNER Landlord shall ipso facto be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER landlord for the return of said cash security or Letter of Credit. It and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the letter of credit or security or Letter of Credit to a new OWNERlandlord. TENANT covenants that it If 30 days prior to the date of such sale, Landlord shall be holding a letter of credit as Tenant's security, Tenant will upon five (5) days prior written notice, deliver a substitute letter of credit naming the new landlord as the new beneficiary thereof. In the event Tenant shall default in such obligation, Landlord may draw upon the letter of credit and transfer the proceeds thereof to the new landlord. Tenant shall not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted assignment or encumbrance. In the event the letter of credit referred to above or any substitute letter of credit is not renewed so that at any time during all times the term letter of this Leasecredit held by Landlord hereunder is valid for a period in excess of 30 days, OWNER, in OWNER’s reasonable opinion, believes (a) that Landlord may draw upon said letter of credit and hold the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred proceeds thereof subject to as the “Existing L/C”) and in accordance with the terms thereofof this Section.
40.02. So long as Tenant is not then in default under this Lease and no monetary default or material non-monetary default under this Lease shall have previously occurred, thenTenant shall have the right, upon by notice (a "Reduction Notice") given to Landlord at any time after each Reduction Date (as defined below) to reduce the happening amount of either of the foregoingsecurity held by landlord pursuant to this Article 40 by $24,000.00. If Tenant properly gives a Reduction Notice to Landlord, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new Landlord shall return such letter of credit (hereinafter referred to as Tenant; provided, that Tenant has delivered to Landlord a substitute letter of credit in an amount equal to the “Replacement L/C”) from an Issuing Bank meeting difference between the qualifications described hereinaboveamount of the letter of credit which Landlord is returning to Tenant less $24,000.00. Upon receipt Anything to the contrary contained in this Section 40.02 notwithstanding, in no event shall the amount of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be security held by OWNER Landlord pursuant to this Article 40 be less than $120,000.00. "Reduction Date" means March 31, 1999, March 31, 2000, March 31, 2001, March 31, 2002 and March 31, 2003. Landlord agrees to reasonably cooperate with Tenant to substitute any letter of credit in accordance with this Section 40.02; provided, that such cooperation shall be without expense or liability to Landlord. If at any time Tenant shall be in monetary default or material non-monetary default under this Lease, subject, however, this Section 40.02 shall be null and void and of no further force and effect and Tenant shall have no further right to TENANT’s obligation reduce the amount of security held by Landlord pursuant to replace such cash security with a new letter of credit meeting said qualificationsthe Article 40.
Appears in 2 contracts
Sources: Office Lease (Exodus Communications Inc), Office Lease (Exodus Communications Inc)
Security. (A) At 2.1 The Owner confirms that it has undertaken and hereby undertakes to pay to the Mortgagee all of the Obligations according to the Loan Agreement and the Note and the Owner undertakes at all times prior to observe, perform and comply with all the terms, covenants and conditions of each Security Document to which it is a party on its part to be observed, performed and complied with.
2.2 The Owner hereby assigns and agrees to assign to the expiration Mortgagee all of its right, title and interest in and to any Requisition Compensation to which it may be or at any time become entitled and will upon the request of the term of Mortgagee from time to time give notice to any person by whom any such Requisition Compensation may be payable requesting such person to pay any such Requisition Compensation directly to the Mortgagee or as the Mortgagee may from time to time direct.
2.3 The security created by the Mortgage and this LeaseDeed and by the terms, TENANT covenants and conditions hereof shall maintain on deposit with OWNER be held by the sum of $243,109.90 Mortgagee as a continuing security for (i) the due and faithful payment, as herein provided, punctual payment by the Owner to the Mortgagee of the rent, additional rent, charges Obligations and damages payable by TENANT under this Lease or pursuant to law and for (ii) the due and faithful keeping, punctual performance and observance and performance by the Owner in favor of the Mortgagee of all the other covenants, agreements, terms, provisions covenants and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as each Security Document to which TENANT it is a party, provided that if at any time (a) the Owner has paid to the Mortgagee the Obligations in default full and (b) the Owner is under no further actual or for contingent liability towards the Mortgagee under any sum Security Document to which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any it is party and has otherwise performed and observed each of the terms, covenants and conditions of this Leaseon its part to be performed and observed under each such Security Document the Mortgagee will, as well as for any damages or deficiency in at the reletting request and cost of the demised premises caused Owner, discharge the security created by TENANT’S defaultthe Mortgage and this Deed.
2.4 All payments to be made by the Owner hereunder or under any Security Document shall be made without set-off or counterclaim and free and clear of and without deduction or withholding for or on account of any present or future taxes of any nature now or hereafter imposed, whatever levied, collected or assessed by any taxing or governmental authority whatsoever unless the Owner is compelled by law to deduct such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretiontaxes. In the that event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings all such taxes shall be instituted borne by or against TENANTthe Owner, or its successors or assignsif under the provisions of any applicable law this stipulation cannot be applied, then the security deposit Owner shall increase the payment to the Mortgagee so that the net amounts paid to the Mortgagee shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be full amounts which the Mortgagee would have received had payment not been made subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove such deduction or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amountwithholding.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 2 contracts
Sources: Deed of Covenants (R&b Falcon Corp), Deed of Covenants (R&b Falcon Corp)
Security. (A) At all times prior 14.1. Subtenant is simultaneously herewith delivering to the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER Sublandlord the sum of $243,109.90 14,170.00 as security for the due faithful performance and faithful payment, as herein provided, observance by Subtenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease on Sublease; it is agreed that in the part event Subtenant defaults in respect of TENANT to be keptany of the terms, observed provisions, covenants and performed. TENANT expressly acknowledges conditions of this Sublease, including, but not limited to, the payment of fixed annual rent and agrees that OWNER additional rent, Sublandlord may use, apply or retain the whole or any part of the security deposit under so deposited to the extent required for the payment of any fixed annual 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, provisions, covenants and conditions of this Lease Sublease, including but not limited to, any damages or deficiency accrued before or after summary proceedings or other re-entry by Sublandlord. In the event that Subtenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Sublease, the security shall be returned to Subtenant after the date fixed as the end of this Sublease and after delivery of entire possession of the Premises to Sublandlord. In the event of a transfer or assignment of Sublandlord's interest in the Premises, Sublandlord shall have the right to transfer the security to the assignee or transferee and Sublandlord shall thereupon be released by Subtenant from all liability for the return of such security; and Subtenant agrees to look solely to the new landlord or sublandlord for the return of said security. Subtenant further covenants that it will not assign or encumber or attempt to assign or encumber the monies deposited herein as security and that neither Sublandlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance. In the event Sublandlord applies or retains any portion or all of the security deposited, Subtenant shall forthwith restore the amount so applied or retained so that at all times the amount deposited shall be $14,170.00.
14.2. In the event Subtenant defaults in respect to any of the terms, provisions, covenants and conditions of this Sublease, including, but not limited to, the payment of rent and additional rent, Sublandlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Subtenant is in default or for any sum which OWNER Sublandlord may expend or may be required to expend by reason of TENANT’s Subtenant's default in respect of any of the terms, covenants provisions, covenants, and conditions of this LeaseSublease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionSublandlord.
14.3. In the event Sublandlord applies or retains any bankruptcyportion or all of the security delivered hereunder, insolvency, reorganization Subtenant shall forthwith restore the amount so applied or other creditor-debtor proceedings retained so that at all times the amount deposited shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be not less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amountSection 14.1.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 2 contracts
Sources: Assignment Agreement (Intralinks Inc), Assignment Agreement (Intralinks Inc)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Owner the sum of $243,109.90 50,706.68 as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease; it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Owner may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent rent, or any other sum as to which TENANT Tenant is in default default, or for any sum which OWNER Owner may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNEROwner. In the case of every such use, application or retention, TENANT Tenant shall, on within five (5) days after demand, pay to OWNER Owner the sum so used, applied or retained which shall be added to the Security Deposit security deposit so that the same shall be replenished to its former amount, or, restore . In the Letter of Credit to the original required amount. The Letter of Credit event that Tenant shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount fully and faithfully comply with all of the Letter terms, provisions, covenants and conditions of Credit upon presentation this lease, the security shall be returned to Tenant after the date fixed as the end of the Letter lease and after delivery of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date entire possession of the Lease), unless the Issuing Bank sends written notice (hereinafter referred demised premises to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTOwner. In the event of a sale of OWNER’s interest in the land and building, or leasing of the Buildingbuilding, OWNER of which the demised premises form a part, Owner shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER Owner shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Owner solely for the return of said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNEROwner. TENANT Tenant further covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder herein as security, and that neither OWNER Owner nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 2 contracts
Sources: Sub Lease Agreement (Loxo Oncology, Inc.), Lease Agreement (Loxo Oncology, Inc.)
Security. (Aa) At all times prior to Subtenant has, simultaneously with the expiration execution hereof, deposited with Sublandlord the amount of the term of this Leasesixty-five thousand, TENANT shall maintain on deposit with OWNER the sum of six hundred twenty-five and 00/100 dollars ($243,109.90 as security 65,625.00; “Security”), for the due faithful performance and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable observance by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any Subtenant of the terms, covenants covenants, conditions and conditions provisions of this Sublease. Sublandlord may retain, use, or apply the whole or part of the Security to the extent required for payment of any: (i) Sublease Rent not paid when due (subject to applicable grace or cure periods); (ii) loss or damage that Sublandlord may suffer by reason of an Event of Default (defined in Section 19.1 of the Prime Lease) by Subtenant including, as well as for without limitation, any damages incurred by Sublandlord or deficiency in resulting from the reletting re-letting of the demised premises caused by TENANT’S defaultSubleased Premises, whatever whether such damages or deficiency accrued accrues before or after summary proceedings or other re-entry reentry by OWNER, all Sublandlord; and (iii) costs incurred by Sublandlord in connection with the cleaning or repair of the foregoing in such order Subleased Premises upon expiration or earlier termination of this Sublease. Sublandlord may at its option apply the Security and priority as OWNER may elect in its sole discretionthe Sublandlord’s right to bring an action or special proceeding to recover damages or otherwise to obtain possession of the Subleased Premises before or after Sublandlord’s declaration of the termination of this Sublease for nonpayment of Sublease Rent or for any other reason shall not be affected by reason of the fact that Sublandlord holds the Security. In The parties acknowledge and agree that the event any bankruptcy, insolvency, reorganization Security is not a limitation on the Sublandlord’s damages or other creditor-debtor proceedings shall be instituted by or against TENANTrights and remedies available under this Sublease, or its successors at law or assignsequity, nor is the security deposit shall be deemed to be applied first to the Security a payment of liquidated damages or advance of the Sublease Rent or any rents and/or other charges due OWNER for all periods prior to the institution of such proceedingscomponent thereof.
(b) If Sublandlord uses, and/orapplies, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to or retains all or any part portion of such securitythe Security, Subtenant shall restore the Security to its original amount of cash so on deposit with OWNER within five (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (105) business days after demandwritten demand from Sublandlord. The TENANTSubtenant’s failure to strictly comply with this requirement is an Event of Default.
(c) Subject to applicable legal requirements, Sublandlord may commingle the Security with its own funds. Sublandlord is not required to keep the Security in an interest bearing account. Subtenant shall not mortgage, assign, or encumber the Security, and neither Sublandlord nor its successors or assigns will be bound by any such mortgage, assignment or encumbrance.
(d) Sublandlord shall return any unapplied portion of the Security to Subtenant within thirty (30) days after the latest to occur of: (1) the determination of Subtenant’s obligation to pay such deficiency shall be treated as if it was an obligation for Taxes and Landlord’s Operating Expenses pursuant to pay fixed rent or additional rent and shall be subject to all Section 3(c)(iii) for the final year of the remedies for non-payment of fixed rent. The security deposit Sublease Term; (if held by OWNER and not provided in a letter of credit2) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part date Subtenant surrenders possession of the security deposit. Notwithstanding anything Subleased Premises to Sublandlord in accordance with this Sublease; or (3) the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amountSublease Expiration Date.
(Be) Notwithstanding the foregoing, in In lieu of a cash deposit, TENANT Subtenant may deliver the Security to OWNER Sublandlord in the form of a clean, irrevocable and unconditional standby Letter letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) credit from a banking institution having a tangible net worth of not less than One Billion at least one billion U.S. dollars, and 00/100 ($1,000,000,000.00) Dollarsmeeting the other criteria set forth in this paragraph that a letter of credit issuer must satisfy. Each letter of credit shall be unconditional and irrevocable, which Letter payable to Sublandlord solely upon presentation of Credit may a sight draft, and otherwise in form and content reasonably acceptable to Sublandlord for the account of Sublandlord. Said letter of credit shall be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have for a term of not less than one year, (1) year and shall be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented automatically renewed by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
bank (i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder)from Sublandlord; however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.i.
Appears in 2 contracts
Sources: Sublease (Roka BioScience, Inc.), Sublease (Roka BioScience, Inc.)
Security. (A) At all times prior to As security for the expiration faithful performance and observance by Tenant of the term terms, covenants and conditions of this "Tenant's Existing Lease, TENANT shall maintain " (defined in Article 38) on deposit with OWNER Tenant's part to be observed and performed Owner currently holds the sum of TWENTY FIVE THOUSAND SEVEN HUNDRED FIFTY SIX and 00/100 ($243,109.90 25,756.00) DOLLARS, together with interest thereon, if any, (referred to herein as the "Existing Security"). Owner and Tenant agree that the amount then constituting the Existing Security on the Commencement Date, if any, shall be held by Owner as the security for (sometimes referred to herein as the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT "Security") under this Lease or pursuant to law and in accordance with the following provisions of Article 36 hereof for the due faithful performance and faithful keepingobservance by Tenant of the terms, conditions and covenants of this Lease on Tenant's part to be performed and observed. In the event of any default by Tenant in the observance and or performance of all any of the other covenants, agreements, terms, provisions and covenants or conditions of this Lease on the part of TENANT Tenant to be keptobserved or performed including, observed and performed. TENANT expressly acknowledges and agrees that OWNER may usebut not limited to, apply or retain any default in the whole or payment when due of any part monthly installment of the security deposit under this Lease for the payment Fixed Rent or of any rent and additional rent after applicable grace periods. Owner may use or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, apply all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment to Owner for Tenant's account of any rent sum or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of sums due under this Lease, including without thereby waiving any damages other rights or deficiency in the re-letting remedies of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them Owner with respect to such terminationdefault. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT Tenant agrees to look solely to replenish all or any part of the new OWNER for the return of said cash security Security so used or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time applied during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinaboveDemised Term. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that After (i) a Replacement L/C meeting the qualifications is not received by OWNER within Expiration Date or any other date upon which the time specifiedDemised Term shall expire and come to an end, or and (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.full observance and
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER the Landlord a sum of money (by check, subject to collection) equal to $243,109.90 16,114.58, as security for the due full and faithful payment, as herein provided, performance and observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease. If Tenant defaults in respect of any of the part terms, provisions and conditions of TENANT to be keptthis lease, observed including but not limited to, the payment of rent and performed. TENANT expressly acknowledges and agrees that OWNER additional rent, Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent rent, or any other sum as to which TENANT Tenant is in default default, or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultPremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion▇▇▇▇▇▇▇▇. In the event any bankruptcythat Tenant shall fully and faithfully comply with all of the terms, insolvencyprovisions, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assignscovenants and conditions of this lease, the security deposit shall be deemed returned to be applied first Tenant after the date fixed as the Expiration Date and after delivery of possession of the entire Premises to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)Landlord. If as a result of Landlord applies or retains any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Leaseso deposited, in the event that Tenant, for a fourth timeupon demand, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to shall deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter with Landlord the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoingso applied or retained, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), so that Landlord shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down full deposit on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each hand at all times during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTlease. In the event of a sale of OWNER’s interest in the land Land and Building or condominium unit of which the BuildingPremises may be a part or leasing, OWNER conveyance or transfer of the Building or condominium unit of which the Premises form a part, Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee vendee, lessee or lessee, transferee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and ▇▇▇▇▇▇ agrees to look solely to the new OWNER Landlord solely for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.*
Appears in 1 contract
Security. (A) At all times prior to Sublessee shall deposit with Sublessor on the expiration of the term execution of this Lease, TENANT shall maintain on deposit with OWNER Agreement the sum of One Hundred Thousand ($243,109.90 100,000.00) as security for the due and Sublessee’s faithful payment, as herein provided, performance of the Sublessee’s obligations hereunder (“Security”). If Sublessee fails to pay rent, additional rentrent or other charges due hereunder, charges and damages payable by TENANT under this Lease or pursuant otherwise defaults with respect to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions any provision of this Lease on the part of TENANT to be keptAgreement, observed and performed. TENANT expressly acknowledges and agrees that OWNER Sublessor may use, apply or retain the whole all or any part portion of the security said deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is charge in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER sum to which Sublessor may become obligated by reason of Sublessee’s default or to compensate Sublessor for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)any loss or damage which Sublessor may suffer thereby. If as a result of any such application to Sublessor so uses or applies all or any part portion of such securitysaid deposit, the amount of cash so on deposit with OWNER (exclusive of any interest) Sublessee shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, written demand therefore deposit cash or certified check with Sublessor in an additional monthamount sufficient to restore said deposit to the full amount hereinabove stated and Sublessee’s security under failure to do so shall be a breach of this Lease (calculated at the then monthly rate of fixed rent payable under this Lease)Sublease, and thereafter the amount of security required to be maintained by Tenant throughout the term of Sublessor may at his option terminate this Lease Agreement. Sublessor shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend keep said deposit separate from its general accounts. If Sublessee performs all of Sublessee’s covenants, terms and obligations hereunder, and is not in default under Prime Lease and this Agreement or such deposit has not been applied by reason of TENANT’s default in respect of any of the terms of Sublessor pursuant to this Leaseprovision, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which said deposit shall be added returned without payment of interest for its use to Sublessee (or, at Sublessor’s option, to the Security Deposit so that the same shall be replenished to its former amountlast assignee, orif any, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(iSublessee’s interest hereunder) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than within sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following after the expiration of the existing Letter term hereof, or after Sublessee has vacated the Premises, whichever is later. Sublessee shall not be responsible for the security deposit under the Prime Lease or the Sublease. Nothwithstanding anything to the contrary stated herein, provided Sublessee is not in default under this Agreement, Seventy Two Thousand, Six Hundred and Fifty-Four ($72,654.00) Dollars of Credit not fewer than thirty the Security Deposit shall be applied as Base Rent to the three (303) days months prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion Expiration Date of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsAgreement.
Appears in 1 contract
Sources: Sublease Agreement (Taleo Corp)
Security. (A) At all times prior Subtenant has deposited with Sublandlord a cash sum equal to the expiration one monthly installment of the term of this LeaseFixed Rent hereunder, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for (i) the due faithful performance and faithful payment, as herein provided, observance by Subtenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Sublease and (ii) the faithful performance and observance by the applicable subtenants of the terms, provisions and conditions of each of the Combined Leases. It is agreed that in the event Subtenant or the applicable subtenant defaults in respect of any of the terms, provisions and conditions of this Sublease or any of the Combined Leases, including, but not limited to, the payment of Rental, Kindred or Sublandlord or the applicable sublandlord under a Combined Lease on may, after notice to Subtenant and the part expiration of TENANT any applicable grace period provided for in this Sublease or the applicable Combined Lease (as applicable with respect to be keptsuch default), observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent Rental or any other sum as to which TENANT Subtenant or the subtenant under the applicable Combined Lease is in default or for any sum which OWNER Sublandlord or the relevant sublandlord may expend or may be required to expend by reason of TENANT’s Subtenant's or the applicable subtenant's default in respect of any of the terms, covenants and conditions of this Sublease or any of the Combined Lease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultPremises or the facility under this Sublease or the applicable Combined Lease, whatever whether such damages or deficiency accrued accrue before or after summary proceedings or other re-entry by OWNERSublandlord or the sublandlord under the applicable Combined Lease. In any such event, all Subtenant shall promptly on demand deposit with Sublandlord so much of the foregoing in such order and priority security as OWNER may elect in its sole discretionshall have been so expended so that Sublandlord shall at all times have the full security deposit required hereunder. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that (a) Subtenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment terms, provisions, covenants and conditions of fixed rent. The security deposit this Sublease, (if held by OWNER and not provided in a letter b) the applicable subtenants of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part each of the security deposit. Notwithstanding anything to Combined Leases shall fully and faithfully comply with the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect such Combined Leases and (c) Subtenant has delivered possession of the Premises to require TENANT to deposit (or to increase the letter Sublandlord upon expiration of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease hereof and otherwise in accordance with the provisions hereof, then the security (less any portion thereof which Sublandlord is entitled to retain) shall be increased by returned to Subtenant. Sublandlord shall hold such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable security and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of shall not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay account to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them Subtenant with respect to such terminationsecurity and shall not be required to pay any interest thereon. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER Sublandlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of commingle such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsany other funds.
Appears in 1 contract
Sources: Operations Transfer Agreement (Kindred Healthcare Inc)
Security. (A) At A. On or before the date that is three business days after Sublessor notifies Sublessee that Sublessor has received the Consent to Sublease and the Consent to Sublessee's Initial Plans and Specifications, Sublessee shall deposit and shall thereafter maintain at all times prior to with Sublessor until the date that is days after the expiration of the term of this LeaseTerm, TENANT shall maintain on as a security deposit with OWNER (the sum of $243,109.90 as security "Security") for the due faithful performance and faithful payment, as herein provided, observance by Sublessee of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease Sublease, an unconditional irrevocable commercial letter of credit in the aggregate amount of Sixty Three Thousand Eight Hundred Ninety Nine Dollars ($63,899.00), in form and substance satisfactory to Sublessor and issued by a commercial bank that is reasonably acceptable to Sublessor, payable upon presentation by Sublessor to such issuer at its counters in New York City of a sight draft, which letter of credit shall provide for the continuance of such credit for the period of at least one (1) year after the date of issue. From time to time during the Term, on or before the part date that is thirty (30) days prior to the expiry date of TENANT any letter of credit, Sublessee shall deliver to be keptSublessor a replacement letter of credit, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole an extension or any part renewal of the security existing letter of credit, that complies with the requirements of this Section. If Sublessee shall fail properly and timely to replace, renew or extend the letter of credit as aforesaid, then Sublessor shall have the right to draw on such letter of credit for the balance remaining under such letter of credit and hold and apply the proceeds thereof in accordance with this Section. Sublessor shall endeavor in good faith (but shall not be required) to notify Sublessee prior to any draw pursuant to the foregoing sentence. Notwithstanding the foregoing, in lieu of the foregoing letter of credit in the amount of $63,899.00. Sublessee at its option, may deposit under this Lease for with Sublessor the sum of Thirty One Thousand Nine Hundred Forty-Nine Dollars and Fifty Cents ($31,949.50) in cash and a letter of credit in the amount of Thirty-One Thousand Nine Hundred Forty-Nine Dollars and Fifty Cents ($31,949.50) in the form of the letter of credit described herein to constitute the Security. If Sublessee exercises such option, then in such event, to the extent the cash portion of the Security has not been otherwise utilized or applied in accordance with the provisions hereof, it shall be applied by Sublessor to the payment of any rent the Fixed Rent payable for the last sixty (60) days of the Term.
B. Each letter of credit to be deposited and additional rent maintained with Sublessor (or any other sum the proceeds thereof) shall be held by Sublessor as to which TENANT is in default or security for any sum which OWNER may expend or may be required to expend the faithful performance and observance by reason of TENANT’s default in respect of any Sublessee of the terms, covenants provisions and conditions of this LeaseSublease, as well as for any damages or deficiency and in the reletting event that (x) any default occurs under this Sublease and is not cured by Sublessee within any applicable grace period, or) Sublessor is entitled to draw on the letter of credit pursuant to the demised premises caused provisions of subsection (A), then, in any such event, Sublessor may draw on such letter of credit, and the proceeds of such letter of credit (or any cash security deposited by TENANT’S default, whatever the Sublessee with Sublessor in substitution for such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, letter of credit) (collectively the "Security Proceeds"; all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit Security Proceeds shall be deemed to constitute the Security hereunder) shall then be held and applied first as security (and be Sublessor agrees to deposit the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedingsreplenished, and/or, at OWNER’s optionif necessary), in partial liquidation of OWNER’s damages arising from such default of proceeding(saccordance with this Section. Sublessor agrees to deposit the Security Proceeds in a separate interest bearing escrow account and, with respect to Security Proceeds only, after deducting any administrative fees permitted by law (currently 1 % per annum). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security depositSublessee annually. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, Sublessee's tax identification number is ▇▇-▇▇▇▇▇▇▇.
C. It is agreed that in the event that Tenant, for a fourth time, is ever Sublessee defaults in monetary default or material non-monetary default (beyond any cure period as may apply) respect of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit Sublease (or to increase after notice and the letter expiration of creditany applicable grace period), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER Sublessor may use, apply or retain the whole or any such part of the Security Deposit, Proceeds as represented by the Letter of Credit, by drawing down on the same shall be equal to the extent required for the payment of any rent sum as to which Sublessee is in default or for any sum which OWNER Sublessor may expend or may be required to expend by reason of TENANT’s Sublessee's default in respect of any of the terms covenants, agreements, terms, provisions and conditions of this LeaseSublease, including including, but not limited to, any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s defaultSubleased Premises, whether accruing such damages or deficiency occurred before or after summary proceedings or other re-entry by OWNERSublessor. In the case of every such Sublessor shall not be required to so use, application apply or retentionretain any part of the Security Proceeds, TENANT shall, on demand, pay to OWNER the sum but if any part thereof is so used, applied or retained which shall be added in accordance with the provisions of this Section, Sublessee shall, upon demand, immediately deposit with Sublessor an amount equal to the Security Deposit amount so that the same shall be replenished to its former amountused, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:applied or retained.
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. D. In the event that at any time during Sublessee shall fully and faithfully comply with all of the term terms, provisions, covenants, agreements and conditions of this LeaseSublease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank any unapplied Security Proceeds shall be less than the minimum amount specified above, or returned to Sublessee within ten (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (1510) business days to replace after the Existing L/C with a new letter of credit (hereinafter referred to date fixed as the “Replacement L/C”) from an Issuing Bank meeting end of this Sublease and after delivery of the qualifications described hereinabove. Upon receipt entire possession of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C Subleased Premises to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsSublessor.
Appears in 1 contract
Sources: Lease (Turbochef Inc)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT Tenant shall maintain on deposit with OWNER Landlord the sum of $243,109.90 80,000.00 as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Lease; it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this Lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER may expend or may be required to expend Landlord expended by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Lease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-re- entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, fully and faithfully comply with all the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, thenthe security with the interest thereon, OWNERif any, at its option, may elect to require TENANT to deposit (or to increase which the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease is entitled shall be increased by such amount.
(B) Notwithstanding returned to Tenant promptly after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before or and after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount Demised Premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the Demised Premises form a part, Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER landlord for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERlandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term For purposes of this Leaserecording security, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANTTenant's I.D. number is . In the event that (i) a Replacement L/C meeting the qualifications Tenant is not received by OWNER within in default of this Lease beyond any applicable cure period, Landlord shall apply $40,000.00 of the security towards Tenant's rental payment due for the 13th month of this Lease. Thereafter, if Tenant is not in default of this Lease beyond any applicable cure period, Landlord shall apply the remaining $40,000.00 towards Tenant's rental payment due for the 25th month of this Lease. Tenant shall pay Landlord the difference in the rental payment due for the 13th and 25th month(s) at the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationspayments become due hereunder.
Appears in 1 contract
Security. 41.01 (Aa) At all times prior to Tenant has deposited with Landlord the expiration sum of $85,737.67 as security for the faithful performance and observance by Tenant of the term terms, provisions, covenants and conditions of this Lease, TENANT shall maintain on deposit with OWNER it is agreed that in the sum event Tenant defaults in respect of $243,109.90 as security for the due and faithful payment, as herein provided, any of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease on including, but not limited to, the payment of fixed annual rent and additional rent, Landlord may use, apply or retail the whole or any part of TENANT the security so deposited to the extent required for the payment of any fixed annual rent and additional rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be keptrequired to expend by reason of Tenant’s default in respect of any of the terms, observed provisions, covenants and performedconditions of this Lease, the security shall be returned to Tenant promptly after the date fixed as the end of the Lease and after delivery of entire possession of the demised premises to Landlord. TENANT expressly acknowledges In the event of a sale of the Land and Building or leasing of the Building, of which the demised premises form a part, Landlord shall have the right to transfer the security to the vendee or lessee and Landlord shall thereupon be released by Tenant from all liability for the return of such security; and Tenant agrees to look solely to the new landlord for the return of said security, and it is agreed that OWNER the provisions hereof shall apply to every transfer or assignment made of the security to a new landlord. Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the monies deposited herein as security and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance. In the event Landlord applies or retains any portion or all of the security deposited, Tenant shall forthwith restore the amount so applied or retained so that at all times the amount deposited shall be $85,737.67.
(i) Notwithstanding the foregoing, in lieu of cash security deposit provided for in subsection (a) hereof Tenant has delivered to Landlord and, shall maintain in effect at all times during the term hereof, an irrevocable letter of credit, in the form of Schedule H hereto in the amount of the security required pursuant to this Lease issued by a banking corporation reasonably satisfactory to Landlord and having its principal place of business or its duly licensed branch or agency in the City and State of New York. Such letter of credit shall have an expiration date no earlier than the first anniversary of the date of issuance thereof and shall be automatically renewed from year to year unless terminated by the issuer thereof by notice to Landlord given not less than 45 days prior to the expiration thereof. Except as otherwise provided herein, Tenant shall, throughout the term of this Lease deliver to Landlord, in the event of the termination of any such letter of credit, replacement letters of credit in lieu thereof (each such letter of credit and such extensions or replacements thereof, as the case may be, is hereinafter referred to as a “Security Letter”) no later than 30 days prior to the expiration date of the preceding Security Letter. The term of each such Security Letter shall be not less than one year and shall be automatically renewable from year to year as aforesaid. If Tenant shall fail to obtain any replacement of a Security Letter within the time limits set forth in its subsection (b)(i), Landlord may draw down the full amount of the existing Security Letter and retain the same as security hereunder until provided with a Security Letter that complies with the provisions of this Section 41.01(b).
(ii) In the event Tenant defaults in respect to any of the terms, provisions, covenants and conditions of this Lease, including, but not limited to, the payment of rent and additional rent, Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms, covenants provisions, covenants, and conditions of this Lease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNERLandlord. To insure that Landlord may utilize the security represented by the Security Letter in the major, all for the purpose, and to the extent provided in this Article 41, each Security Letter shall provide that the full amount thereof may be drawn down by Landlord upon the presentation to the issuing bank of Landlord’s draft drawn on the foregoing in such order and priority as OWNER may elect in its sole discretion. issuing bank without accompanying memoranda on statement of beneficiary.
(iii) In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment that Tenant defaults in respect of any rents and/or other charges due OWNER for all periods prior to of the institution terms, provisions, covenants and conditions of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to the Lease and Landlord utilizes all or any part of such securitythe security represented by the Security Letter but does not terminate this Lease as provided in Article 16 hereof, Landlord may, in addition to exercising its rights as provided in subsection (b)(ii), retain the unapplied and unused balance of the principal amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to Security Letter as security for the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent faithful performance and shall be subject to all observance by Tenant thereafter of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply apply, or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same said balance to the extent required for the payment of rent, additional rent, or any rent other sum as to which Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms terms, covenants, and conditions of this Lease. In the event Landlord applies or retains any portion or all of the security delivered hereunder, Tenant shall forthwith restore the amount so applied or retained so that at all times the amount deposited shall not be less than the security required by Section 41.01.
(iv) In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, including any damages or deficiency in the re-letting security shall be returned to Tenant promptly after the date fixed as the end of the Lease and after delivery of entire possession of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land Land and Building or leasing of the Building, OWNER Landlord shall (subject to the provisions of the final sentence of this subsection (b)(iv)) have the right to transfer (at no expense to OWNER) any interest it may have in the cash security or Security Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security Security Letter, provided such vendee or Letter lessee assumes any responsibilities of Credit. In Landlord with respect to such eventSecurity Letter, TENANT and Tenant agrees to look solely to the new OWNER landlord for the return of said cash security or Letter of Credit. It Security letter; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or the Security Letter of Credit to a new OWNERlandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth a sale or leasing of the Issuing Bank Building Landlord shall be less than have the minimum amount specified aboveright to require Tenant to deliver a replacement Security Letter naming new landlord as beneficiary and, or (b) that circumstances have occurred indicating that if Tenant shall fail to timely deliver the Issuing Bank may be incapable ofsame, unable to, or prohibited from honoring to draw down the then existing Security Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and retain the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash as security with hereunder until a new letter of credit meeting said qualificationsreplacement Security Letter is delivered.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on Tenant will deposit with OWNER the sum of Landlord $243,109.90 8,220.16 as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rentterms, additional rent, charges provision and damages payable by TENANT under conditions of this Lease or pursuant to law and for Lease; it is agreed that in the due and faithful keeping, observance and performance event Tenant defaults in respect of all any of the other covenants, agreements, terms, provisions and conditions of this Lease on Lease, including, but not limited to, the part payment of TENANT to be kept, observed rent and performedadditional rent. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Lease, as well as for including but not limited to, any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultDemised Premises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNER, at its option, may elect the security shall be returned to require TENANT to deposit Tenant within five (or to increase the letter of credit), within ten (105) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of date fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before or and after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount Demised Premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the Demised Premises form a part, Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, Lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Landlord solely for the return of said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Office Lease (On Site Sourcing Inc)
Security. Lessee has this day deposited with Lessor Nine Thousand Eight Hundred Fifty-Eight and No/100 Dollars (A$9,858.00) At all times prior to as a security deposit (the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security "Security Deposit") for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable performance by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance Lessee of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed Lease upon Lessee's part to be applied first performed. Unless required to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedingsdo so by law, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) Lessor shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s have no obligation to pay segregate such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent Security Deposit from any other funds of Lessor, and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereonon such Security Deposit, less the maximum annual administrative fee allowable to OWNER under lawif any, shall belong to Lessor. Security Deposits shall not be deemed considered advance payments of Rent or a part measure of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this LeaseLessor's damages, in the event that Tenant, for case of a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease Lessee. The Security Deposit shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver returned to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than Lessee within thirty (30) days prior after the Expiration Date, provided Lessee has fully performed its obligations hereunder. Regardless of any permitted assignment of this Lease by Lessee, Lessor may return the Security Deposit to the expiration original Lessee in the absence of evidence satisfactory to Lessor of an assignment of the Letter of Creditright to receive the Security Deposit or the balance thereof, such failure which shall constitute a material default under this Lease and OWNER satisfy in full Lessor's obligation to return the Security Deposit. Lessor shall have the rightright to apply any part of said Security Deposit to cure any default of Lessee and if Lessor does so, exercisable by a sight draft, to receive Lessee shall upon demand deposit with Lessor the monies represented by amount so applied so that Lessor shall have the Letter of Credit (which monies shall be held by OWNER as a cash full Security Deposit on deposit pursuant to at all times during the terms of the printed portion Term of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale or lease of OWNER’s interest in the land and Building subject to this Lease, Lessor shall transfer the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder Security Deposit to the vendee Purchaser or lessee, and OWNER Lessor shall thereupon be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to Security Deposit and Lessee shall look solely to the new OWNER successor Lessor for the return of said cash security or Letter of Creditthe Security Deposit. It is agreed that the provisions hereof This provision shall apply to every transfer or assignment made of said cash security or Letter of Credit the Security Deposit to a new OWNERsuccessor Lessor. TENANT covenants that it will The Security Deposit shall not assign be assigned or encumber, encumbered by Lessee without the prior written consent of Lessor and any such unapproved assignment or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns encumbrance shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsvoid.
Appears in 1 contract
Sources: Lease Agreement (Emtec Inc/Nj)
Security. (A) At all times prior to 41.01. Tenant has deposited with Landlord upon execution hereof the expiration sum of $175,000.00 as security for the faithful performance and observance by Tenant of the term terms, provisions, covenants and conditions of this Lease; it is agreed that in the event Tenant defaults in respect of any of the terms, provisions, covenants and conditions of this Lease, TENANT shall maintain on deposit with OWNER including, but not limited to, the sum payment of $243,109.90 as security for the due fixed annual rent and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any fixed annual rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, provisions, covenants and conditions of this Lease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount end of the Security Deposit. In the event TENANT defaults in the performance Lease and after delivery of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting entire possession of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land Land and Building or leasing of the Building, OWNER of which the demised premises form a part, Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT and Tenant agrees to look solely to the new OWNER landlord for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERlandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event Landlord applies or retains any portion or all of the security deposited, Tenant shall forthwith restore the amount so applied or retained so that at all times except as provided in the following sentence the amount deposited shall be $175,000.00. On the date occurring thirty (30) days prior to the expiration of the abatement period (as defined in Section 1.5 hereof) the, security to be retained by Landlord hereunder shall be increased to $350,000.00 and Tenant shall on or before such date provide Landlord with such additional funds as may be necessary to maintain the security deposit at such amount. The cash security required to be maintained under this Lease shall be hold in an interest-bearing account, the interest on which, less an administration fee in the amount of one (1%) percent per annum of the principal amount thereof, shall be paid to Tenant annually.
41.02. In lieu of the cash security deposit provided for in Section 41.01 hereof Tenant may deliver to Landlord and, shall, except as otherwise provided herein, maintain in effect at all times during the term hereof, an irrevocable letter of credit, in form and substance reasonably satisfactory to Landlord in the amount of the security deposit required hereunder issued by a banking corporation satisfactory to Landlord and having its principal place of business or its duly licensed branch or agency in the State of Now York. Such letter of credit shall have an expiration date no earlier than the first anniversary of the date of issuance thereof and shall be automatically renewed from year to year unless terminated by the issuer thereof by notice to Landlord given not less than 45 days prior to the expiration thereof. Except as otherwise provided herein, Tenant shall, throughout the term of this Lease deliver to Landlord, in the event of the termination of any such letter of credit, replacement letters of credit in lieu thereof (each such letter of credit and such extensions or replacements thereof, as the case may be, is hereinafter referred to as a "Security Letter") no later than 45 days prior to the expiration date of the preceding Security Letter. The term of each such Security Letter shall be not less than one year and shall be automatically renewable from year to year as aforesaid. If Tenant shall fail to obtain any replacement of a Security Letter within the time during limits set forth in this Section 41.2, Landlord may draw down the full amount of the existing Security Letter and retain the same as security hereunder.
41.03. In the event Tenant defaults in respect to any of the terms, provisions, covenants and conditions of this Lease, including, but not limited to, the payment of fixed annual rent and additional rent, Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any fixed annual rent and additional rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant's default in respect of any of the terms, provisions, covenants, and conditions of this Lease, including but not limited to, any damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord. To insure that Landlord may utilize the security represented by the Security Letter in the manner, for the purpose, and to the extent provided in this Article 41, each Security Letter shall provide that the full amount thereof may be drawn down by Landlord upon the presentation to the issuing bank of Landlord's sight draft drawn on the issuing bank.
41.04. In the event that Tenant defaults in respect of any of the terms, provisions, covenants and conditions of the Lease and Landlord utilizes all or any part of the security represented by the Security Letter but does not terminate this Lease as provided in Article 16 hereof, Landlord may, in. addition to exercising its rights as provided in Section 41.3 hereof, retain the unapplied and unused balance of the principal amount of the Security Letter as security for the faithful performance and observance by Tenant thereafter of the terms, provisions, and conditions of this Lease, and may use, apply, or retain the whole or any part of said balance to the extent required for payment of fixed annual rent, additional rent, or any other sums as to which Tenant is in default or for any sum which Landlord may expend or be required to expend by reason of Tenant's default in respect of any of the terms, covenants, and conditions of this Lease. In the event Landlord applies or retains any portion or all of the security delivered hereunder, Tenant shall forthwith restore the amount so applied or retained so that at all times the amount deposited shall be not less than the security required by this Article 41.
41.05. If Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, the security or any balance thereof to which Tenant is entitled shall be returned or paid over to Tenant after the date fixed as the end of the Lease and after delivery of entire possession of the demised premises to Landlord. In the event of a sale, transfer or leasing of Landlord's interest in the Building whether or not in connection with a sale, transfer or leasing of the Land, Landlord shall have the right to transfer any interest it may have in the Security Letter to the vendee or lessee and Landlord shall thereupon be released by Tenant from all liability for the return of such Security Letter, and Tenant agrees to look solely to the new landlord for the return of said Security Letter; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of the Security Letter to a now landlord. Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the monies deposited herein as security and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance. In the event of a sale of the Building, Landlord shall have the right to require Tenant to deliver a replacement Security Letter naming the new landlord as beneficiary and, if Tenant shall fail to timely deliver the same, to draw down the existing Security Letter and retain the proceeds as security hereunder until a replacement Security Letter is delivered.
41.06. Provided that Tenant is not then in default of its obligations under this Lease on the sixth (6th) anniversary of the Commencement Date, the security which Tenant is obligated to maintain hereunder shall be reduced to $175,000.00 for the remainder of the term of this Lease, OWNER, . If Tenant is at such time in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER default and thereafter cures such default within the time specifiedgrace period, or (ii) OWNER reasonably believes an emergency existsafter notice, provided herein, then in either event, promptly after Tenant effects such cure the Existing L/C may be presented for payment by OWNER and the proceeds thereof reduction provided herein shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationstake effect.
Appears in 1 contract
Security. Landlord acknowledges receipt of Five Thousand Three Hundred -------- (A$5,300.00) At all times prior Dollars that Landlord is to the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 retain as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions terms and conditions of this Lease Lease. Landlord shall not be obligated to apply the security depose on rents or other charges in arrears, or in damages for failure to perform the part terms and conditions of TENANT to be kept, observed and performedthis Lease. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part Application of the security deposit under this Lease to the arrears of rental payments or damages shall be at the sole option of the Landlord, and the right to possession of the premises by the Landlord for the payment nonpayment of any rent and additional rent or for any other sum as reason shall not in any event be affected by the security deposit. Tenant expressly acknowledges that Tenant shall not have the right to which TENANT apply the security deposit to rent. In no event is in default or for any sum which OWNER may expend or may the security deposit to be required returned until Tenant has vacated the Premises end delivered possession to expend by reason of TENANT’s default in respect of any the Landlord. In the event the Landlord repossesses the Premises because of the terms, covenants default of the Tenant or because of the failure by the Tenant to carry out the terms and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER Landlord may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, apply the security deposit shall be deemed to be applied first on ail damages suffered to the payment day or repossession and may retain the balance of any rents and/or other charges due OWNER for all periods prior the security deposit to apply on damages that may accrue or be suffered thereafter by reasons of a default or breach of the institution of such proceedingsTenant. Landlord shall not be obligated to hold the security deposit in a separate fund, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, but may mix the amount of cash so on security deposit with OWNER (exclusive other funds of any interest) the Landlord, and Landlord shall not be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation obligated to pay such deficiency shall be treated as if it was an obligation interest to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of Tenant on the security deposit. Notwithstanding anything to As further security for the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any faithful performance of the covenants, agreements, terms, provisions terms and conditions of this Lease, thenTenant hereby pledges and assigns to Landlord all of the furniture, OWNERfixtures, at its option, may elect to require TENANT to deposit (or to increase the letter goods and chattels of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) DollarsTenant, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Leasebrought or put on said Premises, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT Tenant agrees to look solely to the new OWNER for the return of that said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank lien may be incapable ofenforced by distress, unable to, foreclosure or prohibited from honoring without press of law at the then existing Letter election of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsLandlord.
Appears in 1 contract
Sources: Lease (Eco Rx Inc)
Security. (A) At all times prior to A. Simultaneously with the expiration of the term execution and delivery of this LeaseSublease, TENANT Subtenant shall maintain on deposit $8,563,75 in cash (the “Deposit”) with OWNER the sum of $243,109.90 Sublandlord as security for the due full and faithful paymentperformance by Subtenant of each and every term, as herein providedcovenant, condition and agreement of this Sublease or any renewals or extensions thereof on Subtenant’s part to be performed.
B. If Subtenant is in default in the performance or observance of any of the rent, additional rent, charges and damages payable by TENANT conditions on its part to be performed or observed under this Lease Sublease or pursuant any other obligation of Subtenant to law Sublandlord and for such default shall continue beyond the due and faithful keepingapplicable cure period, observance and performance of all the other covenantsif any, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER Sublandlord may use, apply or retain the whole or any part of the security deposit under this Lease Deposit to the extent required for the payment of Base Rental or any rent and additional rent Additional Rental or any other sum as to which TENANT Subtenant is in default to Sublandlord or for any sum which OWNER Sublandlord may expend or may be required to expend by reason of TENANTSubtenant’s default in respect non-performance, non-observance, breach or violation of any of the terms, covenants and covenants, conditions or agreements of this LeaseSublease or other agreements between Subtenant and Sublandlord, as well as for including but not limited to, any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultSublet Premises, whatever whether such damages or deficiency accrued accrues before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amountSublandlord.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver C. Sublandlord shall not be required so to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by but if the Letter of Credit, by drawing down on the same to the extent required for the payment of whole or any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum part thereof is so used, applied or retained which retained, Subtenant shall be added within ten (10) days after demand immediately deposit with Sublandlord a sum equal to the Security Deposit amount so that used, applied or retained. If Subtenant shall fully and faithfully comply with all the same shall be replenished to its former amountterms, orcovenants, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit conditions and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term agreements of this Lease (Sublease and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants other agreements between Subtenant and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days Sublandlord prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); howeverperiod, OWNER’s holding the Deposit or any balance thereof remaining shall be returned to Subtenant after the date fixed as the end of such cash security shall not be deemed a waiver this Sublease and after delivery to Sublandlord of TENANT’s default possession of its obligation to maintain the security Sublet Premises in the form of a Letter of Credit); andcondition required hereunder and under the Lease.
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit D. Subtenant shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder as security, Deposit and that neither OWNER Sublandlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Security. 35.01. Tenant shall deposit with Landlord the sum of $462,500.00 upon the execution of this Lease. Said deposit (Asometimes referred to as the "Security Deposit") At shall be held by Landlord as security for the faithful performance by Tenant of all times prior the terms of the Lease by said Tenant to be observed and performed. The Security Deposit shall not and may not be mortgaged, assigned, transferred, or encumbered by Tenant, without the written consent of Landlord, and any such act on the part of Tenant shall be without force and termination of the Lease as to entitle Tenant to the recovery of the Security Deposit. If Tenant complies with all of the terms, covenants, and conditions of the Lease and pays all of the fixed and additional rent and all other sums payable by Tenant to Landlord as they fall due, the Security Deposit shall be promptly returned in full to Tenant after the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due Lease and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance Tenant's satisfaction of all its obligations accruing prior to the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionexpiration date. In the event any bankruptcy, insolvency, reorganization of bankruptcy or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assignsTenant, the security deposit Security Deposit and all other securities shall be deemed to be applied first to the payment of any rents and/or fixed and additional rent and other charges due OWNER Landlord for all periods prior to the institution filing of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale by Landlord of OWNER’s the Building, Landlord may deliver the then balance of the Security Deposit to the transferee of Landlord's interest in the land Demised Premises and Landlord shall thereupon be discharged from any further liability with respect to the BuildingSecurity Deposit and this provision shall also apply to any subsequent transferees. No holder of a superior mortgage to which the Lease is subordinate shall be responsible in connection with the Security Deposit, OWNER by way of credit or payment of any fixed or additional rent, or otherwise, unless such mortgagee actually shall have received the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsentire Security Deposit.
Appears in 1 contract
Sources: Lease Agreement (Globespan Inc/De)
Security. (A) At all times prior to 8.01. Tenant has deposited with Landlord the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 Security Deposit as security for the due full and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance payment and performance by Tenant of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable 's obligations under this Lease), and thereafter the amount of security required to be maintained by . If Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the full and prompt payment and performance of any of the terms of its obligations under this Lease, including including, without limitation, the payment of rentRent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER Landlord may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same Deposit to the extent required for the payment of any rent Rent or any other sums as to which Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms of Tenant's obligations under this Lease, including including, without limitation, any damages or deficiency in the re-letting reletting of the demised premises after termination of the Lease for Tenant’s defaultDemised Premises, whether accruing such damages or deficiency accrue before or after summary proceedings or other re-entry by OWNERLandlord. In the case of every such If Landlord shall so use, application apply or retentionretain the whole or any part of the security, TENANT shall, on demand, pay Tenant shall upon demand immediately deposit with Landlord a sum equal to OWNER the sum amount so used, applied or retained which and retained, as security as aforesaid. If Tenant shall be added to fully and faithfully pay and perform all of Tenant's obligations under this Lease, the Security Deposit so that the same or any balance thereof to which Tenant is entitled shall be replenished returned or paid over to its former amountTenant after the date on which this Lease s II expire or sooner end or terminate, or, restore the Letter and after delivery to Landlord of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTDemised Premises. In the event of a any sale or leasing of OWNER’s interest in the land and the BuildingLand, OWNER Landlord shall have the right to transfer (at no expense the security to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder which Tenant is entitled to the vendee or lesseelessee and upon receipt of written acknowledgement by Tenant from such vendee or lessee of the assumption of Landlord's obligations under the Lease, and OWNER including acknowledgement of the receipt of Security Deposits. Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such eventpayment thereof, TENANT agrees to and Tenant shall look solely to the new OWNER landlord for the return or payment of said cash security or Letter of Credit. It is agreed that the same; and the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit the same to a new OWNERlandlord. TENANT covenants that it will Tenant shall not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Office Lease (Audible Inc)
Security. (A) At all times prior to the expiration of the term of this Lease, Section 27.1 TENANT shall maintain on deposit with OWNER LANDLORD the sum of $243,109.90 11,850.99 as security for the due faithful performance and faithful payment, as herein provided, observance by TENANT of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Lease. It is agreed that in the part event TENANT defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this Lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, LANDLORD may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT is in default or of for any sum which OWNER may expend or may be required to expend by reason of TENANT’s 'S default in respect of any of the terms, covenants and conditions of this Lease, as well as for including, but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLANDLORD. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, that TENANT shall deposit fully and faithfully comply with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to TENANT after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before and without deduction or charge after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount Demised Premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLANDLORD. In the event of a sale of OWNER’s interest in the land and the Buildingbuilding, OWNER LANDLORD shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER LANDLORD shall thereupon be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, security; and the TENANT agrees to look solely to the new OWNER LANDLORD solely for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLANDLORD. TENANT further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER LANDLORD nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In Provided that the event that at any time during TENANT is not in default under the term terms, covenants and conditions of this the Lease, OWNER, TENANT shall be entitled to a credit of $6,173.86 in OWNER’s reasonable opinion, believes the twenty-fifth (a25th ) that the net worth month of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace leaving a remaining security of $5,713.13 after such cash security with a new letter of credit meeting said qualificationscredit.
Appears in 1 contract
Security. (A) At all times The Borrower will not have executed prior to 21 days following the expiration of date hereof a debenture granting security over its assets in a form and substance satisfactory to the term of this Lease, TENANT shall maintain on deposit with OWNER Lender; then immediately upon the sum of $243,109.90 as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect occurrence of any of the terms, covenants events described in Section 7.5 or 7.6 and conditions of this Lease, as well as for any damages or deficiency in at the reletting option of the demised premises caused by TENANT’S defaultLender upon the occurrence of any other Event of Default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNERthe Loan, all of the foregoing in such order notes and priority as OWNER may elect in its sole discretion. In the event any bankruptcyall other Obligations immediately will mature and become due and payable without presentment, insolvencydemand, reorganization protest or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment notice of any rents and/or other charges due OWNER for all periods prior to kind which are hereby expressly waived. After the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result occurrence of any such application Event of Default, Lender is authorized without notice to anyone to offset and apply to all or any part of such securitythe Obligations all moneys, credits and other property of any nature whatsoever of Borrower now or at any time hereafter in the amount of cash so possession of, in transit to or from, under the control or custody of, or on deposit with OWNER (exclusive whether held by Borrower individually or jointly with another party), Lender or any of Lender’s Affiliates. The rights and remedies of Lender upon the occurrence of any interest) shall Event of Default will include but not be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject limited to all rights and remedies provided in the Loan Documents and all rights and remedies provided under applicable law. In furtherance but not in limitation of the remedies for non-payment foregoing, upon the occurrence of fixed rentan Event of Default, Lender may refuse to make any further advances under any Note included in the Obligations. The security deposit (if held by OWNER and not provided in a letter Borrower waives any requirement of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part marshalling of the security deposit. Notwithstanding anything to assets covered by the contrary contained hereinabove or elsewhere in this Lease, in Loan Documents upon the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) occurrence of any Event of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Default. Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), Borrower shall have a term the right to cure any Event of not less than one yearDefault described in Sections 7.1, be in form 7.2, 7.4, 7.8, 7.11, 7.12 7.13 and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than 7.14 within thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement receiving notice from Lender of such Letter Event of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder)Default; however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subjectprovided, however, if, within such thirty (30) day cure period, Borrower commences to TENANTexercise best efforts to cure such Event of Default, as solely determined by Lender, Borrower’s obligation right to replace cure such cash security with a new letter Event of credit meeting said qualificationsDefault shall be extended to ninety (90) days of receiving notice from Lender of such Event of Default.
Appears in 1 contract
Security. The Tenant has deposited with the Landlord the sum of Fifteen Thousand Eight Hundred Sixteen 66/100 (A$15,816.66) At all times prior Dollars which represents two (2) months Minimum Rent as security for the payment of the rent hereunder and the full and faithful performance by the Tenant of the covenants and conditions on the part of the Tenant to be performed. On the first year anniversary of this Lease and on each anniversary date thereafter, the Tenant shall deposit the additional money due to maintain the security deposit in an amount equal to two (2) months Minimum Rent. Thereafter, the security deposit will always be equal to two (2) months Minimum Rent. Said sum shall be refunded to the Tenant, without interest, after the expiration of the term hereof, provided that the Tenant has fully and faithfully performed all such covenants and conditions and is not in arrears in any Minimum Rent or Additional Rent. During the Term hereof, the Landlord may, if the Landlord so elects, have recourse to such security, to make good any default by the Tenant, in which event the Tenant shall on demand, promptly restore said security to its original amount. If Tenant shall be in default by non-payment of this Leaserent, TENANT Landlord may apply such security deposit to Minimum Rent, or Additional Rents due, and the Lease shall maintain on deposit be declared terminated and Tenant shall become a month to month Tenant, and not otherwise. Liability to repay said security to the Tenant shall run with OWNER the sum reversion of $243,109.90 title to said premises, whether any change in ownership thereof be by voluntary alienation or as security the result of judicial sale, foreclosure or other proceedings, or the exercise of a right of taking or entry by any mortgagee. The Landlord shall assign or transfer said security, for the due and faithful paymentbenefit of Tenant, to any subsequent owner or holder of the reversion of title to said premises, in which case the assignee shall become liable for the repayment thereof as herein provided, of and the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit assignor shall be deemed to be applied first released by the Tenant from all liability to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of return such security, the amount of cash so on deposit with OWNER (exclusive of any interest) . This provision shall be less than the amount set forth above, TENANT shall deposit with OWNER cash applicable to every alienation or change in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent title and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall no way be deemed a part of to permit the Landlord to retain the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In Landlord's ownership of the case reversion of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amounttitle. The Letter of Credit Tenant shall provide that:
(i) The Issuing Bank shall pay to OWNER not mortgage, encumber or its duly authorized representative an amount up to the face amount assign said security without consent of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsLandlord.
Appears in 1 contract
Security. Tenant has deposited with Owner (Aa) At all times prior to cash or a Letter of Credit in the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum amount of $243,109.90 360,000.00 for the Temporary Space (the "Temporary Space Security Deposit") and (b) Letter of Credit in the amount of $198,500.00 for the Long Term Space (the "Long Term Space Security Deposit") as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease; it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Owner may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent rent, or any other sum as to which TENANT Tenant is in default default, or for any sum which OWNER Owner may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNEROwner. In the case of every such use, application or retention, TENANT Tenant shall, on within five (5) days after demand, pay to OWNER Owner the sum so used, applied or retained which shall be added to the Security Deposit security deposit so that the same shall be replenished to its former amount, or, restore . In the Letter of Credit to the original required amount. The Letter of Credit event that Tenant shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount fully and faithfully comply with all of the Letter terms, provisions, covenants and conditions of Credit upon presentation this lease, the security shall be returned to Tenant after the date fixed as the end of the Letter lease and after delivery of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date entire possession of the Lease), unless the Issuing Bank sends written notice (hereinafter referred demised premises to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTOwner. In the event of a sale of OWNER’s interest in the land and building, or leasing of the Buildingbuilding, OWNER of which the demised premises form a part, Owner shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER Owner shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Owner solely for the return of said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNEROwner. TENANT Tenant further covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder herein as security, and that neither OWNER Owner nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Security. Tenant has deposited with Landlord ONE HUNDRED SEVENTY-ONE THOUSAND and NO/100 Dollars (A$171,000.00) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all Tenant’s obligations under the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performedLease. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security deposit under this Lease for to the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be extent required to expend by reason cure any default of TENANTTenant’s default in respect of any of the terms, covenants and conditions of this Lease, as well as to reimburse Landlord for any damages or expenses (including, without limitation, counsel fees) incurred by reason of such default, including, but not limited to, any damages, deficiency or expenses in the reletting of the demised premises caused by TENANT’S defaultDemised Premises, whatever such damages or deficiency whether accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)Landlord. If as a result of any such application to all or Landlord applies any part of such securitysaid security deposit to remedy any default of Tenant, Tenant shall, upon demand, deposit with Landlord the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event applied so that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), Landlord shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down full deposit on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each hand at all times during the term of this Lease (and Lease. If Tenant complies with all of its obligations hereunder, the security shall remain in effect for not less than sixty (60) days following be returned to it after the expiration date end of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date Term and delivery of possession of the Letter of CreditDemised Premises to Landlord. In the event the Landlord shall sell or assign the premises then, that it elects not to have upon such Letter of Credit renewed. OWNER covenants and transfer, Landlord agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain transfer the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land deposit to such transferee and the Building, the Letter of Credit Landlord shall thereupon be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and released from all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them liability with respect to such terminationsecurity. If TENANT Tenant shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In Landlord agrees that, as of December 31 of each calendar year, Landlord shall pay to Tenant an interest factor on the event security deposit equal to the interest paid by United Jersey Bank on “Preferred Money Market Accounts” during that calendar year. The foregoing shall not require Landlord to escrow or otherwise deposit such sum or segregate same, and Tenant recognizes and understands that Landlord shall have the right to use these funds for Landlord’s general purposes. The interest shall be calculated at any time the rate in effect as of the opening of business of each day during that year. Landlord, with the term sum of ONE THOUSAND and NO/100 Dollars ($l,000.00) on the Commencement Date of this LeaseLease will open such an account, OWNER, in OWNER’s reasonable opinion, believes (a) and the interest rate so reflected on such account during that calendar year shall be the net worth interest rate applied to the amount of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be security deposit held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsthe Landlord during that year.
Appears in 1 contract
Sources: Lease Agreement (Inter Parfums Inc)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the The sum of One Hundred Ninety Two Thousand Nine Hundred Thirty Seven and 50/100 Dollars ($243,109.90 192,937.50) representing security (referred to as security “Security”) for the due faithful performance and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable observance by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any Tenant of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in Lease on Tenant’s part to be observed and performed is due and payable at the reletting time of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all execution and delivery of the foregoing in such order and priority as OWNER may elect in its sole discretionthis Lease. In the event of any bankruptcydefault by Tenant in the observance or performance of any of the terms, insolvency, reorganization covenants or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, conditions of this Lease on the security deposit shall be deemed part of Tenant to be applied first observed or performed including, but not limited to, any default in the payment when due of any monthly installment of the Fixed Rent or increase in the Fixed Rent payable pursuant to the payment provisions of Articles TWENTY-FIRST or TWENTY-SECOND or of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedingsadditional rent, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to Landlord may use or apply all or any part of such security, the amount of cash so on deposit with OWNER (exclusive Security for the payment to Landlord for Tenant’s account of any interest) sum or sums due under this Lease, without thereby waiving any other rights or remedies of Landlord with respect to such default. Tenant agrees to replenish all or any part of the Security so used or applied during the Term. In the event that Tenant shall be less than the amount set forth above, TENANT shall deposit fully and faithfully comply with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the terms, provisions, covenants and conditions of this Lease, the Security shall be returned to Tenant after the date fixed as the end of the Lease and after delivery of entire possession of the Demised Premises to Owner. Tenant agrees that, unless required by law or by the general policies of lending institutions in New York City, Landlord shall not be required to deposit the Security in an interest-bearing savings account and shall deposit the same with a New York bank selected by Landlord.. Tenant agrees that Tenant shall not assign or encumber any part of the Security, and no assignment or encumbrance by Tenant of all or any part of the Security shall be binding upon Landlord, whether made prior to, during, or after the Term. Landlord shall not be required to exhaust its remedies for non-payment against Tenant or against the Security before having recourse to any other form of fixed rent. The security deposit (if held by OWNER Landlord and recourse by Landlord to any form of security shall not affect any remedies of Landlord which are provided in a letter this Lease or which are available to Landlord in law or equity. In the event of creditany sale, assignment or transfer by Landlord named herein (or by any subsequent Landlord) of its interest in the Building as owner or lessee, Landlord (or such subsequent owner) shall be held have the right to assign or transfer the Security to its grantee, assignee or transferee and, in an interest bearing account the event of such assignment or transfer, Landlord named herein, (or such subsequent Landlord) shall have no liability to Tenant for the return of the Security and Tenant shall look solely to the interest earned thereongrantee, less assignee or transferee for such return. A lease of the maximum annual administrative fee allowable to OWNER under law, entire Building shall be deemed a part transfer within the meaning of the security depositforegoing sentence. Notwithstanding anything to the contrary contained hereinabove set forth in the foregoing provisions of this Article, Landlord shall be entitled to retain the one (1%) percent administrative fee permitted by law to be retained by landlords with respect to security deposits. Provided that Tenant is not then in default under this Lease after applicable notice and expiration of any applicable grace period, Landlord shall return (or elsewhere in credit) to Tenant on the fourth (4th) anniversary of the Commencement Date, a portion of the Security held under the provisions of this LeaseArticle 20th equal to Eighty Five Thousand Seven Hundred Fifty and 00/100 Dollars ($85,750.00), and as a result thereof the Security hereunder shall be then reduced to One Hundred Seven Thousand One Hundred Eighty Seven and 50/100 Dollars ($107,187.50); further provided, however, that in the event that Tenantof two (2) defaults by Tenant under this Lease (and failure to cure beyond applicable notice and cure periods in each instance) which defaults occur subsequent to such reduction in the amount of Security, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any Landlord shall entitled to demand restoration of the covenants, agreements, terms, provisions amount of Security so reduced to the original amount of Security under this Lease as of the Commencement Date and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), Tenant shall so restore said amount within ten (10) days day after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amountwritten demand thereof.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Lease (Passport Brands, Inc)
Security. (A) At all times prior 33.01 LANDLORD has agreed not to the expiration hold a security deposit on behalf of the term of this LeaseTENANT. However, TENANT shall maintain on has agreed, if required by LANDLORD, due to TENANT’s continued late payments or at the discretion of the LANDLORD, to deposit with OWNER the sum of $243,109.90 15,000.00 to be held as security for the due faithful performance and faithful payment, as herein provided, observance by TENANT of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease. It is agreed that in the part event TENANT defaults beyond applicable grace and notice periods in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of Basic Annual Rent and agrees that OWNER Additional Rent, LANDLORD may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent Basic Annual Rent and additional rent Additional Rent or any other sum as to which TENANT is in default beyond applicable grace and notice periods or for any sum which OWNER LANDLORD may expend or may be required to expend by reason of TENANT’s default beyond applicable grace and notice periods in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionlease. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings LANDLORD shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to apply all or any part of such security, the amount of cash so on TENANT’s security deposit with OWNER (exclusive of any interest) shall be less than the amount set forth abovethen upon LANDLORD notifying TENANT thereof, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter such notification replace the amount of security required so applied and the failure of TENANT to replace the same shall be deemed and construed to be maintained by Tenant throughout a failure in the term payment of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable Additional Rent and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), LANDLORD shall have a term the same remedies therefore as if TENANT had failed to pay any item of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security DepositAdditional Rent. In the event that TENANT defaults in shall fully and faithfully comply with all the performance of any of the terms terms, provisions, covenants and conditions of this Leaselease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which security shall be added returned to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than within thirty (30) days prior to after the expiration date fixed as the end or sooner termination of the Letter lease and after delivery of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms entire possessions of the printed portion Demised Premises to LANDLORD free of this Leaseall subtenants, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); howeverlicensees, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease occupants and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter right of Credit in order to satisfy such amounts owed by TENANTpossession. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the Demised Premises form a part, LANDLORD shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER the LANDLORD shall thereupon be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such eventsecurity, and TENANT agrees to look solely to the new OWNER Landlord solely for the December 15, 2005 14 /s/ JD Initial /s/ JU return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLandlord. TENANT further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER LANDLORD nor its successors or assigns shall be bound by any such assignment, encumbranceencumbrances, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Lease Agreement (Cargo Connection Logistics Holding, Inc.)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Subtenant has deposited with OWNER Sublessor the sum of $243,109.90 38,991.00 Dollars as security for the due faithful performance and faithful payment, as herein provided, observance by Subtenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Sublease; it is agreed that in the part event Subtenant defaults beyond any applicable notice or cure periods in respect of TENANT to be keptany of the terms, observed provisions, and performed. TENANT expressly acknowledges conditions of this Sublease, including, but not limited to, the payment of Base Rent and agrees that OWNER Additional Rent, Sublessor may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent Base Rent and additional rent Additional Rent, or any other sum as to which TENANT Subtenant is in default or for any sum which OWNER Sublessor may expend or may be required to expend by reason of TENANT’s Subtenant's default in respect of any of the terms, covenants covenants, and conditions of this LeaseSublease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultSubleased Premises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionSublessor. In the event that Subtenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Sublease, within any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings applicable notice and cure period upon the first anniversary of the Commencement Date the sum of $12,997.00 shall be instituted by or against TENANT, or its successors or assigns, deducted from the security deposit and returned to Subtenant and the balance of the security shall be deemed returned to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER Subtenant within thirty (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (1030) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated the date fixed as if it was an obligation to pay fixed rent or additional rent and shall be subject to all the end of the remedies for non-payment Term and after delivery of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part entire possession of the security deposit. Notwithstanding anything Subleased Premises to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTSublessor. In the event of a sale of OWNER’s interest in the land and Building or leasing of the Building, OWNER Sublessor shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Sublessor shall thereupon be released by TENANT Subtenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Subtenant agrees to look solely to the new OWNER Sublessor solely for the return of said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERSublessor. TENANT Subtenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Sublessor nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Sublease Agreement (Ultrafem Inc)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Sublessee has deposited with OWNER Sublessor the sum of $243,109.90 64,724 as security for the due faithful performance and faithful payment, as herein provided, observance by Sublessee of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions covenants and conditions of this Lease on Sublease. It is agreed that in the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default event Sublessee defaults in respect of any of the terms, covenants and conditions of this LeaseSublease, including but not limited to, the payment of fixed rent and additional rent, Sublessor may, but shall not be obligated to, use, apply, or retain the whole or any part of the security so deposited to the extent required for payment of any fixed rent and additional rent or any other sum as well as to which Sublessee is in default or for any sum which Sublessor may expend or may be required to expend by reason of Sublessee's default, including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultSubleased Premises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNERSublessor. Sublessee shall, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcyupon demand, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than Sublessor the full amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which in order that Sublessor shall be added to have the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each full security deposit on hand at all times during the term of this Lease (Sublease. In the event that Sublessee shall fully and shall remain in effect for not less than sixty (60) days following the expiration date faithfully comply with all of the Lease)terms, unless covenants and conditions of this Sublease, the Issuing Bank sends written notice (hereinafter referred security shall be returned to Sublessee after the date fixed as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date end of the Letter Sublease and after the delivery of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date possession of the Lease;
(iii) If OWNER receives a Non-Renewal Notice Subleased Premises to Sublessor vacant, broom clean and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security otherwise in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in condition required hereunder and under the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTPrime Lease. In the event of a sale transfer or assignment of OWNER’s interest in the land and the Buildingthis Sublease by Sublessor, OWNER Sublessor shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee transferee or lessee, assignee and OWNER Sublessor shall thereupon be released by TENANT Sublessee from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof thereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERSublessor. TENANT Sublessee further covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder herein as security, and that neither OWNER Sublessor nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Sublease (Princeton Video Image Inc)
Security. (Aa) At As collateral for the payment of any and all times prior obligations of Applicant to Banc of America under the Agreement, Applicant hereby grants to Banc of America a security interest in (i) any and all documents of title, policies or certificates of insurance and other documents accompanying or related to instruments drawn under the Credit, and any and all other property shipped under or in connection with the Credit or in any way related thereto or to any of the instruments drawn thereunder (whether or not such documents or property are released to or upon the order of Applicant in trust or otherwise) and (ii) any and all proceeds and products of the foregoing. Also to secure the payment of any and all obligations of Applicant under the Agreement, Banc of America shall be subrogated to the expiration rights of Applicant in respect of any transaction to which the term Credit relates. Insofar as any property which may be held by Banc of this LeaseAmerica, TENANT or for Banc of America's account, as collateral hereunder may be released to or upon the order of Applicant, Applicant hereby acknowledges that such delivery of property is in trust pending satisfaction of Applicant's obligations to Banc of America under the agreement, and hereby agrees to execute and/or file such receipts, agreements, forms or other documents as Banc of America may request to further evidence Banc of America's interests in such property, it being understood that Banc of America's rights as specified therein shall maintain be in furtherance of and in addition to (but not in limitation of) Banc of America's rights hereunder. If at any time and from time to time Banc of America in good f▇▇▇▇ ▇▇▇▇▇ itself insecure and requires collateral (or additional collateral), Applicant will, on deposit with OWNER the sum demand, assign and deliver to Banc of $243,109.90 America as security for any and all obligations of Applicant under the due Agreement, collateral of a type and faithful paymentvalue satisfactory to Banc of America or make such cash payment as Banc of America may require. Banc of America is hereby authorized, as herein providedat its option at any time and with or without notice to Applicant, to transfer to or register in its name or the name of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance any Banc of America's nominees all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as property subject to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions security interests granted under or contemplated by the Agreement. Banc of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/orAmerica is also authorized, at OWNER’s its option, in partial liquidation to file financing statements without the signature of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application Applicant with respect to all or any part of such security, property. Applicant will pay the amount of cash so on deposit with OWNER (exclusive cost of any interestsuch filing and, upon the request of Banc of America, sign such instruments, documents or other papers, and take such other action, as Banc of America may reasonably require to perfect such security interests.
(b) If any Event of Default shall have occurred and be less than continuing, Banc of America may exercise in respect of the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be property subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part any of the security deposit. Notwithstanding anything to interests granted under or contemplated by the contrary contained hereinabove Agreement all the rights and remedies of a secured party on default under the applicable Uniform Commercial Code or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease)other applicable law, and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by also may, with notice except as specified below, sell such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole property or any part thereof in one or more parcels at public or private sale, at any Banc of America office or elsewhere, for cash, on credit or for future delivery, and upon such other terms as Banc of America may deem commercially reasonable. To the extent notice of sale of such property shall be required by law, reasonable notification shall be satisfied by written notice mailed or delivered to Applicant at the address specified above at least five business days prior to the date of public sale or prior to the date after which private sale is to be made. Applicant will pay to Banc of America on demand all costs and expenses (including, without limitation, reasonable attorney's fees and legal expenses) related or incidental to the custody, preservation or sale of, or collection from, or other realization upon, any of such property or related or incidental to the establishment, preservation or enforcement of the Security Deposit, as represented by the Letter rights of Credit, by drawing down on the same to the extent required for the payment Banc of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default America in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTproperty. In the event of a sale of OWNER’s interest in the land and the Buildingof, OWNER shall have the right to transfer (at no expense to OWNER) the cash security collection from, or Letter of Credit, as the case may be, deposited hereunder to the vendee other realization upon all or lessee, and OWNER shall be released by TENANT from all liability for the return any part of such cash security property, Banc of America may, in its discretion, hold the proceeds thereof as additional collateral hereunder or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security then or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and thereafter apply the proceeds thereof shall to the payment of such of the costs and expenses referred to above and such of the obligations of Applicant under the Agreement, whether or not then due, as Banc of America may determine in its discretion, any surplus to be held by OWNER in accordance with this Lease, subject, however, paid over to TENANT’s obligation Applicant or to replace whomever may be lawfully entitled to receive such cash security with a new letter of credit meeting said qualificationssurplus.
Appears in 1 contract
Sources: Application and Agreement for Standby Letter of Credit (Rent a Wreck of America Inc)
Security. (A) At all times prior to 42.01. Tenant has deposited with Landlord the expiration sum of $220,580.00 as security for the faithful performance and observance by Tenant of the term terms, provisions, covenants and conditions of this Lease; it is agreed that in the event Tenant defaults in respect of any of the terms, provisions, covenants and conditions of this Lease, TENANT shall maintain on deposit with OWNER including, but not limited to, the sum payment of $243,109.90 as security for the due fixed annual rent and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security deposit under so deposited to the extent required for the payment of any fixed annual rent and additional rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant's default in respect of any of the terms, provisions, covenants and conditions of this Lease, including but not limited to, any damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord. In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, the security shall be returned to Tenant after the date fixed as the end of the Lease and after delivery of entire possession of the demised premises to Landlord. In the event of a sale of the Land and Building or leasing of the Building, of which the demised premises form a part, Landlord shall have the right to transfer the security to the vendee or lessee and Landlord shall thereupon be released by Tenant from all liability for the return of such security; and Tenant agrees to look solely to the new landlord for the return of said security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of the security to a new landlord. Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the monies deposited herein as security and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance. In the event Landlord applies or retains any portion or all of the security deposited, Tenant shall forthwith restore the amount so applied or retained so that at all times the amount deposited shall be $220, 580.00.
42.02. In lieu of the cash security provided for in Section 42.01 hereof, Tenant may, at any time during the term of this lease, deliver to Landlord and, shall, except as otherwise provided herein, maintain in effect at all times during the term hereof, an irrevocable letter of credit, in form and substance satisfactory to Landlord in the amount of the security required pursuant to this Article 42 issued by a banking corporation satisfactory to Landlord and having its principal place of business or its duly licensed branch or agency in the State of New York. Such letter of credit shall have an expiration date no earlier than the first anniversary of the date of issuance thereof and shall be automatically renewed from year to year unless terminated by the issuer thereof by notice to Landlord given not less than 45 days prior to the expiration thereof. Except as otherwise provided in this Article 42, Tenant shall, throughout the term of this Lease deliver to Landlord, in the event of the termination of any such letter of credit, replacement letters of credit in lieu thereof (each such letter of credit and such extensions or replacements thereof, as the case may be, is hereinafter referred to as a "Security Letter") no later than 45 days prior to the expiration date of the preceding Security Letter. The term of each such Security Letter shall be not less than one year and shall be automatically renewable from year to year as aforesaid. If Tenant shall fail to obtain any replacement of a Security Letter within the time limits set forth in this Section 42.02, Landlord may draw down the full amount of the existing Security Letter and retain the same as security hereunder.
42.03. In the event Tenant defaults in respect of any of the terms, provisions, covenants and conditions of this Lease, including, but not limited to, the payment of rent and additional rent, Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants provisions, covenants, and conditions of this Lease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNERLandlord. To insure that Landlord may utilize the security represented by the Security Letter in the manner, all for the purposes, and to the extent provided in this Article 42, each Security Letter shall provide that the full amount thereof may be drawn down by Landlord upon the presentation to the issuing bank of Landlord's sight draft drawn on the foregoing in such order and priority as OWNER may elect in its sole discretionissuing bank.
42.04. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment that Tenant defaults in respect of any rents and/or other charges due OWNER for all periods prior to of the institution terms, provisions, covenants and conditions of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to the Lease and Landlord utilizes all or any part of such securitythe security represented by the Security Letter but does not terminate this Lease as provided in Article 16 hereof, Landlord may, in addition to exercising its rights as provided in Section 42.03, retain the unapplied and unused balance of the principal amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to Security Letter as security for the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent faithful performance and shall be subject to all observance by Tenant thereafter of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply apply, or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same said balance to the extent required for the payment of rent, additional rent, or any rent other sum as to which Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms terms, covenants, and conditions of this Lease. In the event Landlord applies or retains any portion or all of the security delivered hereunder, Tenant shall forthwith restore the amount so applied or retained so that at all times the amount deposited shall be not less than the security required by Section 42.02.
42.05. In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, including any damages or deficiency in the re-letting security shall be returned to Tenant after the date fixed as the end of the Lease and after delivery of entire possession of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land Land and Building or leasing of the Building, OWNER of which the demised premises form a part, Landlord shall have the right to transfer (at no expense to OWNER) any interest it may have in the cash security or Security Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security Security Letter, provided such vendee or lessee assumes any responsibilities of Landlord with respect to such Security Letter of Credit. In such event, TENANT and Tenant agrees to look solely to the new OWNER landlord for the return of said cash security or Letter of Credit. It Security Letter; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or the Security Letter of Credit to a new OWNERlandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during of a sale of the term Building Landlord shall have the right to require Tenant to deliver a replacement Security Letter naming the new landlord as beneficiary and, if Tenant shall fail to timely deliver the same, to draw down the existing Security Letter and retain the proceeds as security hereunder until a replacement Security Letter is delivered.
42.06. For so long as Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Leaselease, OWNERand shall have paid all installments of fixed annual rent and additional rent due hereunder within seven (7) days of the due date therefor, in OWNER’s reasonable opinionthe security, believes as represented by the Security Letter, shall be reduced on the third (a3rd) and fifth (5th) anniversaries of the Commencement Date such that the net worth of the Issuing Bank remaining amount upon each such anniversary date shall be less than the minimum amount specified above, or as follows: Amount ------ Third (b3rd) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit Anniversary Date $183,816.67 Fifth (hereinafter referred to as the “Existing L/C”5th) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.Anniversary Date $147,053.33
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term Upon execution of this Lease, TENANT Tenant shall maintain on deposit with OWNER Landlord the sum of $243,109.90 10,270.00 (carried over) as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions terms and conditions of this Lease on Lease. The depositing of said sum with the part Landlord is a condition precedent to the valid execution of TENANT to be keptthe Lease. Landlord, observed and performed. TENANT expressly acknowledges and agrees that OWNER at its option, may use, apply or retain the whole or any part of the security deposit under this Lease so deposited for the payment of any rent and additional rent or any other sum as to for which TENANT Tenant is in default or for any sum which OWNER Landlord, at its option, may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants terms and conditions of this Lease. Any expenditures made by Landlord as herein stipulated shall be paid by Tenant as additional rent. Landlord shall be permitted to co-mingle Tenant security funds with other funds of Landlord and shall not be required to pay interest on any sum so held. In the event that Tenant shall fully and faithfully comply with all the terms and conditions of this Lease, the security shall be returned to Tenant after the date fixed as well as for any damages or deficiency in the reletting end of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or Lease and after summary proceedings or other re-entry by OWNER, all delivery of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted Premises by or against TENANT, or its successors or assigns, the security deposit shall be deemed Tenant to be applied first Landlord pursuant to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions terms and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the BuildingPremises, OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, buyer and OWNER Landlord shall thereupon be released relieved by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT and Tenant agrees to look solely to the new OWNER buyer solely for the return of said cash security or Letter of Creditsecurity. It is agreed that the The provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERbuyer. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER the Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit has deposited with OWNER LANDLORD the sum of EIGHT THOUSAND EIGHT HUNDRED EIGHTY FOUR AND 88/100 ($243,109.90 8,884.88) DOLLARS, as security for the due faithful performance and faithful payment, as herein provided, observance by TENANT of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Lease; it is agreed that, in the part event TENANT defaults in respect to any of TENANT the terms, provisions, and conditions of this Lease, including, but not limited to be keptthe payment of rent and additional rent, observed and performed. TENANT expressly acknowledges and agrees that OWNER LANDLORD may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum amy ▇▇▇ which OWNER LANDLORD may expend or may be required to expend by reason of TENANT’s 'S default in respect of to any of the terms, covenants and conditions of this Lease, as well as for including, but not limited to any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages damage or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLANDLORD. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, that TENANT shall deposit fully and faithfully comply with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase Lease the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to TENANT after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before or and after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLANDLORD. In the event of a sale of OWNER’s interest in the land and the Building, OWNER of which the premises form a part, LANDLORD shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lesseevendee, and OWNER LANDLORD shall thereupon be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, and TENANT agrees to look solely to the new OWNER LANDLORD solely for the return of said cash security or Letter of Creditsecurity. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLANDLORD. TENANT further covenants that it will not assign or encumber, or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER LANDLORD nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In LANDLORD shall not be required to keep the event that at any time during security in a segregated account and the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank security may be incapable ofcommingled with other funds of LANDLORD, unable to, or prohibited from honoring and in no event shall TENANT be entitled to any interest on the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationssecurity.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit 34. Tenant has deposited with OWNER Owner the sum of $243,109.90 [HAND GRAPHIC] $ _____ as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease; it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Owner may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Owner may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionOwner. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Leaselease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount end of the Security Deposit. In the event TENANT defaults in the performance Lease and after delivery of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting entire possession of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTOwner. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the demised premises form a part, Owner shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Owner shall thereupon be released release by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such eventsaid security, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNEROwner. TENANT covenants Tenant further convenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Owner nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that Estoppel Certificate: 35. Tenant, at any time, and from time during to time, upon at least 10 days' prior notice by Owner, shall execute, acknowledge and deliver to Owner, and/or to any other person, firm or corporation specified by Owner, a statement certifying that this Lease is unmodified and in full force and effect (or, if there have been modifications, that the term of same is in full force and effect as modified and starting the modifications), stating the dates to which the rent and additional rent have been paid, and stating whether or not there exists any default by Owner under this Lease, OWNERand, in OWNER’s reasonable opinionif so, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace specifying each such cash security with a new letter of credit meeting said qualificationsdefault.
Appears in 1 contract
Security. (A) At all times prior Tenant hereby deposits the sum of $20,000.00 with the Landlord, receipt of which is hereby acknowledged, as security for the full and faithful performance by the tenant of each and every term, covenant and condition of this Lease. In the event that the Tenant defaults in respect to the expiration any of the term terms, provisions, covenants and conditions of this Lease, TENANT shall maintain on deposit with OWNER the sum including but not limited to payment of $243,109.90 as security for the due rent and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any other sum which OWNER the Landlord may expend or may be required to expend by reason of TENANTthe Tenant’s default in respect of any of the termsdefault, covenants and conditions of this Lease, as well as for including any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages damage or deficiency accrued accrue before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that the Tenant shall be instituted by or against TENANT, or its successors or assigns, fully and faithfully comply with the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (the security or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease any balance thereof shall be increased by such amount.
(B) Notwithstanding returned to the foregoing, in lieu of a cash deposit, TENANT may deliver Tenant after the Expiration Date. The Tenant shall not be entitled to OWNER a clean, irrevocable and unconditional standby Letter of Credit (any interest on the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Depositaforesaid security. In the event TENANT defaults in absence of evidence satisfactory to the performance Landlord of any assignment of the terms of this Lease, including right to receive the payment of rent, beyond any applicable cure periodsecurity, or in the event of remaining balance thereof, the filing of a bankruptcy proceeding by or against TENANT, OWNER Landlord may use, apply or retain return the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same security to the extent required for the payment original Tenant, regardless of any rent one or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination more assignments of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTitself. In the event of a sale bona fide transfer of OWNERthe Landlord’s interest in under the land and Master Lease, the Building, OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, transferee thereof for the benefit of the Tenant and OWNER Landlord shall be considered released by TENANT the Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and the Tenant agrees to look solely to the new OWNER landlord solely for the return of the said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof this shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERlandlord. TENANT covenants that it will The security deposited under this lease shall not assign be mortgaged, assigned or encumber, or attempt encumbered by the Tenant without the written consent of the Landlord. The issuance of a warrant and the re-entering of said premises by the Landlord for any default on the part of the Tenant prior to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns Expiration Date shall not be bound by any deemed such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term a termination of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that Lease as to entitle the net worth Tenant to the recovery of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationssecurity.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term Upon execution of this LeaseSublease, TENANT Sublessor shall maintain on deposit with OWNER tender Fourteen Thousand Two Hundred Ninety-Eight and 21/100 Dollars ($14,298.21), which Sublessor shall have the sum of $243,109.90 right to retain as security for the due and Sublessee’s faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, conditions and agreements of this Sublease, but in no event shall the Sublessor be obligated to apply the same upon rents or other charges in arrears or upon damages for the Sublessee’s failure to perform the said covenants, conditions and agreements, termsexcept as required by law; the Sublessor may so apply the security, provisions at its option, and conditions of this Lease on the part of TENANT Sublessor’s right to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part possession of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies Demised Premises for non-payment of fixed rentrent or for any other reason shall not in any event be affected by reason of the fact that the Sublessor holds this security. The security deposit (said sum, if held not applied toward the payment of rent in arrears or toward the payment of damages suffered by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part Sublessor by reason of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any Sublessee’s breach of the covenants, agreementsconditions and agreements of this Sublease, is to be returned to the Sublessee without interest when this Sublease is terminated, according to these terms, provisions and in no event is the said security to be returned until the Sublessee has vacated the Demised Premises and delivered possession to the Sublessor. If the Sublessor repossesses itself of the Demised Premises because of the Sublessee’s default or because of the Sublessee’s failure to carry out the covenants, conditions and agreements of this LeaseSublease, then, OWNER, at its option, the Sublessor may elect apply the said security toward all damages suffered to require TENANT the date of said repossession and may retain the said security to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by apply toward such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to damages as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), suffered or shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend accrue thereafter by reason of TENANTthe Sublessee’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amountbreach. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security Sublessor shall not be deemed obligated to keep the said security as a waiver of TENANT’s default of its obligation to maintain separate fund, but may commingle the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsits own funds.
Appears in 1 contract
Sources: Sublease (Vie Financial Group Inc)
Security. (A) At all times prior to The Tenant concurrently with the expiration of the term execution of this Lease, TENANT shall maintain on deposit Lease has deposited with OWNER Lessor the sum of $243,109.90 4,240.00
(1) as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Lease; it is agreed that, in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this Lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent Lessor may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT tenant is in default or for any sum which OWNER Lessor may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of to any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultincluding, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNERbut not limited to, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing such damage or deficiency accrued before or after summary proceedings or on other re-entry by OWNERLessor. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which event that Tenant shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount fully and faithfully comply with all of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewedterms, without amendmentprovisions, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion conditions of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver returned to Tenant after the date fixed as the end of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT after delivery of entire possession of the premises to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLessor. In the event of a sale of OWNER’s interest in the land and Building of ---------------------------
(1) Lessor acknowledges that Lessee has paid these amounts in full upon execution of previous leases regarding these units with Lessor. which the Buildingpremises form a part, OWNER Lessor shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER Lessor shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT and Tenant agrees to look solely to the new OWNER Lessor solely for the return of said cash security or Letter of Creditsuch security. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLessor. TENANT Tenant further covenants that it he will not assign or encumber, or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Lessor nor its successors or assigns shall be bound by and any such assignment, encumbrance, attempted assignment, assignment or attempted encumbranceencumbrances. In Lessor shall not be required to keep the event that at any time during security in a segregated account and the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank security may be incapable of, unable to, or prohibited from honoring commingled with other funds of Lessor and in ono event shall Tenant be entitled to any interest on the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationssecurity.
Appears in 1 contract
Security. The Company and the Trustee may treat the person in whose names the Debt Securities, including the Global Security, are registered as the owner thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. None of the Company, the Trustee, any Registrar, the paying agent or any agent of the Company or the Trustee will have any responsibility or liability for (Aa) At all times prior any aspect of the records relating to or payments made on account of the beneficial ownership interests of the Global Security by the Depositary or its nominee or any of the Depositary's direct or indirect participants, or for maintaining, supervising or reviewing any records of the Depositary, its nominee or any of its direct or indirect participants relating to the expiration beneficial ownership interests of the term Global Security, (b) the payments to the beneficial owners of this Leasethe Global Security of amounts paid to the Depositary or its nominee, TENANT shall maintain on deposit or (c) for any other matter relating to the actions and practices of the Depositary, its nominee or any of its direct or indirect participants. None of the Company, the Trustee or any such agent will be liable for any delay by the Depositary, its nominee, or any of its direct or indirect participants in identifying the beneficial owners of the Debt Securities, and the Company and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the Depositary or its nominee for all purposes (including with OWNER respect to the sum of $243,109.90 as security for registration and delivery, and the due and faithful payment, as herein providedrespective principal amounts, of the rent, additional rent, charges and damages payable by TENANT under this Lease or Debt Securities to be issued). The Trustee shall deliver individual Bearer Securities issued in exchange for a Global Security pursuant to law this Section 2.15 to the Persons and in such authorized denominations as the Depositary for such Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the due Trustee; provided, however, that individual Bearer Securities shall be delivered in exchange for a Global Security only in accordance with the procedures set forth in Section 2.07 and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required specified pursuant to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionSection 2.03. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu the exchange of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may Bearer Securities for Registered Securities will be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same subject to the extent required for the payment provisions of any rent or for any sum which OWNER may expend or may be required United States income tax laws and regulations applicable to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain Debt Securities in effect for not less than sixty (60) days following at the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement time of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsexchange.
Appears in 1 contract
Sources: Senior Subordinated Debt Indenture (Pioneer Natural Resources Usa Inc)
Security. (A) At all times prior LANDLORD has agreed not to the expiration hold a security deposit on behalf of the term of this LeaseTENANT. However, TENANT shall maintain on has agreed, if required by LANDLORD, due to TENANT’s continued late payments or at the discretion of the LANDLORD, to deposit with OWNER the sum of $243,109.90 50,000.00 to be held as security for the due faithful performance and faithful payment, as herein provided, observance by TENANT of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease. It is agreed that in the part event TENANT defaults beyond applicable grace and notice periods in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of Basic Annual Rent and agrees that OWNER Additional Rent, LANDLORD may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent Basic Annual Rent and additional rent Additional Rent or any other sum as to which TENANT is in default beyond applicable grace and notice periods or for any sum which OWNER LANDLORD may expend or may be required to expend by reason of TENANT’s default beyond applicable grace and notice periods in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency the lease. The security deposit shall be placed in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionsegregated account. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings LANDLORD shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to apply all or any part of such security, the amount of cash so on TENANT’s security deposit with OWNER (exclusive of any interest) shall be less than the amount set forth abovethen upon LANDLORD notifying TENANT thereof, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter such notification replace the amount of security required so applied and the failure of TENANT to replace the same shall be deemed and construed to be maintained by Tenant throughout a failure in the term payment of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable Additional Rent and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), LANDLORD shall have a term the same remedies therefore as if TENANT had failed to pay any item of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security DepositAdditional Rent. In the event that TENANT defaults in shall fully and faithfully comply with all the performance of any of the terms terms, provisions, covenants and conditions of this Leaselease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which security shall be added returned to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than within thirty (30) days prior to after the expiration date fixed as the end or sooner termination of the Letter lease and after delivery of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms entire possessions of the printed portion Demised Premises to LANDLORD free of this Leaseall subtenants, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); howeverlicensees, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease occupants and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter right of Credit in order to satisfy such amounts owed by TENANTpossession. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the Demised Premises form a part, LANDLORD shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER the LANDLORD shall thereupon be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such eventsecurity, and TENANT agrees to look solely to the new OWNER Landlord solely for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLandlord. TENANT further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER LANDLORD nor its successors or assigns shall be bound by any such assignment, encumbranceencumbrances, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this LeaseDecember 15, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.2005 15 /s/ JD Initial /s/ JU
Appears in 1 contract
Sources: Lease Agreement (Cargo Connection Logistics Holding, Inc.)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit 32. Tenant has deposited with OWNER Owner the sum of $243,109.90 22,000. - as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease; it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Owner may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Owner may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionOwner. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Leaselease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount end of the Security Deposit. In the event TENANT defaults in the performance Lease and after delivery of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting entire possession of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTOwner. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the demised premises form a part, Owner shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Owner shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Owner solely for the return of said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNEROwner. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Owner nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Lease Agreement (Medscape Inc)
Security. (A) At all times prior to the expiration of the term 8.01. Upon execution of this Lease, TENANT Tenant shall maintain on deposit with OWNER Landlord the sum of $243,109.90 as security Deposit for the due full and faithful payment, as herein provided, payment and performance by Tenant of the rent, additional rent, charges and damages payable by TENANT Tenant's obligations under this Lease Lease. Such Security Deposit shall be by certified funds or pursuant to law an irrevocable, evergreen letter of credit issued (in favor of Superior Mortgagee) by a federally chartered bank in Seattle, Washington or such other location approved by Landlord. If Tenant defaults in the full and for the due and faithful keeping, observance prompt payment and performance of all any of its obligations under this Lease, including, without limitation, the other covenantspayment of Rent, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security deposit under this Lease Security Deposit so deposited to the extent required for the payment of any rent and additional rent Rent or any other sum sums as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of Tenant's obligations under this Lease, as well as for including, without limitation, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultDemised Premises, whatever whether such damages or deficiency accrued accrue before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)Landlord. If as a result of any such application to all or any part of such security, the amount of cash Landlord shall so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of CreditTenant shall, by drawing down on the same upon demand, immediately deposit with Landlord a sum equal to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum amount so used, applied or and retained which as the Security Deposit. If Tenant shall be added to fully and faithfully pay and perform all of Tenant's obligations under this Lease, the Security Deposit so that the same or any balance thereof to which Tenant is entitled shall be replenished returned or paid over to its former amountTenant, orwithout interest, restore after the Letter date on which this Lease shall expire or sooner end or terminate, and after delivery to Landlord of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTDemised Premises. In the event of a any sale or leasing of OWNER’s interest in the land and Building and/or the BuildingLand, OWNER Landlord shall have the right to transfer (at no expense the Security Deposit to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder which Tenant is entitled to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to payment thereof and Tenant shall look solely to the new OWNER Landlord for the return or payment of said cash security or Letter of Creditthe same. It is agreed that the The provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit the same to a new OWNERLandlord. TENANT covenants that it will The Tenant shall not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of Notwithstanding the foregoing, OWNER may send written notice to TENANT (hereinafter referred to provided Tenant's net worth, as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with certified by a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualificationsreputable accounting firm, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency existsexceeds $10,000,000.00, then in either event, commencing on the Existing L/C may be presented fifth (5th) anniversary of the Commencement Date and for payment by OWNER and each anniversary date thereafter for so long as Tenant's net worth continues to exceed $10,000,000.00 the proceeds thereof security Deposit shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter reduced at the rate of credit meeting said qualificationstwenty (20%) percent per year.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit 17.1 Subtenant has deposited with OWNER Sublandlord the sum of $243,109.90 as security 10,729.88 (which is an amount equal to two months of Base Rent, plus sales tax of 6.5%) (the "Security") for the due faithful performance and faithful payment, as herein provided, observance by Subtenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Sublease, including, but not limited to, the part payment of TENANT Base Rent and all other items of Rental and the surrender of the Premises to be keptSublandlord as herein provided.
17.2 If Subtenant defaults in respect of any of the material or monetary terms, observed provisions and performed. TENANT expressly acknowledges and agrees that OWNER conditions of this Sublease, Sublandlord may use, apply or retain the whole or any part of the security deposit under this Lease Security so deposited, as the case may be, to the extent required for the payment of any rent and additional rent Base Rent or any other sum item of Rental as to which TENANT Subtenant is in default or for any sum which OWNER Sublandlord may expend or may be required to expend by reason of TENANT’s Subtenant's default in respect of any of the terms, covenants and conditions of this LeaseSublease, as well as for including, but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultPremises, whatever whether such damages or deficiency accrued accrue or accrues before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)Sublandlord. If as a result of any such application to all Sublandlord applies or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or retains any part of the Security Depositso deposited, as represented by the Letter of CreditSubtenant, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on upon demand, pay to OWNER shall deposit with Sublandlord the sum amount so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER Sublandlord shall have the rightfull deposit on hand at all times during the Term. If Subtenant shall fully and faithfully comply with all of the terms, exercisable by a sight draftprovisions, to receive covenants and conditions of this Sublease, the monies represented by the Letter of Credit (which monies Security, together with accrued interest thereon, shall be held by OWNER as a cash deposit pursuant promptly returned to Subtenant after the terms Expiration Date and after delivery of possession of the printed portion of this Premises to Sublandlord in the condition required to be delivered to Landlord under the Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security except as otherwise provided herein. Subtenant shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Sublandlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Owner the sum of $243,109.90 5,499.99* as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease; it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Owner may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Owner may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionOwner. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Leaselease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount end of the Security Deposit. In the event TENANT defaults in the performance Lease and after delivery of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting entire possession of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTOwner. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the demised premises form a part, Owner shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Owner shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Owner solely for the return of said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNEROwner. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Owner nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove*Bears interest - See Rider Par. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications63.
Appears in 1 contract
Sources: Loft Lease (General Credit Corp)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT Tenant shall maintain on deposit with OWNER Landlord the sum of $243,109.90 21,375.00 upon execution of the Lease as security for the due and faithful payment, as herein provided, performance of the rent, additional rent, charges and damages payable by TENANT Tenant’s obligations under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to (“Deposit”). The Deposit shall be kept, observed and performedplaced in a non-interest bearing account. TENANT expressly Tenant hereby acknowledges and agrees that OWNER Landlord may use, commingle the Deposit with any other funds or accounts of Landlord and/or security deposits and rent deposits of other tenants at the Shopping Center.
(B) Landlord may apply or retain the whole all or any part of the security deposit under this Lease for the payment of Deposit to cure any rent default by Tenant hereunder and additional rent or to pay any other sum as to which TENANT is in default or for any sum which OWNER monies that Landlord may expend or may be required to expend by reason of TENANTTenant’s default in respect of without limiting any of the terms, covenants and conditions of this Lease, as well as for any damages other right or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER remedy that Landlord may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or as otherwise pursuant provided by law. If Landlord applies any part of the Deposit to legal process or lawcure any default of Tenant, OWNER Tenant shall on demand deposit with Landlord the amount so applied, so that Landlord shall have a full Deposit on hand at all times during the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land Term and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbranceOption Term. In the event that at the Premises is sold or conveyed to a third party, Landlord shall transfer and deliver the Deposit to the transferee of the Premises and shall notify Tenant thereof and, thereupon, Landlord shall be discharged from any time during further liability relating to the term Deposit.
(C) If Tenant shall fully perform each provision of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that Lease through the net worth first 11 months of the Issuing Bank first Lease Year, Landlord shall deduct the sum of $5,343.75 from the Deposit and apply it to the monthly installment of Fixed Rent that shall become due and payable on the first day of the last month of the first Lease Year and, thereafter, Tenant shall be less than required only to maintain a Deposit in the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications$16,031.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Section 26.01. Tenant has deposited with OWNER Landlord the sum of $243,109.90 41,666.67 (one (1) month’s Base Rent) as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Lease. It is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this Lease, including, but not limited to, the payment of Base Rent and agrees that OWNER Additional Rent, Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent Base Rent and additional rent Additional Rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event Landlord applies or retains any bankruptcyportion or all of the security deposited, insolvency, reorganization Tenant shall forthwith restore the amount so applied or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, retained. The amount required to restore the security deposit as provided shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER considered Additional Rent for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)purposes under this Lease. If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s Landlord has no obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The place Tenant’s security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the and, by reason thereof, Tenant is not entitled to any interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit.
Section 26.02. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in In the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any Tenant shall fully and faithfully comply with all of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver returned to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than Tenant within sixty (60) days following after the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to fixed as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date end of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT after delivery of the entire possession of the Demised Premises to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land and Building or a master leasing of the Building, OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee vendee, or master lessee, and OWNER . Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such eventsecurity, TENANT and Tenant agrees to look solely to the new OWNER landlord solely for the return of said cash security or Letter of Creditsecurity. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERlandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Lease (Yunhong CTI Ltd.)
Security. (A) At Tenant has deposited with Landlord the sum Specified in Article M of Section I as security for the faithful performance and observance by Tenant of all times prior to the expiration of the term terms, covenants, conditions, provisions, and agreements of this Lease. Tenant shall not be entitled to interest on such security deposit and Landlord shall not be obligated to hold such deposit as a separate fund, but may commingle it with other funds. In the event Tenant defaults in respect of any of the terms, covenants, conditions, provisions or agreements of this Lease, TENANT shall maintain on deposit with OWNER including, but not limited to, the sum payment of $243,109.90 as security for the rent or other sums due and faithful paymenthereunder, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum sums as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions covenants, conditions, provisions or agreements of this Lease, as well as for including, but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultDemised Premises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNERLandlord. Tenant, all of on demand by Landlord, will forthwith replenish the foregoing in such order and priority as OWNER may elect in its sole discretionsecurity or any portion thereof so used or applied by Landlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereonterms, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, termsconditions, provisions and conditions agreements of this Lease, thenthe security, OWNERwithout interest, at its option, may elect shall be returned to require TENANT to deposit (or to increase Tenant promptly after the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at date fixed as the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term end of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu but only after delivery of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount entire possession of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same Demised Premises to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land and and/or Building or leasing of the land and/or the entire Building, OWNER or the sale of such leasehold, Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee transferee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter security; and in the event of Credit. In such eventtransfer of security, TENANT agrees to Tenant shall look solely to the new OWNER Landlord solely for the return of said cash security or Letter of Credit. It is agreed that security; and the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERlandlord. TENANT covenants that it will Tenant shall not assign or encumber, encumber or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.attempt
Appears in 1 contract
Sources: Office Lease (PDF Solutions Inc)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit THIRTY-EIGHTH: -- Tenant has deposited with OWNER Landlord the sum of $243,109.90 $ NONE, as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease: it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages damage or deficiency accrued before or after summary proceedings or other re-entry by OWNERLandlord, Tenant shall, upon demand, deposit with Landlord the full amount so used, in order that Landlord shall have the full security deposit on hand at all of the foregoing in such order and priority as OWNER may elect in its sole discretiontimes. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Leaselease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount end of the Security Deposit. In the event TENANT defaults in the performance lease and after delivery of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting entire possession of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of any transfer or conveyance by Landlord of its lease to the building of which the demised premises form a sale of OWNER’s interest in the land and the Buildingpart, OWNER hereinafter referred to, Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee transferee or lesseegrantee, and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security: and Tenant agrees to look solely to the new OWNER Landlord solely for the return of said cash security or Letter of Credit. It security: and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Assignment and Assumption Agreement (G Iii Apparel Group LTD /De/)
Security. (A) At all times prior to For the expiration of purposes hereof, the term “Security Deposit” shall mean the amount of $1,681,054.38. ▇▇▇▇▇▇ has deposited with Owner on the signing of this LeaseLease the Security Deposit by Letter of Credit (as defined and further described in Paragraph 43(B)), TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performedLease. TENANT expressly acknowledges and Tenant agrees that OWNER in the event (i) of the occurrence of an Event of Default or (ii) Tenant has defaulted in the performance of any of its obligations under this Lease, including the payment of any item of Basic Annual Rent or Additional Rent, and the transmittal of a notice of default by Owner is barred by applicable law, Owner may draw the entire amount of the Letter of Credit or any portion thereof and use, apply or retain the whole or any part of such proceeds, to the security deposit under this Lease extent required for the payment of any rent and additional rent Basic Annual Rent, Escalation Rent, or any other Additional Rent or other sum as to which TENANT Tenant is in default default, or for any sum which OWNER that Owner may expend or may be required to expend by reason of TENANT’s such default in respect of (including any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionOwner). In addition, Owner may make multiple partial draws upon the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of accordance with the terms of this Lease, including the payment of rent, beyond Article. If Owner applies or retains any applicable cure period, portion or in the event all of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date proceeds of the Letter of Credit, that it elects not to have such Tenant shall forthwith restore the amount so applied or retained by delivering an additional or new Letter of Credit renewed. OWNER covenants and agrees to return so that, at all times, the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date amount of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies Security Deposit shall be held by OWNER as a cash deposit pursuant the amount set forth in this Paragraph. Tenant’s failure to restore the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit amount so applied or TENANT’s default retained within three (3) Business Days after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, Owner has drawn upon the Letter of Credit shall be transferableconstitute an Event of Default under this Lease. Provided there is no uncured default, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have any balance of the right, exercisable by a sight draft, to receive monies represented by the Letter proceeds of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees held by Owner and payments owed not used, applied or retained by TENANT in connection with such terminationOwner as above provided, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or remaining Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for returned to Tenant after the return Expiration Date and after delivery of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth possession of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred entire Demised Premises to as the “Existing L/C”) Owner in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Security. (Aa) At all times prior to Simultaneously with the expiration of the term execution of this LeaseSublease, TENANT Sublessee shall maintain on deposit with OWNER Sublessor the sum of Five Hundred Eighty-Nine Thousand, Four Hundred Twenty Dollars ($243,109.90 589,420.00) ("Security Deposit") as security for the due faithful performance and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable observance by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance Sublessee of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed Sublease on Sublessee's part to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)performed and observed. If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER Sublessor may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same Deposit to the extent required for the payment of any rent or Rent and any other sums as to which Sublessee may be in default hereunder beyond the expiration of applicable grace and notice periods and for any sum which OWNER Sublessor may expend or may be required to expend by reason of TENANT’s Sublessee's default beyond the expiration of applicable grace and notice periods in respect of any of the terms terms, covenants and conditions of this LeaseSublease, including including, without limiting the generality of the foregoing, any and all damages and deficiencies in the reletting of the Premises, whether such damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing deficiencies shall accrue before or after summary proceedings or other re-entry by OWNERSublessor. In the case event that Sublessee shall fully and faithfully comply with all of every such usethe terms, application provisions, covenants and conditions of this Sublease, the Security Deposit, or retentionso much thereof as shall not have been applied by Sublessor as aforesaid, TENANT shalltogether with accrued interest thereof, on demand, pay to OWNER the sum so used, applied or retained which shall be added returned to Sublessee promptly following the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter Expiration Date or date of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount earlier termination and delivery of the Letter of Credit upon presentation entire possession of the Letter of Credit and a sight draft in the amount Premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTSublessor. In the event of a sale an assignment by Sublessor of OWNER’s its interest in under the land and Master Lease, Sublessor shall transfer the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder Security Deposit to the vendee or lessee, assignee and OWNER Sublessor shall thereupon be released by TENANT Sublessee from all liability for the return of such cash security or Letter of CreditSecurity Deposit. In such event, TENANT agrees to Sublessee shall look solely to the its new OWNER landlord for the return of said cash security or Letter of CreditSecurity Deposit. It is agreed that the The foregoing provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit the Security Deposit to a new OWNERlandlord. TENANT Sublessee further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder as security, Security Deposit and that neither OWNER Sublessor nor its successors or and assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance.
(b) The Security Deposit shall be placed by Sublessor in an interest be aring account. In Interest that accrues thereon shall belong to Sublessee. Provided Sublessee is not in default hereunder and Sublessee supplies Sublessor with its Tax I.D. Number, interest shall be paid to Sublessee once annually. The obligation to pay any taxes, whether income or otherwise, related to or affecting any interest earned on the event Security Deposit shall be the sole responsibility of Sublessee and Sublessee hereby agrees to pay same. Sublessee represents that its Tax I.D. Number is ▇▇-▇▇▇▇▇▇▇.
(c) Sublessee shall have the right, either (i) in lieu of certain funds required to be deposited with Sublessor pursuant to this Article 18 of this Sublease or (ii) at any time during thereafter in substitution for such funds, to deposit and maintain with Sublessor as a portion of the security deposit referred to in Section 18.1(a) of this Sublease, a surety bond not to exceed the aggregate amount of $294,710.00, in the form attached hereto as Exhibit B (the "Surety Bond").
(d) Sublessee shall, not less than sixty (60) days prior to the expiration of the term of the Surety Bond, time being of the essence of this Leaseprovision of the Sublease, OWNERdeliver to Sublessor one of the following: (i) an extension of the Surety Bond for a term equal to the term of the expiring Surety Bond; (ii) a new surety bond substantially in the form attached hereto as Exhibit B; (iii) cash in the sum of $294,710.00; or (iv) an irrevocable commercial letter of credit, in OWNER’s reasonable opinion, believes accordance with the terms of Section 18.1(e) below. If Sublessee shall fail to deliver one of above items (ai) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or through (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”iv) in accordance with the terms thereofprovisions of this Section, thensuch failure shall be an event of default under this Sublease.
(e) Sublessee shall have the right, upon either (i) in lieu of providing the happening Sublessor with a Surety Bond pursuant to Section 18.1(c) of either this Sublease or (ii) at any time thereafter in substitution for such Surety Bond, to deposit and maintain with Sublessor as a portion of the foregoing, OWNER may send written notice to TENANT (hereinafter security deposit referred to as the “Replacement Notice”in Section 18.1(a) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new of this Sublease, an irrevocable commercial letter of credit (hereinafter referred in the aggregate amount of $294,710.00, in form and substance reasonably satisfactory to as Sublessor, and issued by a member bank of the “Replacement L/C”) from an Issuing Bank meeting New York Clearing House Association, acceptable to Sublessor, payable upon the qualifications described hereinabove. Upon receipt presentation by Sublessor to such bank in New York City of a Replacement L/C meeting sight draft, without presentation of any other documents, statements or authorizations, other than a written statement by an officer or authorized representative of the qualificationsbeneficiary of the Letter of Credit stating that Sublessee is in default under this Sublease, OWNER beyond any applicable grace period (a "Letter of Credit"), which Letter of Credit shall forthwith return provide (a) for the Existing L/C continuance of such credit for the period of at least one (1) year from the date hereof, (b) for the automatic extension of such Letter of Credit for additional periods of one (1) year from the initial and each future expiration date thereof (the last such extension to TENANTprovide for the continuance of such Letter of Credit for at least three (3) months beyond the Expiration Date) unless such bank gives Sublessor notice of its intention not to renew such Letter of Credit, not less than sixty (60) days prior to the initial or any future expiration date of such Letter of Credit and (c) that in the event such notice is given by such bank, Sublessor shall have the right to draw on such bank at sight for the balance remaining in such Letter of Credit and hold and apply the proceeds thereof in accordance with the provisions of this Article 18. In Each Letter of Credit to be deposited and maintained with Sublessor (or the proceeds thereof) shall be held by Sublessor as security for the faithful performance and observance by Sublessee of the terms, provisions and conditions of this Sublease, and in the event that (ix) a Replacement L/C meeting the qualifications is not received by OWNER within the time specifiedany default occurs under this Sublease, or (iiy) OWNER reasonably believes an emergency existsSublessor transfers its right, then title and interest under this Sublease to a third party and the bank issuing such Letter of Credit does not consent to the transfer of such Letter of Credit to such third party, or (z) notice is given by the bank issuing such Letter of Credit that it does not intend to renew the same, as above provided, then, in either any such event, the Existing L/C Sublessor may be presented for payment by OWNER draw on such Letter of Credit, and the proceeds thereof of such Letter of Credit shall then be held and applied as security (and be replenished, if necessary) as provided in Article 18 and herein.
(f) In the event Sublessor shall use, apply or retain the whole or any part of the security deposited under this Article 18, Sublessee shall immediately deliver to Sublessor an amount equal to the sum used, applied or retained by OWNER Sublessor in accordance therewith so that at all times during the term hereof, Sublessor shall have as security hereunder an amount equal to $589,420.00. Sublessee shall pay as Additional Rent Sublessor's reasonable attorneys' fees in connection with this Leasethe replacement, subject, however, to TENANT’s obligation to replace such cash security with a new letter substitution or amendment of credit meeting said qualificationsany Letter of Credit or Surety Bond described herein.
Appears in 1 contract
Sources: Sublease Agreement (Ambi Inc)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Landlord the sum of $243,109.90 5,234.00 (carried over) as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions terms and conditions of this Lease on Lease. The depositing of said sum with the part Landlord is a condition precedent to the valid execution of TENANT to be keptthe Lease. Landlord, observed and performed. TENANT expressly acknowledges and agrees that OWNER at its option, may use, apply or retain the whole or any part of the security deposit under this Lease so deposited for the payment of any rent and additional rent or any other sum as to for which TENANT Tenant is in default or for any sum which OWNER Landlord, at its option, may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants terms and conditions of this Lease. Any expenditures made by Landlord as herein stipulated shall be paid by Tenant as additional rent. Landlord shall be permitted to co-mingle Tenant security funds with other funds of Landlord and shall not be required to pay interest on any sum so held. In the event that Tenant shall fully and faithfully comply with all the terms and conditions of this Lease, the security shall be returned to Tenant after the date fixed as well as for any damages or deficiency in the reletting end of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or Lease and after summary proceedings or other re-entry by OWNER, all delivery of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted Premises by or against TENANT, or its successors or assigns, the security deposit shall be deemed Tenant to be applied first Landlord pursuant to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions terms and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the BuildingPremises, OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, buyer and OWNER Landlord shall thereupon be released relieved by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT and Tenant agrees to look solely to the new OWNER buyer solely for the return of said cash security or Letter of Creditsecurity. It is agreed that the The provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERbuyer. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER the Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Lease Agreement (Intest Corp)
Security. (A) At To secure all times prior of the Lessee’s obligations under this Agreement, including and without derogating from any of the Lessee’s other obligations, timely vacating the Premises, the payment for any damage that is caused to the expiration of the term of this LeasePremises, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent Rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of payments that are imposed upon the Lessee under this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assignsAgreement, the security deposit following provisions shall be deemed to be applied first apply: The Lessee hereby delivers to the payment of any rents and/or other charges due OWNER for all periods prior Lessor upon this Agreement’s execution an unconditional bank guarantee linked to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash dollar in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all six months of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) DollarsRent, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form realized at any time and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty the entire Lease Period and for two additional months (60) days following the expiration date of the Lease)hereinafter, unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal NoticeSecurity”) ). The Lessor shall be entitled at any time to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following extend the expiration of the existing Letter bank guarantee in order that it shall be in effect during the entire Lease Period and/or the Option Periods if they are exercised (plus two additional months). The Lessor shall realize the aforesaid Security and/or any part thereof in its sole discretion based upon the value of Credit any breach and/or damage if the Lessee does not fewer than thirty (30) days prior fulfill its undertakings under this Agreement, including if the Lessee does not timely vacate the Premises and/or does not make any Rent payment or payment that is imposed upon it by law and under the Agreement, and if it does not pay for damages that were caused to the expiration Premises. It is hereby clarified that realizing the said Security or any part thereof by the Lessor shall not grant the Lessee any rights in the Premises and such an act shall not constitute a waiver or conditioning of any of the Letter of Credit, such failure shall constitute a material default Lessor’s rights and/or the Lessee’s obligations under this Lease and OWNER shall have Agreement’s provisions and/or by law. For the rightavoidance of doubt, exercisable by a sight draftit is agreed that for efficiency’s sake only, to receive the monies represented by the Letter of Credit (which monies Security shall be held by OWNER as a cash deposit pursuant to granted for the terms benefit of the printed portion of this LeaseNiber Promotions and Investments Ltd., pending the replacement of such Letter of Credit or TENANT’s default after notice that is Lessor number 1, and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit it shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have entitled to realize upon it even if the right, exercisable by a sight draft, to receive monies represented by Lessee breaches the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them Agreement with respect to such terminationthe other Lessors. If TENANT For the avoidance of doubt, it is hereby clarified that the delivery of possession is conditioned upon the timely delivery of the bank guarantee as stated above and upon the arranging of insurance as detailed in Section 8d above. The Security shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder be returned to the vendee or lesseeLessee within thirty days after the Premises is vacated at the end of the Lease Period, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed provided that the provisions hereof shall apply to every transfer or assignment made Lessee fulfilled all of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of obligations under this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsAgreement.
Appears in 1 contract
Sources: Lease Agreement (Optium Corp)
Security. (A) At all times prior to A. Upon the expiration execution of this Sublease and receipt of the term consent of the Overlandlord to this Sublease as provided in Section 32 of this LeaseSublease, TENANT Subtenant shall maintain on deposit with OWNER Sublandlord the sum of $243,109.90 22,222.50 (the “Security Deposit Amount”), as security for the due faithful performance and faithful payment, as herein provided, observance by Subtenant of all of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Sublease. Subtenant agrees that, if Subtenant shall default with respect to any of the part covenants, agreements, terms, provisions and conditions that shall be the obligation of TENANT Subtenant to be keptobserve, observed perform or keep under the terms of this Sublease, including the payment of the Fixed Rent and performed. TENANT expressly acknowledges and agrees that OWNER Additional Charges, Sublandlord may use, apply or retain the whole or any part of the security deposit under this Lease being held by Sublandlord (the “Security”) to the extent required for the payment of any rent Fixed Rent and additional rent Additional Charges, or any other sum payments as to which TENANT is Subtenant shall be in default or for any sum monies which OWNER Sublandlord may expend or may be required to expend by reason of TENANTSubtenant’s default in respect of any of the covenants, agreements, terms, covenants provisions and conditions of this LeaseSublease, as well as for including any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultSublease Premises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionSublandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings Sublandlord shall not be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may so use, apply or retain the whole or any part of the Security Depositso deposited, as represented by but if the Letter of Credit, by drawing down on the same to the extent required for the payment of whole or any rent or for any sum which OWNER may expend or may part thereof shall be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which retained, then Subtenant shall be added immediately deposit with Sublandlord an amount in cash equal to the Security Deposit amount so used, applied or retained, so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER Sublandlord shall have the rightentire Security on hand at all times during the Term. In the event that Subtenant shall fully and faithfully comply with all of the terms, exercisable by a sight draftprovisions, to receive covenants, agreements and conditions of this Sublease, the monies represented by the Letter of Credit (which monies Security shall be held by OWNER as a cash deposit pursuant returned to Subtenant within ten (10) days after the terms Expiration Date and delivery of exclusive possession of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation Sublease Premises to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTSublandlord. In the event of a sale any making or assignment of OWNERany ground or underlying lease or upon an assignment of Sublandlord’s interest in the land and the Building, OWNER this Sublease: (i) Sublandlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder Security to the vendee assignee or lesseelessee or transferee, and OWNER (ii) upon acknowledgment by such assignee or lessee or transferee of receipt of the Security, (x) Sublandlord shall thereupon be released by TENANT Subtenant from all liability for the return of such cash security or Letter of Credit. In such eventSecurity, TENANT and (y) Subtenant agrees to look solely to the new OWNER Sublandlord’s successor for the return of said cash security or Letter of Credit. It is Security; it being agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit the Security to a new OWNERSublandlord. TENANT Subtenant further covenants that it Subtenant will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as securitySecurity, and that neither OWNER Sublandlord nor its Sublandlord’s successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In .
B. Sublandlord agrees to place the event Security in a separate interest-bearing account in a bank that at any time during is a member of the term New York Clearinghouse Association, and, unless disbursed or applied by Sublandlord as provided in Subparagraph 27A above, the interest earned thereon (less an amount equal to the lesser of this Lease(i) the interest earned thereon and (ii) one (1%) percent of the Security, OWNERwhich may be retained by Sublandlord each year as compensation for management and administration of said account) shall, in OWNERSublandlord’s reasonable opiniondiscretion: (i) be added to the Security Deposit Amount as additional security, believes (a) that the net worth of the Issuing Bank and shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) held and/or disbursed in accordance with the terms thereof, then, upon the happening provisions of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specifiedsaid Subparagraph 27A, or (ii) OWNER reasonably believes an emergency existsbe disbursed annually to Subtenant within sixty (60) days following Sublandlord’s receipt of a written request therefor from Subtenant, then but only if Subtenant shall not be in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance default with respect to any of Subtenant’s obligations under this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsSublease.
Appears in 1 contract
Sources: Sublease (Ameritrans Capital Corp)
Security. (A) At all times prior to the expiration of the term of The Tenant has this Lease, TENANT shall maintain on deposit day deposited with OWNER the sum of Landlord $243,109.90 30,000.00 as security for the due full and faithful payment, as herein provided, of performance by the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance Tenant of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this LeaseLease upon the Tenant's part to be performed, as well as for which said sum shall be returned to the Tenant, with interest at the passbook rate paid from time to time by banks reasonably chosen by Landlord (although Landlord shall have no obligation to deposit any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of said security) after the foregoing in such order and priority time fixed as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter term herein, provided Tenant has vacated demised premises, removed all personalty therefrom and has fully and faithfully carried out all of Credit not fewer than thirty (30) days prior said terms, covenants and conditions on Tenant's part to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTperformed. In the event of a sale of OWNER’s interest in bona fide sale, the land and the Building, OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, for the benefit of the Tenant and OWNER the Landlord shall be considered released by TENANT the Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and the Tenant agrees to look solely to the new OWNER vendee solely for the return of the said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof this shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERvendee. TENANT covenants that it will The security deposited under this lease shall not assign be mortgaged, assigned or encumber, or attempt to assign or encumber, encumbered by the monies or Letter Tenant without the written consent of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrancethe Landlord. In the event that at any time during or all of said security is utilized by Landlord, the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank entire amount so utilized shall be less than replenished by Tenant's depositing with Landlord a further sum in the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter so utilized forthwith upon Landlord's notification to Tenant of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsutilization.
Appears in 1 contract
Sources: Lease Agreement (Martha Stewart Living Omnimedia Inc)
Security. (A) At Tenant shall keep on deposit with Landlord at all times prior to during the expiration of the term Term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 Security Deposit as security for the due and faithful payment, as herein provided, payment by Tenant of the rent, additional rent, charges Base Rent and damages payable by TENANT any other sums due under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions conditions and conditions covenants of this Lease. If, at any time during the Term of this Lease on the part of TENANT to Tenant shall be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms provision of this Lease, including Landlord may, but shall not be required to, use the Security Deposit or so much thereof as necessary, in payment of rentany Base Rent or any other sums due under this Lease in default, beyond in reimbursement of any applicable cure period, expense incurred by Landlord or in payment of the damages incurred by Landlord by reason of Tenant’s default. In such event, Tenant shall, on written demand of Landlord, forthwith remit to Landlord a sufficient amount in cash to restore the Security Deposit to its original amount. In the event of the filing of a bankruptcy proceeding by or against TENANTSecurity Deposit has not been utilized as described above, OWNER may use, apply or retain the whole or any part of the Security Deposit, or as represented by the Letter of Creditmuch thereof as has not been utilized for such purposes, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added refunded to the Security Deposit so that the same shall be replenished to its former amountTenant, orwith interest, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than within sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date end of the Letter of CreditTerm, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements upon full performance of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of CreditTenant. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER Landlord shall have the right to transfer commingle the Security Deposit with other funds of Landlord; however, Landlord shall quarterly pay Tenant interest on the average daily principal balance of the Security Deposit at an annual rate of eight percent (at no expense to OWNER8%). Landlord shall deliver the Security Deposit (plus any accrued interest) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lesseepurchaser of Landlord’s interest in the Premises in the event such interest be sold, and OWNER thereupon, Landlord shall be released by TENANT discharged from all further liability with respect to the Security Deposit. Notwithstanding the above provisions of this Section 28, if claims of Landlord exceed the Security Deposit, Tenant shall remain liable for the return balance of such cash security or Letter of Creditclaims. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof Tenant shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder as security, and Security Deposit provided for herein except that neither OWNER nor its successors or assigns shall be bound by any Tenant may assign such assignment, encumbrance, attempted assignment, or attempted encumbrance. In deposit in the event that at any time during the term of a permitted assignment of Tenant’s entire interest in this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Security. (A) At all times prior A. Upon the execution of this Sublease, but subject to the expiration provisions of the term of this LeaseSubparagraph 27C below, TENANT Subtenant shall maintain on deposit with OWNER Sublandlord the sum of $243,109.90 US$211,800.00 (the “Security Deposit Amount”), as security for the due faithful performance and faithful payment, as herein provided, observance by Subtenant of all of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Sublease. Subtenant agrees that, if Subtenant shall default, beyond the part expiration of TENANT the applicable cure period (if any), with respect to any of the covenants, agreements, terms, provisions and conditions that shall be keptthe obligation of Subtenant to observe, observed perform or keep under the terms of this Sublease, including the payment of the Fixed Rent and performed. TENANT expressly acknowledges and agrees that OWNER Additional Charges, Sublandlord may use, apply or retain the whole or any part of the security deposit under this Lease being held by Sublandlord (the “Security”) to the extent required for the payment of any rent Fixed Rent and additional rent Additional Charges, or any other sum payments as to which TENANT is Subtenant shall be in default or for any sum monies which OWNER Sublandlord may expend or may be required to expend by reason of TENANTSubtenant’s default in beyond the expiration of the applicable cure period (if any), with respect of to any of the covenants, agreements, terms, covenants provisions and conditions of this LeaseSublease, as well as for including any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultSublease Premises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionSublandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings Sublandlord shall not be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may so use, apply or retain the whole or any part of the Security Depositso deposited, as represented by but if the Letter of Credit, by drawing down on the same to the extent required for the payment of whole or any rent or for any sum which OWNER may expend or may part thereof shall be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added retained, then Subtenant shall, upon demand, immediately deposit with Sublandlord an amount in cash equal to the Security Deposit amount so used, applied or retained, so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER Sublandlord shall have the rightentire Security on hand at all times during the Term. In the event that Subtenant shall fully and faithfully comply with all of the terms, exercisable by a sight draftprovisions, to receive covenants, agreements and conditions of this Sublease, the monies represented by the Letter of Credit (which monies Security shall be held by OWNER as a cash deposit pursuant returned to Subtenant within 60 days after the terms Expiration Date and delivery of exclusive possession of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation Sublease Premises to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTSublandlord. In the event of a sale any making or assignment of OWNERany ground or underlying lease, or upon an assignment of Sublandlord’s interest in the land and the Building, OWNER this Sublease: (i) Sublandlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder Security to the vendee assignee or lesseelessee or transferee, and OWNER (ii) upon acknowledgment by such assignee or lessee or transferee of receipt of the Security, Sublandlord shall thereupon be released by TENANT Subtenant from all liability for the return of such cash security or Letter of Credit. In such eventSecurity, TENANT and (iii) Subtenant agrees to look solely to the new OWNER Sublandlord’s successor for the return of said cash security or Letter of Credit. It is Security; it being agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit the Security to a new OWNERSublandlord. TENANT Subtenant further covenants that it Subtenant will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as securitySecurity, and that neither OWNER Sublandlord nor its Sublandlord’s successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In .
B. Subject to the event that at any time during provisions of Subparagraph 27C below, Sublandlord agrees to place the term Security in an interest-bearing account, and, unless disbursed or applied by Sublandlord as provided in Subparagraph 27A above, the interest earned thereon (less an amount equal to one percent of this Leasethe Security, OWNERwhich may be retained by Sublandlord each year as compensation for management and administration of said account) shall, in OWNERSublandlord’s reasonable opiniondiscretion: (i) be added to the Security Deposit Amount as additional security, believes (a) that the net worth of the Issuing Bank and shall be less than held and/or disbursed in accordance with the minimum amount specified aboveprovisions of said Subparagraph 27A, or (bii) that circumstances have occurred indicating that be disbursed annually to Subtenant within 60 days following Sublandlord’s receipt of a written request therefor from Subtenant, but only if Subtenant shall not be in default, beyond the Issuing Bank may be incapable ofexpiration of the applicable cure period (if any), unable towith respect to any of Subtenant’s obligations under this Sublease.
(i) Notwithstanding anything to the contrary contained in Subparagraph 27A above, or prohibited from honoring simultaneously with the then existing execution of this Sublease by Subtenant, Subtenant shall deliver to Sublandlord, in lieu of the cash security deposit delivered pursuant to Subparagraph 27A above, a clean, irrevocable, transferable and unconditional letter of credit (the “Letter of Credit Credit”) issued by and drawn upon a commercial bank (hereinafter referred to as the “Existing L/CIssuing Bank”) which shall be a member bank of the New York Clearinghouse Association (or, in accordance the alternative, which shall have offices for banking purposes in the Borough of Manhattan and shall have a net worth of not less than $1,000,000,000, with appropriate evidence thereof to be submitted by Subtenant), which Letter of Credit shall: (i) have a term of not less than one year, (ii) be in the form annexed hereto as Exhibit C, (iii) be for the benefit of Sublandlord, (iv) be in the amount of the Security Deposit Amount, (v) except as otherwise provided in this Subparagraph 27C, conform and be subject to the International Standby Practices (ISP 1998, Publication 590) (or any revision thereof or successor thereto) and (to the extent not inconsistent therewith) the laws of the State of New York, including the Uniform Commercial Code, (vi) be fully transferable by Sublandlord without any fees or charges therefor (or, if the Letter of Credit shall provide for the payment of any transfer fees or charges, the same shall be paid by Subtenant as and when such payment shall be requested by the Issuing Bank (and the same shall constitute Additional Charges hereunder)), (vii) provide that Sublandlord shall be entitled to draw upon the Letter of Credit in New York City upon presentation to the Issuing Bank of a sight draft accompanied by Sublandlord’s statement that Sublandlord is then entitled to draw upon the Letter of Credit pursuant to the terms thereofof this Sublease, thenand (viii) provide that the Letter of Credit shall be deemed automatically renewed, upon without amendment, for consecutive periods of one year each year thereafter during the happening entire Term and for a period of either of 60 days thereafter, unless the foregoing, OWNER may Issuing Bank shall send written notice to TENANT (hereinafter referred to as the “Replacement Non-Renewal Notice”) requiring TENANT to Sublandlord by registered mail, return receipt requested, not less than 60 days next preceding the then expiration date of the Letter of Credit that the Issuing Bank elects not to renew such Letter of Credit, in which case Sublandlord shall have the right, by sight draft on the Issuing Bank, to receive the monies represented by the then-existing Letter of Credit, and to hold and/or disburse such proceeds pursuant to the terms of Subparagraph 27A above as cash security. If Sublandlord shall fail, for any reason whatsoever, to draw upon the Letter of Credit within fifteen (15) business days said 60 day period, and the Letter of Credit shall expire prior to replace the Existing L/C 60th day following the Expiration Date of the Term, then Subtenant shall, upon demand, immediately furnish Sublandlord with a new letter replacement Letter of credit Credit (hereinafter referred which shall comply with all of the conditions set forth in this Subparagraph 27C), so that Sublandlord shall have the entire Security on hand at all times during the Term and for a period of 60 days thereafter. Subtenant acknowledges and agrees that the Letter of Credit shall be delivered to Sublandlord as security for the “Replacement L/C”faithful performance and observance by Subtenant of all of the covenants, agreements, terms, provisions and conditions of this Sublease, and that Sublandlord shall have the right to draw upon the Letter of Credit in any instance in which Sublandlord would have the right to use, apply or retain the whole or any part of any cash security deposited with Sublandlord pursuant to Subparagraph 27A above.
(ii) from an Issuing Bank meeting With respect to the qualifications described hereinabove. Upon receipt Letter of a Replacement L/C meeting Credit being required hereunder in lieu of cash security, upon Subtenant’s delivery of the qualifications, OWNER shall forthwith return the Existing L/C Letter of Credit to TENANT. In the event that Sublandlord: (i) a Replacement L/C meeting all references to “Security” in Subparagraph 27A above shall be deemed to refer to the qualifications is not received by OWNER within the time specifiedLetter of Credit, or any proceeds thereof as may be drawn upon by Sublandlord, and (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C provisions of Subparagraph 27B above shall apply only to such Letter of Credit proceeds (if any) as may be presented for payment by OWNER drawn and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsSublandlord.
Appears in 1 contract
Sources: Sublease (TRANS LUX Corp)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Subtenant has deposited with OWNER Sublandlord the sum of -------- $243,109.90 29,260.00 as security for the due faithful performance and faithful payment, as herein provided, observance by Subtenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Sublease. In the part event Subtenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this Sublease, including, but not limited to, the payment of base rent and agrees that OWNER additional rent, which default continues after the expiration of any applicable grace period, Sublandlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any base rent and additional rent or any other sum as to which TENANT Subtenant is in default or for any sum which OWNER Sublandlord may expend or may be required to expend by reason of TENANT’s Subtenant's default in respect of any of the terms, covenants and conditions of this LeaseSublease, as well as for including, but not limited to, any damages demages or deficiency in the reletting of the demised premises caused by TENANT’S defaultSublet Premises, whatever whether such damages damage or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionSublandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Subtenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this LeaseSublease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver returned to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than Subtenant within thirty (30) days prior to after the expiration date fixed as the end of this Sublease and after delivery of entire possession of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, Sublet Premises to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of CreditSublandlord. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT Subtenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Sublandlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In Sublandlord shall hold the event that at any time during security deposit in an interest-bearing account and shall pay the term of this Leaseinterest to Subtenant annually, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to so long as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications Subtenant is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with default under this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsSublease.
Appears in 1 contract
Sources: Sublease Agreement (American Home Mortgage Holdings Inc)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit 41.01. Tenant has deposited with OWNER Landlord the sum of $243,109.90 95,343.75 as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease; it is agreed that in the event Tenant defaults in respect of any of the terms, provisions, covenants and conditions of this Lease on including, but not limited to, the part payment of TENANT to be keptfixed annual rent and additional rent, observed and performed. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any fixed annual rent and additional rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant's default in respect of any of the terms, provisions, covenants and conditions of this Lease, including but not limited to, any damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord. In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, the security shall be returned to Tenant after the date fixed as the end of the Lease and after delivery of entire possession of the demised premises to Landlord. In the event of a sale of the Land and Building or leasing of the Building, of which the demised premises form a part, Landlord shall have the right to transfer the security to the vendee or lessee and Landlord shall thereupon be released by Tenant from all liability for the return of such security; and Tenant agrees to look solely to the new landlord for the return of said security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of the security to a new landlord. Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the monies deposited herein as security and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance. In the event Landlord applies or retains any portion or all of the security deposited, Tenant shall forthwith restore the amount so applied or retained so that at all times the amount deposited shall be $95,343.75.
(a) In lieu of the cash security deposit under provided for in Section 41.01 hereof Tenant may at any time during the term hereof deliver to Landlord and, shall, except as otherwise provided herein, maintain in effect at all times during the term hereof, an irrevocable letter of credit, in form and substance satisfactory to Landlord in the amount of the security required pursuant to this Lease issued by a banking corporation satisfactory to Landlord and having its principal place of business or it duly licensed branch or agency in the State of New York. Such letter of credit shall have an expiration date no earlier than the first anniversary of the date of issuance thereof and shall be automatically renewed from year to year unless terminated by the issuer thereof by notice to Landlord given not less than 45 days prior to the expiration thereof. Except as otherwise provided herein, Tenant shall, throughout the term of this Lease deliver to Landlord, in the event of the termination of any such letter of credit, replacement letters of credit in lieu thereof (each such letter of credit and such extensions or replacements thereof, as the case may be, is hereinafter referred to as a "Security Letter") no later than 45 days prior to the expiration date of the preceding Security Letter. The term of each such Security Letter shall be not less than one year and shall be automatically renewable from year to year as aforesaid. If Tenant shall fail to obtain any replacement of a Security Letter within the time limits set forth in this Section 41.02(a), Landlord may draw down the full amount of the existing Security Letter and retain the same as security hereunder.
(b) In the event Tenant defaults in respect to any of the terms, provisions, covenants and conditions of this Lease, including, but not limited to, the payment of rent and additional rent, Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants provisions, covenants, and conditions of this Lease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNERLandlord. To insure that Landlord may utilize the security represented by the Security Letter in the manner, all for the purpose, and to the extent provided in this Article 41, each Security Letter shall provide that the full amount thereof may be drawn down by Landlord upon the presentation to the issuing bank of Landlord's draft drawn on the foregoing in such order and priority as OWNER may elect in its sole discretion. issuing bank without accompanying memoranda on statement of beneficiary.
(c) In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment that Tenant defaults in respect of any rents and/or other charges due OWNER for all periods prior to of the institution terms, provisions, covenants and conditions of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to the Lease and Landlord utilizes all or any part of such securitythe security represented by the Security Letter but does not terminate this Lease as provided in Article 16 hereof, Landlord may, in addition to exercising its rights as provided in subsection 41.02(b) hereof, retain the unapplied and unused balance of the principal amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to Security Letter as security for the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent faithful performance and shall be subject to all observance by Tenant thereafter of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply apply, or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same said balance to the extent required for the payment of rent, additional rent, or any rent other sum as to which Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms terms, covenants, and conditions of this Lease. In the event Landlord applies or retains any portion or all of the security delivered hereunder, Tenant shall forthwith restore the amount so applied or retained so that at all times the amount deposited shall be not less than the security required by Section 41.01 hereof.
(d) In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, including any damages or deficiency in the re-letting security shall be returned to Tenant after the date fixed as the end of the Lease and after delivery of entire possession of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land Land and Building or leasing of the Building, OWNER Landlord shall have the right to transfer (at no expense to OWNER) any interest it may have in the cash security or Security Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security Security Letter, provided such vendee or Letter lessee assumes any responsibilities of Credit. In Landlord with respect to such eventSecurity Letter, TENANT and Tenant agrees to look solely to the new OWNER landlord for the return of said cash security or Letter of Credit. It Security Letter; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or the Security Letter of Credit to a new OWNERlandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth a sale of the Issuing Bank Building Landlord shall be less than have the minimum amount specified aboveright to require Tenant to deliver a replacement Security Letter naming the new landlord as beneficiary and, or (b) that circumstances have occurred indicating that if Tenant shall fail to timely deliver the Issuing Bank may be incapable ofsame, unable to, or prohibited from honoring to draw down the then existing Security Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and retain the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash as security with hereunder until a new letter of credit meeting said qualificationsreplacement Security Letter is delivered.
Appears in 1 contract
Sources: Lease Agreement (24/7 Media Inc)
Security. (A) At all times prior to 32.01 Tenant has deposited with Landlord the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 Security Deposit as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Lease. Such security Deposit shall be held by Landlord in a proper interest bearing security account with interest accruing to the part benefit of TENANT the party entitled to same. Landlord shall be keptentitled to withdraw one (1%) percent per annum for administrative charges. It is agreed that in the event Tenant defaults in respect of any of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this Lease, including, but not limited to, the payment of Fixed Rent and agrees that OWNER Additional Rent, Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent Fixed Rent and additional rent Additional Rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants covenants, and conditions of this Lease, as well as for including, but not limited to, any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultDemised Premises or a part thereof, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereonterms, less the maximum annual administrative fee allowable to OWNER under lawprovisions, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before or and after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount Demised Premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land and Building or leasing of the Building, OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Landlord solely for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Security. (Aa) At all times prior to In the expiration of event Tenant deposits with Landlord any Security Deposit, the term of this Lease, TENANT same shall maintain on deposit with OWNER the sum of $243,109.90 be held as security for the due full and faithful payment, as herein provided, payment and performance by Tenant of the rent, additional rent, charges and damages payable by TENANT Tenant’s obligations under this Lease or pursuant to law Lease. If Tenant defaults in the full and for the due and faithful keeping, observance prompt payment and performance of all any of its obligations under this Lease, including, without limitation, the other covenantspayment of Rent, agreementsin each case after notice and the expiration of applicable grace periods, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent Rent or any other sum sums as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms, covenants and conditions of Tenant’s obligations under this Lease, as well as for including, without limitation, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultDemised Premises, whatever whether such damages or deficiency accrued accrue before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)Landlord. If as a result of any such application to all or any part of such security, the amount of cash Landlord shall so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Depositsecurity, as represented by the Letter of Credit, by drawing down on the same Tenant shall upon demand immediately deposit with Landlord a sum equal to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum amount so used, applied or retained which and retained, as security as aforesaid. If Tenant shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter fully and faithfully pay and perform all of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default Tenant’s obligations under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit or any balance thereof to which Tenant is entitled shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by returned or against TENANT, OWNER shall have paid over to Tenant after the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of date on which this Lease occursshall expire or sooner end or terminate, OWNER shall have and after delivery to Landlord of entire possession of the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTDemised Premises. In the event of a any sale or leasing of OWNER’s interest in the land and the BuildingLand, OWNER Landlord shall have the right to transfer (at no expense the security to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder which Tenant is entitled to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to payment thereof; and Tenant shall look solely to the new OWNER landlord for the return or payment of said cash security or Letter of Credit. It is agreed that the same; and the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit the same to a new OWNERlandlord. TENANT covenants that it will Tenant shall not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance.
(b) In lieu of the cash security required by this Lease, Tenant shall provide to Landlord an irrevocable transferable Letter of Credit in the amount of the Security Deposit in form annexed hereto as Exhibit E and issued by a financial institution approved by Landlord. Landlord shall have the right, regardless of the exercise of any other remedy the Landlord may have by reason of a default, to draw upon said Letter of Credit for any purpose authorized by section 8.01(a) of this Lease and if Landlord does so, Tenant shall, upon demand, additionally fund the Letter of Credit with the amount so drawn so that Landlord shall have the full deposit on hand at all times during the Term of the Lease and for a period of thirty (30) days’ thereafter. In the event that at any time during of a sale of the term Building or a lease of the Building subject to this Lease, Landlord shall have the right to transfer the security to the vendee or lessee.
8.02. The Letter of Credit shall expire not earlier than thirty (30) days after the Expiration Date of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing . The Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either shall be of the foregoingtype which is automatically renewed on an annual basis (Annual Renewal Date), OWNER may send provided however, in such event Tenant shall maintain the Letter of Credit and its renewals in full force and effect during the entire Term of this Lease (including any renewals or extensions) and for a period of thirty (30) days thereafter. The Letter of Credit will contain a provision requiring the issuer thereof to give the beneficiary (Landlord) sixty (60) days’ advance written notice of its intention not to TENANT (hereinafter referred to as renew the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace Letter of Credit on the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANTnext Annual Renewal Date.
8.03. In the event that Tenant shall fail to deliver to Landlord a substitute irrevocable Letter of Credit, in the amount stated above, on or before thirty (i30) a Replacement L/C meeting days prior to the qualifications is not received by OWNER within the time specifiednext Annual Renewal Date, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof said failure shall be held by OWNER in accordance with deemed a default under this Lease. Landlord may, subjectin its discretion treat the same as a default in the payment of Rent or any other default and pursue the appropriate remedy. In addition, howeverand not in limitation, Landlord shall be permitted to TENANT’s obligation to replace such cash security with a new letter draw upon the Letter of credit meeting said qualificationsCredit as in the case of any other default by Tenant under the Lease.
Appears in 1 contract
Sources: Lease Agreement (Switch & Data Facilities Company, Inc.)
Security. (A) At all times prior to 59.1 It is agreed that in the event Tenant defaults under the terms of this Lease beyond the expiration of the term of this Leaseall grace and notice periods, TENANT Landlord may (but shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to not be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may required to) use, apply or retain return the whole or any part of the security deposit under this Lease so deposited for any sum Landlord may expend by reason of Tenant's default, or for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other repast-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretiondue rental. In the event Landlord shall apply all or any bankruptcyportion of Tenant's security in accordance with this lease, insolvencyTenant shall promptly deposit with Landlord an amount sufficient to restore such security to the amount set forth in Article 34. If Landlord retains or applies all or a portion of Tenant's security deposit as a result of Tenant's default in the payment of Fixed Rental or Additional Rental and Tenant fails to restore the same as aforesaid, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the Tenant's failure to restore such security deposit shall be deemed to be applied first to a default in the payment of any rents and/or other charges due OWNER Additional Rental, for all periods prior default in the payment of which Landlord shall have the same remedies as for a default in the payment of Fixed Rental.
59.2 In the event of a sale or lease of the Building, Landlord shall have the right to transfer the security to the institution purchaser, and, to the extent such funds (or letter of such proceedingscredit, and/orif applicable) are or is actually transferred by Landlord, at OWNER’s option, in partial liquidation of OWNER’s damages arising Landlord shall thereupon be released by Tenant from such default of proceeding(s). If as a result of any such application to all or any part liability for the return of such security.
59.3 Tenant agrees that it shall not assign or encumber the funds deposited as security hereunder.
59.4 In lieu of depositing all cash for the security deposit hereunder, Tenant may deliver cash security in the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent $70,000 and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter letter of Credit (the “Letter of Credit”) credit issued by and drawn upon Silicon Valley Bank or any a commercial bank which is a member of the New York Clearing House Association (hereinafter referred to as the “"Issuing Bank”") with offices for banking purposes in the City of New York and having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars100,000,000, which Letter letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), credit shall have a term of not less than one year, be in form and content acceptable satisfactory to OWNERLandlord, be for the account of OWNERLandlord, and initially be in the amount of $70,000. If Tenant elects to provide a letter of credit, the Security Deposit. In the event TENANT defaults in the performance letter of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit credit shall provide that:
(i) 59.4.1 The Issuing Bank shall pay to OWNER Landlord or its duly authorized representative an amount up to the face amount of the Letter letter of Credit credit upon presentation of the Letter letter of Credit credit and a sight draft in the amount to be drawn, together with a certificate executed on behalf of Landlord., stating that as of the date of such certificate, Tenant is in default under this Lease beyond any applicable period of notice and/or cure and that the amount drawn by Landlord represents funds that are due and payable to Landlord under the Lease;
(ii) 59.4.2 The Letter letter of Credit credit shall be deemed to be automatically renewed, without amendmentamendment (except as provided below with respect to reduction in face amount), for consecutive periods of one year each during the entire term of this Lease (and shall remain in effect for the last such automatic renewal to expire not less earlier than sixty a date which is one (601) days following month after the expiration date of the term of this Lease), ) unless the Issuing Bank sends written notice (hereinafter referred to as called the “"Non-Renewal Notice”") to OWNER Landlord by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty thirty (6030) days next preceding the then expiration date of the Letter letter of Creditcredit, that it elects not to have such Letter letter of Credit credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date ;
59.4.3 Landlord, after receipt of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of CreditRenewal, such failure shall constitute a material default under this Lease and OWNER Notice, shall have the right, exercisable by a sight draftdraft and an affidavit indicating that Tenant is still obligated under the Lease, to receive the monies represented by the Letter letter of Credit credit (which monies shall be held by OWNER as a cash security deposit pursuant to the terms provisions of the printed portion of Article 32 and this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of CreditArticle); and
(iv) 59.4.4 Upon OWNER’s Landlord's sale of OWNER’s the Building, or the transfer of Landlord's interest in the land and therein, or a leasing of the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held transferable by OWNER in accordance with this LeaseLandlord to the purchaser, subjectvendee or transferee, however, to TENANT’s obligation to replace and all expenses of such cash security with a new letter of credit meeting said qualificationstransfer shall be paid by Landlord.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this LeaseTenant, TENANT simultaneously herewith, shall maintain on deposit with OWNER Landlord either the cash sum or a letter of credit in the amount of Forty Thousand One Hundred Forty-Two and 26/100 Dollars ($243,109.90 40,142.26) as security for the due full and faithful payment, as herein provided, punctual performance by Tenant of all of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions terms and conditions of this Lease on the part of TENANT to be kept(such amount, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or together with any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under lawif any, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the such letter of credit, and/or any funds drawn by Landlord thereunder being herein called the “Security Deposit”). In respect thereof, the following provisions shall apply:
(a) If Tenant defaults hereunder (beyond the expiration of any applicable grace or cure periods), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER Landlord may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same Deposit to the extent required for the payment of any rent Rent or any other sum(s) as to which Tenant is in default or for any sum sum(s) which OWNER Landlord may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms of this Leasepursuant hereto, including any damages or deficiency in with respect to the re-letting reletting of the demised premises after termination of the Lease for Tenant’s defaultPremises, whether accruing before or after summary proceedings or other re-entry by OWNERLandlord (and if the Security Deposit is a letter of credit, Landlord may draw the full amount thereof, holding the balance, following application or retention as provided above, as Landlord is required to hold a cash Security Deposit under this Section 11.6). In the case of every such use, application or retention, TENANT Tenant shall, on within ten (10) Business Days after demand, pay to OWNER Landlord the sum so used, applied or retained which shall be added to such that the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:.
(ib) The Issuing Bank If Tenant shall pay to OWNER or its duly authorized representative an amount up to the face amount fully and punctually comply with all of the Letter terms and conditions of Credit upon presentation of this Lease, then the Letter of Credit and a sight draft in the amount Security Deposit (or portion thereof to be drawn;
(iiwhich Tenant is entitled) The Letter of Credit shall be deemed returned or paid over to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease Tenant within forty-five (and shall remain in effect for not less than sixty (6045) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following after the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on and the day following the expiration surrender of the existing Letter Premises to Landlord in accordance herewith.
(c) In the event of Credit a sale or lease of the Building (or the portion thereof containing the Premises), Landlord shall have the right to transfer the security to the vendee or lessee, and if so transferred, Landlord shall ipso facto be released by Tenant from all liability for the return of such security and Tenant agrees to look solely to the new landlord for the return thereof upon notice to Tenant of such transfer. Except in connection with a permitted assignment of this Lease, Tenant shall not fewer than assign or encumber or attempt to assign or encumber the monies deposited as security and Landlord shall not be bound by any such assignment, encumbrance or attempted assignment or encumbrance.
(d) If the Security Deposit is a letter of credit, the provisions of this subparagraph (d) shall apply. The letter of credit shall be issued by a reputable banking institution having an office in New York, and shall be presentable for payment at an office of such institution located in New York. Tenant shall deliver to Landlord at least thirty (30) days prior to the expiration of the Letter letter of Credit, such failure shall constitute credit a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented replacement letter of credit issued by the Letter of Credit (which monies shall be held by OWNER same financial institution as a cash deposit pursuant to issued the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new expiring letter of credit (hereinafter referred or such other reputable banking institution as is reasonably acceptable to Landlord), in the same form as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new expiring letter of credit meeting (or in such other form as is reasonably acceptable to Landlord). If Tenant fails to timely deliver any such replacement letter of credit, such failure shall, without the need for any additional notice from Landlord, entitle Landlord to draw the full amount of such letter of credit, and thereafter to hold and use the funds so drawn as a cash Security Deposit hereunder. The letter of credit shall be irrevocable, shall name Landlord and any successor-in-interest of Landlord as beneficiary, shall be unconditional except as to require a sight draft drawn on the issuing bank to be tendered by the beneficiary at said qualificationsbank’s office, and shall otherwise be in such form as may be reasonably required by Landlord. The term “letter of credit” shall mean the original letter of credit delivered to Landlord and each replacement thereof delivered to Landlord during the Term of this Lease.
Appears in 1 contract
Sources: Lease Agreement (Teltronics Inc)
Security. (Aa) At all times prior Tenant, simultaneously herewith, has deposited with Landlord, the Security. If Tenant defaults with respect to the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and covenants, provisions or conditions of this Leaselease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultincluding, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNERbut not limited to, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents Rental, and/or other charges due OWNER for all periods prior the payment and performance of its obligations pursuant to the institution of such proceedingsPromissory Note, and/or, at OWNER’s option, then in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of addition to any such application other remedies to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall which Landlord may be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all entitled by virtue of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Leaselease, thenor pursuant to law or equity, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), Landlord shall have a term of not less than one year, be in form and content acceptable the right to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent Rental, any payment pursuant to the Promissory Note or for any other sum as to which Tenant is in default or any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s default in respect of any Tenant's default, including, but not limited to, damages or deficiencies resulting from the reletting of the terms of this LeasePremises, including any whether such damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing deficiencies accrued before or after summary proceedings or other re-entry reentry by OWNER. In Landlord.
(b) If the case entire Security or any portion thereof is appropriated or applied by Landlord for the payment of every such use, application or retention, TENANT shallRental, on demandaccount of the Promissory Note or any other sums due and payable to Landlord by Tenant hereunder, pay or for the payment or reimbursement of any cost or expense incurred by Landlord as a result of any default or failure of performance by Tenant hereunder, then Tenant, upon the demand of Landlord, forthwith shall remit to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Landlord a sufficient Letter of Credit and/or good funds to restore the Security to the original sum required amount. The to be deposited hereunder, the delivery of such Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be and/or good funds hereby deemed to be automatically renewedAdditional Rental, without amendment, for consecutive periods and Tenant's failure to do so within five (5) days after the forwarding of one year each during the term such demand shall constitute a breach of this Lease lease.
(c) If Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of the Promissory Note and this lease, including the delivery of the Premises to Landlord in accordance with the provisions hereof and compliance with all Environmental Acts, then the Security shall remain in effect for not less than sixty be returned to Tenant within thirty (6030) days following the expiration date of the Lease)Term hereof.
(d) If Tenant shall exercise its Renewal Option hereunder, unless then upon the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date commencement of the Letter First Renewal Term and the receipt of Creditthe Security required pursuant to the exercise thereof, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to Landlord shall return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;Tenant.
(iiie) If OWNER receives a Non-Renewal Notice and TENANT fails Tenant shall not be entitled to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing any interest on the day following aforesaid deposit of Security or the expiration of proceeds thereof. Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER Security except as a cash deposit permitted pursuant to the terms provisions of Paragraph 15 hereof, and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance.
(f) It is expressly understood and agreed that the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration exercise of any applicable cure period hereunder); however, OWNER’s holding remedy by Landlord for any default on the part of such cash security Tenant shall not be deemed such a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, lease as to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant entitle Tenant to the Lease recovery of the Security, and any termination fees said Security shall be retained and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have remain in the right, exercisable by sight draft, to receive monies represented by the Letter possession of Credit in order to satisfy such amounts owed by TENANT. Landlord as hereinbefore stated.
(g) In the event of a sale sale, leasing or assignment of OWNER’s Landlord's interest in the land and the Buildingthis lease by Landlord, OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder Security to the vendee purchaser, lessee or lesseeassignee, shall furnish Tenant with notice thereof and OWNER thereupon shall be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such eventthe Security, TENANT and Tenant agrees to look solely to the new OWNER transferee for the return application of said cash security or Letter of Creditthe Security. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or the Security to a new transferee.
(h) Each Letter of Credit to be deposited hereunder shall be a new OWNER. TENANT covenants that it will not assign or encumberclean, or attempt irrevocable Letter of Credit, shall be in the amount set forth herein, shall be issued by a bank and shall be in form and substance, satisfactory to assign or encumberLandlord, and shall provide, inter alia, the monies or following:
(i) It shall be renewed in the agreed upon amount, automatically from year to year unless the issuing bank, not less than forty-five (45) days prior to its expiration, shall notify Landlord and Tenant in writing that the Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors shall not be renewed;
(ii) Landlord shall have the right to draw upon all or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (apart(s) that the net worth of the Issuing Bank shall be less than Letter of Credit, immediately upon delivering a certification to the minimum amount specified above, or (b) issuing bank setting forth that circumstances have occurred indicating that it is entitled to draw upon the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit pursuant to the provisions of the Promissory Note, and/or this lease and setting forth the amount of the money sought to be received, which Letter of Credit may be drawn upon, to the extent necessary, to satisfy said request in full.
(hereinafter referred iii) Landlord shall have the right to as draw upon the “Existing L/C”entire Letter of Credit, whether or not Tenant shall be 4n default hereunder, within the last twenty (20) days of the thereof, upon delivering a certification to the issuing bank setting forth that the bank has elected not to renew the Letter of Credit and that Tenant has not provided Landlord with a substitute Letter of Credit in accordance with the provisions of this Agreement.
(i) Landlord shall retain the proceeds of the Letter of Credit received pursuant to the provisions of Paragraph 39(h)(iii) in accordance with the terms thereof, then, provisions hereof and shall return such proceeds to Tenant upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then new Letter of Credit in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationscompliance herewith.
Appears in 1 contract
Security. 36.01 Tenant has deposited with Landlord the sum of $56,630.37 (Ain the form of a cashiers check) At all times prior to as security for the expiration faithful performance and observance by Tenant of the term terms, provisions, covenants and conditions of this Lease; it is agreed that in the event Tenant defaults in respect of any of the terms, provisions, covenants and conditions of this Lease, TENANT shall maintain on deposit with OWNER including, but not limited to, the sum payment of $243,109.90 as security for the due Fixed Annual Rent and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent Fixed Annual Rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms, provisions, covenants and conditions of this Lease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before or and after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount Demised Premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land Land and Building or leasing of the Building, OWNER of which the Demised Premises form a part, Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER landlord for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERlandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event Landlord applies or retains any portion or all of the security deposited, Tenant shall forthwith restore the amount so applied or retained.
36.02 Notwithstanding anything to the contrary contained above, on or before 60 days from the Commencement date, in lieu of the cash security deposit provided for in this Article 36 hereof, Tenant shall deliver to Landlord and, shall thereafter, except as otherwise provided herein, maintain in effect at all times during the term hereof, an irrevocable letter of credit, in form and substance reasonably satisfactory to Landlord, in the amount of the security required pursuant to this Article 36 and Lease issued by a banking corporation reasonably satisfactory to Landlord and having its principal place of business and a duly licensed branch or agency in the State of New York, that at any time during is also nationally recognized whose deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”). Such letter of credit shall have an expiration date no earlier than the first anniversary of the date of issuance thereof and shall be automatically renewable from year to year unless terminated by the issuer thereof by notice to Landlord given not less than ninety (90) days prior to the expiration thereof. Except as otherwise provided herein, Tenant shall, throughout the term of this Lease, OWNERdeliver to Landlord, in OWNER’s reasonable opinionthe event of the termination of any such letter of credit, believes replacement letters of credit in lieu thereof (aeach such letter of credit and such extension or replacement thereof, as the case may be, is hereby referred to as a “Security Letter”) no later than sixty (60) days prior to the expiration date of the preceding Security Letter. If Landlord is notified that the net worth Security Letter shall be terminated Landlord shall have the right to draw down the full amount of the Issuing Bank existing Security Letter and retain the same as security hereunder until such time that the Tenant provides Landlord with a replacement Security Letter that complies with the terms of this Agreement. The term of each such Security Letter shall not be less than one year and shall be automatically renewable from year to year as aforesaid. If Tenant shall fail to obtain any replacement of a Security Letter within the minimum time limits set forth in this Section 36.02 Landlord may draw down the full amount specified aboveof the existing Security Letter and retain the same as security hereunder. To ensure that Landlord may utilize the security represented by the Security Letter in the matter, for the purpose, and to the extent provided in this Article 36 each Security Letter shall provide that the full amount thereof may be drawn down by Landlord upon the presentation to the issuing bank of Landlord’s draft drawn on the issuing bank without accompanying memoranda or statement of beneficiary. Landlord may utilize the Security Letter and the proceeds thereof in the same manner as provided herein for a cash security deposit pursuant to Section 36.01 hereof. The final expiration date of the letter of credit shall be at least ninety (90) days following the stated Expiration Date of this Lease.
36.03 Tenant shall cooperate and take any and all actions as are reasonably necessary to ensure that the Landlord is always fully secured with a letter of credit meeting the requirements of this Article 36, including but not limited to any action reasonably necessary to effect the replacement of a lost, stolen, mutilated, or (b) destroyed letter of credit, so as to assure the Landlord that circumstances have occurred indicating it is at all times fully secured by a valid letter of credit that the Issuing Bank may be incapable ofdrawn upon by the Landlord, unable toits grantees, successors, representatives, and assigns.
36.04 If Landlord draws on the letter of credit, Tenant shall, within ten (10) days after demand by Landlord, deliver to Landlord an additional letter of credit meeting the requirements of this Article 36 or prohibited amend the existing letter of credit so that, at all times, the amount of the letter of credit held by Landlord, together with any cash held by Landlord not yet applied to any default equals the original amount of the letter of credit.
36.05 If Tenant seeks to enjoin payment of the letter of credit and Landlord incurs any fees (i.e., attorneys’ fees) defending such enjoinment Landlord shall recover all costs and expenses incurred from honoring the then existing Tenant.
36.06 Landlord may require a new Letter of Credit from a more financially secure insurer (hereinafter referred to as the “Existing L/C”i) in accordance with the terms thereof, then, upon the happening of either failure of the foregoingissuing bank, OWNER may send written notice (ii) upon any renewal of the Letter of Credit, (iii) if the bank rating of the institution is no longer acceptable to TENANT (hereinafter referred Landlord. Should Landlord require a new Letter of Credit pursuant to as the “Replacement Notice”) requiring TENANT this Article 36 Tenant shall be required to provide said new Letter of Credit within fifteen (15) business days notice of Landlord’s notice to replace the Existing L/C with Tenant to obtain a new Letter of Credit. Tenant shall be deemed to be in default upon Tenant’s failure to provide a new Letter of Credit with the requisite time frame.
36.07 If Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, and delivers possession of the Premises to Landlord at the Expiration Date in the condition required by this Lease, the letter of credit (hereinafter referred and any cash proceeds held by Landlord not applied pursuant to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualificationsthis Article 36, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, returned to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsTenant within thirty (30) days after the Expiration Date.
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Security. (A) At all times prior Section 27.1 Tenant has deposited with Landlord a sum of equal to the expiration three months Base Rent as of the term date of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 Lease Agreement as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part Lease. Landlord shall place the security in a non-interest-bearing account. It is agreed that in the event Tenant defaults in respect to any of TENANT to be keptthe terms, observed provisions and performed. TENANT expressly acknowledges and agrees that OWNER conditions of the Lease, including, but not limited to, the payment of Rent, Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent Rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the termsdefault, covenants and conditions of this Leaseincluding but not limited to, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultPremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-re- entry by OWNER, all Landlord. If any portion of the foregoing security is so used, applied, or retained, Tenant shall, within five (5) days after written demand therefor by Landlord, deposit cash with Landlord in such order and priority as OWNER may elect in an amount sufficient to restore the security to its sole discretionoriginal amount. In the event any bankruptcythat Tenant shall fully and faithfully comply with all of the terms, insolvencyprovisions, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assignscovenants and conditions of the Lease, the security deposit shall be deemed returned to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency Tenant within ten (10) business thirty days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after following termination of the Lease for Tenant’s default, whether accruing before or as provided in Article XXIII and after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount Premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale an assignment by Landlord of OWNER’s interest its estate in the land and the Buildingthis Lease, OWNER Landlord shall have the right obligation to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, assignee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability liabilities for the return of such cash security or Letter of Creditsecurity. In the event of such eventassignment, TENANT Tenant agrees to look solely to the new OWNER Landlord for the return of said cash security or Letter of Creditsuch security. It is further agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
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Sources: Assignment and Assumption of Lease (Brooklyn ImmunoTherapeutics, Inc.)
Security. (A) At all times prior to The Tenant has this day deposited with the expiration of Landlord the term of this Lease, TENANT shall maintain on deposit with OWNER first and last month's rent in the sum of $243,109.90 9,817.98, as security for the due full, and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable performance by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance Tenant of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Leaselease upon Tenant's part to be performed, which said sum shall be returned to Tenant 10 days after the time fixed as well as for any damages or deficiency in the reletting expiration of the demised premises caused by TENANT’S defaultterm hereof, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, provided that Tenant has fully and faithfully carried out all of the foregoing in such order said terms, covenants and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed conditions on Tenant's part to be applied first performed. Landlord shall have the right, but not obligation to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or apply any part of such securitysaid deposit to cure any default of Tenant; 8 and, if Landlord does so, Tenant shall, upon demand, deposit with Landlord the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth aboveapplied, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event so that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), Landlord shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down full deposit on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each hand at all times during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTlease. In the event of a sale of OWNER’s interest in the building or lease of the land and the Buildingon which it stands, OWNER subject to this lease, Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER and, Landlord shall be considered released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to and Tenant shall look solely to the new OWNER Landlord solely for the return of said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof this shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLandlord. TENANT covenants that it will The security deposited under this lease shall not assign be mortgaged, assigned or encumberencumbered by Tenant without the written consent of Landlord, or an any attempt to assign or encumber, do so shall be void. One half of the monies or Letter of Credit deposited hereunder security deposit will be considered last months rent. This will be used as securitythe last months rent only if tenant is in good standing, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, not in OWNER’s reasonable opinion, believes (a) that the net worth default of the Issuing Bank shall lease agreement. The tenant will be less than responsible for the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either deficit of the foregoingrental amount due to cost of living adjustments. If Tenant shall lease from Landlord additional space in the building, OWNER may send written notice Tenant shall pay additional security deposit to TENANT (hereinafter referred to as landlord in the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace amount of first and last month's rent for the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsadditional space.
Appears in 1 contract
Security. (A) At all times prior to The Lessee, concurrently with the expiration of the term executive of this Lease, TENANT shall maintain on deposit has deposited with OWNER Lessor the sum of Five Thousand and No/100 ($243,109.90 5,000.00) Dollars as security for the due faithful performance and faithful paymentobservance by Tenant of the terms, as herein providedprovision and conditions, of this lease, it is agreed that in the rentevent Tenant defaults in respect of any of the terms, additional rentprovision and conditions, charges and damages payable by TENANT under of this Lease or pursuant to law and for lease; it is agreed that in the due and faithful keeping, observance and performance event Tenant defaults in respect of all any of the other covenants, agreements, terms, provisions and conditions of this Lease on including, but not limited to, the part payment of TENANT to be kept, observed rent and performed. TENANT expressly acknowledges and agrees that OWNER additional rent Lessor may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Lessor may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Lease, as well as for including, but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever promises whether such damages or deficiency accrued occurred before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLessor. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, fully and faithfully comply with all the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before or and after summary proceedings or other re-entry by OWNER. In delivery of entire possession of the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added premises to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLessor. In the event of a sale of OWNER’s interest in the land and Building of which the Buildingpremises form a part, OWNER Lessor shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lesseevendee, and OWNER Lessor shall thereupon be released by TENANT tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT and Tenant agrees to look solely to the new OWNER Lessor solely for the return of said cash security or Letter of Creditsuch security. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLessor. TENANT Tenant further covenants that it he will not assign or encumber, or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder as security, herein an security and that neither OWNER Lessor nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbranceencumbrances. In Lessor shall not be required to keep the event that at any time during security in a segregated account and the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank security may be incapable of, unable to, or prohibited from honoring commingled with other fund of Lessor and in no event shall Tenant be entitled to any interest on the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationssecurity.
Appears in 1 contract
Security. (Aa) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Owner the sum of $243,109.90 21,875.00 (the "Security Deposit") as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease; it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment or Base Rent and agrees that OWNER Additional Rent, Owner may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent Base Rent and additional rent Additional Rent or any other sum as to which TENANT Tenant is in default or for any sum such which OWNER Owner may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including, but not limited to, any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionOwner. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Leaselease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before or and after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount Demised Premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTOwner. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the Demised Premises form a part, Owner shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lesseelessee and upon the new Owner's acknowledgment of receipt thereof, and OWNER Owner shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Owner solely for the return of said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNEROwner. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Owner nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event .
(b) The Security Deposit shall be increased by Tenant whenever Owner requests Tenant to do so so that Owner will always maintain on deposit an amount equal to two (2) months Base Rent at then current rates.
(c) If at any time during the term terms hereof Owner shall apply all or a portion of this LeaseTenant's Security Deposit to cure a default of Tenant hereunder, OWNERTenant shall promptly and without further demand, in OWNER’s reasonable opinion, believes (a) that deposit with Owner an amount equal to the net worth portion of the Issuing Bank Security Deposit so applied by Owner so that Owner shall be less than at all times have the minimum total amount specified above, or of security required hereunder.
(bd) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt No holder of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) mortgage or deed of trust or a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with lessor under a new letter of credit meeting said qualifications.ground lease to
Appears in 1 contract
Sources: Lease Agreement (Edgar Online Inc)
Security. (A) At all times prior to the expiration of the term of this LeaseLessee has deposited with Lessor, TENANT shall maintain on deposit in connection with OWNER an -------- existing lease, the sum of $243,109.90 seven hundred ($ 700.00) DOLLARS as security. This security deposit will continue to be held by the Lessor for the due faithful performance and faithful payment, as herein provided, observance by Lessee of the rentterms, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Lease. It is agreed that in the part event Lessee defaults in respect of TENANT to be keptany of the terms, observed covenants, provisions and performed. TENANT expressly acknowledges conditions of this Lease, including, but not limited to, the payment of base rent and agrees that OWNER additional rent, Lessor may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent reasonably required for the payment of any base rent and additional rent or any other sum as to which TENANT Lessee is in default or for any sum which OWNER Lessor may expend or may be required to expend by reason of TENANT’s Lessee's default in respect of any of the terms, covenants and conditions of this Lease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultDemised Premises, whatever whether such damages or deficiency accrued occurred before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLessor. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Lessee shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNERand in such event, at its optionupon the expiration hereof, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease Lessor shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same return to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewedLessee said security, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have interest thereon; on such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTdate. In the event of a sale sale, transfer or conveyance of OWNER’s the Lessor's entire interest in the land and premises of which the BuildingDemised Premises form a part, OWNER Lessor shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lesseeTransferee/Purchaser, who shall be bound by the Lessor's obligations hereunder and OWNER Lessor shall thereupon be released by TENANT Lessee from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Lessee agrees to look solely to the new OWNER Lessor solely for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLessor. TENANT covenants Lessee further convenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Lessor nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Lease Agreement (Liquid Audio Inc)
Security. (A) At The Tenant shall at all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum Landlord cash in the amount of $243,109.90 27,935.00 as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due full and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this LeaseLease provided to be kept, thenobserved or performed by the Tenant (expressly including, OWNERwithout being limited to, at its optionthe payment as and when due of the fixed rent, may elect to require TENANT to deposit (percentage rent, if any, additional rent and any other sums or to increase damages payable by the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable Tenant under this Lease), ) and thereafter the amount payment of security required to be maintained by any and all other damages for which the Tenant throughout the term of this Lease shall be increased liable by such amount.
(B) Notwithstanding reason of any act or omission contrary to any of said covenants, agreements, terms, provisions or conditions. If at any time the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), Tenant shall have a term of not less than one year, be in form and content acceptable to OWNERdefault in the payment as aforesaid of any such fixed rent, be for the account of OWNERpercentage rent, and additional rent, and/or any other sums or damages or shall otherwise be in the amount of the Security Deposit. In the event TENANT defaults default in the keeping, observance or performance of any of the terms covenants, agreements, terms, provisions or conditions of this Lease, including then at the Landlord's election, the cash on deposit with it as aforesaid may be applied by the Landlord to the payment of the fixed rent, beyond any applicable cure periodpercentage rent, additional rent, other sums or damages in respect to which the Tenant is so in default and/or, if the Tenant is otherwise in default in the event of the filing of a bankruptcy proceeding by keeping, observing or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, performing as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect aforesaid of any of the terms covenants, agreements, terms, provisions or conditions of this Lease, including said cash on deposit may be applied by the Landlord to the payment of such costs and expenses as the Landlord shall incur in curing any damages such default. If at any time the Landlord is required to return or deficiency repay to the Tenant, for any reason in connection with the re-letting bankruptcy or insolvency of the demised premises after termination of Tenant, any fixed rent, percentage rent, additional rent, and/or any other sums paid by the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added Tenant to the Security Deposit Landlord under the Lease, then at the Landlord's election the cash on deposit with it as aforesaid may be applied by the Landlord to offset such return or repayment. If as a result of any such application of any such cash, the amount of cash so on deposit with the Landlord shall at any time be less than that hereinabove specified, the same Tenant shall be replenished to its former amount, or, restore forthwith deposit with the Letter of Credit Landlord additional cash in an amount equal to the original required amountdeficiency. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewedIf, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following at the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNERall of said fixed rent, percentage rent, if any, additional rent, other sums or damages, costs or expenses shall have been paid by the Tenant to the Landlord and the Tenant shall not be in OWNER’s reasonable opiniondefault in the keeping, believes (a) that observance or performance of any other covenant, agreement, term, provision or condition of this Lease, then the net worth Landlord shall return to the Tenant all, or such part of the Issuing Bank cash, if any, then on deposit with the Landlord pursuant to this Article, together with any interest earned thereon. In lieu of maintaining on deposit with the Landlord cash as aforesaid, the Tenant may maintain with the Landlord an irrevocable letter of credit issued by a New York clearing house bank in the amount of $27,935.00 drawable upon by the Landlord, either in partial draws or in one full draw, at any time when cash on deposit with it as aforesaid might and to the extent could have been applied by the Landlord pursuant to the first paragraph of this Article upon the delivery to said bank of the Landlord's certificate to such effect, and otherwise containing terms and conditions satisfactory to the Landlord. The Landlord shall use any amount so drawn in accordance with said first paragraph. If at any time the sum of the amount drawable pursuant to said letter of credit plus any cash on deposit with the Landlord pursuant to this Article shall be less than the minimum amount specified aboveof $27,935.00, or (b) that circumstances have occurred indicating the Tenant agrees forthwith to deposit with the Landlord cash equal to such deficiency. If any letter of credit so maintained with the Landlord provides that the Issuing Bank may amount drawable pursuant to said letter of credit shall cease to be incapable ofavailable on a date prior to October 31, unable to1992, the Tenant shall, at least 30 days prior to the date specified in said letter of credit as being the date on which such drawable amount will cease to be available, either furnish to the Landlord a renewal or prohibited from honoring the then existing Letter extension of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereofsaid letter of credit, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specifiedcomplying herewith, or (ii) OWNER reasonably believes an emergency existsdeposit with the Landlord such amount of cash as shall, when added to any cash then in either eventon deposit with the Landlord, equal the Existing L/C may amount of $27,935.00. Failure to comply with the provisions of the preceding sentence prior to the commencement of said 30-day period shall be presented for payment by OWNER deemed to be a default under this Lease and the proceeds thereof shall be held by OWNER in accordance with this LeaseLandlord may, subjectat any time during said 30-day period, however, to TENANT’s obligation to replace draw upon such cash security with a new letter of credit meeting said qualificationsand retain as security hereunder the amount so drawn. Any cash deposit shall be kept in a federally insured interest bearing account in New York City.
Appears in 1 contract
Sources: Sublease (Abacus Direct Corp)
Security. (A) At all times prior 19.1 Simultaneously with the delivery to the expiration Sublandlord of an executed counterpart of the term of this LeaseSublease, TENANT Subtenant shall maintain on deposit with OWNER tender Security (as defined herein) in the sum amount of $243,109.90 as security for 273,090.00 (5 times monthly rent) in the due and faithful payment, as herein provided, form of either (i) a check payable to Sublandlord (the rent, additional rent, charges and damages payable by TENANT under this Lease “Cash Security”) or pursuant to law and for the due and faithful keeping, observance and performance (ii) an irrevocable letter of all the other covenants, agreements, terms, provisions and conditions credit in favor of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent Sublandlord (or any other sum beneficiary as to which TENANT is in default or for any sum which OWNER may expend or may be required designated by Sublandlord during the term hereof, in which event Subtenant shall pay any transfer or other fees which may be imposed by the issuing bank), in a form reasonably acceptable to expend Sublandlord (the “LC”) (the Cash Security and LC shall hereinafter be referred collectively as the “Security”). The Security shall be tendered for the faithful performance and observance by reason of TENANT’s default in respect of any Subtenant of the terms, provisions, covenants and conditions of this Lease, as well as for any damages or deficiency in Sublease. Sublandlord shall not be required to deposit the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided Cash Security in a letter of credit) shall be held in an interest segregated or interest-bearing account and the interest earned thereonaccount, less the maximum annual administrative fee allowable to OWNER under unless required by applicable law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Leasebut, in the event that TenantSublandlord shall maintain same in an interest-bearing account, for a fourth timeSublandlord shall be permitted to retain from the Cash Security, is ever in monetary default or material non-monetary default as an administrative fee, one percent (beyond any cure period as may apply1%) of any of interest accruing thereon, to the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, extent permitted at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Depositlaw. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding default by or against TENANTSubtenant under the Sublease, OWNER Sublandlord may use, apply apply, or retain retain, the whole whole, or any part part, of the Security DepositSecurity, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent Rent, or for any sum which OWNER Sublandlord may expend expend, or may be required to expend expend, by reason of TENANT’s default in respect such event of any of the terms of this Leasedefault, including including, but not limited to, any damages or deficiency deficiencies in the re-letting reletting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNERSublet Premises. In the case event that any portion of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so Security is used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requestedapplied, or national overnight courier service requiring receiptretained, not less than sixty by Sublandlord, as permitted hereunder, Subtenant shall replenish such amount within five (605) business days next preceding the then expiration date after receipt of the Letter of Credit, that it elects not to have such Letter of Credit renewedSublandlord’s written demand therefor. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following Upon the expiration of the existing Letter term of Credit not fewer than the Sublease, the Security shall be returned to Subtenant (less any amount applied as provided for hereunder), within thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within Expiration Date or earlier termination of the time specified, Sublease or (ii) OWNER reasonably believes an emergency existsSubtenant’s surrender of the Sublet Premises to Sublandlord in the condition required hereunder, whichever is the later to occur.
19.2 Notwithstanding anything contained in Section 19.1 hereof to the contrary, provided (i) that Subtenant has not been in default under the Sublease at any time prior thereto and (ii) the full amount of the Security is then on deposit with Sublandlord, then, in either such event, effective as of the Existing L/C may be presented for payment first day of the twenty-five (25th) complete calendar month following the Commencement Date, upon Subtenant’s delivery to Sublandlord of a written notice requesting a reduction in the amount of the Security held by OWNER and Sublandlord, either the proceeds thereof (i) Cash Security shall be held by OWNER in accordance reduced to $163,854.00 (3 times monthly rent) and Sublandlord shall refund to Subtenant the remaining balance of the Cash Security then on deposit or (ii) the LC shall be replaced with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsan LC for $163,854.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Lessee has deposited with OWNER Lessor the sum of $243,109.90 656.25 as security for the due faithful performance and faithful payment, as herein provided, observance by Lessee of the rentterms, additional rentprovisions, charges and damages payable by TENANT under conditions of this Lease or pursuant Lease; it is agreed that in the event Lessee defaults in respect to law and for any of the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Lease, including but not limited to, the part payment of TENANT to be keptrent and additional rent, observed and performed. TENANT expressly acknowledges and agrees that OWNER Lessor may use, apply apply, or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Lessee is in default or for any sum which OWNER Lessor may expend or may be required to expend by reason of TENANT’s Lessee's default in respect of to any of the terms, covenants covenants, and conditions of this Lease, as well as for including but limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultleased premises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLessor. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Lessee shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereonterms, less the maximum annual administrative fee allowable to OWNER under lawprovisions, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Lessee, with interest, after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before or and after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount leased premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLessor. In the event of a sale of OWNER’s interest in the land and building of which the Buildingleased premises form a part, OWNER hereinafter referred to as the building, or leasing of the building, Lessor shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Lessor shall thereupon be released by TENANT Lessee from all liability for the return of such cash security or Letter of Credit. In such event, TENANT and Lessee agrees to look solely to the new OWNER Lessor solely for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLessor. TENANT Lessee further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Lessor nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event of any bankruptcy or other proceeding against or by Lessee under Paragraph 35 ("ESTOPPEL LETTER") herein, it is agreed that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank all such security deposit held hereunder shall be less than deemed to be applied first to rent and other charges first due to Lessor for all periods prior to the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter filing of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace any such cash security with a new letter of credit meeting said qualificationsproceedings.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Landlord the sum of $243,109.90 $ 1,563.68 as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges terms provisions and damages payable by TENANT under conditions of this Lease or pursuant to law and for Lease; it is agreed that in the due and faithful keeping, observance and performance event Tenant defaults in respect of all any of the other covenants, agreements, terms, provisions and conditions of this Lease on Lease, including but not limited to the part payment of TENANT to be kept, observed rent and performedadditional rent. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of security so deposited to the security deposit under this Lease extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, terms covenants and conditions of this Lease, as well as for including but not limited to any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultleased premises, whatever whether such damages or deficiency accrued acceded before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions covenants and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s . The security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant without interest. After the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before or and after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount leased premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land and building of which the Buildingleased premises form a part, OWNER hereinafter referred to as the buildings or leasing of the building. Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, tenant and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event of any bankruptcy or other proceeding against or by Tenant under Paragraph 23 herein, it is agreed that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank all such security deposit held hereunder shall be less than deemed to be applied first to rent and other charges first due to Landlord for all periods prior to the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter filing of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace any such cash security with a new letter of credit meeting said qualificationsproceedings.
Appears in 1 contract
Sources: Lease Agreement (View Systems Inc)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Owner the sum of $243,109.90 42,141.67 as security for the due faithful performance and faithful payment, as herein provided, observance of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease; it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Owner may use, apply supply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT tenant is in default or for any sum which OWNER Owner may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)Owner. If as a result of Owner so uses, applies or retains any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Leaseso deposited, in the event that Tenant, for a fourth timeupon demand, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to shall deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter with Owner the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit applied, retained, so that Owner shall have the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each full deposit on hand at all times during the term of this Lease (lease. In the event that Tenant shall fully and shall remain in effect for not less than sixty (60) days following the expiration date faithfully comply with all of the Lease)terms, unless provisions, covenants and conditions of this lease, the Issuing Bank sends written notice (hereinafter referred security shall be returned to Tenant after the date fixed as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date end of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT after delivery of entire ossession of teh demised premises to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTOwner. In the event of a sale slae of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the demised premises form a part, Owner shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Owner shall thereupon be released by TENANT TRenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Owner solely for the return of said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNEROwner. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign assighn or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Owner nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Loft Lease (Lifecodes Corporation)
Security. (A) At all times prior to the expiration of the term 8.01. Upon execution of this Lease, TENANT Tenant shall maintain on deposit with OWNER Landlord the sum of $243,109.90 as security Security Deposit for the due full and faithful payment, as herein provided, payment and performance by Tenant of the rent, additional rent, charges and damages payable by TENANT Tenant’s obligations under this Lease Lease. Such Security Deposit shall be by certified funds or pursuant to law an irrevocable, evergreen letter of credit issued (in favor of Superior Mortgagee) by a federally chartered bank in Seattle, Washington or such other location approved by Landlord. If Tenant defaults in the full and for the due and faithful keeping, observance prompt payment and performance of all any of its obligations under this Lease, including, without limitation, the other covenantspayment of Rent, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security deposit under this Lease Security Deposit so deposited to the extent required for the payment of any rent and additional rent Rent or any other sum sums as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms, covenants and conditions of Tenant’s obligations under this Lease, as well as for including, without limitation, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultDemised Premises, whatever whether such damages or deficiency accrued accrue before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)Landlord. If as a result of any such application to all or any part of such security, the amount of cash Landlord shall so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of CreditTenant shall, by drawing down on the same upon demand, immediately deposit with Landlord a sum equal to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum amount so used, applied or and retained which as the Security Deposit. If Tenant shall be added to fully and faithfully pay and perform all of Tenant’s obligations under this Lease, the Security Deposit so that the same or any balance thereof to which Tenant is entitled shall be replenished returned or paid over to its former amountTenant, orwithout interest, restore after the Letter date on which this Lease shall expire or sooner end or terminate, and after delivery to Landlord of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTDemised Premises. In the event of a any sale or leasing of OWNER’s interest in the land and Building and/or the BuildingLand, OWNER Landlord shall have the right to transfer (at no expense the Security Deposit to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder which Tenant is entitled to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to payment thereof and Tenant shall look solely to the new OWNER landlord for the return or payment of said cash security or Letter of Creditthe same. It is agreed that the The provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit the same to a new OWNERlandlord. TENANT covenants that it will The Tenant shall not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of Notwithstanding the foregoing, OWNER may send written notice to TENANT (hereinafter referred to provided Tenant’s net worth, as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with certified by a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualificationsreputable accounting firm, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency existsexceeds $10,000,000.00, then in either event, commencing on the Existing L/C may be presented fifth (5th) anniversary of the Commencement Date and for payment by OWNER and each anniversary date thereafter for so long as Tenant’s net worth continues to exceed $10,000,000.00 the proceeds thereof Security Deposit shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter reduced at the rate of credit meeting said qualificationstwenty (20%) percent per year.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Landlord the sum of $243,109.90 7,287.00 as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Lease; it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and or additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages damages, or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions covenants and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before or and after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount Demised Premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the demised premises form a part, Landlord shall have the right to transfer (at no expense the security to OWNER) the cash vendee of lessee and Landlord shall have the right to transfer the security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released release by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Landlord solely for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERLandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER nor Landlord not its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsencumbrances.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Owner the sum of $243,109.90 132,660.00 34.1 as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease; it is agreed that in the part event Tenant defaults in respect of TENANT to be keptany of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Owner may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent rent, or any other sum as to which TENANT Tenant is in default default, or for any sum which OWNER Owner may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNEROwner. In the case of every such use, application or retention, TENANT Tenant shall, on within five (5) days after demand, pay to OWNER Owner the sum so used, applied or retained which shall be added to the Security Deposit security deposit so that the same shall be replenished to its former amount, or, restore . In the Letter of Credit to the original required amount. The Letter of Credit event that Tenant shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount fully and faithfully comply with all of the Letter terms, provisions, covenants and conditions of Credit upon presentation this lease, the security shall be returned to Tenant after the date fixed as the end of the Letter lease and after delivery of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date entire possession of the Lease), unless the Issuing Bank sends written notice (hereinafter referred demised premises to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTOwner. In the event of a sale of OWNER’s interest in the land and building, or leasing of the Buildingbuilding, OWNER of which the demised premises form a part, Owner shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER Owner shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Owner solely for the return of said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNEROwner. TENANT Tenant further covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder herein as security, and that neither OWNER Owner nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Office Lease (Olo Inc.)
Security. (A) At all times prior to Simultaneously with the expiration of the term execution of this Lease, TENANT Tenant shall maintain on deposit with OWNER Landlord the sum of $243,109.90 2,200.00 as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT Tenant under this Lease lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease lease on the part of TENANT Tenant to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or The security will be deposited into an interest bearing account. If at any part of the security deposit under this Lease for time Tenant shall be in default in the payment of any rent and additional such rent or any other sum as to which TENANT is in default the keeping, observance or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect performance of any of the termssuch other covenant, covenants and conditions of this Leaseagreement, as well as for any damages term, provision or deficiency in the reletting of the demised premises caused by TENANT’S defaultcondition, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER Landlord may elect in at its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, election apply the security so on deposit shall be deemed to be applied first with Landlord to the payment of any rents and/or other charges due OWNER for all periods prior such rent or to the institution payment of the costs incurred by Landlord in curing such proceedingsdefault, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)as the case may be. If as a result of any such application to of all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) Landlord shall be less than the amount set forth above$2,200.00 , TENANT Tenant shall forthwith deposit with OWNER Landlord cash in an amount equal to the deficiency within ten (10) business days after demanddeficiency. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all If at the expiration of the remedies for non-term of this lease Tenant shall not be in default in the payment of fixed any such rent. The security deposit , charge or damage or in the keeping, observance or performance of any such other covenant, agreement, term, provision or condition, then Landlord shall, within a reasonable time after the expiration of said term, return to Tenant said security, if any, (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the with interest earned thereon, less the maximum annual a 1% administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may applyfee) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to then on deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit Landlord pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security Article. Tenant shall not be deemed a waiver of TENANT’s default of its obligation entitled to maintain any interest on said security so on deposit with Landlord, or on any part thereof, and Landlord may commingle the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection deposit with such termination, including without limitation, accrued but unpaid rents and/or its other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTassets. In the event of a sale transfer of OWNER’s ▇▇▇▇▇▇▇▇'s interest in the land and the Buildingbuilding, OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lesseetransferee and Landlord shall, and OWNER shall without any further agreement between the parties, thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and ▇▇▇▇▇▇ agrees to look solely to the new OWNER landlord solely for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERlandlord. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, the monies encumber said security or Letter of Credit deposited hereunder as security, any part thereof and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Lease Extension (Accufacts Pre Employment Screening Inc)
Security. Section 39.01. Tenant has deposited with Landlord the sum of SIX THOUSAND EIGHT HUNDRED SIXTEEN and 00/100 (A$6,816.00) At all times prior to DOLLARS as security for the expiration faithful performance and observance by Tenant of the term terms, provisions, covenants and conditions of this Lease. In the event Tenant defaults in respect of any of the provisions, covenants and conditions of this Lease, TENANT shall maintain on deposit with OWNER including, but not limited to, the sum payment of $243,109.90 as security for the due annual minimum rental and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant Landlord may, from time to law and for the due and faithful keepingtime, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply apply, or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent annual minimum rental and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the termsprovisions, covenants and conditions of this Lease, as well as for including, but not limited to, reasonable counsel fees and other collection charges, or of any damages or deficiency in the reletting reletting, repairing or altering of the demised premises caused by TENANT’S defaultDemised Premises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event any bankruptcythat Tenant shall fully and faithfully comply with all the provisions, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions covenants and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver returned to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendmentinterest, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following after the expiration of the existing Letter Lease, and after delivery of Credit not fewer than entire possession of the Demised Premises to Landlord. If, due to Tenant's default hereunder, Landlord shall be entitled to apply or retain any portion of said security, Tenant shall within thirty (30) days prior following demand, deposit with Landlord such amount as may be necessary to restore the amount of security to the expiration of amount set forth in the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion first sentence of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security Article. Tenant shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, encumber the monies or Letter of Credit security deposited hereunder as security, and that neither OWNER nor Landlord or its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at absence of evidence satisfactory to Landlord of any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth assignment of the Issuing Bank shall be less than right to receive the minimum amount specified abovesecurity, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms remaining portion thereof, then, upon Landlord may return the happening security to the original tenant regardless of either any number of assignments of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANTLease itself. In the event that (i) of a Replacement L/C meeting sale of the qualifications is not received by OWNER within Demised Premises or larger premises of which the time specifiedDemised Premises form a part, or (ii) OWNER reasonably believes an emergency existsLandlord shall transfer the security to the purchaser for the benefit of Tenant and Landlord, then in either eventafter giving notice to Tenant, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held deemed released by OWNER Tenant from all liability for the return of such security and Tenant shall look solely to the new owner for the return thereof. No holder of any mortgage upon the Demised Premises or the larger property of which the Demised Premises forms a part shall be responsible in accordance connection with this Lease, subject, however, the security deposited hereunder unless such mortgagee shall have in fact received such security and acknowledged such receipt in writing to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsTenant.
Appears in 1 contract
Sources: Lease Agreement (Microframe Inc)
Security. (A) At all times prior to To the expiration of extent permitted by law and by the term of this Leaseapplicable instrument, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due Borrower's repayment obligations hereunder, the Borrower hereby pledges, assigns, hypothecates, and faithful paymentdelivers to the Company a first lien on, as herein providedand security interest in, the shares or other securities (the "Shares") covered by any options or other right to purchase common stock of the rentCompany or CareInsite, additional rentInc. ("Subject Options"), charges and damages payable by TENANT under this Lease or pursuant to law in all proceeds thereof, and, if requested, will deliver appropriate undated stock powers coupled with an interest and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is assignments duly executed in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionblank. In the event that the Borrower defaults on his repayment obligations hereunder, or the Borrower's employment with the Company or any bankruptcyof its affiliates terminates for any reason, insolvencythe Company may cause the Borrower to exercise the Subject Options (but only those that are "in the money" and then only up to that number of options which need to be exercised to satisfy the unpaid obligations hereunder) and/or sell, reorganization assign, transfer or other creditor-debtor proceedings otherwise dispose of the Shares, the proceeds of which (such proceeds being net of the applicable exercise price) shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior such obligations. Any amounts remaining thereafter shall be returned to the institution Borrower. The Borrower shall take all steps necessary in the Company's reasonable judgment, to consummate any such exercise of the Subject Options and/or disposition of the Shares. Until the full payment of all such proceedingsamounts due the Company, and/orthe Borrower shall not, at OWNER’s optionwithout the prior written consent of the Company, in partial liquidation of OWNER’s damages arising (i) sell, assign, transfer or otherwise dispose of, the Subject Options or the Shares unless the net proceeds from such default of proceeding(s). If as a result of any such application sale, assignment, transfer or disposition are applied in full to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down interest on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms and principal of this Lease, including any damages Note or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) incur any lien on the Subject Options or the Shares, except as provided hereunder. The Letter of Credit Company shall be deemed entitled to be automatically renewed, without amendment, for consecutive periods of one year each during all rights available to it under the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewedUniform Commercial Code. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the BuildingIn addition, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER Company shall have the right to transfer (at no expense offset amounts owed by the Borrower pursuant to OWNER) this Note against the cash security or Letter Company's obligation to pay severance under the Employment Agreement dated as of CreditMay 16, as 1999 between the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER Borrower and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsCompany (the "Employment Agreement").
Appears in 1 contract
Sources: Secured Promissory Note (Medical Manager Corp/New/)
Security. The obligation of the Buyer to repay the principal of the Promissory Note together with any and all accrued interest thereon will be secured as follows:
(Aa) At all times prior on and after the Closing Date, the Sold Shares (that have then been registered in the name of the Buyer) will be pledged by the Buyer to the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of Seller until all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency obligations set forth in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing Promissory Note have been satisfied in such order and priority as OWNER may elect in its sole discretionfull. In the event that such obligations are not satisfied by the Maturity Date, AdvEn and the Buyer (if not AdvEn) will take any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall and all steps necessary to cause a certain number of the Sold Shares to be instituted transferred back into the name of the Seller effective on the Maturity Date determined in accordance with the following formula: A = B – (C/D) Whereby: A = Number of Sold Shares to be transferred back from Buyer to Seller B = 3,699,000 (being the total number of Sold Shares) C = Total amount of principal of the Promissory Note repaid by or against TENANT, or its successors or assignsthe Buyer to the Seller as at the Maturity Date plus the amount of the Cash Payment D = 0.54069 (being the deemed value of each Sold Share for the purposes of this Letter Agreement)
(b) For greater certainty, the security deposit shall Cash Payment will be deemed to have been forfeited by the Buyer and will not be applied first reimbursable by the Seller to the payment Buyer in the event of any rents and/or other charges due OWNER for all periods prior default as contemplated in the foregoing; and
(c) on the Closing Date, AdvEn will execute and deliver to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as Seller a result of any such application general security agreement (the GSA) pursuant to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to which all of the remedies for non-payment personal property and after acquired assets of fixed rent. The AdvEn, including, but not limited to, the intellectual property of AdvEn, will be put forward as security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part favour of the security deposit. Notwithstanding anything to Seller for the contrary contained hereinabove or elsewhere in this Lease, due performance by the Buyer of the obligations set forth in the event that TenantPromissory Note or, for a fourth timealternatively, is ever the performance by AdvEn in monetary default or material non-monetary default (beyond any cure period as may applyconnection with the provisions of Section 3(a) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Letter Agreement. Notwithstanding the foregoing, the Seller agrees that any and all security obtained from AdvEn in lieu connection with the GSA will be and is hereby subordinated and postponed in favour of the current secured creditors of AdvEn (namely KNP Group Inc. and ▇▇▇▇▇▇▇ Alberta Ltd.), Spartan Capital Securities, LLC (Spartan) and in connection with the currently contemplated brokered and/or non-brokered private placements of convertible debt securities, or a cash depositsimilar financing structure, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible for aggregate net worth proceeds of not less than One Billion CDN$5,000,000 (after payment of agent commissions, agent expenses, and 00/100 the legal and accounting expenses of Nano Innovations Inc. ($1,000,000,000.00Nano) Dollars, which Letter of Credit may be drawn by facsimile draft incurred in connection therewith) (if the issuer’s offices are located outside the City of New YorkQualified Financing), shall have a term of any other third party investors investing with or through Spartan in connection with the Qualified Financing (collectively, the Senior Creditors). The Seller hereby agrees that it will not less than one year, be in form and content acceptable entitled to OWNER, be commence any action or proceeding against ▇▇▇▇▇ for the account realization of OWNER, and be any indebtedness or other recovery proceedings in connection with the amount GSA without the prior written consent of the Security DepositSenior Creditors. In Accordingly, the event TENANT defaults Seller agrees to execute any and all subordination, standstill and postponement documentation or instruments required by the Senior Creditors or any one of them in such form as such Senior Creditors may require. For greater certainty, the performance Seller will take such steps so as to ensure that the completion of any the Qualified Financing will not be prohibited, limited and/or restricted by way of the issuance of the GSA to the Seller. Any breach of the foregoing provisions by the Seller will be deemed a fundamental breach of the terms of this LeaseLetter Agreement and, including in addition to any other rights available to the payment of rent, beyond any applicable cure period, Buyer at law or in equity, will entitle the event Buyer to treat the Promissory Note as void and of no further effect as against the filing of Buyer and such treatment is agreed not to be a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain penalty but is intended to serve as compensation for the whole or any part of the Security Deposit, as represented damages suffered by the Letter Buyer and AdvEn as a result of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented fundamental breach by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsSeller.
Appears in 1 contract
Sources: Purchase Agreement (Adven Inc.)
Security. (A) At Landlord acknowledges receipt of $2,700.00, that Landlord is to retain as security for the faithful performance of all times prior the terms and conditions of this Lease. Landlord shall not be obligated to apply the security deposit on rents or other charges in arrears, or in damages for failure to perform the terms and conditions of this Lease. Application of the security deposit to the expiration arrears of rental payments or damages shall be at the sole option of the term Landlord, and the right to possession of the Premises by the Landlord for non-payment of rent for any other reason shall not in any event be affected by the security deposit. The security deposit is to be returned to Tenant when this Lease is terminated, according t the terms of this Lease, TENANT shall maintain on deposit with OWNER the sum If not otherwise applied by reason of $243,109.90 as security for the due and faithful payment, as herein provided, any breach of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions terms and conditions of this Lease on the part of TENANT to be kept, observed and performedby Tenant. TENANT Tenant expressly acknowledges and agrees that OWNER may use, Tenant shall not have the right to apply or retain the whole or any part of the security deposit under this Lease for to rent. In no event is the payment of any rent security deposit to be returned until Tenant has vacated the Premises and additional rent or any other sum as delivered possession to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any the Landlord. In the event the Landlord repossesses the Premises because of the terms, covenants default of the Tenant or because of the failure by the Tenant to carry out the terms and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER Landlord may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, apply the security deposit shall be deemed to be applied first on all damages suffered to the payment day of any rents and/or repossession and may retain the balance of the security deposit to apply on damages that may accrue or be suffered thereafter by reason of a default or breach of the Tenant. Landlord shall not be obligated to hold the security deposit in a separate fund, but may mix the security deposit wit other charges due OWNER for all periods prior to funds of the institution of such proceedingsLandlord, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) and Landlord shall not be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation obligated to pay such deficiency shall be treated as if it was an obligation interest to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of Tenant on the security deposit. Notwithstanding anything to As security for the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any faithful performance of the covenants, agreements, terms, provisions terms and conditions of this Lease, thenTenant hereby pledges and assigns to Landlord all of the furniture, OWNERfixtures, at its optiongoods and chattels of Tenant, which shall or may elect to require TENANT to deposit (be brought or to increase put on said Premises, and the letter Tenant agrees that said lien may be enforced by distress, foreclosure or other process of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated law at the then monthly rate election of fixed rent payable under this Lease)Landlord, and thereafter Tenant agrees to pay reasonable attorney' fees, together with all costs and charges incurred or paid by the amount Landlord by reason of security required Tenant's failure to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of perform any of the terms and conditions of this Lease, including which sums shall bear interest at the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding highest rate permitted by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Owner the sum of nineteen thousand ($243,109.90 19,000) dollars as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease; said security shall be held in an interest bearing account (passbook savings rate) and the part of TENANT interest shall be paid to Tenant annually, less the 1% administrative fee permitted to be keptretained by Landlord. It is agreed that in the event Tenant defaults in respect of any of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Owner may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Owner may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionOwner. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Leaselease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount end of the Security Deposit. In the event TENANT defaults in the performance Lease and after delivery of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting entire possession of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTOwner. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the demised premises form a part, Owner shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Owner shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such eventsecurity, TENANT and Tenant agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNEROwner. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Owner nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Security. (A) At all times prior Tenant has deposited with Kindred a cash sum equal to the expiration one monthly installment of the term of this LeaseFixed Rent hereunder, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for (i) the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on and (ii) the part faithful performance and observance by the applicable tenants and subtenants of TENANT the terms, provisions and conditions of each of the Combined Leases (each of the Combined Leases shall be referred to be keptin the singular, observed as a "Combined Lease"). It is agreed that in the event Tenant or the applicable tenant or subtenant defaults in respect of any of the terms, provisions and performed. TENANT expressly acknowledges conditions of this Lease or any of the Combined Leases, including, but not limited to, the payment of Rent, Kindred or Lessor or the applicable landlord or sublandlord under a Combined Lease may, after notice to Tenant and agrees that OWNER may the expiration of any applicable grace period provided for in this Lease or the applicable Combined Lease, as applicable with respect to such default, use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent Rent or any other sum as to which TENANT Tenant or the tenant or subtenant under the applicable Combined Lease is in default or for any sum which OWNER Lessor or the relevant landlord or sublandlord may expend or may be required to expend by reason of TENANT’s Tenant's or the applicable tenant's default in respect of any of the terms, covenants and conditions of this LeaseLease or any of the Combined Leases, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultLeased Property or the facility under the applicable Combined Lease, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNERLessor or the landlord or sublandlord under the applicable Combined Lease. In any such event, all Tenant shall promptly on demand deposit with Lessor so much of the foregoing in such order and priority security as OWNER may elect in its sole discretionshall have been so expended so that Lessor shall at all times have the full security deposit required hereunder. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNER, at its option, may elect the security (less any portion thereof which Lessor is entitled to require TENANT to deposit (or to increase the letter of credit), within ten (10retain) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount end of the Security Deposit. In the event TENANT defaults in the performance Lease and after delivery of any possession of the terms Leased Property to Lessor in accordance with the provisions of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may Section 40.3. Lessor shall hold such security and shall not be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit account to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such terminationsecurity and shall not be required to pay any interest thereon. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER Lessor shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of commingle such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsany other funds.
Appears in 1 contract
Sources: Operations Transfer Agreement (Kindred Healthcare Inc)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Section 20.1 Tenant has deposited with OWNER Landlord the sum of $243,109.90 45,000.00 (the "Security Amount") as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease (such amount, together with any interest theretofore earned thereon, if any, being herein called the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s"Security Deposit"). If as a result of any such application to all or any part of such securityTenant defaults hereunder, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER Landlord may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same Deposit to the extent required for the payment of any rent Rent or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this LeaseTenant's default, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s defaultPremises, whether accruing before or after summary proceedings proceedings, or other re-entry by OWNERLandlord. In the case of every such use, application or retention, TENANT Tenant shall, on demand, pay to OWNER Landlord the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore so that Landlord shall at all times have a Security Deposit in the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation Security Amount. If Tenant shall fully and punctually comply with all of the Letter terms and conditions of Credit and a sight draft in this lease, then the amount Security Deposit (or portion thereof to be drawn;
(iiwhich Tenant is entitled) The Letter of Credit shall be deemed returned or paid over to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease Tenant within forty-five (and shall remain in effect for not less than sixty (6045) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following after the expiration or termination date of this lease and delivery of exclusive possession of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails Premises to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security Landlord in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTaccordance herewith. In the event of a sale or lease of OWNER’s interest in the land and Building (or the Buildingportion thereof containing the Premises), OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder Security Deposit to the vendee or lessee, and OWNER Landlord shall ipso facto be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT Security Deposit and Tenant agrees to look solely to the new OWNER Landlord for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.said
Appears in 1 contract
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as As security for the due and faithful payment, as herein provided, performance by T▇▇▇▇▇ of all of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions terms and conditions of this Lease on the Tenant’s part of TENANT to be keptperformed, observed and performedT▇▇▇▇▇ has deposited with Landlord the sum equal to two month’s rent, or SIXTY THOUSAND DOLLARS ($60,000.00). TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings Such amount shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed returned to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit)without interest, within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to after the day set forth for the expiration or sooner termination of the Letter Term if Tenant has fully and faithfully carried out all of Creditthe terms, such failure shall constitute a material default under covenants, and conditions of this Lease and OWNER on its part to be performed. Landlord shall have the rightright to apply any part of said deposit to cure any default of Tenant, exercisable by a sight draft, including but not limited to receive damages and payment of Rent or additional rent. The application of the monies represented by the Letter of Credit (which monies deposit shall be held by OWNER as a cash deposit pursuant at the sole discretion of Landlord. It is expressly understood that this remedy is in addition to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit remedies vested in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the building of which the Demised Premises are a part or lease of the land and the Buildingon which it stands subject to this Lease, OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, purchaser and OWNER Landlord and his Agent shall be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to and Tenant shall look solely to the new OWNER landlord solely for the return of said cash security or Letter of Creditsecurity. It is agreed that the provisions hereof this provision shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERlandlord. TENANT covenants that it will The security deposited under this Lease shall not assign or encumberbe mortgaged, assigned, or attempt to assign or encumber, encumbered by Tenant without the monies or Letter written consent of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. Landlord In the event that at of any time during the term authorized assignment of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that Lease by Tenant the net worth of the Issuing Bank said security deposit shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred deemed to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance the Landlord as a deposit made by the assignee and Landlord shall have no further liability with this Lease, subject, however, respect to TENANT’s obligation the return of said security to replace such cash security with a new letter of credit meeting said qualificationsTenant.
Appears in 1 contract
Sources: Lease Agreement (Hut 8 Corp.)
Security. (Aa) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Landlord the sum of $243,109.90 NONE as security in a non-interest bearing account for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT Lease; this money is not required to be keptdeposited in a separate bank account but can be deposited in the Landlord’s general bank account and commingled with other monies within the account; it is agreed that in the event Tenant defaults in respect of any of the terms, observed provisions and performed. TENANT expressly acknowledges conditions of this Lease, including, but not limited to, the payment of rent and agrees that OWNER additional rent, Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for including but not limited to, any damages or deficiency deficiencies in the reletting re-letting of the demised premises caused by TENANT’S defaultPremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding returned to Tenant after the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to date fixed as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination end of the Lease for Tenant’s default, whether accruing before or and after summary proceedings or other re-entry by OWNER. In the case delivery of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount Premises to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding of which the Premises form a part, OWNER Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such eventsecurity, TENANT and Tenant agrees to look solely to the new OWNER owner of the building or building lessee solely for the return of said cash security or Letter of Credit. It security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNERowner of the building or building lessee. TENANT Tenant further covenants that it will not assign or encumber, or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Security. (A) At 10.1 To secure the repayment of the Bridge Loan and the payment of all times prior other monies due hereunder, MMG agrees to execute a Promissory Note in the form attached as Schedule C hereof, evidencing each advance of funds under the Bridge Loan and sign a general security agreement in the standard form, securing all the Assets in favour of the Lenders. The Lenders shall file the necessary UCC filings to register its security interests.
10.2 The Lenders may grant extensions, take and give up securities, accept compositions, grant releases and discharges and otherwise deal with MMG and with other parties, sureties or securities as the Lenders may see fit without prejudice to the expiration liability of FCIC or the Lenders’ rights under this Agreement or under the Promissory Note.
10.3 The grant of the term Promissory Note or of any other security in replacement thereof shall not operate so as to create any merger or discharge of any indebtedness or liability of MMG hereunder, nor of any assignment, transfer, guarantee, lien, contract, promissory note, ▇▇▇▇ of exchange or security of any form held or which may hereafter be held by the Lenders from MMG or from any other person whomsoever.
10.4 The Lenders may waive any breach by MMG of this Lease, TENANT shall maintain on deposit with OWNER Agreement or of any default by MMG in the sum of $243,109.90 as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease observance or pursuant to law and for the due and faithful keeping, observance and performance of all any covenant or condition under the other covenants, agreements, terms, provisions and conditions of this Lease Promissory Note. No failure or delay on the part of TENANT the Lenders to be keptexercise any right, observed and performed. TENANT expressly acknowledges and agrees that OWNER may usepower or remedy given herein or by statute or at law or in equity or otherwise shall operate as a waiver thereof, apply nor shall any single or retain the whole or any part of the security deposit under this Lease for the payment partial exercise of any rent and additional rent or right preclude any other sum as to which TENANT is in default exercise thereof or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect the exercise of any of other right, power or remedy, nor shall any waiver by the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall Lenders be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by any subsequent similar or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Sources: Bridge Loan and Representation Agreement (Mega Media Group Inc)
Security. (Aa) At all times prior to In the expiration of event Tenant deposits with Landlord any Security Deposit, the term of this Lease, TENANT same shall maintain on deposit with OWNER the sum of $243,109.90 be held as security for the due full and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance payment and performance by Tenant of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable obligations under this Lease), and thereafter the amount of security required to be maintained by . If Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the full and prompt payment and performance of any of the terms of its obligations under this Lease, including including, without limitation, the payment of rentRent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER Landlord may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same Deposit to the extent required for the payment of any rent Rent or any other sums as to which Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms of Tenant’s obligations under this Lease, including including, without limitation, any damages or deficiency in the re-letting reletting of the demised premises after termination of the Lease for Tenant’s defaultDemised Premises, whether accruing such damages or deficiency accrue before or after summary proceedings or other re-entry by OWNERLandlord. In the case of every such If Landlord shall so use, application apply or retentionretain the whole or any part of the security, TENANT shall, on demand, pay Tenant shall upon demand immediately deposit with Landlord a sum equal to OWNER the sum amount so used, applied or retained which and retained, as security as aforesaid. If Tenant shall be added to fully and faithfully pay and perform all of Tenant’s obligations under this Lease, the Security Deposit so that the same or any balance thereof to which Tenant is entitled shall be replenished returned or paid over to its former amountTenant after the date on which this Lease shall expire or sooner end or terminate, or, restore the Letter and after delivery to Landlord of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount entire possession of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTDemised Premises. In the event of a any sale or leasing of OWNER’s interest in the land and the BuildingLand, OWNER Landlord shall have the right to transfer (at no expense the security to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder which Tenant is entitled to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to payment thereof; and Tenant shall look solely to the new OWNER landlord for the return or payment of said cash security or Letter of Credit. It is agreed that the same; and the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit the same to a new OWNERlandlord. TENANT covenants that it will Tenant shall not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. .
(b) In lieu of the event that at any time during the term of cash security required by this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank Tenant shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing provide to Landlord an irrevocable transferable Letter of Credit (hereinafter referred to as in the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either amount of the foregoing, OWNER may send written notice Security Deposit in form and substance satisfactory to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with Landlord and issued by a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.financial institution approved by
Appears in 1 contract
Sources: Lease Agreement (Vs Direct Inc.)
Security. Notwithstanding the foregoing, the Agent and the other Lenders -------------- agree, as among themselves, that (Ai) At all times prior to the expiration Agent shall not without the consent of the term of this Lease, TENANT shall maintain on deposit with OWNER the sum of $243,109.90 as security for the due and faithful payment, as herein provided, Majority Lenders make any sale or disposition of the rent, additional rent, charges and damages payable by TENANT under this Lease or Collateral pursuant to law any of the Security Documents, and for (ii) the due and faithful keeping, observance and performance Agent shall not without the consent of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the Lenders release the security deposit under this Lease for interest of the payment Lenders in any of the Collateral or release or discharge any Person which is a party to any of the Security Documents from its obligations thereunder, except in each case as expressly provided in the Security Documents, or consent or agree to any amendment or waiver of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect material provision of any of the terms, covenants Security Documents. The Agent acknowledges to the other Lenders that it is acting in an agency capacity hereunder and conditions of this Lease, as well as for any damages or deficiency that the security interest in the reletting Collateral granted under the Security Documents secures the Indebtedness of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject Company owing to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLenders. In the event of a sale any default, the Agent will apply and/or pay over to the Lenders any net proceeds derived from the Collateral pro rata on --- ---- the basis of OWNER’s interest the then outstanding portion of the total Indebtedness of the Company owed to the Lenders. The Agent will be reimbursed or properly indemnified by the Lenders in the land and event the Building, OWNER Agent is requested by the Lenders to take or omit to take any action with respect to the Collateral (any such reimbursement or indemnification to be pro rata as provided in subsection 14.5). The Agent shall have the --- ---- --------------- right to transfer (at no expense retain counsel to OWNER) the cash security advise it as to any action or Letter of Credit, as the case may be, deposited hereunder decision with respect to the vendee or lessee, Collateral and OWNER shall be released reimbursed by TENANT from all liability the other Lenders for the return cost of such cash security or Letter of Credit. In such event, TENANT agrees to look solely the same (to the new OWNER for extent the return Agent is not reimbursed by the Company) prior to distributing any of said cash security the Collateral or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any proceeds thereof (any such assignment, encumbrance, attempted assignment, or attempted encumbrancereimbursement to be pro rata as aforesaid). In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.--- ----
Appears in 1 contract
Security. (Aa) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Owner the sum of $243,109.90 24,200.00 (the “Security Deposit”) as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on Lease. If Tenant defaults in respect of any of the part terms, provisions and conditions of TENANT to be keptthis Lease, observed including, but not limited to, the payment or Base Rent and performed. TENANT expressly acknowledges and agrees that OWNER Additional Rent, Owner may use, apply or retain the whole or any part of the security deposit under this Lease so deposited to the extent required for the payment of any rent Base Rent and additional rent Additional Rent or any other sum as to which TENANT Tenant is in default or for any sum such which OWNER Owner may expend or may be required to expend by reason of TENANTTenant’s default in respect of any of the terms, covenants and conditions of this Lease, as well as for including, but not limited to, any damages or deficiency in the reletting re-letting of the demised premises caused by TENANT’S defaultpremises, whatever whether such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionOwner. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings that Tenant shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit fully and faithfully comply with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Lease, then, OWNER, at its option, may elect the security shall be returned to require TENANT to deposit (or to increase Tenant after the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at date fixed as the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term end of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu and after delivery of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount entire possession of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same Demised Premises to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTOwner. In the event of a sale of OWNER’s interest in the land and building or leasing of the Buildingbuilding, OWNER of which the Demised Premises form a part, Owner shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Owner shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT security; and Tenant agrees to look solely to the new OWNER Owner solely for the return of said cash security or Letter of Credit. It security, and it is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash the security or Letter of Credit to a new OWNEROwner. TENANT Tenant further covenants that it will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as security, security and that neither OWNER Owner nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In .
(b) The Security Deposit shall be increased by Tenant, upon any increase in the event Base Rent, so that Owner will always maintain on deposit an amount equal to 2 months’ Fixed Rent.
(c) If at any time during the term hereof Owner shall apply all or a portion of this LeaseTenant’s Security Deposit to cure a default of Tenant hereunder, OWNERTenant shall promptly and without further demand, in OWNER’s reasonable opinion, believes (a) that deposit with Owner an amount equal to the net worth portion of the Issuing Bank Security Deposit so applied by Owner so that Owner shall at all times have the total amount of security required hereunder.
(d) No holder of a mortgage or deed of trust or a lessor under a ground lease to which this Lease is or may become subordinate shall be less than responsible for the minimum amount specified aboveSecurity Deposit, unless such mortgagee or (b) that circumstances holder of such deed of trust or lessor shall have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not actually received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualificationsSecurity Deposit.
Appears in 1 contract
Sources: Lease Agreement (Edgar Online Inc)
Security. (A) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit Tenant has deposited with OWNER Landlord the sum of $243,109.90 16,940.08 as security for the due full and faithful payment, as herein provided, performance and observance by Tenant of the rent, additional rent, charges Tenant's covenants and damages payable by TENANT obligations under this Lease or pursuant to law Lease. If Tenant defaults in the full and for the due and faithful keeping, observance prompt payment and performance of all any of Tenant's covenants and obligations under this Lease, including, but not limited to, the other covenantspayment of Fixed Rent and Additional Rent, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER Landlord may use, apply or retain the whole or any part of the security deposit under this Lease so deposited and the interest accrued thereon, if any, to the extent required for the payment of any rent Fixed Rent and additional rent Additional Rent or any other sum sums as to which TENANT Tenant is in default or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Lease, as well as for including, but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S defaultDemised Premises, whatever whether such damages or 36 39 deficiency accrued accrue before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s)Landlord. If as a result of any such application to all or any part of such security, the amount of cash Landlord shall so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Depositsecurity or the interest accrued thereon, as represented by the Letter of Creditif any, by drawing down on the same Tenant shall upon demand immediately deposit with Landlord a sum equal to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum amount so used, applied or retained which as security as aforesaid. If Tenant shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter fully and faithfully comply with all of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER Tenant's covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default obligations under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in or any balance thereof, with the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Buildingthereon, the Letter of Credit if any, to which Tenant is entitled, shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by returned or against TENANT, OWNER shall have paid over to Tenant after the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of date on which this Lease occursshall expire or sooner end or terminate, OWNER shall have and after delivery to Landlord of entire possession of the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTDemised Premises. In the event of a any sale of OWNER’s Landlord's interest in the land and Building or leasing of the Building, OWNER Landlord shall have the right to transfer (at no expense the security and interest thereon, if any, to OWNER) the cash security or Letter of Creditwhich Tenant is entitled, as the case may be, deposited hereunder to the vendee or lessee, lessee and OWNER Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to payment thereof; and Tenant shall look solely to the new OWNER landlord for return or payment of the return of said cash security or Letter of Credit. It is agreed that same; and the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit the same to a new OWNERlandlord. TENANT covenants that it will Tenant shall not assign or encumber, encumber or attempt to assign or encumber, encumber the monies deposited herein as security or Letter of Credit deposited hereunder as securityany interest thereon to which Tenant is entitled, and that neither OWNER Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.
Appears in 1 contract
Security. (A) At all times prior to Section 33.01. Upon the expiration of the term execution of this Lease, TENANT Tenant shall maintain on deposit with OWNER Landlord the sum of $243,109.90 Security Deposit Amount, as security for the due faithful performance and faithful payment, as herein provided, observance by Tenant of all of the rentcovenants, additional rentagreements, charges terms, provisions and damages payable by TENANT under conditions of this Lease or pursuant to law and for Lease. Tenant agrees that, if Tenant shall default in respect of any of the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on (beyond notice and the part expiration of TENANT to be keptthe applicable cure period, observed if any) including the payment of the Fixed Rent and performed. TENANT expressly acknowledges and agrees that OWNER additional rent, Landlord may use, apply or retain the whole or any part of the security deposit under this Lease being held by Landlord (the "Security") to the extent required for the payment of any rent Fixed Rent and additional rent rent, or any other sum payments as to which TENANT is Tenant shall be in default or for any sum monies which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default in respect of any of the terms, covenants and conditions of this Lease, as well as for any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such security, the amount of cash so on deposit with OWNER (exclusive of any interest) shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, thenincluding any damages or deficiency in the reletting of the Demised Premises, OWNER, at its option, may elect to require TENANT to deposit (whether such damages or to increase the letter of credit), within ten (10) days deficiency accrued before or after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained summary proceedings or other re-entry by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Landlord. Notwithstanding the foregoingforegoing sentence, in lieu of a cash deposithowever, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of Landlord shall not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Depositif Tenant's default (i) is non-monetary and (ii) arises from strikes, as represented lock-outs or labor problems, governmental preemption, or by the Letter of Credit, by drawing down on the same to the extent required for the payment reason of any rent Legal Requirements, or for any sum by reason of the conditions of supply and demand which OWNER may expend have been or may shall be affected by war or other emergency or general market conditions or otherwise; provided, however, that Tenant shall use its best efforts and diligently pursue to completion the curing of such default. Landlord shall not be required to expend by reason of TENANT’s default in respect of so use, apply or retain the whole or any part of the terms of this LeaseSecurity so deposited, including but if the whole or any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum part thereof shall be so used, applied or retained which retained, then Tenant shall, within ten (10) days after demand therefor deposit with Landlord an amount in cash equal to the amount so used, applied or retained, so that Landlord shall have the entire Security on hand at all times during the Term. In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants, agreements and conditions of this Lease, the Security shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit returned to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than within thirty (30) days prior to after the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit Expiration Date or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary earlier termination of this Lease occurs, OWNER shall have as provided herein and delivery of exclusive possession of the right, exercisable by sight draft, Demised Premises to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANTLandlord. In the event of any making or assignment of any Underlying Lease or upon a sale conveyance of OWNER’s interest in the land and the Building, OWNER : (i) Landlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder Security to the vendee assignee or lesseelessee or transferee, and OWNER (ii) Landlord shall thereupon be released by TENANT Tenant from all liability for the return of such cash security or Letter of Credit. In such eventSecurity, TENANT and (iii) Tenant agrees to look solely to the new OWNER Landlord's successor for the return of said cash security or Letter of Credit. It is Security provided that Tenant has received notice thereof, it being agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit the Security to a new OWNERLandlord. TENANT Tenant further covenants that it Tenant will not assign or encumber, encumber or attempt to assign or encumber, encumber the monies or Letter of Credit deposited hereunder herein as securitySecurity, and that neither OWNER Landlord nor its Landlord's successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, assignment or attempted encumbrance.
Section 33.02. In Landlord agrees to place the event that at Security in an interest- bearing account, and, unless disbursed or applied by Landlord as provided in Section 33.01 above, the interest earned thereon (less an amount equal to one (1%) percent of the Security, which may be retained by Landlord each year as compensation for management and administration of said account) shall be disbursed annually to Tenant when Landlord shall generally make such distributions to tenants in the Building, but only if Tenant shall not be in default with respect to any time during of Tenant's obligations under this Lease beyond notice and the term expiration of this Leasethe applicable cure period, OWNERif any.
A. Notwithstanding anything to the contrary contained in Section 33.01 above, in OWNER’s reasonable opinionlieu of a cash security deposit, believes Tenant may deliver to Landlord a clean, irrevocable, transferable and unconditional letter of credit (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing "Letter of Credit Credit") issued by and drawn upon a commercial bank (hereinafter referred to as the “Existing L/C”"Issuing Bank") which shall be a member bank of the New York Clearinghouse Association (or, in the alternative, which shall have offices for banking purposes in the Borough of Manhattan and shall have a net worth of not less than $100,000,000, with reasonably appropriate evidence thereof to be submitted by Tenant), which Letter of Credit shall: (i) have a term of not less than one (1) year, (ii) contain the same substance and be in materially the same form annexed hereto as Exhibit "G," (iii) be for the account of Landlord, (iv) be in the amount of $70,950.00, (v) except as otherwise provided in this Section 33.03, conform and be subject to Uniform Customs and Practice for Documentary Credits, 1993 Revision, ICC Publication No. 500 (or any revision thereof or successor thereto), (vi) be fully transferable by Landlord without any fees or charges therefor (or, if the Letter of Credit shall provide for the payment of any transfer fees or charges, the same shall be paid by Tenant as and when such payment shall be requested by the Issuing Bank), (vii) provide that Landlord shall be entitled to draw upon the Letter of Credit upon presentation to the Issuing Bank of a sight draft accompanied by Landlord's statement that Landlord is then entitled to draw upon the Letter of Credit pursuant to the terms of this Lease, and (viii) provide that the Letter of Credit shall be deemed automatically renewed, without amendment, for consecutive periods of one (1) year each year thereafter during the entire Term of this Lease and for a period of thirty (30) days thereafter, unless the Issuing Bank shall send notice (the "Non-Renewal Notice") to Landlord by certified or registered mail, return receipt requested, not less than forty-five (45) days next preceding the then expiration date of the Letter of Credit that the Issuing Bank elects not to renew such Letter of Credit, in which case Landlord shall have the right, by sight draft on the Issuing Bank, to receive the monies represented by the then existing Letter of Credit, and to hold and/or disburse such proceeds pursuant to the terms of Section 33.01 above as cash security. If Landlord shall fail, for any reason whatsoever, to draw upon the Letter of Credit within said forty-five (45) day period, and the Letter of Credit shall expire prior to the thirtieth (30th) day following the Expiration Date of the Term of this Lease, then Tenant shall within five (5) days after demand therefor deposit with Landlord the Security Deposit Amount in cash or furnish Landlord with a replacement Letter of Credit (which shall comply with all of the conditions set forth in the immediately preceding sentence), so that Landlord shall have the entire Security on hand at all times during the Term and for a period of thirty (30) days thereafter. Tenant acknowledges and agrees that the Letter of Credit shall be delivered to Landlord as security for the faithful performance and observance by Tenant of all of the covenants, agreements, terms, provisions and conditions of this Lease, and that Landlord shall have the right to draw upon the entire Letter of Credit in any instance in which Landlord would have the right to use, apply or retain the whole or any part of any cash security deposited with Landlord pursuant to Section 33.01 above. If Landlord shall draw upon the entire Letter of Credit and such amount shall be greater than that required for the payments referred to in the first sentence of Section 33.01 hereof, the balance of any amounts received by Landlord pursuant to drawing upon such Letter of Credit shall be held by Landlord as a cash security deposit in accordance with the terms thereofprovisions of this Section 33.
B. In the event that Tenant shall elect to furnish the Letter of Credit in lieu of cash security: (i) all references to "Security" in Section 33.01 above shall be deemed to refer to the Letter of Credit, thenor any proceeds thereof as may be drawn upon by Landlord, upon and (ii) the happening provisions of either Section 33.02 above shall apply only to such Letter of Credit proceeds (if any) as may be drawn and held by Landlord.
C. Landlord agrees that, provided that the conditions set forth below shall be satisfied, Tenant shall be permitted to (i) reduce the amount of said Letter of Credit on the third (3rd) anniversary of the foregoing, OWNER may send written notice Commencement Date to TENANT $47,300 (hereinafter with such anniversary date being referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter "Reduction Date", and such reduction being referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified"Permitted Reduction"), or (ii) OWNER reasonably believes in the event that Landlord shall then be holding cash security in lieu of a Letter of Credit, to receive a refund on or after the third (3rd) anniversary of the Commencement Date, in an emergency existsamount equal to the difference between the amount of cash security then being held by Landlord and $47,300, if any. Landlord shall have no obligation to refund any portion of the cash security until thirty (30) days following Landlord's receipt of a written notice requesting such refund (the "Security Refund Notice"). Landlord agrees that, if and to the extent Landlord's cooperation shall be required in order to facilitate a Permitted Reduction, Landlord will, at Tenant's request, but at no cost or expense to Landlord, cooperate with Tenant in all reasonable respects to cause such Permitted Reduction to occur. Tenant shall only have the right to reduce the Letter of Credit or to receive such refund as aforesaid provided that on the Reduction Date or the date upon which Landlord shall receive the Security Refund Notice (x) Tenant shall not then be in either event, the Existing L/C may be presented for payment by OWNER default (after notice and the proceeds thereof expiration of the applicable cure period) with respect to any of Tenant's non-monetary obligations under this Lease (a "Non-Monetary Default") and (y) Tenant shall not be held by OWNER in accordance default with respect to any of Tenant's monetary obligations under this LeaseLease after notice and the expiration of the applicable cure period, subjectif any (a "Monetary Default"); it being agreed, however, that following Tenant's cure of such Non-Monetary Default or Monetary Default, as the case may be, Tenant shall be permitted to TENANT’s obligation to replace reduce the Letter of Credit or receive such cash security with a new letter of credit meeting said qualificationsrefund as aforesaid.
Appears in 1 contract
Sources: Lease (CTC Communications Corp)
Security. (ASupplementing Article 34) At all times prior to the expiration of the term of this Lease, TENANT shall maintain on deposit --------
65.01 Tenant has deposited with OWNER Landlord the sum of $243,109.90 ("the "Security") either in cash or by Letter of Credit as provided in Section 65.02, as security for the due faithful performance and faithful payment, as herein provided, observance by tenant of the rent, additional rent, charges and damages payable by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance of all the other covenants, agreements, terms, provisions and conditions of this Lease on lease. Landlord agrees that in the part of TENANT event Tenant deposits a cash security as aforesaid, Landlord shall maintain said cash security in an interest bearing account, in a bank or savings and loan association to be keptselected, observed from time to time, by Landlord in its sole discretion which account shall be insured by the Federal Deposit Insurance Corporation, so long as such insurance shall be available, and performedall interest earned thereon (except with respect to Landlord's administrative expense as set forth below) shall be retained in such account and be deemed added to the cash security deposited hereunder or upon request of Tenant be delivered to Tenant annually within twenty (20) days after such request. TENANT expressly acknowledges and Landlord agrees further to hold the said cash security in such an account for the entire term hereof, subject, however, to the terms of this Article 65 with respect to the application of the security in the event of Tenant's default hereunder. To the extent permitted by law, Tenant agrees that OWNER Landlord shall be entitled to receive and retain per such sum from time to time as Landlord shall determine, in its sole discretion. Landlord shall not be required to credit any of the cash security with interest for any period during which Landlord does not receive interest thereon. It is agreed that in the event Tenant defaults after notice and the expiration of any applicable cure period hereunder, in respect of any of the terms, provisions and conditions of this lease, including, but not limited to, the payment of rent and additional rent, Landlord may use, apply or retain the whole or any part of the cash security deposit under this Lease so deposited and any interest thereon then held by Landlord, or Landlord may notify the "Issuing Bank" (as such term is defined in Section 65.02) and thereupon receive all of the monies represented by the said Letter of Credit and use, apply or retain the whole or any part of such proceeds, as the case may be, to the extent required for the payment of any rent and additional rent or any other sum as to which TENANT Tenant is in default default, after notice and any cure period provided herein, or for any sum which OWNER Landlord may expend or may be required to expend by reason of TENANT’s Tenant's default after notice and the expiration of any applicable cure period hereunder, in respect of any of the terms, covenants and conditions of this Leaselease, as well as for including but not limited to, any damages or deficiency in the reletting of the demised premises caused by TENANT’S default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretionLandlord. In the event that Landlord applies or retains any bankruptcy, insolvency, reorganization portion or other creditor-debtor proceedings shall be instituted by or against TENANTall of such cash security and interest held thereon, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution proceeds of such proceedingsLetter of Credit, and/oras the case may be, Tenant shall forthwith restore the amount so applied or retained so that at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or any part of such securitytimes, the amount of cash so on deposit with OWNER (exclusive of any interest) deposited shall be less than the amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demandSecurity plus the amount of any interest held thereon immediately prior to such application or retention in the event of a cash security deposit. The TENANT’s obligation to pay such deficiency In the event that Tenant shall be treated as if it was an obligation to pay fixed rent or additional rent fully and shall be subject to faithfully comply with all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions provisions, covenants and conditions of this Leaselease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the term of this Lease (and shall remain in effect for not less than sixty (60) days following the expiration date of the Lease), unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requested, or national overnight courier service requiring receipt, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than thirty (30) days prior to the expiration of the Letter of Credit, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); and
(iv) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale of OWNER’s interest in the land and the Building, OWNER shall have the right to transfer (at no expense to OWNER) the cash security and any interest thereon then held by Landlord, or Letter of Credit, as the case may be, deposited hereunder to the vendee or lessee, and OWNER shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees returned to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit deposited hereunder as security, and that neither OWNER nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that the net worth of the Issuing Bank shall be less than the minimum amount specified above, or (b) that circumstances have occurred indicating that the Issuing Bank may be incapable of, unable to, or prohibited from honoring the then existing Letter of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT Tenant within fifteen (15) business days following the date fixed as the end of the lease and after delivery of entire possession of the Demised Premises to replace the Existing L/C with Landlord.
65.02 In lieu of a new cash deposit, Tenant may deliver to Landlord a clean, irrevocable and unconditional letter of credit (hereinafter referred to as the “Replacement L/C”"Letter of Credit") from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER which shall forthwith return the Existing L/C (a) be issued by and drawn upon any commercial bank (hereinafter referred to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANT’s obligation to replace such cash security with a new letter of credit meeting said qualifications.as the
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Security. (Aa) At all times prior to the expiration of the term of this Lease, TENANT Subtenant shall maintain on deposit with OWNER Sublandlord the sum of Nineteen Thousand Two Hundred Forty-Nine Dollars ($243,109.90 19,249.08) (the “Security Deposit”) as security for the due and faithful payment, as herein provided, of the rent, additional rent, charges and damages payable performance by TENANT under this Lease or pursuant to law and for the due and faithful keeping, observance and performance Subtenant of all the other covenants, agreements, terms, provisions and conditions of this Lease on the part of TENANT to be kept, observed and performed. TENANT expressly acknowledges and agrees that OWNER may use, apply or retain the whole or any part of the security deposit under this Lease for the payment of any rent and additional rent or any other sum as to which TENANT is in default or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms, covenants and conditions of this LeaseSublease on Subtenant’s part to be performed. The Security Deposit shall be paid by Subtenant upon execution of this Sublease and held by Sublandlord in a non interest bearing account. Sublandlord shall have the right, as well as for any damages or deficiency in the reletting with notice to Subtenant, and regardless of the demised premises caused exercise of any other remedy Sublandlord may have by TENANT’S reason of a default, whatever such damages or deficiency accrued before or after summary proceedings or other re-entry by OWNER, all of the foregoing in such order and priority as OWNER may elect in its sole discretion. In the event any bankruptcy, insolvency, reorganization or other creditor-debtor proceedings shall be instituted by or against TENANT, or its successors or assigns, the security deposit shall be deemed to be applied first to the payment of any rents and/or other charges due OWNER for all periods prior to the institution of such proceedings, and/or, at OWNER’s option, in partial liquidation of OWNER’s damages arising from such default of proceeding(s). If as a result of any such application to all or apply any part of such securitysaid deposit to cure any default of Subtenant, and, if Sublandlord does so, Subtenant shall upon demand deposit with Sublandlord the amount of cash so on deposit with OWNER (exclusive of any interest) applied so that Sublandlord shall be less than have the full amount set forth above, TENANT shall deposit with OWNER cash in an amount equal to the deficiency within ten (10) business days after demand. The TENANT’s obligation to pay such deficiency shall be treated as if it was an obligation to pay fixed rent or additional rent and shall be subject to all of the remedies for non-payment of fixed rent. The security deposit (if held by OWNER and not provided in a letter of credit) shall be held in an interest bearing account and the interest earned thereon, less the maximum annual administrative fee allowable to OWNER under law, shall be deemed a part of the security deposit. Notwithstanding anything to the contrary contained hereinabove or elsewhere in this Lease, in the event that Tenant, for a fourth time, is ever in monetary default or material non-monetary default (beyond any cure period as may apply) of any of the covenants, agreements, terms, provisions and conditions of this Lease, then, OWNER, at its option, may elect to require TENANT to deposit (or to increase the letter of credit), within ten (10) days after notice from OWNER, an additional month’s security under this Lease (calculated at the then monthly rate of fixed rent payable under this Lease), and thereafter the amount of security required to be maintained by Tenant throughout the term of this Lease shall be increased by such amount.
(B) Notwithstanding the foregoing, in lieu of a cash deposit, TENANT may deliver to OWNER a clean, irrevocable and unconditional standby Letter of Credit (the “Letter of Credit”) issued by and drawn upon Silicon Valley Bank or any commercial bank (hereinafter referred to as the “Issuing Bank”) having a tangible net worth of not less than One Billion and 00/100 ($1,000,000,000.00) Dollars, which Letter of Credit may be drawn by facsimile draft (if the issuer’s offices are located outside the City of New York), shall have a term of not less than one year, be in form and content acceptable to OWNER, be for the account of OWNER, and be in the amount of the Security Deposit. In the event TENANT defaults in the performance of any of the terms of this Lease, including the payment of rent, beyond any applicable cure period, or in the event of the filing of a bankruptcy proceeding by or against TENANT, OWNER may use, apply or retain the whole or any part of the Security Deposit, as represented by the Letter of Credit, by drawing down on the same to the extent required for the payment of any rent or for any sum which OWNER may expend or may be required to expend by reason of TENANT’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the demised premises after termination of the Lease for Tenant’s default, whether accruing before or after summary proceedings or other re-entry by OWNER. In the case of every such use, application or retention, TENANT shall, on demand, pay to OWNER the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount, or, restore the Letter of Credit to the original required amount. The Letter of Credit shall provide that:
(i) The Issuing Bank shall pay to OWNER or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each all times during the term of this Lease (and Sublease. If Subtenant shall remain fail to make such deposit, Sublandlord shall have the same remedies for such failure as Sublandlord has for a default in effect for not less than sixty (60) days following the expiration date payment of the Lease)Rent. If Subtenant performs all of its obligations hereunder, unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to OWNER by certified or registered mail, return receipt requestedsaid Security Deposit, or national overnight courier service requiring receiptas much has not been validly applied by Sublandlord, not less than sixty (60) days next preceding the then expiration date of the Letter of Credit, that it elects not to have such Letter of Credit renewed. OWNER covenants and agrees to return the Letter of Credit to Tenant on or before the sixty-first (61st) day following the expiration or termination date of the Lease;
(iii) If OWNER receives a Non-Renewal Notice and TENANT fails to provide a replacement Letter of Credit which meets the requirements of this Lease with an effective date commencing on the day following the expiration of the existing Letter of Credit not fewer than will be returned/applied without interest within thirty (30) days prior to after the expiration of the Letter of CreditTerm, such failure shall constitute a material default under this Lease and OWNER shall have the right, exercisable by a sight draft, to receive the monies represented by the Letter of Credit (which monies shall be held by OWNER as a cash deposit pursuant to the terms of the printed portion of this Lease, pending the replacement of such Letter of Credit or TENANT’s default after notice and the expiration of including any applicable cure period hereunder); however, OWNER’s holding of such cash security shall not be deemed a waiver of TENANT’s default of its obligation to maintain the security in the form of a Letter of Credit); andrenewals thereof.
(ivb) Upon OWNER’s sale of OWNER’s interest in the land and the Building, the Letter of Credit shall be transferable, without charge, by OWNER If a bankruptcy proceeding is filed by or against TENANT, OWNER shall have the right, exercisable by a sight draft, to receive monies represented by the Letter of Credit. If a voluntary termination of this Lease occurs, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy any fees and payments owed by TENANT in connection with such termination, including without limitation, accrued but unpaid rents and/or other charges payable pursuant to the Lease and any termination fees and all other amounts owed by TENANT to OWNER pursuant to any written agreement entered into between them with respect to such termination. If TENANT shall owe any late charges or fees or interest on late payments to OWNER pursuant to this Lease or otherwise pursuant to legal process or law, OWNER shall have the right, exercisable by sight draft, to receive monies represented by the Letter of Credit in order to satisfy such amounts owed by TENANT. In the event of a sale an assignment or transfer of OWNER’s interest in the land and leasehold estate under the BuildingMain Lease, OWNER Sublandlord shall have the right to transfer (at no expense to OWNER) the cash security or Letter of Credit, as the case may be, deposited hereunder to the vendee assignee. The security deposited under this Sublease shall not be assigned or lesseeencumbered by Subtenant without the prior consent of Sublandlord, and OWNER any such assignment or encumbrance shall be released by TENANT from all liability for the return of such cash security or Letter of Credit. In such event, TENANT agrees to look solely to the new OWNER for the return of said cash security or Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said cash security or Letter of Credit to a new OWNER. TENANT void.
(c) Subtenant covenants that it will not assign or encumber, or attempt to assign or encumber, the monies or Letter of Credit cash Security Deposit deposited hereunder as securityhereunder, and that neither OWNER Sublandlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that at any time during bankruptcy, insolvency, reorganization or other debtor-creditor proceedings shall be instituted by or against Subtenant, its successors or assigns, or any guarantor of Sub-Tenant hereunder, the term of this Lease, OWNER, in OWNER’s reasonable opinion, believes (a) that security shall be deemed to be applied to the net worth payment of the Issuing Bank shall be less than Base Rent due Sublandlord for periods prior to the minimum amount specified aboveinstitution of such proceedings and the balance, or (b) that circumstances have occurred indicating that the Issuing Bank if any, may be incapable of, unable to, or prohibited from honoring the then existing Letter retained by Sublandlord in partial satisfaction of Credit (hereinafter referred to as the “Existing L/C”) in accordance with the terms thereof, then, upon the happening of either of the foregoing, OWNER may send written notice to TENANT (hereinafter referred to as the “Replacement Notice”) requiring TENANT within fifteen (15) business days to replace the Existing L/C with a new letter of credit (hereinafter referred to as the “Replacement L/C”) from an Issuing Bank meeting the qualifications described hereinabove. Upon receipt of a Replacement L/C meeting the qualifications, OWNER shall forthwith return the Existing L/C to TENANT. In the event that (i) a Replacement L/C meeting the qualifications is not received by OWNER within the time specified, or (ii) OWNER reasonably believes an emergency exists, then in either event, the Existing L/C may be presented for payment by OWNER and the proceeds thereof shall be held by OWNER in accordance with this Lease, subject, however, to TENANTSublandlord’s obligation to replace such cash security with a new letter of credit meeting said qualificationsdamages.
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Sources: Sublease (Century Communities, Inc.)