AFTER THE DRAW OCCURS.
THE PROCEEDS OF THE LETTER OF
CREDIT SHALL CONSTITUTE SUBLESSOR'S SOLE AND SEPARATE PROPERTY (AND NOT
SUBLESSEE'S PROPERTY OR THE PROPERTY OF SUBLESSEE'S BANKRUPTCY ESTATE) AND
SUBLESSOR MAY IMMEDIATELY UPON ANY DRAW (AND WITHOUT NOTICE TO SUBLESSEE) APPLY
OR OFFSET THE PROCEEDS OF THE LETTER OF CREDIT: (A) AGAINST ANY RENT PAYABLE BY
SUBLESSEE UNDER THIS SUBLEASE THAT IS NOT PAID WHEN DUE; (B) AGAINST ALL LOSSES
AND DAMAGES THAT SUBLESSOR HAS SUFFERED OR THAT SUBLESSOR REASONABLY ESTIMATES
THAT IT MAY SUFFER AS A RESULT OF SUBLESSEE'S FAILURE TO COMPLY WITH ONE OR MORE
PROVISIONS OF THIS SUBLEASE, INCLUDING ANY DAMAGES ARISING UNDER SECTION 1951.2
OF THE CALIFORNIA CIVIL CODE FOLLOWING TERMINATION OF THE SUBLEASE; (C) AGAINST
ANY COSTS INCURRED BY
SUBLESSOR IN CONNECTION WITH THE SUBLEASE (INCLUDING REASONABLE ATTORNEYS'
FEES); AND (D) AGAINST ANY OTHER AMOUNT THAT SUBLESSOR MAY INCUR BY REASON OF
SUBLESSEE'S DEFAULT.
PROVIDED SUBLESSEE HAS PERFORMED ALL OF ITS OBLIGATIONS
UNDER THIS SUBLEASE, SUBLESSOR AGREES TO PAY TO SUBLESSEE WITHIN THIRTY (30)
DAYS AFTER THE FINAL LC EXPIRATION DATE THE AMOUNT OF ANY PROCEEDS OF THE LETTER
OF CREDIT RECEIVED BY SUBLESSOR AND NOT APPLIED AS ALLOWED ABOVE; PROVIDED, THAT
IF PRIOR TO THE FINAL LC EXPIRATION DATE A VOLUNTARY PETITION IS FILED BY
SUBLESSEE
OR ANY GUARANTOR, OR AN INVOLUNTARY PETITION IS FILED AGAINST SUBLESSEE OR ANY
GUARANTOR BY ANY OF SUBLESSEE'S OR GUARANTOR'S CREDITORS, UNDER THE FEDERAL
BANKRUPTCY CODE, THEN SUBLESSOR SHALL NOT BE OBLIGATED TO MAKE SUCH PAYMENT IN
THE AMOUNT OF THE UNUSED LETTER OF CREDIT PROCEEDS UNTIL EITHER ALL PREFERENCE
ISSUES RELATING TO PAYMENTS UNDER THIS SUBLEASE HAVE BEEN RESOLVED IN SUCH
BANKRUPTCY OR REORGANIZATION CASE OR SUCH BANKRUPTCY OR REORGANIZATION CASE HAS
BEEN DISMISSED, IN EACH CASE PURSUANT TO A FINAL COURT ORDER NOT SUBJECT TO
APPEAL OR ANY STAY PENDING APPEAL.
IF, AS RESULT OF ANY APPLICATION OR USE BY
SUBLESSOR OF ALL OR ANY PART OF THE LETTER OF CREDIT, THE AMOUNT OF THE LETTER
OF CREDIT SHALL BE LESS THAN THE LETTER OF CREDIT AMOUNT, SUBLESSEE SHALL,
WITHIN 5 BUSINESS DAYS THEREAFTER, PROVIDE SUBLESSOR WITH ADDITIONAL
LETTER(S) OF CREDIT IN AN AMOUNT EQUAL TO THE DEFICIENCY (OR A REPLACEMENT
LETTER OF CREDIT IN THE TOTAL LETTER OF CREDIT AMOUNT), AND ANY SUCH ADDITIONAL
(OR REPLACEMENT) LETTER OF CREDIT SHALL COMPLY WITH ALL OF THE PROVISIONS OF
THIS SECTION 21, AND IF SUBLESSEE FAILS TO COMPLY WITH THE FOREGOING,
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SUBLEASE, THE SAME
SHALL CONSTITUTE AN INCURABLE DEFAULT BY SUBLESSEE.
NOTWITHSTANDING ANYTHING
TO THE CONTRARY SET FORTH IN THIS SUBLEASE, IF, SUBLESSEE IS LATE IN THE PAYMENT
OF ANY RENT DUE UNDER THIS SUBLEASE, BEYOND ANY APPLICABLE NOTICE AND CURE
PERIODS UNDER THIS SUBLEASE, THREE (3) OR MORE TIMES IN ANY TWELVE (12) CALENDAR
MONTH PERIOD, SUBLESSEE SHALL, WITHIN 5 BUSINESS DAYS AFTER NOTICE FROM
SUBLESSOR, PROVIDE SUBLESSOR WITH ADDITIONAL LETTER(S) OF CREDIT IN AN AMOUNT
EQUAL TO THE FINAL LAST TWO (2) MONTHS' FIXED RENT