DEEMED TO
BE A PART OF THE SECURITY DEPOSIT.
AMONG OTHER THINGS, LANDLORD HAS ASSIGNED
(OR INTENDS TO ASSIGN) TO THE HOLDER OF THE MORTGAGE NOW OR HEREAFTER
ENCUMBERING THE BUILDING, ALL OF LANDLORD'S INTEREST IN THIS LEASE, INCLUDING,
WITHOUT LIMITATION, THE SECURITY DEPOSIT.
THE SECURITY DEPOSIT SHALL BE SECURITY FOR THE PERFORMANCE BY TENANT OF
ALL OF TENANT'S OBLIGATIONS, COVENANTS, CONDITIONS AND AGREEMENTS UNDER THIS
LEASE.
WITHIN SIXTY (60) DAYS AFTER THE EXPIRATION OF THE LEASE TERM, AND
PROVIDED TENANT HAS VACATED THE PREMISES AND IS NOT IN DEFAULT HEREUNDER,
LANDLORD SHALL RETURN THE SECURITY DEPOSIT TO TENANT, LESS ONLY SUCH PORTION
THEREOF AS LANDLORD SHALL HAVE REASONABLY AND PROPERLY APPROPRIATED TO SATISFY
ANY EVENT OF DEFAULT BY TENANT HEREUNDER.
IF ANY PORTION OF THE SECURITY
DEPOSIT IS SO APPROPRIATED AND WITHHELD FROM THE AMOUNTS TO BE RETURNED TO
TENANT, AND TENANT DISPUTES SAME, THEN LANDLORD SHALL RETAIN THE SECURITY
DEPOSIT UNTIL THE DISPUTE HAS BEEN RESOLVED.
IN THE EVENT OF ANY EVENT OF
DEFAULT BY TENANT HEREUNDER, LANDLORD SHALL HAVE THE RIGHT, BUT SHALL NOT BE
OBLIGATED, TO DRAW UPON THE LETTER OF CREDIT AND USE, APPLY OR RETAIN ONLY SUCH
PORTION OF THE SECURITY DEPOSIT FOR (I) THE PAYMENT OF ANY ANNUAL BASE RENT OR
ADDITIONAL RENT OR ANY OTHER SUM AS TO WHICH SUCH EVENT OF DEFAULT RELATES, (II)
THE PAYMENT OF ANY AMOUNT WHICH LANDLORD MAY SPEND OR BECOME OBLIGATED TO SPEND
TO REPAIR PHYSICAL DAMAGE TO THE PREMISES OR THE BUILDING PURSUANT TO SECTION
8.2 HEREOF, OR (III) THE PAYMENT OF ANY AMOUNT LANDLORD MAY SPEND OR BECOME
OBLIGATED TO SPEND, OR FOR THE COMPENSATION OF LANDLORD FOR ANY LOSSES INCURRED,
BY REASON OF SUCH EVENT OF DEFAULT HEREUNDER, INCLUDING, BUT NOT LIMITED TO, ANY
DAMAGE OR DEFICIENCY ARISING IN CONNECTION WITH THE RELETTING OF THE PREMISES;
PROVIDED THAT, IN THE CASE OF THE APPLICABLE OF THE SECURITY DEPOSIT TO PAYMENTS
OF THE TYPE DESCRIBED IN CLAUSES (II) OR (III) ABOVE, IF TENANT HAS IN GOOD
FAITH DISPUTED SUCH APPLICATION OF FUNDS, THEN LANDLORD MAY NOT APPLY SUCH SUMS
UNTIL ITS ENTITLEMENT THERETO HAS BEEN DETERMINED BY A COURT OF COMPETENT
JURISDICTION.
IF ANY PORTION OF THE LETTER OF CREDIT IS DRAWN UPON AND IS SO
USED OR APPLIED, WITHIN THREE (3) BUSINESS DAYS AFTER WRITTEN NOTICE TO TENANT
OF SUCH USE OR APPLICATION, TENANT SHALL RESTORE THE SECURITY DEPOSIT BY
PROVIDING EITHER A REPLACEMENT LETTER OF CREDIT OR AN AMENDMENT TO THE LETTER OF
CREDIT THEN HELD BY LANDLORD SUCH THAT LANDLORD IS HOLDING ONE LETTER OF CREDIT
IN THE AGGREGATE AMOUNT OF THE SECURITY DEPOSIT REQUIRED HEREUNDER, AND TENANT'S
FAILURE TO DO SO SHALL CONSTITUTE A DEFAULT UNDER THIS LEASE.
TENANT HEREBY
AUTHORIZES LANDLORD TO DEPOSIT THE SECURITY DEPOSIT WITH THE HOLDER OF ANY
MORTGAGE (AS DEFINED IN SECTION 21.1) IF AND TO THE EXTENT REQUIRED BY SAID
HOLDER; PROVIDED, HOWEVER, THAT SUCH HOLDER SHALL HOLD THE SECURITY DEPOSIT
SUBJECT TO TENANT'S RIGHTS WITH RESPECT TO THE SECURITY DEPOSIT SET FORTH
HEREIN.