TENANT HAS OCCURRED UNDER THIS LEASE AND NO DEFAULT BY TENANT OF WHICH TENANT
HAS RECEIVED NOTICE THEN REMAINS UNCURED, TENANT MAY ELECT TO REDUCE THE AMOUNT
OF SUCH LETTER OF CREDIT OR CASH TO $637,670 AFTER JUNE 30, 2011 (THE
"ADJUSTMENT DATE").
IN THE EVENT THAT TENANT ELECTS TO REDUCE THE AMOUNT OF
SUCH LETTER OF CREDIT PURSUANT TO THE PRECEDING SENTENCE, TENANT SHALL, NO
EARLIER THAN THE ADJUSTMENT DATE, DELIVER TO LANDLORD EITHER (I) A SUBSTITUTE
LETTER OF CREDIT IN THE AMOUNT OF $637,670, WHEREUPON LANDLORD SHALL IMMEDIATELY
RETURN THE ORIGINAL LETTER OF CREDIT TO TENANT, OR (II) AN AMENDMENT TO THE
LETTER OF CREDIT REDUCING THE AMOUNT TO $637,670.
IF, AT THE TIME TENANT MAKES
SUCH ELECTION, LANDLORD IS HOLDING CASH IN LIEU OF A LETTER OF CREDIT AS A
SECURITY DEPOSIT (HEREINAFTER DEFINED), THEN LANDLORD SHALL APPLY ANY CASH IN
EXCESS OF $637,670 TO THE NEXT INSTALLMENT OF RENT COMING DUE UNDER THIS LEASE.
THE LETTER OF CREDIT SHALL CONTAIN A SO-CALLED "EVERGREEN" CLAUSE PROVIDING THAT
THE LETTER OF CREDIT SHALL NOT BE CANCELED UNLESS THE ISSUING BANK DELIVERS AT
LEAST SIXTY (60) DAYS' PRIOR WRITTEN NOTICE TO LANDLORD.
TENANT SHALL DELIVER
TO LANDLORD, NO LATER THAN THIRTY (30) DAYS PRIOR TO THE EXPIRY DATE OF THE THEN
OUTSTANDING AND EXPIRING LETTER OF CREDIT A REPLACEMENT LETTER OF CREDIT.
LANDLORD SHALL BE ENTITLED TO DRAW ON THE LETTER OF CREDIT (I) IF TENANT FAILS
TO DELIVER ANY REPLACEMENT LETTER OF CREDIT AS REQUIRED, IN WHICH EVENT LANDLORD
SHALL BE PERMITTED TO RETAIN THE ENTIRE PROCEEDS OF SUCH LETTER OF CREDIT FOR
8
APPLICATION AS A SECURITY DEPOSIT ("SECURITY DEPOSIT") HEREUNDER, (II) TO CURE
OR ATTEMPT TO CURE, IN WHOLE OR IN PART, ANY EVENT OF DEFAULT BY TENANT UNDER
THIS LEASE, IN WHICH EVENT TENANT SHALL REPLENISH THE AMOUNT SO DRAWN UPON
WRITTEN DEMAND BY LANDLORD, AND (III) IF THE CREDIT RATING OF THE LONG-TERM DEBT
OF THE ISSUER OF THE LETTER OF CREDIT (ACCORDING TO MOODY'S OR SIMILAR NATIONAL
RATING AGENCY) IS DOWNGRADED TO A GRADE BELOW INVESTMENT RATE), OR IF THE ISSUER
OF THE LETTER OF CREDIT SHALL ENTER INTO ANY SUPERVISORY AGREEMENT WITH ANY
GOVERNMENTAL AUTHORITY, OR IF THE ISSUER OF THE LETTER OF CREDIT SHALL FAIL TO
MEET ANY CAPITAL REQUIREMENTS IMPOSED BY APPLICABLE LAW, UNLESS TENANT DELIVERS
TO LANDLORD A REPLACEMENT LETTER OF CREDIT COMPLYING WITH THE TERMS OF THIS
LEASE WITHIN TEN (10) DAYS AFTER WRITTEN DEMAND THEREFOR FROM LANDLORD.
FAILURE
BY THE ISSUER TO HONOR A DRAW REQUEST ON THE LETTER OF CREDIT SHALL BE A DEFAULT
UNDER THE TERMS OF THIS LEASE ENTITLING LANDLORD TO EXERCISE ITS REMEDIES
HEREUNDER.
EACH LETTER OF CREDIT SHALL BE FOR THE BENEFIT OF LANDLORD AND ITS
SUCCESSORS AND ASSIGNS AND SHALL ENTITLE LANDLORD OR ITS SUCCESSORS OR ASSIGNS
TO DRAW FROM TIME TO TIME UNDER THE LETTER OF CREDIT IN PORTIONS OR IN WHOLE
UPON PRESENTATION OF A SIGHT DRAFT AND STATEMENT BY LANDLORD THAT LANDLORD IS
ENTITLED TO DRAW THEREUNDER