AMOUNT AND ANY FAILURE TO DO SO SHALL BE AN EVENT OF
DEFAULT WITHOUT FURTHER NOTICE.
TENANT MAY NOT USE THE SECURITY DEPOSIT TO PAY
RENT OR OTHERWISE CAUSE LANDLORD TO OFFSET ANY AMOUNTS PAYABLE BY TENANT AGAINST
THE SECURITY DEPOSIT (EXCEPT AS PROVIDED HEREIN).
THE SECURITY DEPOSIT SHALL BE
RETURNED TO TENANT WITHIN THIRTY (30) DAYS AFTER THE FIRST TO OCCUR OF (1) THE
INVESTMENT GRADE CRITERIA BEING SATISFIED AND THE WAIVER SET FORTH IN PARAGRAPH
5(D)(V) BEING APPLICABLE, AND (2) THE EXPIRATION OR EARLIER TERMINATION OF THE
TERM AND TENANT'S SURRENDER OF THE PREMISES TO LANDLORD AS REQUIRED BY
PARAGRAPH 22 OF THIS LEASE, IN EACH CASE LESS SUCH AMOUNTS AS MAY HAVE BEEN USED
TO CURE OR PARTIALLY CURE ANY EVENTS OF DEFAULT BY TENANT.
TENANT'S FAILURE TO
DEPOSIT, MAINTAIN AND REPLENISH THE SECURITY DEPOSIT AS REQUIRED BY THIS LEASE
SHALL CONSTITUTE AN IMMEDIATE EVENT OF DEFAULT UNDER THIS LEASE.
(II)
IF TENANT DESIRES TO MAKE THE SECURITY
DEPOSIT IN CASH OR OTHER IMMEDIATELY AVAILABLE FUNDS, THE SECURITY DEPOSIT SHALL
BE HELD FROM TIME TO TIME IN AN ACCOUNT IN LANDLORD'S OR MORTGAGEE'S NAME (IN
EITHER CASE WITH PROPER NOTATION BY SUCH ACCOUNT INSTITUTION TO INDICATE THAT
THE SECURITY DEPOSIT IS TENANT'S PROPERTY SUBJECT TO THE LIEN ARISING UNDER
PARAGRAPH 5(D)(V) BELOW), AS DETERMINED BY LANDLORD, AT A FEDERALLY INSURED
INSTITUTION AND NOT OPERATING UNDER ANY REGULATORY OR SUPERVISORY AGREEMENT, AND
IN SUCH STATE WITHIN THE CONTINENTAL UNITED STATES AS THE HOLDER THEREOF SHALL
DETERMINE.
SUCH FUNDS SHALL NOT BE DEEMED TO BE TRUST FUNDS BUT SHALL NOT BE
COMMINGLED WITH THE GENERAL FUNDS OF LANDLORD AND SHALL INSTEAD BE HELD IN A
SEPARATE ESCROW ACCOUNT OPENED AND MAINTAINED FOR THIS LEASE ALONE; PROVIDED,
HOWEVER, TO THE EXTENT SO RECEIVED, ANY MORTGAGEE WHICH IS AN ENTITY
UNAFFILIATED WITH LANDLORD OR ANY AFFILIATE OF LANDLORD, MAY COMMINGLE SUCH
SECURITY DEPOSIT FUNDS.
LANDLORD SHALL CAUSE INTEREST TO BE EARNED UPON ANY
CASH OR OTHER IMMEDIATELY AVAILABLE FUNDS BY DEPOSITING SUCH CASH OR FUNDS IN A
SEPARATE INTEREST-BEARING FEDERALLY INSURED ACCOUNT AT AN INSTITUTION NOT
OPERATING UNDER ANY REGULATORY OR SUPERVISORY AGREEMENT, OR INVESTING IT IN
PERMITTED INVESTMENTS (AS DIRECTED BY, OR ON BEHALF OF, TENANT).
ANY SUCH
INTEREST EARNED ON THE SECURITY DEPOSIT SHALL BE PAID ANNUALLY TO TENANT.
TENANT SHALL COOPERATE WITH LANDLORD TO ENSURE THAT ANY TAX LIABILITY ATTRIBUTED
TO LANDLORD FOR SUCH INTEREST SHALL BE PROPERLY REALLOCATED TO TENANT AND PAID
FOR BY TENANT, AND TENANT AGREES TO INDEMNIFY, DEFEND AND HOLD LANDLORD
HARMLESS FROM ALL SUCH TAX LIABILITY.
SUCH INDEMNITY SHALL SURVIVE THE
EXPIRATION OR EARLIER TERMINATION OF THE LEASE FOR SIX (6) YEARS.
(III)
IF TENANT DESIRES TO MAKE THE SECURITY
DEPOSIT BY DELIVERING AN IRREVOCABLE STANDBY LETTER OF CREDIT TO LANDLORD, SUCH
LETTER OF CREDIT SHALL MEET ALL OF THE FOLLOWING REQUIREMENTS:
(A) IT IS A
SIGHT DRAFT LETTER OF CREDIT FROM A FINANCIAL INSTITUTION (THE "ISSUER")
ACCEPTABLE TO LANDLORD AND MORTGAGEE, EACH IN THEIR RESPECTIVE SOLE AND ABSOLUTE
DISCRETION; PROVIDED, HOWEVER,