L/C SECURITY, THEN
TENANT SHALL PROVIDE LANDLORD, AND MAINTAIN IN FULL FORCE AND EFFECT THROUGHOUT
THE TERM, A LETTER OF CREDIT IN SUBSTANTIALLY THE FORM OF EXHIBIT E ISSUED BY
ANY NATIONAL BANK THAT HAS (X) A BRANCH OFFICE WITHIN SAN DIEGO COUNTY WHERE
LANDLORD MAY PRESENT DRAFTS UNDER THE L/C SECURITY AND (Y) AN ISSUER REASONABLY
SATISFACTORY TO LANDLORD, IN THE AMOUNT OF THE SECURITY DEPOSIT, WITH AN INITIAL
TERM OF AT LEAST ONE YEAR.
IF, AT THE TERM EXPIRATION DATE, ANY RENT REMAINS
UNCALCULATED OR UNPAID, THEN:
(I) LANDLORD SHALL WITH REASONABLE DILIGENCE
COMPLETE ANY NECESSARY CALCULATIONS; (II) TENANT SHALL EXTEND THE EXPIRY DATE OF
SUCH L/C SECURITY FROM TIME TO TIME AS LANDLORD REASONABLY REQUIRES; AND
(III) IN SUCH EXTENDED PERIOD, LANDLORD SHALL NOT UNREASONABLY REFUSE TO CONSENT
TO AN APPROPRIATE REDUCTION OF THE L/C SECURITY.
TENANT SHALL REIMBURSE
LANDLORD'S OUT-OF-POCKET LEGAL COSTS NOT TO EXCEED THE SUM OF TWO THOUSAND
DOLLARS ($2,000) IN HANDLING LANDLORD'S ACCEPTANCE OF L/C SECURITY OR ITS
REPLACEMENT OR EXTENSION, EXCEPT WITH RESPECT TO ANY REPLACEMENT IN ACCORDANCE
WITH SUBPARAGRAPH (D) OF THIS SECTION 9.5.
(B)
IF TENANT DELIVERS TO LANDLORD SATISFACTORY L/C
SECURITY IN PLACE OF THE ENTIRE SECURITY DEPOSIT, LANDLORD SHALL PROMPTLY REMIT
TO TENANT ANY CASH SECURITY DEPOSIT LANDLORD PREVIOUSLY HELD.
(C)
LANDLORD MAY DRAW UPON THE L/C SECURITY, AND HOLD
AND APPLY THE PROCEEDS IN THE SAME MANNER AND FOR THE SAME PURPOSES AS THE
SECURITY DEPOSIT, IF:
(I) AN UNCURED DEFAULT EXISTS; (II) AS OF THE DATE 45
DAYS BEFORE ANY L/C SECURITY EXPIRES (EVEN IF SUCH SCHEDULED EXPIRY DATE IS
AFTER THE TERM EXPIRATION DATE) TENANT HAS NOT DELIVERED TO
7
LANDLORD AN AMENDMENT OR REPLACEMENT FOR SUCH L/C SECURITY, REASONABLY
SATISFACTORY TO LANDLORD, EXTENDING THE EXPIRY DATE TO THE EARLIER OF (1) THE
DATE TWO (2) MONTHS AFTER THE THEN-CURRENT TERM EXPIRATION DATE OR (2) THE DATE
ONE YEAR AFTER THE THEN-CURRENT EXPIRY DATE OF THE L/C SECURITY; (III) THE L/C
SECURITY PROVIDES FOR AUTOMATIC RENEWALS, LANDLORD ASKS THE ISSUER TO CONFIRM
THE CURRENT L/C SECURITY EXPIRY DATE, AND THE ISSUER FAILS TO DO SO WITHIN TEN
(10) BUSINESS DAYS; (IV) TENANT FAILS TO PAY (WHEN AND AS LANDLORD REASONABLY
REQUIRES) ANY BANK CHARGES FOR LANDLORD'S TRANSFER OF THE L/C SECURITY; (V) THE
ISSUER OF THE L/C SECURITY CEASES, OR ANNOUNCES THAT IT WILL CEASE, TO MAINTAIN
AN OFFICE WITHIN SAN DIEGO COUNTY WHERE LANDLORD MAY PRESENT DRAFTS UNDER THE
L/C SECURITY, OR (VI) UPON THE EXPIRATION OR EARLIER TERMINATION OF THIS LEASE,
THE CONDITIONS SET FORTH IN SECTION 9.4 HAVE NOT BEEN SATISFIED, AND THE L/C
SECURITY EXPIRES IN LESS THAN THIRTY (30) DAYS.
THIS PARAGRAPH DOES NOT LIMIT
ANY OTHER PROVISIONS OF THIS LEASE ALLOWING LANDLORD TO DRAW THE L/C SECURITY
UNDER SPECIFIED CIRCUMSTANCES.
(D)
TENANT SHALL NOT SEEK TO ENJOIN, PREVENT, OR
OTHERWISE INTERFERE WITH LANDLORD'S DRAW UNDER L/C SECURITY, EVEN IF IT VIOLATES
THIS LEASE.
TENANT ACKNOWLEDGES THAT THE ONLY EFFECT OF A WRONGFUL DRAW WOULD
BE TO SUBSTITUTE A