other charges due Landlord for
all periods prior to the filing of such proceedings.
8.3.
Landlord may deliver to any purchaser of
Landlord's interest in the Premises the funds deposited hereunder by Tenant, and
thereupon Landlord shall be discharged from any further liability with respect
to such deposit.
This provision shall also apply to any subsequent transfers.
8.4.
The Security Deposit, or any balance thereof
after Landlord applies the Security Deposit to the payment of Rent or the amount
reasonably necessary to repair damage to the Premises caused by Tenant or to
compensate Landlord for any breach by Tenant, shall be returned to Tenant (or,
at Landlord's option, to the last assignee of Tenant's interest hereunder)
within thirty (30) days after the later of: (a) the expiration or earlier
termination of this Lease so long as Tenant is not then in Default under this
Lease nor is any event then occurring which with
5
the giving of notice or the passage of time, or both, would constitute a Default
hereunder; or (b) the date that Tenant has cured all such Defaults or
prospective Defaults under this Lease.
8.5.
THE SECURITY DEPOSIT MAY BE IN THE FORM OF
CASH, A LETTER OF CREDIT OR ANY OTHER SECURITY INSTRUMENT ACCEPTABLE TO LANDLORD
IN ITS SOLE DISCRETION.
TENANT MAY AT ANY TIME, EXCEPT DURING DEFAULT, DELIVER
A LETTER OF CREDIT (THE "L/C SECURITY") AS THE ENTIRE SECURITY DEPOSIT, AS
FOLLOWS.
(A)
IF TENANT ELECTS TO DELIVER 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 8.5.
(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