NOR SHALL TENANT BE ENTITLED TO USE THE SECURITY DEPOSIT FOR THE
PAYMENT OF RENT.
IF THERE SHALL BE ANY DEFAULT BY TENANT UNDER THIS LEASE, THEN
LANDLORD SHALL HAVE THE IMMEDIATE RIGHT, BUT NOT THE OBLIGATION, WITH OR WITHOUT
PRIOR NOTICE TO TENANT, TO DRAW UPON THE LETTER OF CREDIT AND USE AND APPLY ANY
PORTION OF THE PROCEEDS (A) FOR THE PAYMENT OF ANY BASE RENT, ADDITIONAL RENT OR
ANY OTHER SUM AS TO WHICH TENANT IS IN DEFAULT; (B) FOR THE PAYMENT OF ANY
AMOUNT LANDLORD MAY SPEND OR BECOME OBLIGATED TO SPEND BY REASON OF TENANT'S
DEFAULT; OR (C) AS COMPENSATION TO LANDLORD FOR ANY LOSSES INCURRED BY REASON OF
TENANT'S DEFAULT (INCLUDING, BUT NOT LIMITED TO, ANY DAMAGE OR DEFICIENCY
ARISING IN CONNECTION WITH THE RELETTING OF THE PREMISES).
IF ANY PORTION OF
THE SECURITY DEPOSIT IS SO USED OR APPLIED, THEN WITHIN SEVEN (7) BUSINESS DAYS
AFTER LANDLORD'S NOTICE TO TENANT OF SUCH USE OR APPLICATION, TENANT SHALL CAUSE
THE ISSUING BANK TO RESTORE THE LETTER OF CREDIT TO ITS ORIGINAL AMOUNT AS SET
FORTH IN ARTICLE I, AND TENANT'S FAILURE TO DO SO SHALL CONSTITUTE AN EVENT OF
DEFAULT UNDER THIS LEASE.
LANDLORD SHALL ALSO HAVE THE IMMEDIATE RIGHT TO DRAW
UPON THE LETTER OF CREDIT IF THE ISSUING BANK FAILS, AT ANY TIME, TO CONTINUE TO
COMPLY WITH THE BANK CRITERIA, IN WHICH CASE LANDLORD MAY RETAIN THE CASH
PROCEEDS OF THE LETTER OF CREDIT.
WITHIN APPROXIMATELY THIRTY (30) DAYS AFTER
THE LATER TO OCCUR OF THE EXPIRATION OR EARLIER TERMINATION OF THE TERM, OR
TENANT'S VACATING AND SURRENDERING THE PREMISES IN THE CONDITION REQUIRED
HEREUNDER, LANDLORD SHALL RETURN THE LETTER OF CREDIT TO TENANT, LESS THE
PROCEEDS OF ANY DRAW LANDLORD SHALL HAVE MADE THEREON IN ORDER TO SATISFY ANY OF
TENANT'S OBLIGATIONS AS PROVIDED HEREUNDER.
(C)
IF DESPITE TENANT'S BEST EFFORTS, TENANT IS UNABLE TO PROVIDE AN
"EVERGREEN" LETTER OF CREDIT AS REQUIRED BY CLAUSE "(VIII)" OF SECTION 11.2(A)
ABOVE, THEN THE LETTER OF CREDIT SHALL EXPIRE NO EARLIER THAN TWELVE (12) MONTHS
AFTER ISSUANCE, AND ALL SUBSEQUENT REPLACEMENT LETTERS OF CREDIT SHALL EXPIRE NO
EARLIER THAN TWELVE (12) MONTHS FROM THE EXPIRATION DATE OF THE THEN OUTSTANDING
AND EXPIRING LETTER OF CREDIT, OR IF EARLIER, THE TIME PROVIDED IN ARTICLE 1.
TENANT SHALL ENSURE THAT AT ALL TIMES DURING THE TERM OF THIS LEASE AND FOR
THIRTY (30) DAYS AFTER THE EXPIRATION DATE, LANDLORD SHALL BE IN POSSESSION OF
AN UNEXPIRED LETTER OF CREDIT IN THE AMOUNT REQUIRED HEREUNDER.
DURING THE
TERM, TENANT SHALL DELIVER A REPLACEMENT LETTER OF CREDIT TO LANDLORD NO LATER
THAN THIRTY (30) DAYS PRIOR TO THE EXPIRATION DATE OF THE THEN OUTSTANDING AND
EXPIRING LETTER OF CREDIT; PROVIDED, HOWEVER, THAT THE REPLACEMENT LETTER OF
CREDIT SHALL NOT BE REQUIRED TO HAVE AN EFFECTIVE DATE EARLIER THAN THE
EXPIRATION DATE OF THE THEN EXISTING LETTER OF CREDIT (IT BEING THE INTENT THAT
TENANT NOT BE REQUIRED TO HAVE TWO OUTSTANDING LETTERS OF CREDIT AT ANY