Common use of DEPOSIT FOR SECURITY Clause in Contracts

DEPOSIT FOR SECURITY. Tenant shall deposit with Landlord an irrevocable sight-draft, on-demand letter of credit in the amount of Seven Hundred and Seventy Thousand Dollars ($770,000.00) (the “Security Deposit”) upon Tenant’s execution and submission of this Lease. The letter of credit shall be in a form and drawn upon an institution reasonably acceptable to Landlord. The letter of credit shall specify that it shall remain in force and be renewed annually automatically during the Term of the Lease, unless Landlord shall have received not less than thirty (30) days’ days written notice of cancellation or nonrenewal by the issuer, in which case Tenant shall substitute a new letter or credit on or before the expiration or cancellation of the existing letter of credit. The Security Deposit shall serve as security for the prompt, full, and faithful performance by Tenant of the terms and provisions of this Lease, including the value of future rents as damages in accordance with California Civil Code § 1951.2, as set forth in § 20.3 below. Landlord shall not be required to keep the Security Deposit separate from Landlord’s general funds or pay interest on the Security Deposit.