Common use of Increase in security deposit Clause in Contracts

Increase in security deposit. Landlord is currently holding a Security Deposit in the amount of Twelve Thousand Three Hundred Forty-Seven and 50/100 Dollars ($12,347.50) under Article 21 of the Lease as security for Tenant’s obligations relating to the Lease. The Security Deposit shall be increased to Eighty-Five Thousand Dollars ($85,000.00) (the “Increased Security Deposit Amount”) and within ten (10) business days of date of this Amendment, Tenant shall provide additional funds in order to increase the cash Security Deposit to the Increased Security Deposit Amount. At Tenant’s option, Tenant shall deliver to Landlord a clean, unconditional, irrevocable letter of credit (the “Letter of Credit”) in lieu of the cash in the amount of the Increased Security Deposit Amount and upon receipt of the Letter of Credit, Landlord shall return any cash Security Deposit then held under the Lease. After Tenant makes its initial election to provide cash or the Letter of Credit in the Increased Security Deposit Amount, Tenant shall have no further right to change the form of security provided for in this Section 13. The Letter of Credit shall be: (a) in form and substance satisfactory to Landlord in its reasonable discretion (with the following criteria at a minimum); (b) at all times in the stated face amount of not less than the Increased Security Deposit Amount, and shall on its face state that multiple and partial draws are permitted; (c) issued by a commercial bank acceptable to Landlord from time to time; (d) expressly transferable and assignable one or more times at no charge to Landlord; (e) payable at sight upon presentment of a sight draft stating only that Landlord is permitted to draw on the Letter of Credit under the terms of the Lease and setting forth the amount that Landlord is drawing, which drawing shall also be permitted via facsimile or email; (f) of a term not less than one year, and shall on its face state that the same shall be renewed automatically, without the need for any further written notice or amendment, for successive minimum one year periods, unless the issuer notifies Landlord in writing, at least thirty (30) days prior to the expiration date thereof, that such issuer has elected not to renew the Letter of Credit (which will thereafter entitle Landlord to draw on the Letter of Credit); and (g) at least thirty (30) days prior to the then current expiration date of such Letter of Credit, either (1) renewed (or automatically and unconditionally extended) from time to time through the ninetieth (90th) day after the expiration of the Lease Term, or (2) replaced by Tenant with cash, or another Letter of Credit meeting the requirements of this Section, in the full amount of the Increased Security Deposit Amount. Within five (5) business days after Tenant becomes aware of any partial draw on the Letter of Credit by Landlord, Tenant shall provide Landlord with an amendment to the original Letter of Credit or a new Letter of Credit meeting the requirements of this Section 13 which amendment or new Letter of Credit results in Landlord once again holding Letter of Credit(s) in the full Security Deposit Amount, and in the event Landlord does not receive such amendment or new Letter of Credit reinstating the full Security Deposit Amount, Landlord shall have the right, but not the obligation, to immediately draw on the remainder of the Letter of Credit and apply the proceeds to a cash security deposit pursuant this Section 13 and Article 21 of the Lease (it being understood that the total security deposit on hand, whether in cash or Letter of Credit form, shall at all times be not less than the total Increased Security Deposit Amount as so defined). Tenant shall cooperate with Landlord to effect any modifications, transfers or replacements of the Letter of Credit requested by Landlord in order to assure that Landlord is at all times fully secured by a valid Letter of Credit that may be drawn upon by Landlord, its successors and assigns. Notwithstanding anything in this Lease to the contrary, any cure or grace period provided in connection with an Event of Default shall not apply to any of the foregoing requirements of the Letter of Credit, and, specifically, if any of the aforesaid requirements are not complied with timely, then an immediate Event of Default shall occur and Landlord shall have the right to immediately draw upon the Letter of Credit without notice to Tenant and apply the proceeds to the security deposit. Each Letter of Credit shall be issued by a commercial bank that has a credit rating with respect to certificates of deposit, short term deposits or commercial paper of at least A-2 (or equivalent) by ▇▇▇▇▇’▇ Investor Service, Inc., or at least P-2 (or equivalent) by Standard & Poor’s Corporation, and shall be otherwise acceptable to Landlord in its sole and absolute discretion. If the issuer’s credit rating is reduced below A-2 (or equivalent) by ▇▇▇▇▇’▇ Investors Service, Inc. or below P-2 (or equivalent) by Standard & Poor’s Corporation, or if the financial condition of such issuer changes in any other materially adverse way, then Landlord shall have the right to require that Tenant obtain from a different issuer a substitute Letter of Credit that complies in all respects with the requirements of this Section, and Tenant’s failure to obtain such substitute Letter of Credit within ten (10) days following Landlord’s written demand therefor (with no other notice or cure or grace period being applicable thereto, notwithstanding anything in this Lease to the contrary) shall entitle Landlord to immediately draw upon the then existing Letter of Credit in whole or in part, without notice to Tenant. In the event the issuer of any Letter of Credit held by Landlord is insolvent or is placed into receivership or conservatorship by the Federal Deposit Insurance Corporation, or any successor or similar entity, or if a trustee, receiver or liquidator is appointed for the issuer, then, effective as of the date of such occurrence, said Letter of Credit shall be deemed to not meet the requirements of this Section, and, within ten (10) days thereof, Tenant shall replace such Letter of Credit with other collateral acceptable to Landlord in its sole and absolute discretion (and Tenant’s failure to do so shall, notwithstanding anything in this Lease to the contrary, constitute an Event of Default for which there shall be no notice or grace or cure periods being applicable thereto other than the aforesaid ten (10) day period). Any failure or refusal of the issuer to honor the Letter of Credit shall be at Tenant’s sole risk and shall not relieve Tenant of its obligations hereunder with respect to the security deposit. Landlord hereby approves Citizens Bank as an issuer of the Letter of Credit; provided that all times Citizens Bank maintains a branch in New York able to process draw requests under the Letter of Credit or that Citizens Bank allows for draw requests to be permitted via facsimile or email by Landlord.

Increase in security deposit. Notwithstanding any provision of the New Lease to the contrary, in addition to the cash held by Landlord is currently holding as a Security Deposit in under the amount of Twelve Thousand Three Hundred Forty-Seven and 50/100 Dollars ($12,347.50) under Article 21 of the Lease as security for New Lease, concurrently with Tenant’s obligations relating to the Lease. The Security Deposit shall be increased to Eighty-Five Thousand Dollars ($85,000.00) (the “Increased Security Deposit Amount”) and within ten (10) business days of date 's execution of this Amendment, Tenant shall provide additional funds in order to increase the cash Security Deposit to the Increased Security Deposit Amount. At Tenant’s option, Tenant shall deliver to deposit with Landlord a clean, unconditional, an irrevocable letter of credit (the “Letter of Credit”) in lieu of the cash in the amount of Four Hundred Fifty Thousand Dollars ($450,000.00) to be held as part of the Increased Security Deposit Amount under the Lease in accordance with the provisions of this Section and upon receipt of the Lease (the "Letter of Credit, Landlord shall return any cash ") so that the total amount of the Security Deposit then held under the Lease. After Tenant makes its initial election to provide cash or the Letter of Credit in the Increased Security Deposit Amount, Tenant shall have no further right to change the form of security provided for in this Section 13hereafter required is Five Hundred Twenty-three Thousand Four Hundred and Ten Dollars ($523,410.00). The Letter of Credit provided for under this Section shall be: (a) in form be an irrevocable, unconditional "clean" Letter of Credit and substance satisfactory to Landlord in its reasonable discretion (with the following criteria at a minimum); (b) at all times in the stated face amount of not less than the Increased Security Deposit Amountrequire no documents, and shall on its face state that multiple be in form, scope and partial draws are permitted; (c) issued by substance and from a commercial bank acceptable to Landlord from time to time; (d) expressly transferable and assignable one or more times at no charge banking institution satisfactory to Landlord; (e) payable at sight upon presentment , in its sole discretion, provided however, Landlord pre-approves Union Bank as the issuer of a sight draft stating only that Landlord is permitted to draw on the initial Letter of Credit. It shall also be in compliance with all applicable laws and regulations, including, without limitation, applicable regulations of the Comptroller of the Currency. Said Letter of Credit under the terms may have an initial term of the Lease and setting forth the amount that Landlord is drawing, which drawing shall also be permitted via facsimile or email; (f) of a term not less no greater than one (1) year, and shall on its face state that the same shall be renewed automaticallyextended or reissued in a manner and from a banking institution satisfactory to Landlord, without the need for any further written notice or amendmentreplaced by Tenant, for successive minimum one year periods, unless the issuer notifies Landlord in writing, each case at least thirty (30) days prior to the its expiration date thereof, that such issuer has elected not to renew the Letter of Credit (which will thereafter entitle Landlord to draw on the Letter of Credit); and (g) at least thirty (30) days prior to the then current expiration date of such Letter of Credit, either (1) renewed (or automatically and unconditionally extended) from time to time through the ninetieth (90th) day after the expiration of the Lease Term, or (2) replaced by Tenant with cash, or another Letter of Credit meeting which complies with the requirements of this Section, so that in all events the Letter of Credit shall continue in effect until the date which is forty-five (45) days after the Termination Date. The Letter of Credit shall be in the full amount form attached as Exhibit B. Tenant shall pay all expenses, points and/or fees charged by the issuer or incurred by Tenant in obtaining, transferring or replacing the Letter of Credit. Upon a proposed sale or other transfer of any interest (i) of Landlord in the Premises or this Lease, or (ii) in or of Landlord (including, without limitation, consolidations, mergers or other entity changes), in all such events Tenant, at its sole cost and expense and upon ten (10) business days notice, shall, concurrent with Landlord's delivery to the issuer or Tenant of the Increased then outstanding Letter of Credit, deliver or cause the issuer to deliver to any such transferees, successors or assigns a replacement Letter of Credit on identical terms (except for the stated beneficiary) from the same issuer or another banking institution acceptable to Landlord, in its sole discretion, naming such transferees, successors or assigns as the new beneficiary or beneficiaries thereof. It is agreed that in the event (i) Tenant defaults in the performance or observance of any of the terms, provisions, covenants and conditions of this Lease, including the payment of Rent or any other sum due from Tenant with respect to the Lease, or (ii) the Letter of Credit is not extended or replaced by Tenant in a manner which complies with the foregoing provisions of this Section, Landlord shall have the right but shall not be required to, from time to time without prejudice to any other remedy Landlord may have on account thereof, to present the Letter of Credit for payment (but any payments or draws with respect to events covered by item (i) shall be in amounts sufficient to cure the alleged defaults, in Landlord's sole discretion) and to use, apply or retain the whole or any part of the proceeds to the extent Landlord could use, apply or retain any other funds deposited with Landlord as a Security Deposit Amount. Within hereunder, and any amounts so used, applied or retained shall be replenished by Tenant's payment to Landlord of such amount within five (5) business days after Tenant becomes aware of any partial draw on written demand by Landlord. If Landlord presents the Letter of Credit by Landlordfor payment, no interest shall be payable to Tenant on the proceeds. Tenant shall provide Landlord with an amendment not assign or encumber or attempt to the original Letter of Credit assign or a new Letter of Credit meeting the requirements of this Section 13 which amendment or new Letter of Credit results in Landlord once again holding Letter of Credit(s) in the full Security Deposit Amount, and in the event Landlord does not receive such amendment or new Letter of Credit reinstating the full Security Deposit Amount, Landlord shall have the right, but not the obligation, to immediately draw on the remainder of encumber the Letter of Credit and apply (or the proceeds to a cash security deposit pursuant this Section 13 and Article 21 thereof) held as part of the Lease (it being understood that the total security deposit on handSecurity Deposit, whether in cash or Letter of Credit form, shall at all times be not less than the total Increased Security Deposit Amount as so defined). Tenant shall cooperate with and neither Landlord to effect any modifications, transfers or replacements of the Letter of Credit requested by Landlord in order to assure that Landlord is at all times fully secured by a valid Letter of Credit that may be drawn upon by Landlord, nor its successors and assigns. Notwithstanding anything in this Lease to the contrary, any cure or grace period provided in connection with an Event of Default shall not apply to any of the foregoing requirements of the Letter of Credit, and, specifically, if any of the aforesaid requirements are not complied with timely, then an immediate Event of Default shall occur and Landlord shall have the right to immediately draw upon the Letter of Credit without notice to Tenant and apply the proceeds to the security deposit. Each Letter of Credit assigns shall be issued bound by a commercial bank that has a credit rating with respect to certificates of depositany such assignment, short term deposits encumbrance, attempted assignment or commercial paper of at least A-2 (or equivalent) by ▇▇▇▇▇’▇ Investor Service, Inc., or at least P-2 (or equivalent) by Standard & Poor’s Corporation, and shall be otherwise acceptable to Landlord in its sole and absolute discretion. If the issuer’s credit rating is reduced below A-2 (or equivalent) by ▇▇▇▇▇’▇ Investors Service, Inc. or below P-2 (or equivalent) by Standard & Poor’s Corporation, or if the financial condition of such issuer changes in any other materially adverse way, then Landlord shall have the right to require that Tenant obtain from a different issuer a substitute Letter of Credit that complies in all respects with the requirements of this Section, and Tenant’s failure to obtain such substitute Letter of Credit within ten (10) days following Landlord’s written demand therefor (with no other notice or cure or grace period being applicable thereto, notwithstanding anything in this Lease to the contrary) shall entitle Landlord to immediately draw upon the then existing Letter of Credit in whole or in part, without notice to Tenant. In the event the issuer of any Letter of Credit held by Landlord is insolvent or is placed into receivership or conservatorship by the Federal Deposit Insurance Corporation, or any successor or similar entity, or if a trustee, receiver or liquidator is appointed for the issuer, then, effective as of the date of such occurrence, said Letter of Credit shall be deemed to not meet the requirements of this Section, and, within ten (10) days thereof, Tenant shall replace such Letter of Credit with other collateral acceptable to Landlord in its sole and absolute discretion (and Tenant’s failure to do so shall, notwithstanding anything in this Lease to the contrary, constitute an Event of Default for which there shall be no notice or grace or cure periods being applicable thereto other than the aforesaid ten (10) day period). Any failure or refusal of the issuer to honor the Letter of Credit shall be at Tenant’s sole risk and shall not relieve Tenant of its obligations hereunder with respect to the security deposit. Landlord hereby approves Citizens Bank as an issuer of the Letter of Credit; provided that all times Citizens Bank maintains a branch in New York able to process draw requests under the Letter of Credit or that Citizens Bank allows for draw requests to be permitted via facsimile or email by Landlordattempted encumbrance.