Common use of Stated Amount Clause in Contracts

Stated Amount. Within ten (10) days after Tenant’s execution and delivery of this Lease, Tenant shall deliver to Landlord an unconditional, irrevocable and renewable letter of credit (“Letter of Credit”) in favor of Landlord in the form attached hereto as Exhibit E, issued by a financial institution satisfactory to Landlord, in the principal amount (“Stated Amount”) specified below, to be held by Landlord in accordance with the terms, provisions and conditions of this Lease. Tenant shall pay all expenses, points and/or fees incurred by Tenant in obtaining the Letter of Credit. If the Letter of Credit delivered by Tenant is inconsistent with the form attached hereto as Exhibit E (including, without limitation, the wrong name or address for the Beneficiary), Landlord may so notify Tenant in writing, in which case Tenant shall cause the Letter of Credit to be corrected within five (5) business days after such notice. Landlord shall be entitled to draw upon the Letter of Credit if the credit rating or financial condition of the issuer of the Letter of Credit is no longer reasonably acceptable to Landlord. Following any such draw by Landlord on the Letter of Credit solely because of the deterioration of the creditworthiness of the issuer of the Letter of Credit, Landlord will disburse such Letter of Credit proceeds to Tenant provided (A) Tenant delivers to Landlord a replacement Letter of Credit from a financial institution satisfactory to Landlord in the form attached hereto as Exhibit “E” within sixty (60) days after Landlord’s draw thereon, (B) there exists no event of default with respect to any provision of this Lease, and (C) Tenant pays all of Landlord’s fees and expenses incurred in connection with such disbursement; provided, however, if any of the three (3) foregoing conditions are not satisfied, the proceeds received from such draw shall constitute Landlord’s property (and not Tenant’s property or the property of the bankruptcy estate of Tenant) and Landlord may then use, apply or retain all or any part of the proceeds for the purposes set forth in clauses (1) through (5) of the next paragraph. The Stated Amount shall initially be One Hundred Fifty Thousand Dollars ($150,000.00); provided, however, that, except as hereinafter provided, upon the last day of the thirty-sixth (36th) month of the initial Term (the “Letter of Credit Return Date”), Landlord shall return the Letter of Credit to Tenant and this Section 4(b) shall be of no further force and effect. However, if (i) a default by Tenant occurs under this Lease, or (ii) circumstances exist that would, with notice or lapse of time, or both, constitute a default by Tenant, and in the case of (i) or (ii) Tenant has failed to cure such default within the time period permitted by Article 19 or such lesser time as may remain before the Letter of Credit Return Date as provided above, the Letter of Credit shall not be returned to Tenant and this Section 4(b) shall continue to be in force and effect, unless and until such default shall have been fully cured pursuant to the terms of this Lease, at which time Landlord shall return to Tenant the Letter of Credit and this Section 4(b) shall be of no further force and effect as hereinabove described.