LA 1485 Addendum Providing For Tenant's Participation In Building's Net Cash Flow And Tenant's Posting Of Letter Of Credit
This lease addendum is designed to be executed by the landlord and the tenant when the lease is signed. It allows the tenant to share in the net cash flow from the building which the tenant is leasing. Obviously the tenant has considerable leverage to qualify for a participation in cash flows from the property. This leverage arises from the tenant's lease which provides the security for the financing of the property.
The addendum provides that the participation applies only to the original landlord for the property, and the tenant may not enforce the participation against future purchasers of the property in the event it is sold. In such a case, the tenant would share in the proceeds of sale of the property received by the original landlord pursuant to the addendum, but the participation would thereafter cease to exist as against the new owner landlord of the property.
Finally, the addendum obligates the tenant to post a letter of credit to secure its performance under the lease.
Number of Single Spaced Pages: 8
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