Equity Kickers, Tenant Participations, And Warrants As Additional Rent

LA 411 Office Lease Addendum Permitting Major Tenant To Share In Building Appreciation

This addendum entitles the commercial tenant to share in a portion of the appreciation (10% in this case) of the property in which the tenant leases space.

It is only applicable to tenants with extremely strong leverage in a leasing transaction, since most commercial landlords would never allow tenant sharing in property appreciation unless they absolutely had to in order to sign the tenant.

Number of Single Spaced Pages: 3

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LA 251 Lease Amendment Granting The Landlord Warrants As Additional Rent

This lease amendment grants the commercial landlord warrants to purchase the tenant’s corporate shares as additional rent under the lease payable to the landlord.

In the case of certain start up tenants without a substantial operating history, this is the sort of concession the tenant must offer in order to lease first class office space. The warrant agreement is attached as an exhibit to the amendment.

Number of Single Spaced Pages: 12

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LA 735 Amendment And Assignment Of Lease And Sale Of Personal Property To New Tenant With Landlord Receiving Cash And Warrants From Original Tenant

The following form is designed to effect an assignment of an existing lease from the original tenant to a new tenant who will occupy the space after the satisfaction of certain conditions. The agreement also contains the consent of the landlord required under the lease for assignments.

The new tenant is acquiring the furniture and personal property of the original tenant pursuant to a bill of sale which is an exhibit to the agreement. The landlord is to receive cash and warrants to acquire common stock in the original tenant as part of the deal. Exhibits Included: Bill of Sale and Warrant for Common Stock Purchase.

Number of Single Spaced Pages: 27

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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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LA 1409 Triple Net Build To Suit Lease With Annual Stepped Up Rent Based On Total Construction Costs And Warrants Payable To Landlord As Additional Rent

The following triple net lease form is designed for a single tenant build to suit transaction, where the landlord builds the entire premises for the tenant. The rent payable by the tenant is pegged to the total construction cost of the project, and it is then stepped up annually on a percentage basis. The landlord also receives warrants from the tenant as additional rent.

Number of Single Spaced Pages: 46

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