A Letter of Credit That Only Shrinks If the Tenant's Market Cap Hits $2.4 Billion
8x8 posted an $8.1 million letter of credit at Coleman Highline in San Jose on 23 January 2018. Section 21.9 lets it fall to half at month 37 and a quarter at month 91, but only while 8x8 has an equity market capitalization above $2.4 billion and then $3.6 billion. The same 10-K that filed the lease reports $1.2 billion of non-affiliate stock value. Six months later the same landlord gave Roku a trailing twelve month Adjusted EBITDA test with four named add-backs, and no default condition at all, in exchange for a landlord confirmation right. When Roku took over 8x8's building in April 2019 the landlord deleted the market cap test, replaced it with six conduct conditions, and wrote in that the first reduction would not happen. Unity's $25 million EBITDA hurdle produced no reduction either; the cut it got came from a delivery delay settlement. Reddit's test is defined in the subletting article.