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Date Soldier Pass Development Company RE: Old Marketplace Shopping Center Dear Mr. Miller: This letter will confirm our intent to execute a lease (the "Lease") for one of the spaces (the "Space") in the Marketplace Bazaar at your Old Marketplace Shopping Center at the northwest comer of Highway 89A and Soldier Pass Road in Sedona, Arizona (the "Shopping Center"). Attached to this letter of intent is an initial deposit in the amount of $ , which you may hold and apply to our obligations if and when we execute a definitive, written lease agreement. Our intent to execute the Lease is subject to the following terms and conditions. 1. The Lease will be upon your standard form lease for spaces at Marketplace Bazaar. 2. The gross rental square feet of the Space will be approximately square feet and we would prefer to occupy Space # . Our second preference would be Space # . 3. The minimum monthly basic rent for the Space shall be from Two and 50/100 to Three and no/100 Dollars ($2.50 - $3.00) per square foot. Also commencing on the first day of January after the Lease begins, we will start to pay additional rent based upon the increase in the Consumer Price Index ("CPI") since the commencement of the Lease, and the amount of this additional CPI rent will be adjusted each year on the same date. 4. We intend a triple net lease. We will bear full responsibility for all taxes, utilities services, maintenance, repairs, insurance, etc. required in connection with the Space as well as our pro rata share of all other expenses of the Shopping Center and Marketplace Bazaar, including but not limited to common area maintenance expenses, taxes, insurance premiums, merchants association dues, etc. 5. In addition, we will pay any privilege, excise, sales, gross proceeds rent or other tax, which arises in connection with the Lease. 6. The initial term of the Lease will be for a period of two (2) years. We will have the option upon not less 180 days prior written notice to renew the Lease for one (1) additional two-year period upon the same general terms and conditions but at the then prevailing market rate of minimum basic rent as determined by you. 7. You will bear the cost of and be responsible for constructing and installing standard building shell improvements (the "Shell Improvements"); however, we will be obligated at our expense to construct and install all other improvements as well as our retail trade fixtures within the Space and will do so promptly so we can open for business within four (4) weeks after you complete the Shell Improvements. Except for the installation of our retail trade fixtures and inventory, we will use workers and contractors whom you employ or approve in writing to perform our work. 8. When we execute the Lease, we will pay you a security deposit equal to at least one month's minimum basic rent (our initial deposit above shall apply toward the total amount due) and we will prepay both the first and last month's minimum basic rent. 9. We will be entitled to use the Space for , subject, however, to reasonable use limitations which you establish to create an appropriate tenant mix within the Marketplace Bazaar, as set forth in the Lease. 10. The payment and performance of our obligations nnder the Lease will be guaranteed by our principals, members or shareholders upon your standard form guarantee. 11. You will designate an area for employee parking spaces, and the Shopping Center will have no less than the number of parking spaces required by local ordinance. This reflects our present understanding, however, the foregoing terms and conditions described are not intended to be an exhaustive list of all that will be contained in the Lease. It is understood that neither you nor we will be bound or liable to the other by this letter until both of us execute a definitive written lease agreement. We are looking forward to the opportunity to be a tenant at Marketplace Bazaar. Very truly yours, [COMPANY NAME] By [NAME], its [TITLE]
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