LETTER OF INTENT — MULTI-TENANT COMMERCIAL LEASE

Date: [__/__/____]

Delivery Method: ☐ Email ☐ Certified Mail ☐ Hand Delivery ☐ Overnight Courier

PRELIMINARY STATEMENT

This Letter of Intent ("LOI") sets forth the principal business terms upon which [________________________________] ("Landlord") and [________________________________] ("Tenant") propose to negotiate a definitive lease agreement (the "Lease") for space within a multi-tenant property. Except for the Binding Provisions set forth in Section 21, this LOI is non-binding and is intended solely to facilitate negotiation. Neither party shall have any obligation to execute a Lease unless and until a definitive Lease is fully executed and delivered by both parties.

SECTION 1. PROPERTY AND PREMISES

Legal Description: Attached as Exhibit A or to be included in the Lease.

Premises Plan: A floor plan depicting the Premises is attached as Exhibit B or shall be mutually agreed upon within [____] business days of LOI execution.

SECTION 2. LEASE TERM AND COMMENCEMENT

Initial Term: [____] years, commencing on the Commencement Date.

Commencement Date: The earlier of: (a) [__/__/____]; (b) the date Tenant opens for business in the Premises; or (c) [____] days after Landlord delivers the Premises in Delivery Condition (defined below).

Rent Commencement Date: [____] days after the Commencement Date (the "Free Rent Period"), during which Tenant shall pay operating expenses only but no Base Rent.

Estimated Delivery Date: [__/__/____].

Outside Delivery Date: If Landlord fails to deliver the Premises by [__/__/____], Tenant shall receive [____] day(s) of free rent for each day of delay beyond the Outside Delivery Date. If delivery has not occurred by [__/__/____] (the "Drop-Dead Date"), either party may terminate by written notice, and Landlord shall return all deposits.

Fixturing Period: [____] days after delivery during which Tenant may access the Premises to install fixtures, furniture, and equipment. No rent (Base Rent or additional rent) shall accrue during the Fixturing Period.

Early Access: Landlord shall grant Tenant access to the Premises [____] days prior to the Commencement Date for purposes of ☐ fixturing ☐ IT/telecom installation ☐ inventory stocking ☐ other: [________________________________], at no cost and subject to insurance requirements.

SECTION 3. LEASE STRUCTURE AND BASE RENT

3.1 Lease Type

☐ Triple Net (NNN): Tenant pays Base Rent plus its Pro Rata Share of real estate taxes, building insurance, and common area maintenance (CAM).

☐ Modified Gross / Modified Net: Tenant pays Base Rent plus its Pro Rata Share of increases in operating expenses over a Base Year ([____]) amount. Landlord pays the Base Year amount.

☐ Full Service Gross (FSG): Tenant pays a single all-inclusive rent; Landlord pays all operating expenses. Tenant pays its Pro Rata Share of increases over Base Year ([____]).

☐ Percentage Rent (Retail): Tenant pays Base Rent plus Percentage Rent as set forth in Section 6.

3.2 Base Rent Schedule

3.3 Rent Escalations

☐ Fixed Annual Increase: [____]% per annum over prior year's Base Rent.

☐ CPI Adjustment: Annual increase based on the Consumer Price Index (CPI-U, [________] Metropolitan Area), with a floor of [____]% and a cap of [____]%.

☐ Fixed Dollar Increase: $[________] per RSF increase per year.

☐ Fair Market Value Reset: Base Rent resets to FMV at the beginning of Year [____] per the FMV determination mechanism in Section 13.

SECTION 4. OPERATING EXPENSES, CAM, AND ADDITIONAL RENT

4.1 Pro Rata Share

Tenant's Pro Rata Share shall be calculated as the RSF of the Premises divided by the total RSF of the Building ([________] RSF / [________] RSF = [____]%).

4.2 Common Area Maintenance (CAM) Charges

Estimated Year 1 CAM: $[________] per RSF per annum.

CAM charges shall include, without limitation:
- ☐ Common area utilities (lighting, HVAC for lobbies/corridors, elevators)
- ☐ Janitorial and cleaning services for common areas
- ☐ Landscaping and snow/ice removal
- ☐ Security services and systems
- ☐ Common area repairs and maintenance
- ☐ Property management fees (capped at [____]% of gross revenues)
- ☐ Parking lot/garage maintenance, striping, and resurfacing
- ☐ Trash removal and recycling
- ☐ Fire/life safety system maintenance

4.3 CAM Exclusions

The following shall be excluded from CAM charges passed through to Tenant:
- Capital expenditures (except those required by law enacted after Lease execution or those that reduce operating expenses, amortized over useful life at [____]% interest)
- Costs attributable to other tenants' buildouts or defaults
- Landlord's income taxes, entity-level taxes, or franchise taxes
- Depreciation or debt service on the Building
- Leasing commissions and marketing expenses
- Costs arising from Landlord's negligence or willful misconduct
- Legal fees for disputes with other tenants
- Costs to remediate hazardous materials not introduced by Tenant
- Executive compensation above on-site property manager level
- Reserves in excess of [____]% of total CAM

4.4 Controllable Expense Cap

Controllable operating expenses (all CAM charges excluding real estate taxes, insurance premiums, utilities, and snow/ice removal) shall not increase by more than [____]% per annum on a cumulative, compounding basis over the Base Year amount.

4.5 Real Estate Taxes

Estimated Year 1 Taxes: $[________] per RSF per annum.

Tenant shall pay its Pro Rata Share. If Landlord contests the tax assessment, Tenant shall pay its Pro Rata Share of reasonable contest costs and shall receive its Pro Rata Share of any refund or reduction.

4.6 Building Insurance

Estimated Year 1 Insurance: $[________] per RSF per annum.

Tenant shall pay its Pro Rata Share of Landlord's property, casualty, and liability insurance premiums.

4.7 Annual Reconciliation

Landlord shall provide an annual reconciliation statement within [____] days after each calendar year end. Overpayments shall be credited against the next month's additional rent; underpayments shall be due within [____] days.

4.8 Audit Rights

Tenant shall have the right, at its sole expense, to audit Landlord's operating expense records once per calendar year, upon [____] days' prior written notice. If the audit reveals an overcharge exceeding [____]%, Landlord shall reimburse Tenant for reasonable audit costs in addition to the overcharge.

SECTION 5. TENANT IMPROVEMENTS AND LANDLORD WORK

5.1 Delivery Condition

Landlord shall deliver the Premises in the following condition:

☐ Warm Shell: Demised, with HVAC stub-ins, electrical panel, plumbing rough-ins, fire sprinkler loop, and concrete or raised floor.

☐ Cold Shell / Vanilla Box: As-is structural shell with basic mechanical, electrical, and plumbing infrastructure.

☐ Turnkey / Built-Out: Per Landlord's Work Letter (Exhibit C), including [________________________________].

☐ As-Is: In its current condition, with no Landlord work.

5.2 Tenant Improvement Allowance (TIA)

Landlord shall provide a TIA of $[________] per RSF (total: $[________]) to be applied toward:
- ☐ Hard construction costs
- ☐ Architectural and engineering fees
- ☐ Permit and inspection fees
- ☐ Furniture, fixtures, and equipment (FF&E) — capped at [____]% of TIA
- ☐ Cabling, data/telecom infrastructure
- ☐ Signage costs

Disbursement: ☐ Lump sum upon completion ☐ Progress payments upon submission of lien waivers ☐ Other: [________________________________]

Unused Allowance: ☐ Forfeited ☐ Applied as rent credit ☐ Paid to Tenant as cash (capped at [____]% of TIA)

5.3 Landlord's Work

Landlord shall complete the following at Landlord's sole cost and expense prior to the Commencement Date:

[________________________________]
[________________________________]
[________________________________]

5.4 Plans and Construction Timeline

• Tenant submits preliminary space plan: Within [____] days of LOI execution
• Landlord approves or provides comments: Within [____] business days of receipt
• Construction documents completed: Within [____] days of space plan approval
• Landlord commences buildout: Within [____] days of permit issuance
• Substantial completion target: [__/__/____]

5.5 Construction Cost Overruns

Costs exceeding the TIA shall be borne by ☐ Tenant ☐ shared [____]% Landlord / [____]% Tenant ☐ Landlord.

SECTION 6. PERCENTAGE RENT (RETAIL TENANTS)

Applicable only if Percentage Rent is selected in Section 3.1.

Natural Breakpoint: $[________] in annual Gross Sales (calculated as Annual Base Rent / Percentage Rate).

Percentage Rate: [____]% of Gross Sales exceeding the Natural Breakpoint.

Gross Sales Definition: All revenues from sales of merchandise, food, beverage, and services made in, from, or through the Premises, excluding: (a) returns and allowances; (b) sales taxes collected and remitted; (c) employee discounts; (d) internet/catalog sales not fulfilled from the Premises; (e) gift card sales (counted upon redemption); (f) insurance proceeds.

Reporting: Tenant shall provide monthly sales reports within [____] days of each month end and a certified annual statement within [____] days of each fiscal year end.

Audit: Landlord shall have the right to audit Tenant's sales records once per year upon [____] days' notice.

SECTION 7. PERMITTED USE, EXCLUSIVE USE, AND CO-TENANCY

7.1 Permitted Use

Tenant shall use the Premises solely for: [________________________________]

and for no other purpose without Landlord's prior written consent.

7.2 Exclusive Use Clause

Landlord covenants that, during the Lease Term and any renewal periods, Landlord shall not lease, license, or permit any other tenant or occupant of the Building or Project to operate a business primarily engaged in:

[________________________________]

Scope of Exclusive: ☐ Entire building ☐ Entire shopping center/project ☐ Building plus outparcels

Exceptions to Exclusive:
- ☐ Existing tenants as of the Lease Date whose current use includes the exclusive activity
- ☐ Anchor tenants (exceeding [________] RSF) with pre-existing exclusive rights
- ☐ Incidental sales that constitute less than [____]% of another tenant's gross revenues

Remedies for Violation:
- ☐ Rent reduction to $[________] per month until cured
- ☐ Percentage of Base Rent only ([____]%) until cured
- ☐ Right to terminate Lease upon [____] days' notice if not cured within [____] days
- ☐ Injunctive relief
- ☐ Landlord must use commercially reasonable efforts to enforce violating tenant's lease

7.3 Co-Tenancy Clause (Retail)

Opening Co-Tenancy: Tenant's obligation to open for business is conditioned upon:
- ☐ [________________________________] ("Anchor Tenant") is open and operating
- ☐ At least [____]% of the Building/Project gross leasable area is occupied and open for business
- ☐ At least [____] of the following named tenants are open: [________________________________]

Ongoing Co-Tenancy: If, at any time during the Lease Term:
- ☐ The Anchor Tenant ceases operations for more than [____] consecutive days (other than for renovation)
- ☐ Occupancy of the Building/Project falls below [____]% for more than [____] consecutive days

Then Tenant shall have the following remedies:
- ☐ Reduced rent of $[________] per month (or [____]% of Base Rent) until the co-tenancy condition is restored
- ☐ Right to cease operations ("go dark") without violating continuous operation requirements
- ☐ Right to terminate the Lease upon [____] days' written notice if the co-tenancy failure continues for [____] months or more

Landlord Cure Period: Landlord shall have [____] days from receipt of Tenant's notice to cure the co-tenancy failure before Tenant's remedies take effect.

7.4 Continuous Operation

☐ Tenant is required to continuously operate throughout the Lease Term during customary business hours.

☐ Tenant is not required to continuously operate (go-dark right retained), provided Tenant continues to pay all rent and maintain the Premises.

SECTION 8. RADIUS RESTRICTION (RETAIL)

During the Lease Term, Tenant shall not, directly or through any affiliate, open, operate, or have a financial interest in a store or business of similar character within a radius of [____] miles from the Premises, except:

• ☐ Locations in existence as of the Lease Date, listed in Exhibit D
• ☐ Locations acquired as part of a portfolio or entity-level acquisition
• ☐ Internet / e-commerce sales
• ☐ Locations operated under a different trade name with a materially different concept

Remedy for Violation: Landlord may include [____]% of gross sales from the competing location in the calculation of Percentage Rent.

SECTION 9. RENEWAL OPTIONS

Number of Options: [____] successive option(s) of [____] year(s) each.

Exercise Deadline: Written notice no earlier than [____] months and no later than [____] months prior to the expiration of the then-current term.

Renewal Rent:

☐ Fair Market Value (FMV): Determined per the mechanism in Section 13. FMV shall not be less than [____]% or more than [____]% of the expiring Base Rent.

☐ Fixed Increase: [____]% above the then-current Base Rent.

☐ Predetermined Schedule: Per the rent schedule attached as Exhibit E.

Conditions: No uncured Event of Default at time of exercise or at renewal commencement.

SECTION 10. EXPANSION AND RIGHT OF FIRST OPTIONS

10.1 Right of First Offer (ROFO)

If Landlord intends to market Suite(s) [________________________________] (the "ROFO Space"), Landlord shall first offer such space to Tenant on the same terms Landlord intends to offer to the market. Tenant shall have [____] business days to accept.

10.2 Right of First Refusal (ROFR)

If Landlord receives a bona fide third-party offer for Suite(s) [________________________________] (the "ROFR Space"), Landlord shall present the offer to Tenant. Tenant shall have [____] business days to match the third-party terms.

10.3 Expansion Option

Tenant shall have the option to expand into Suite(s) [________________________________] (the "Expansion Space," approximately [________] RSF), exercisable by written notice no later than [__/__/____], on the following terms:
- Rent: Same per-RSF rate as the Premises (or FMV at time of exercise)
- TI Allowance for Expansion Space: $[________] per RSF
- Term: Co-terminous with the initial Lease Term

SECTION 11. SIGNAGE

Tenant shall be entitled to the following signage, subject to Landlord's reasonable design approval and all applicable municipal codes and CC&Rs:

• ☐ Primary building-mounted signage on [________________________________] facade(s)
• ☐ Monument sign panel — ☐ top position ☐ second position ☐ other: [____]
• ☐ Pylon sign panel
• ☐ Building directory listing
• ☐ Suite entry signage
• ☐ Window graphics / vinyl
• ☐ Digital / LED signage (if permitted)

Signage Costs: ☐ Tenant ☐ Landlord ☐ Shared ([____]% Landlord / [____]% Tenant)

Removal upon Expiration: Tenant shall remove signage and restore surfaces at Tenant's expense.

SECTION 12. PARKING AND COMMON AREAS

12.1 Parking

Ratio: [____] spaces per 1,000 RSF of Premises.

Parking Charge Escalation: ☐ Fixed at [____]% per annum ☐ Market rate ☐ No escalation during initial term

12.2 Common Area Access

Tenant and its employees, customers, and invitees shall have non-exclusive access to:
- ☐ Lobbies, corridors, and restrooms
- ☐ Loading docks and service corridors (hours: [________________________________])
- ☐ Elevators and stairwells
- ☐ Conference center / shared amenities (subject to reservation policies)
- ☐ Rooftop / terrace (if applicable)
- ☐ Fitness center (if applicable)

12.3 After-Hours Access

Building shall be accessible to Tenant 24 hours per day, 7 days per week, 365 days per year. After-hours HVAC: $[________] per hour per zone, with [____]-hour minimum.

SECTION 13. FAIR MARKET VALUE DETERMINATION

If FMV is applicable for renewals, expansions, or rent resets:

Step 1 — Negotiation: The parties shall negotiate in good faith for [____] days.

Step 2 — Broker Determination: If agreement is not reached, each party shall appoint a licensed commercial real estate broker with at least [____] years of experience in the local market within [____] days. The two brokers shall determine FMV within [____] days.

Step 3 — Baseball Arbitration: If the two brokers cannot agree, they shall jointly appoint a third broker within [____] days. Each party shall submit its final FMV determination. The third broker shall select the determination closest to their own independent assessment. The selected amount shall be binding.

Exclusions from FMV: The determination shall exclude (a) the value of Tenant-funded improvements, (b) any premium attributable to Tenant's specific business or goodwill, and (c) submarket anomalies not reflective of comparable transactions.

SECTION 14. ASSIGNMENT AND SUBLETTING

Tenant shall not assign the Lease or sublet the Premises without Landlord's prior written consent, which shall not be unreasonably withheld, conditioned, or delayed.

Permitted Transfers (No Consent Required):
- ☐ Transfer to an affiliate or subsidiary where Tenant retains control
- ☐ Transfer in connection with a merger, consolidation, or sale of substantially all of Tenant's assets, provided the successor has a net worth of at least $[________]
- ☐ Transfer to a successor entity resulting from a reorganization

Recapture Right: ☐ Yes — Landlord may recapture the Premises in lieu of consenting ☐ No

Profit Sharing on Sublet/Assignment: [____]% of net sublease/assignment profits (after Tenant's transaction costs and unamortized TI/leasing commissions) payable to Landlord.

SECTION 15. INSURANCE AND INDEMNITY

15.1 Tenant Insurance Requirements

• Commercial General Liability: $[________] per occurrence / $[________] aggregate
• Property / Contents Insurance: Replacement cost
• Business Interruption Insurance: [____] months of rent
• Workers' Compensation: Statutory limits
• Umbrella / Excess Liability: $[________]

Landlord, its lender(s), and property manager shall be named as additional insureds.

15.2 Mutual Waivers

Each party shall obtain from its insurer a waiver of subrogation in favor of the other party.

15.3 Indemnity

Each party shall indemnify, defend, and hold harmless the other party from and against claims arising from the indemnifying party's negligence or willful misconduct.

SECTION 16. SECURITY DEPOSIT AND GUARANTY

Security Deposit: $[________] (equivalent to [____] months' Base Rent), in the form of ☐ cash ☐ letter of credit ☐ surety bond.

Reduction: If no Event of Default has occurred, the security deposit shall reduce to $[________] after Year [____].

Letter of Credit Terms: Irrevocable, standby, from a bank with a credit rating of at least [________], with automatic annual renewal and [____]-day expiry notice.

Personal / Corporate Guaranty: ☐ Required from [________________________________] ☐ Burning guaranty reducing to $[____] after Year [____] ☐ Not required

SECTION 17. SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT (SNDA)

Landlord shall deliver, prior to the Commencement Date, an SNDA agreement from each existing mortgagee and ground lessor in a commercially reasonable form, providing that so long as Tenant is not in default, Tenant's possession and rights under the Lease shall not be disturbed.

SECTION 18. CASUALTY AND CONDEMNATION

Casualty: If the Premises or Building is damaged such that Tenant cannot conduct business, rent shall abate until restored. If restoration is estimated to exceed [____] days, either party may terminate.

Condemnation: If a material portion of the Premises or parking is taken, either party may terminate. Tenant shall be entitled to make a separate claim for its moving expenses, trade fixtures, and unamortized leasehold improvements.

SECTION 19. BROKERS

Landlord's Broker: [________________________________]
Tenant's Broker: [________________________________]

Landlord shall pay all brokerage commissions per a separate agreement. Each party represents it has not dealt with any broker other than those named above and shall indemnify the other against claims by any other broker or finder.

SECTION 20. TIMELINE AND DUE DILIGENCE

SECTION 21. BINDING PROVISIONS

Notwithstanding the non-binding nature of this LOI, the following provisions shall be binding and enforceable upon execution of this LOI:

21.1 Exclusivity

From the date of this LOI through [__/__/____] (the "Exclusivity Period"), Landlord shall not negotiate, solicit, or accept any offer from a third party for the Premises or any portion thereof. If a definitive Lease is not executed by the expiration of the Exclusivity Period, this LOI shall automatically terminate unless extended by mutual written agreement.

21.2 Confidentiality

Each party shall keep the terms of this LOI and all negotiations confidential and shall not disclose such information to any third party, except to its attorneys, accountants, brokers, and lenders on a need-to-know basis.

21.3 Broker Indemnification

The indemnification obligations in Section 19 shall be binding.

21.4 Expenses

Each party shall bear its own costs and expenses in connection with the negotiation and preparation of this LOI and the Lease.

21.5 Governing Law and Venue

This LOI and the Lease shall be governed by the laws of the State of [________________________________]. Any disputes shall be resolved in the courts of [________________________________] County, [________________________________].

SECTION 22. PROPERTY-TYPE-SPECIFIC ADDENDA

Addendum A — Retail / Shopping Center

(Include if the Property is a retail center or mixed-use project with retail components)

• Shopping Center Name: [________________________________]
• GLA of Shopping Center: [________] RSF
• Anchor Tenant(s) and GLA: [________________________________]
• Percentage Rent: Per Section 6
• Radius Restriction: Per Section 8
• Co-Tenancy: Per Section 7.3
• Operating Hours: [________________________________]
• Tenant's Trade Name: [________________________________]
• Patio / Outdoor Seating Area: [________] SF, permitted ☐ Yes ☐ No
• Food Court Participation: ☐ Required ☐ Optional ☐ N/A
• Merchants' Association / Marketing Fund: $[________] per RSF per annum, with cap of [____]% annual increase
• Recapture / Kick-Out: Landlord may terminate if Tenant's Gross Sales do not reach $[________] per annum by Year [____]

Addendum B — Office

(Include if the Property is an office building)

• Building Hours: [________________________________]
• After-Hours HVAC: $[________] per hour per zone
• Supplemental HVAC: ☐ Tenant may install at Tenant's cost, subject to Landlord approval
• Generator / UPS Access: ☐ Available at $[________] per kW per month ☐ Tenant may install dedicated generator
• Roof Rights: ☐ Tenant may install satellite/antenna on roof, subject to license agreement
• Building Standard Finishes: Per Exhibit F
• Janitorial Specifications: Per Exhibit G
• Access Control / Security: ☐ Card access ☐ Biometric ☐ Lobby attendant ☐ 24/7 security
• Sustainability / LEED: Building is ☐ LEED Certified ☐ LEED Gold ☐ LEED Platinum ☐ Not certified

Addendum C — Industrial / Flex

(Include if the Property is an industrial or flex-space building)

• Warehouse / Shop Area: [________] SF
• Office Area: [________] SF
• Clear Height: [____] feet
• Loading Docks: [____] dock-high doors; [____] grade-level doors
• Truck Court Depth: [____] feet
• Floor Load Capacity: [________] PSF
• Power Supply: [____] amps, [____] volts, [____] phase
• Crane / Hoist: ☐ Existing ([____]-ton capacity) ☐ Tenant may install ☐ N/A
• Yard / Outside Storage: ☐ Permitted, [________] SF ☐ Not permitted
• Environmental: Landlord shall deliver Phase I ESA; Landlord represents no known contamination
• Hazardous Materials: Tenant ☐ will ☐ will not use, store, or generate hazardous materials. If yes, describe: [________________________________]

SECTION 23. ADDITIONAL TERMS AND CONDITIONS

[________________________________]
[________________________________]
[________________________________]
[________________________________]

SECTION 24. COUNTERPARTS AND ELECTRONIC SIGNATURES

This LOI may be executed in counterparts and delivered by electronic transmission (including PDF and e-signature platforms), each of which shall be deemed an original.

SIGNATURES

ACCEPTED AND AGREED (non-binding except as expressly stated in Section 21):

LANDLORD:

Entity Name: [________________________________]

Signature: [________________________________]

Printed Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

TENANT:

Entity Name: [________________________________]

Signature: [________________________________]

Printed Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

EXHIBITS

• Exhibit A: Legal Description of Property
• Exhibit B: Floor Plan of Premises
• Exhibit C: Landlord's Work Letter (if applicable)
• Exhibit D: Existing Tenant Locations (Radius Restriction exceptions)
• Exhibit E: Predetermined Renewal Rent Schedule (if applicable)
• Exhibit F: Building Standard Finishes (Office)
• Exhibit G: Janitorial Specifications (Office)

This Letter of Intent is intended solely as a basis for further negotiation. Except for the Binding Provisions in Section 21, it does not create any legally binding obligations between the parties. No party shall be bound unless and until a definitive Lease is fully executed and delivered.