1. Definition of Lease Area Terms. Some important terms used in the 555 Main Street Building lease are “usable floor space” (UFS), “rentable square feet”(RSF), “common space” and “load factor.” Usable floor space is the space, measured in square feet, within the Building occupied exclusively by Tenant. The perimeter of the useable floor space is defined by the outside face of exterior walls and the centerline of interior walls. Rentable square feet is the measurement of the area of the Building that includes, Tenant’s usable floor space plus Tenant’s proportionate share of common space used by all tenants occupying the same floor. Common space, calculated independently for each floor of the Building includes, but is not limited to, lobbies, hallways, restrooms, utility rooms and storage rooms. Tenant’s proportionate share of the common space is known as the “load factor”. The load factor depends upon the makeup of the tenant spaces on a particular floor of the Building. For example, if one tenant occupies a whole floor, the load factor for that floor would be less than if eight tenants occupied the floor because there would be no need for hallways and lobbies resulting in less common space.
2. Tenant Improvement Allowance. The Building is made up of three stories of office/commercial space below two fourth story residence apartments that are condominiums separate from the commercial space below. The Building will have a cement plaster and pre-finished aluminum storefront exterior. All stories of office/commercial space shall be connected by two independent stairs and an elevator. Lease spaces shall be delivered to tenants in shell condition as described in the Building Shell Construction Standards. Tenants shall have an allowance of FORTY DOLLARS ($40.00) per square foot of usable floor space to be used toward the design, permits, and construction of tenant improvements (tenant improvements do not include personal property) and shall be required to construct tenant improvements to the minimum standards described in the Tenant Improvement Construction Standards. The Tenant shall install the tenant improvements and the Tenant shall pay the cost of such tenant improvements that exceeds FORTY DOLLARS ($40.00) per square foot. The Building will be equipped with a DSL Internet connection. The Building will also have common entry lobby and bathrooms on each floor of office/commercial space (except in the event a floor is leased to one tenant, the lobby and bathrooms on that floor will not be common area).
3. Rental Amount. The Tenant shall pay the Building Owner a rent per square foot of rentable square feet per month plus a proportionate share of the total operating expenses of the Building (the “Expenses”) allocated to the floor upon which the Tenant’s space is located. The Tenant’s proportionate share of the Expenses shall be the Tenant’s space divided by the useable square feet for the floor of the Building upon which the Tenant’s space is located.
4. Parking. Tenants shall have use of on-site parking spaces for Tenant’s non-exclusive use. The parking lot will not be secured but will be posted with tow away signage per the California Vehicle Code.
5. Term. The term of the Lease Agreement will commence on the date that is five (5) days after the Building Owner has completed Tenant’s improvements to the Tenant’s Space. The term of the Lease Agreement shall be for a period of time to be negotiated between Tenant and Building Owner. If the Tenant is not in default of any terms or conditions of the Lease Agreement, the Tenant may extend the term of the Lease by delivering to the Building Owner written notice of such extension not less than one hundred eighty (180) days before the end of the current term of the Lease Agreement. Rent shall be adjusted for cost of living increases every 37th month.
6. Services Provided To Tenant. The Tenant, its employees, customers, clients, and other guests shall be allowed the non-exclusive use of all common areas of the Building, including the lobby(s), bathroom(s), (if a floor is leased to one tenant, the lobby and bathrooms on that floor will not be common area), elevator, hallways, stairs, outside walkways, and outside parking. The Tenant shall also be provided once a week garbage service, once per calendar quarter outside window cleaning, and quarterly maintenance and adjustment of the HVAC system. On-site parking spaces are not part of the rentable area.
7. Signage. The Tenant shall be entitled to the following signage in and around the Building:
A. Inclusion in all building directories; and
B. On or near the front entryway of Tenant’s space.
All signage shall be consistent with the look and motif of the Building and the grounds surrounding it, and shall be approved prior to installation by the Building Owner.
8. Brokerage Fees. The Building Owner shall cooperate with real estate brokers and pay a real estate commission to Tenant’s agent. The commission that will be paid such broker/agent shall be due and payable in the event the Tenant executes a Lease Agreement, occupies space within the Building and commences the payment of rent.
9. Conditions to the Transaction. The Tenant understands and acknowledges that the construction of the Building has not been completed. There are many factors that may affect the Lease Agreement, including, but not limited to, construction risks, weather, construction costs, tenant, make-up and location in the Building.
10. Expenses. Each party shall pay its own expenses incident to preparation and review of the Lease Agreement.