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The Proposal: 1. The terms of this proposed lease are 12 months. 2. The proposed start date is May 1, 2011 3. Imagine That! will pay all the utilities on the space 4. Imagine That! will pay 10% of their gross sales. This 10% of total sales will be considered rent and CAM. There will be no cap, thus while the property owner takes a risk on the low end, the business owner takes a risk on the high end. 5. At the end of the 12 month term, Imagine That! will have the option to continue their lease term at terms no less than the terms for the lease for 131 S. Michigan Street'. 6. Imagine That! agrees that they will work to achieve average monthly sales goal of $4,800 per month (based on approx. $200 per day in 6 days a week in a 30 day month) within the first 6 months of the lease (This will cover the fixed cost of the CAM as the payments would reach $480). 7. Imagine That! agrees that they will work to achieve a monthly sales goal of $7,200 per month (based on approx. $300 per day in 6 day week in a 30 -day month) during the second 6 months of the lease. The payments to the property owner would reach $720 per month. 8. The landlord will understand that sales numbers fluctuate, and will look at the overall picture to see if overall payment has averaged to at least $600 per month. This average will be based on the performance from 10 out of the 12 months. 9. If conditions 6, 7, and 8 are not met, the building owner has the right to terminate the lease with a written letter and 30 -day notice. 10. We can, if the commission desires it, also include a 30 -day notice to vacate clause in the case that the following conditions are met: if, the broker is able to first fill at least one of the two larger available spaces (121 or 123 S. Michigan) and then is able to produce a tenant for 117 S. Michigan that has signed a 2 -year lease and put a deposit down for the space at a minimum of $1,163.14 per month or $13,957.68 annually. Staff seeks approval from the Redevelopment Commission to work through the details of a 12 -month lease based upon the above proposal. ' The space at 131 S. Michigan is approximately 1,530 square feet, which at $9.41 including CAM brings their monthly rent to $1,200 per month or $14,400 annually (includes rent and CAM). If these same terms were applied to 117 S. Michigan this would bring in a minimum of $826.00 per month or $10,0351 annually (includes rent and CAM). The purpose of this clause is not to set the lease rate, but to set a bottom floor, below which we would not negotiate going forward. What We Do Today Makes A Difference!