Commercial Ground Lease with Lessee to Construct Improvements Lease Agreement made on the ___ day of __________, 20___, between ________, Inc.,
a corporation organized and existing under the laws of the state of ______________, with its
principal office located at ____________________________________________________
(street address, city, county, state, zip code), referred to herein as Lessor, and ___________,
Inc., a corporation organized and existing under the laws of the state of ______________, with
its principal office located at _____________________________________________________
(street address, city, county, state, zip code), referred to herein as Lessee.Whereas, Lessor is the sole owner of certain land located at _______________________
(street address, city, county, state, zip code) and more fully described below, which it desires to
lease to Lessee; and Whereas, Lessee is a corporation that desires and is empowered to lease said property; and Whereas, the parties desire to enter into a lease agreement to define their respective
rights, duties, and liabilities concerning such a lease; Now, therefore, for and in consideration of the mutual covenants contained in this
agreement, and other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows: 1. Description of Premises and Purpose Lessor hereby leases to Lessee, for the purpose of conducting in and on such premises a
lawful business and for no other purpose, property located at ____________________________
(street address, city, county, state, zip code), and more particularly described in Exhibit A
_____________________________________________________________((legal description), which is attached to and made a part of this Lease Agreement. Said property described in
Exhibit A is hereafter referred to as Premises.
2.Term
The initial term of this Lease Agreement shall be for ____ (number) years, commencing
on _______ (date), and ending on _______ (date). As used in this Lease Agreement, the
expression term of this Lease Agreement refers to the initial term and to any renewal of this
Lease Agreement as provided below. 3. Rent A.Lessee agrees to pay and Lessor agrees to accept $_______________for and as
the monthly rent for the Premises commencing upon execution of this Lease Agreement. Such
rent shall be paid in equal monthly installments in advance on the first day of every month
during the term of this Lease Agreement .B. In addition to the rents as above stated, Lessee shall pay to Lessor a sum equal to
_____% of the amount received by Lessee from rental on subleases of Premises. Said additional
rent shall be due on the first day of the sixth month following receipt of the first such sublease
payment to Lessee and each ______ (e.g., sixth) month thereafter during the term of this Lease
Agreement. C. All rent payments shall be made in lawful money of the United States and shall be
paid to Lessor at ______________________________________________________________
(street address, city, county, state, zip code), or to such other address as Lessor shall notify
Lessee of in writing at _________________________________________________________
(street address, city, county, state, zip code).D. Within _____days after the end of each calendar year of this Lease Agreement,
during the term of this Lease Agreement beginning on the first calendar year following the
receipt by Lessee of a rent payment of one of its sublessees, Lessee shall deliver to Lessor a
complete statement signed by a duly authorized officer of Lessee showing accurately and in
reasonable detail the full amount of all rents collected by Lessee from Lessee's sublessees. If the
amount of rent due under the percentage as above stated is greater than the amount of rent
previously paid with respect to the same lease year, the balance shall be paid by the Lessee with
the submission of such statement.E. Lessee agrees that Lessor or Lessor's agents may during normal business hours
inspect Lessee's books and records for the purpose of verifying Lessee's statement of rent
collections.F. It is understood that all sums collected by Lessee from its sublessees for the
sublessees' share of taxes, insurance, common-area maintenance, and repairs shall not be deemed
to be rents collected by Lessee for the purpose of ascertaining Lessor's share under the
percentage arrangement above stated.G. Such rents shall be absolutely net to Lessor so that this Lease Agreement shall,
except as provided to the contrary in this Lease Agreement, yield net to Lessor the rent as
provided above, to be paid in each year during the term of this Lease Agreement . All costs,
expenses, and obligations of every kind and nature whatever, relating to the Premises, or any
improvements on the Premises, which may arise or become due during the term of this Lease
Agreement, shall be paid by Lessee. Lessor shall be indemnified and saved harmless by Lessee
from and against same. 4.Warranties of Title and Quiet Possession Lessor covenants that Lessor is seized of the Premises in fee simple and has full right to
make and enter into this Lease Agreement and that Lessee shall have quiet and peaceable
possession of the Premises during the term of this Lease Agreement. 5.Delivery of Possession If Lessor, for any reason whatever, cannot deliver possession of the Premises to Lessee at
the commencement of the term of this Lease Agreement, as specified above, this Lease
Agreement shall not be void or voidable, nor shall Lessor be liable to Lessee for any loss or
damage resulting from such nondelivery; but in that event, there shall be a proportionate
reduction of rent covering the period between the commencement of the term of this Lease
Agreement and the time when Lessor can deliver possession.
6.Uses Prohibited Lessee shall not use, or permit the Premises, or any part of the Premises, to be used, for
any purpose or purposes other than the purpose or purposes for which the Premises are leased
under this Lease Agreement. No use shall be made or permitted to be made of the Premises, or
acts done, which will cause a cancellation of any insurance policy covering the building located
on the premises, or any part of such building, nor shall Lessee sell, or permit to be kept, used, or
sold, in or about the Premises, any article that may be prohibited by the standard form of fire
insurance policies. Lessee shall, at its sole cost, comply with all requirements, pertaining to the
demised premises, of any insurance organization or company, necessary for the maintenance of
insurance, as provided in this Lease Agreement, covering any building and appurtenances at any
time located on the Premises. 7.Waste and Nuisance Prohibited During the term of this Lease Agreement, Lessee shall comply with all applicable laws
affecting the Premises, the breach of which might result in any penalty on Lessor or forfeiture of
Lessor's title to the Premises. Lessee shall not commit, or suffer to be committed, any waste on
the Premises, or any nuisance. 8.Abandonment of Premises Lessee shall not vacate or abandon the Premises at any time during the term of this Lease
Agreement. If Lessee abandons, vacates, or surrenders the demised premises, or is dispossessed
by process of law, or otherwise, any personal property belonging to Lessee and left on the
Premises shall be deemed to be abandoned, at the option of Lessor, except such property as may
be encumbered to Lessor. 9.Lessor’s Right of Entry Lessee shall permit Lessor and the agents and employees of Lessor to enter into and on
the Premises at all reasonable times for the purpose of inspecting the Premises, or for the
purpose of posting notices of nonresponsibility for alterations, additions, or repairs, without any
rebate of rent and without any liability to Lessee for any loss of occupation or quiet enjoyment of
the premises occasioned by the entry. Lessee shall permit Lessor and its agents and employees, at
any time within the last _____years prior to the expiration of this Lease Agreement, to place on
the Premises any usual or ordinary "To Let" or "To Lease" signs and exhibit the Premises to
prospective tenants at reasonable hours. 10.Encumbrance of Lessee’s Leasehold Interest A. Lessee may encumber by mortgage or deed of trust, or other proper instrument, its
leasehold interest and estate in the Premises, together with all buildings and improvements
placed by Lessee on the Premises, as security for any indebtedness of Lessee. The execution of
any mortgage, or deed of trust, or other instrument, or the foreclosure of any mortgage, or deed
of trust, or other instrument, or any sale, either by judicial proceedings or by virtue of any power
reserved in a mortgage or deed of trust, or conveyance by Lessee to the holder of the
indebtedness, or the exercising of any right, power, or privilege reserved in any mortgage or deed
of trust, shall not be held as a violation of any of the terms or conditions of this Lease
Agreement, or as an assumption by the holder of the indebtedness personally of the obligations
of this Lease Agreement. No encumbrance, foreclosure, conveyance, or exercise of right shall
relieve Lessee from its liability under this Lease Agreement.B. If Lessee shall encumber its leasehold interest and estate in the Premises and if Lessee or
the holder of the indebtedness secured by the encumbrance shall give notice to Lessor of the
existence of the encumbrance and the address of the holder, then Lessor will mail or deliver to
the holder, at such address, a duplicate copy of all notices in writing which Lessor may, from
time to time, give to or serve on Lessee under and pursuant to the terms and provisions of this
Lease Agreement. The copies shall be mailed or delivered to the holder at, or as near as possible
to, the same time the notices are given to or served on Lessee. The holder may, at its option, at
any time before the rights of Lessee shall be terminated as provided in this Lease Agreement, pay
any of the rents due under this Lease Agreement, or pay any taxes and assessments, or do any
other act or thing required of Lessee by the terms of this Lease Agreement, or do any act or thing
that may be necessary and proper to be done in the observance of the covenants and conditions
of this Lease Agreement or to prevent the termination of this Lease Agreement. All payments so
made and all things so done and performed by the holder shall be as effective to prevent a
foreclosure of the rights of Lessee as if done and performed by Lessee.11.Subletting and Assignment Lessee may sublet the Premises in whole or in part without Lessor's consent, but the
making of any sublease shall not release Lessee from, or otherwise affect in any manner, any of
Lessee's obligations under this Lease Agreement. Lessee shall not assign or transfer this Lease
Agreement, or any interest in this Lease Agreement, without the prior, express, and written
consent of Lessor, and a consent to an assignment shall not be deemed to be a consent to any
subsequent assignment. Any assignment without consent shall be void, and shall, at the option of
Lessor, terminate this Lease Agreement. Neither this Lease Agreement nor the leasehold estate
of Lessee nor any interest of Lessee under this Lease Agreement in the Premises or any buildings
or improvements on the Premises shall be subject to involuntary assignment, transfer, or sale, or
to assignment, transfer, or sale by operation of law in any manner whatever. Any such attempted
involuntary assignment, transfer, or sale shall be void and of no effect and shall, at the option of
Lessor, terminate this Lease Agreement. 12.Notice A. All notices, demands, or other writings in this Lease Agreement provided to be
given or made or sent, or which may be given or made or sent, by either party to the other, shall
be deemed to have been fully given or made or sent when made in writing and deposited in the
United States mail, registered and postage prepaid, and addressed as follows: 1.To Lessor: _______________________________________________ (street address, city, county, state, zip code)2.To Lessee: _______________________________________________ (street address, city, county, state, zip code)
B. The address to which any notice, demand, or other writing may be given or made
or sent to any party as above provided may be changed by written notice given by the party as
above provided. 13.Taxes and Assessments A. Taxes as additional rental. As additional rental under this Lease Agreement, Lessee shall pay and discharge as they
become due, promptly and before delinquency, all taxes, assessments, rates, charges, license
fees, municipal liens, levies, excises, or imposts, whether general or special, or ordinary or
extraordinary, of every name, nature, and kind whatever, including all governmental charges of
whatever name, nature, or kind, which may be levied, assessed, charged, or imposed, or which
may become a lien or charge on or against the demised premises, or any part of the Premises, the
leasehold of Lessee in and under this Lease Agreement, the premises described in this Lease
Agreement, any building or buildings, or any other improvements now or later on the Premises,
or on or against Lessee's estate created by this Lease Agreement that may be a subject of
taxation, or on or against Lessor by reason of its ownership of the fee underlying this Lease
Agreement, during the entire term of this Lease Agreement, excepting only those taxes
specifically excepted below.B. Assessments affecting improvements. Specifically and without in any way limiting the generality of the provisions of
Paragraph A of this Section, Lessee shall pay all special assessments and levies or charges
made by any municipal or political subdivision for local improvements, and shall pay the same in
cash as they shall fall due and before they shall become delinquent and as required by the act and
proceedings under which any such assessments or levies or charges are made by any municipal
or political subdivision. If the right is given to pay either in one sum or in installments, Lessee may elect either mode of payment and its election shall be binding on Lessor. If, by making any
such election to pay in installments, any of the installments shall be payable after the termination
of this Lease Agreement or any extended term of this Lease Agreement, the unpaid installments
shall be prorated as of the date of termination, and amounts payable after that date shall be paid
by Lessor. All of the taxes and charges under this Section 13 shall be prorated at the
commencement and expiration of the term of this Lease Agreement.C. Taxes excepted. In spite of anything in this section to the contrary, Lessee shall not be required to pay any
estate, gift, inheritance, succession, franchise, income, or excess profits taxes that may be
payable by Lessor or Lessor's legal representative, successors, or assigns, nor shall Lessee be
required to pay any tax that might become due on account of ownership of property other than
that leased in this Lease Agreement which may become a lien on or collectable out of the
property leased under this Lease Agreement.D. Contesting taxes. If Lessee shall, in good faith, desire to contest the validity or amount of any tax,
assessment, levy, or other governmental charge agreed in this section to be paid by Lessee,
Lessee shall be permitted to do so, and to defer payment of such tax or charge, the validity or
amount of which Lessee is so contesting, until final determination of the contest, on giving to
Lessor written notice prior to the commencement of any such contest, which shall be at least
____ days prior to delinquency, and on protecting Lessor on demand by a good and sufficient
surety bond against any such tax, levy, assessment, rate, or governmental charge, and from any
costs, liability, or damage arising out of any such contest. E. Disposition of rebates. All rebates on account of any taxes, rates, levies, charges, or assessments required to be
paid and paid by Lessee under the provisions of this Lease Agreement shall belong to Lessee,
and Lessor will, on the request of Lessee, execute any receipts, assignments, or other documents
that may be necessary to secure the recovery of any rebates, and will pay over to Lessee any
rebates that may be received by Lessor.F. Receipts. Lessee shall obtain and deliver receipts or duplicate receipts for all taxes, assessments,
and other items required under this Lease Agreement to be paid by Lessee, promptly on payment
of any such taxes, assessments, and other items. 14.Construction of New Building A. Plans and specifications. On or before ___________ (date by which Lessee to prepare plans and specifications) ,
Lessee shall, at Lessee's sole expense, prepare plans and specifications for buildings to be erected
on the Premises which shall provide for a ____________________________________________ ________________________________________________________ (description of buildings). The plans and specifications shall be submitted to Lessor for Lessor's written approval or any
revisions required by Lessor. Lessor shall not unreasonably withhold approval, and in the event
of disapproval, Lessor shall give to Lessee an itemized statement of reasons for disapproval
within ____days after the plans and specifications are submitted to Lessor. B. Arbitration. If plans and specifications are not approved by Lessor and Lessee in writing within
____days after they are first submitted to Lessor, then Lessor and Lessee shall each select an
arbitrator, and the two arbitrators so selected shall select a third arbitrator. The three arbitrators
so selected shall hear and determine the controversy and their decision as to the final plans and
specifications shall be final and binding on both Lessor and Lessee, who shall bear the cost of the
arbitration equally between them. The arbitrators shall determine the controversy and notify
Lessor and Lessee in writing of their determination within ____ days after the controversy has
first been submitted to the arbitrators.C. Performance Bond Prior to the commencement of any construction on new buildings, Lessee shall furnish
Lessor with a good and sufficient surety bond guaranteeing the completion of the building and
the payment of all bills in connection with the work.D. Alterations, improvements, and changes permitted. Lessee shall have the right to make such alterations, improvements, and changes to any
building that may, from time to time, be on the Premises as Lessee may deem necessary, or to
replace any building with a new one of at least equal value, provided that prior to making any
structural alterations, improvements, or changes, or to replacing any building, Lessee shall obtain
Lessor's written approval of the plans and specifications, which approval Lessor shall not
unreasonably withhold, provided that the value of the building shall not be diminished and the
structural integrity of the building shall not be adversely affected by any such alterations,
improvements, or changes, or that any proposed new building is at least equal in value to the one
that it is to replace, as the case may be. In the event of disapproval, Lessor shall give to Lessee an
itemized statement of reasons for the disapproval. If Lessor does not disapprove the plans and
specifications provided for in this section within ____ days after they have been submitted to
Lessor, the plans and specifications shall be deemed to have been approved by Lessor. Lessee
will in no event make any alterations, improvements, or other changes of any kind to any
building on the Premises that will decrease the value of the building, or that will adversely affect
the structural integrity of the building. Prior to commencing any work that will cost in excess of
$_____________, Lessee shall furnish Lessor, on demand, with a good and sufficient surety
bond insuring the completion of the work and the payment of all bills in connection with the
work. E. Disposition of new improvements. Any new building constructed by Lessee on the Premises, and all alterations,
improvements, changes, or additions made in or to the premises shall be the property of Lessor,
and Lessee shall have only a leasehold interest in them, subject to the terms of this Lease
Agreement. 15. Repairs and Destruction of Improvements A. Maintenance of improvements. Lessee shall, throughout the term of this Lease Agreement, at its own cost, and without
any expense to Lessor, keep and maintain the Premises, including all buildings and
improvements of every kind that may be a part of the Premises, and all appurtenances to the
Premises, including sidewalks adjacent to the premises, in good, sanitary, and neat order,
condition and repair, and, except as specifically provided in this Lease Agreement, restore and
rehabilitate any improvements of any kind that may be destroyed or damaged by fire, casualty, or
any other cause whatever.B. No obligation by lessor to make improvements. Lessor shall not be obligated to make any repairs, replacements, or renewals, of any kind,
nature, or description, to the Premises or any buildings or improvements on the Premises.C. Lessee's compliance with laws. Lessee shall also comply with and abide by all federal, state, county, municipal, and other
governmental statutes, ordinances, laws, and regulations affecting the Premises, the
improvements on or any activity or condition on or in the Premises.D. Damage to and destruction of improvements. The damage, destruction, or partial destruction of any building or other improvement that
is a part of the Premises shall not release Lessee from any obligation under this Lease
Agreement, except as expressly provided below. In case of damage to or destruction of any such
building or improvement, Lessee shall, at its own expense, promptly repair and restore it to a condition as good or better than that which existed prior to the damage or destruction. Without
limiting the obligations of Lessee, it is agreed that the proceeds of any insurance covering
damage or destruction shall be made available to Lessee for repair or replacement. E. Damage or destruction occurring toward end of term. In spite of anything to the contrary in the immediately preceding paragraphs of this
Section 15, in case of the destruction of more than ____% of the improvements on the Premises
or damage to _____%, the buildings from any cause so as to make them untenantable occurring
during the last ____years of the term of this Lease Agreement, Lessee, if not then in default
under this Lease Agreement, may elect to terminate this Lease Agreement by written notice
served on Lessor within _____days after the occurrence of the damage or destruction. In the
event of such termination, there shall be no obligation on the part of Lessee to repair or restore
the buildings or improvements nor any right on the part of Lessee to receive any proceeds
collected under any insurance policies covering the buildings or any part of the buildings. On
such termination, rent, taxes, assessments, and any other sums payable by Lessee to Lessor under
this Lease Agreement shall be prorated as of the termination date. If any rent, taxes, or
assessments shall have been paid in advance, Lessor shall rebate any such payment for the
unexpired period for which payment shall have been made.F. Election not to terminate. If, in the event of destruction or damage during the last _____years of the term of this
Lease Agreement, Lessee does not elect to terminate this Lease Agreement, the proceeds of all
insurance covering the damage or destruction shall be made available to Lessee for repair or
replacement, and Lessee shall be obligated to repair or rebuild the improvements as provided
above. 16.Utilities Lessee shall fully and promptly pay for all water, gas, heat, light, power, telephone
service, and other public utilities of every kind furnished to the premises throughout the term of this Lease Agreement, and all other costs and expenses of every kind whatever of or in
connection with the use, operation, and maintenance of the Premises and all activities conducted
on the Premises, and Lessor shall have no responsibility of any kind for any such utilities. 17.Liens A. Lessee's duty to keep premises free of liens. Lessee shall keep all and every part of the Premises and all buildings and other
improvements at any time located on the Premises free and clear of any and all mechanics',
material suppliers', and other liens for or arising out of or in connection with work or labor done,
services performed, or materials or appliances used or furnished for or in connection with any
operations of Lessee, any alteration, improvement, or repairs or additions that Lessee may make
or permit or cause to be made, or any work or construction, by, for, or permitted by Lessee on or
about the Premises, or any obligations of any kind incurred by Lessee, and at all times promptly
and fully to pay and discharge any and all claims on which any such lien may or could be based,
and to indemnify Lessor and all of the premises and all buildings and improvements on the
Premises from and against any and all such liens and claims of liens and suits or other
proceedings pertaining to the Premises. B. Written notice. Lessee shall give Lessor written notice no less than ____days in advance of the
commencement of any construction, alteration, addition, improvement, or repair estimated to
cost in excess of $________________in order that Lessor may post appropriate notices of
Lessor's nonresponsibility.C. Contesting liens. If Lessee desires to contest any lien, it shall notify Lessor of its intention to do so within
_____days after the filing of the lien. In that case, and provided that Lessee shall, on demand,
protect Lessor by a good and sufficient surety bond against any lien and any cost, liability, or
damage arising out of such contest, Lessee shall not be in default under this Lease Agreement
until _____days after the final determination of the validity of the lien, within which time Lessee
shall satisfy and discharge the lien to the extent held valid. However, the satisfaction and
discharge of any lien shall not, in any case, be delayed until execution is had on any judgment
rendered on the lien, and such delay shall be a default of Lessee under this Lease Agreement.D. Indemnification. In the event of any such contest, Lessee shall protect and indemnify Lessor against any
and all loss, expense, and damage resulting from the contest. 18.Indemnification of Lessor Lessor shall not be liable for any loss, injury, death, or damage to persons or property that
at any time may be suffered or sustained by Lessee or by any person who may at any time be
using or occupying or visiting the Premises or be in, on, or about the Premises, whether the loss,
injury, death, or damage shall be caused by or in any way result from or arise out of any act,
omission, or negligence of Lessee or of any occupant, subtenant, visitor, or user of any portion of
the Premises, or shall result from or be caused by any other matter or thing whether of the same
kind as, or of a different kind than, the matters or things above set forth. Lessee shall indemnify
Lessor against any and all claims, liability, loss, or damage whatever on account of any such
loss, injury, death, or damage. Lessee waives all claims against Lessor for damages to the
building and improvements that are now on or later placed or built on the Premises and to the
property of Lessee in, on, or about the Premises, and for injuries to persons or property in or
about the Premises, from any cause arising at any time. The two preceding sentences shall not
apply to loss, injury, death, or damage arising by reason of the negligence or misconduct of
Lessor, its agents, or employees. 19.Attorney’s Fees If any action at law or in equity shall be brought to recover any rent under this Lease
Agreement, or for or on account of any breach of, or to enforce or interpret any of the covenants,
terms, or conditions of this Lease Agreement, or for the recovery of the possession of the
Premises, the prevailing party shall be entitled to recover from the other party, as part of the
prevailing party's costs, reasonable attorney's fees, the amount of which shall be fixed by the
court and shall be made a part of any judgment or decree rendered.
20.Option to Renew Lessor grants to Lessee, subject to the conditions set forth below, the right and option to
renew this Lease Agreement for a period of ____ (number) years, beginning on _______ (date
of commencement of first renewal term), and expiring on _______ (date of expiration of first
renewal term), at a rental determined as provided above, and otherwise subject to and on all of
the terms and conditions contained in this Lease Agreement. This option must be exercised by
the giving to Lessor, on or before _______ (date), a written notice of the exercise of the option
by Lessee, but Lessee shall, in no event, be entitled to renew the term of this Lease Agreement,
even though the notice be timely given, unless Lessee shall have timely performed all of its
obligations under this Lease Agreement, and shall not be in default in the performance of any
such obligations, on the date of the expiration of the initial term of this Lease Agreement. 21.Sidewalk Space Lessor does not lease to Lessee any space under, in, or on any street or sidewalk adjacent
to the Premises but does license Lessee, subject to all the terms and provisions of this Lease
Agreement, and at Lessee's sole risk, the right to the use of any space under, in, or on any
adjacent street or sidewalk as Lessor itself may have. Lessee shall vacate the space if Lessor is
ordered to vacate it by any public authority; the vacation of the space by Lessee shall not entitle
Lessee to any reduction of rental due under this Lease Agreement. Lessee shall indemnify Lessor
against all claims of _________ (name of city), or _________ (name of county) County, or any
public authority, for compensation or damages for the use or occupation of or intrusion on any
adjacent sidewalk or street by Lessee or by any employee, agent, invitee, or anyone acting under
instruction or authority of Lessee. The rights of Lessee under this Lease Agreement shall be
subject to such present and future ordinances or regulations or laws as may be made by
___________ (name of city), or _________ (name of county) County, or any other public
authority having jurisdiction. 22. Redelivery of Premises Lessee shall pay the rent and all other sums required to be paid by Lessee under this
Lease Agreement in the amounts, at the times, and in the manner provided in this Lease
Agreement, and shall keep and perform all the terms and conditions on its part to be kept and
performed. At the expiration or earlier termination of this Lease Agreement, Lessee shall
peaceably and quietly quit and surrender to Lessor the Premises in good order and condition
subject to the other provisions of this Lease Agreement. In the event of the nonperformance by
Lessee of any of the covenants of Lessee undertaken in this Lease Agreement, this Lease
Agreement may be terminated as provided elsewhere in this instrument. 23. Remedies Cumulative All remedies conferred on Lessor in this Lease Agreement shall be deemed cumulative
and no one exclusive of the other, or of any other remedy conferred by law. 24.Insurance A. Insurance coverage of Premises. Lessee shall, at all times during the term of this Lease Agreement and at Lessee's sole
expense, keep all improvements that are now or later a part of the Premises insured against loss
or damage by fire and the extended coverage hazards for $____________________ of the full
replacement value of the improvements, with loss payable to Lessor and Lessee as their interests
may appear. Any loss adjustment shall require the written consent of both Lessor and Lessee. B. Personal injury liability insurance. Lessee shall maintain in effect throughout the term of this Lease Agreement personal
injury liability insurance covering the Premises and its appurtenances and the sidewalks fronting
on them in the amount of $____________________ for injury to or death of any one person, and
$____________________ for injury to or death of any number of persons in one occurrence, and
property damage liability insurance in the amount of $____________________and insurance on
all boilers and other pressure vessels, fired or unfired, in the sum of $____________________ .
Such insurance shall specifically insure lessee against all liability assumed by it under this Lease
Agreement, as well as liability imposed by law, and shall insure both Lessor and Lessee but shall
be so endorsed as to create the same liability on the part of the insurer as though separate policies
had been written for Lessor and Lessee.C. Lessor's right to pay premiums on behalf of Lessee. All of the policies of insurance referred to in this section shall be written in a form
satisfactory to Lessor and by insurance companies satisfactory to Lessor. Lessee shall pay all of
the premiums for insurance and deliver policies, or certificates of policies, to Lessor. In the event
of the failure of Lessee, either to effect insurance in the names called for in this Lease Agreement
or to pay the premiums for the insurance or to deliver the policies, or certificates of the policies,
to Lessor, Lessor shall be entitled, but shall have no obligation, to effect such insurance and pay
the premiums for the insurance, which premiums shall be repayable to Lessor with the next
installment of rental. Failure to repay the same shall carry with it the same consequence as
failure to pay any installment of rental. Each insurer mentioned in this section shall agree, by
endorsement on the policy or policies issued by it, or by independent instrument furnished to
Lessor, that it will give to Lessor _______ (number) days' written notice before the policy or
policies in question shall be altered or canceled. Lessor agrees that it will not unreasonably
withhold its approval as to the form or to the insurance companies selected by Lessee.D. Definition of full replacement value. The term full replacement value of improvements, as used in this Lease Agreement, shall
mean the actual replacement cost of the improvements from time to time less exclusions
provided in the normal fire insurance policy. If either party believes that the full replacement
value (that is to say, the then replacement cost less exclusions) has increased or decreased, it
shall have the right, but, except as provided below, only at intervals of not less than _______
(number) years, to have such full replacement value redetermined by the fire insurance company
which is then carrying the largest amount of fire insurance carried on the Premises (referred to as
impartial appraiser). The party desiring to have the full replacement value so redetermined by
the impartial appraiser shall promptly, on submission of the determination to the impartial
appraiser, give written notice of the submission to the other party to this Lease Agreement. The
determination of the impartial appraiser shall be final and binding on the parties to this Lease
Agreement, and Lessee shall promptly increase (or may decrease) the amount of the insurance
carried pursuant to this section as the case may be to the amount so determined by the impartial
appraiser. The determination shall be binding for a period of ______ (number) years, and
subsequently until superseded by agreement between the parties to this Lease Agreement or by a
subsequent redetermination by an impartial appraiser. Each party shall pay one-half of the fee, if any, of the impartial appraiser. If during any such ______ (number)-year period, Lessee shall
have made improvements to the Premises, Lessor may have such full replacement value
redetermined at any time after the improvements are made, regardless of when the full
replacement value was last determined. E. Adjustment of coverage. If either party shall at any time deem the limits of the personal injury or property damage
public liability insurance then carried to be either excessive or insufficient, the parties shall
endeavor to agree on the proper and reasonable limits for insurance then to be carried. Insurance
shall then be carried with the limits thus agreed on until further change pursuant to the provisions
of this section; but, if the parties shall be unable to agree on the limits, the proper and reasonable
limits for insurance then to be carried shall be determined by an arbitrator selected by the parties
in accordance with Section 40 below. F. Blanket insurance policies. In spite of anything to the contrary contained in this section, Lessee's obligations to carry
the insurance provided for in this section may be brought within the coverage of a so-called
blanket policy or policies of insurance carried and maintained by Lessee. However, the coverage
afforded Lessor shall not be reduced or diminished or otherwise be different from that which
would have existed under a separate policy meeting all other requirements of this Lease
Agreement by reason of the use of the blanket policy of insurance. The requirements of
Paragraph E of this section must also be otherwise satisfied.G. Cost of insurance deemed additional rental. The cost of insurance required to be carried by Lessee in this section shall be deemed to
be additional rental under this Lease Agreement. 25.Prohibition of Involuntary Assignment; Effect of Involuntary Assignment; Effect of
Bankruptcy or Insolvency
A. Prohibition of involuntary assignment. Neither this Lease Agreement nor the leasehold estate of Lessee nor any interest of
Lessee under this Lease Agreement in the Premises or in the building or improvements on the
Premises shall be subject to involuntary assignment, transfer, or sale, or to assignment, transfer,
or sale by operation of law in any manner whatever (except through statutory merger or
consolidation, or devise, or intestate succession); any attempt at involuntary assignment, transfer,
or sale shall be void and of no effect.B. Effect of bankruptcy. Without limiting the generality of the provisions of the preceding Paragraph A of this
section, Lessee agrees that if any proceedings under the Bankruptcy Act or any amendment to the
act be commenced by or against Lessee, and, if against Lessee, the proceedings shall not be
dismissed before either an adjudication in bankruptcy or the confirmation of a composition,
arrangement, or plan or reorganization, or if Lessee is adjudged insolvent or makes an
assignment for the benefit of its creditors, or if a receiver is appointed in any proceeding or
action to which Lessee is a party, with authority to take possession or control of the Premises or
the business conducted on the Premises by Lessee, and such receiver is not discharged within a
period of (number) days after his or her appointment, any such event or any involuntary
assignment prohibited by the provisions of the preceding Paragraph A of this Section shall be
deemed to constitute a breach of this Lease Agreement by Lessee and shall, at the election of
Lessor, but not otherwise, without notice or entry or other action of Lessor, terminate this Lease
Agreement and also all rights of Lessee under this Lease Agreement and in and to the Premises
and also all rights of any and all persons claiming under Lessee.26.Notice of Default A. Except as to the provisions of Sections 11 and 25 of this Lease Agreement,
Lessee shall not be deemed to be in default under this Lease Agreement in the payment of rent or
the payment of any other moneys as required or in the furnishing of any bond or insurance policy when required in this Lease Agreement unless Lessor shall first give to Lessee ______ (number)
days' written notice of the default and Lessee fails to cure the default within _____ (number)
days.B. Except as to the provisions or events referred to in the preceding Paragraph of this
Section, Lessee shall not be deemed to be in default under this Lease Agreement unless Lessor shall first give to Lessee _____ (number) days' written notice of the default, and Lessee fails to
cure the default within the _______ (number)-day period, or, if the default is of such a nature
that it cannot be cured within _______ (number) days, Lessee fails to commence to cure the
default within the period of _______ (number) days or fails to proceed to the curing of the
default with all possible diligence. 27.Default In the event of any breach of this Lease Agreement by Lessee, Lessor, in addition to the
other rights or remedies it may have, shall have the immediate right of reentry and may remove
all persons and property from the Premises. The property may be removed and stored in a public
warehouse or elsewhere at the cost and for the account of Lessee. Should Lessor elect to reenter,
as provided in this Lease Agreement, or should it take possession pursuant to legal proceedings or pursuant to any notice provided for by law, Lessor may either terminate this Lease Agreement
or it may from time to time, without terminating this Lease Agreement, relet the Premises or any
part of the Premises for such term or terms (which may be for a term extending beyond the term
of this Lease Agreement) and at such rental or rentals and on such other terms and conditions as
Lessor in the sole discretion of Lessor may deem advisable with the right to make alterations and
repairs to the Premises. On each reletting: (a) Lessee shall be immediately liable to pay to lessor,
in addition to any indebtedness other than rent due under this Lease Agreement, the expenses of
reletting and of making such alterations and repairs, incurred by Lessor, and the amount, if any,
by which the rent reserved in this Lease Agreement for the period of reletting (up to but not
beyond the term of this Lease Agreement) exceeds the amount agreed to be paid as rent for the
Premises for the period on reletting; or (b) at the option of Lessor, rents received by the Lessor
from reletting shall be applied, first, to the payment of any indebtedness, other than rent due under this Lease Agreement from Lessee to Lessor; second, to the payment of any expenses of
reletting and of making alterations and repairs; third, to the payment of rent due and unpaid
under this Lease Agreement, and the residue, if any, shall be held by Lessor and applied in
payment of future rent as it may become due and payable under this Lease Agreement. If Lessee
has been credited with any rent to be received by reletting under option (a), above, and the rent
was not promptly paid to Lessor by the new tenant, or if the rentals received from the reletting
under option (b), above, during any month is less than that to be paid during that month by
Lessee under this Lease Agreement, Lessee shall pay any deficiency to Lessor. The deficiency
shall be calculated and paid monthly. No reentry or taking possession of the Premises by Lessor
shall be construed as an election on the part of Lessor to terminate this Lease Agreement unless a
written notice of such intention is given to Lessee or unless the termination of this Lease
Agreement is decreed by a court of competent jurisdiction. In spite of any reletting without
termination, Lessor may, at any subsequent time, elect to terminate this Lease Agreement for
such previous breach. Should Lessor at any time terminate this Lease Agreement for any breach,
in addition to any other remedy it may have, Lessor may recover from Lessee all damages
incurred by reason of the breach, including the cost of recovering the Premises, and including the
worth at the time of termination of the excess, if any, of the amount of rent and charges
equivalent to rent reserved in this Lease Agreement for the remainder of the stated term over the
then reasonable rental value of the Premises for the remainder of the stated term, all of which
amounts shall be immediately due and payable from Lessee to Lessor.28. Lessor’s Right to Perform If Lessee, by failing or neglecting to do or perform any act or thing provided in this Lease
Agreement by it to be done or performed, shall be in default under this Lease Agreement and
such failure shall continue for a period of ______ (number) days after written notice from Lessor
specifying the nature of the act or thing to be done or performed, then Lessor may, but shall not
be required to, do or perform or cause to be done or performed such act or thing (entering on the
Premises for such purposes, if Lessor shall so elect), and Lessor shall not be held liable or in any
way responsible for any loss, inconvenience, annoyance, or damage resulting to Lessee on
account of that election. Lessee shall repay to Lessor on demand the entire expense incurred on account of the election, including compensation to the agents and employees of Lessor. Any act
or thing done by Lessor pursuant to the provisions of this Section shall not be construed as a
waiver of any such default by Lessee, or as a waiver of any covenant, term, or condition
contained in this Lease Agreement, or of any other right or remedy of Lessor, under this Lease
Agreement or otherwise. All amounts payable by Lessee to Lessor under any of the provisions of
this Lease Agreement, if not paid when they become due as in this Lease Agreement provided,
shall bear interest from the date they become due until paid at the rate of ___% per annum,
compounded annually. 29.Lessee’s Right of First Refusal to Purchase Premises If at any time during the term of this Lease Agreement Lessor shall receive from any
third party a bona fide offer to purchase the Premises at a price and on terms acceptable to
Lessor, Lessor shall give written notice of the price and terms to Lessee, and Lessee shall have
_______ (number) days after such notice in which to execute a written agreement with Lessor
for the purchase of the Premises at that price and on those terms. If Lessor shall so notify Lessee
and Lessee shall fail to execute the agreement within the ________ (number) -day period, Lessor
shall then be free to sell the property to the third party making the offer on the same terms and
conditions set forth in the offer. If the property is so sold to that party, then all rights of Lessee
under this Section shall promptly terminate. If the property is not sold to the party making the
offer, then Lessor shall give Lessee the same right to purchase the property on receiving any
subsequent offer from any third party that is acceptable to Lessor; provided, however, that
nothing contained in this Section shall in any way limit the right of Lessor to transfer or convey
the Premises on the dissolution of Lessor or otherwise, for nominal or no consideration, and
Lessee shall have no right to purchase the property in the event of a transfer or conveyance.30.Lessee’s Option to Terminate Lessee shall have the right, by written notice to Lessor given at least _______ (number)
days prior to: (a) the expiration of the first ________ (number)-year period of the term of this
Lease Agreement; or (b) the expiration of any subsequent _______ (number) -year period of the
term of this Lease Agreement, to terminate this Lease Agreement and surrender its leasehold
interest under this Lease Agreement to Lessor, effective on the expiration of the _______
(number)-year or (number) -year period. On the effective date, Lessee shall be relieved from all
further liability under this Lease Agreement and shall deliver possession of the Premises to
Lessor. 31.Effect of Eminent Domain A. Effect of total condemnation. If the entire Premises shall be appropriated or taken under the power of eminent domain
by any public or quasi-public authority, this Lease Agreement shall terminate and expire as of
the date of the taking, and Lessee shall then be released from any liability subsequently accruing
under this Lease Agreement.B. Effect of partial condemnation. If a portion of the Premises shall be so appropriated or taken and the remainder of the
property shall not be suitable for the use then being made of the property by Lessee, or if the
remainder of the property is not one undivided parcel of property, Lessee shall have the right to
terminate this Lease Agreement as of the date of the taking on giving to Lessor written notice of
termination within ______ (number) days after Lessor has notified Lessee in writing that the
property has been so appropriated or taken.C. If there is a partial taking and Lessee does not so terminate this Lease Agreement,
then this Lease Agreement shall continue in full force and effect as to the part not taken, and the
rental to be paid by Lessee during the remainder of the term, subject to adjustment as provided in
the rental adjustment provisions of Section 3 of this Lease Agreement, shall be determined in the
manner provided for in the rental adjustment provisions. Any such determination shall not affect
or change the times at which Lessor may require an adjustment in rent under those provisions;
provided, however, that the words "which in no event shall be less than the rental then being paid
by lessee" appearing in the rental adjustment provisions shall not apply with respect to such
determination, but shall apply with respect to any subsequent adjustment under the rental
adjustment provisions.D. Condemnation award. In the event of the termination of this Lease Agreement by reason of the total or partial
taking of the Premises by eminent domain, then in any such condemnation proceedings, Lessor
and Lessee shall be free to make claim against the condemning or taking authority for the amount
of any damage done to them, respectively, as a result of the condemning or taking. E. In the event of a partial taking of the Premises and this Lease Agreement is not
terminated, then Lessee shall have the right to make claim against the condemning or taking
authority for only the unamortized cost of the improvements placed on the Premises by Lessee
and located on the Premises at the time of the taking or appropriation, which improvements shall
be deemed to amortize in equal annual amounts over the period commencing with the date of
completion of the improvements and ending on _________________ (end date of amortization
period). 32. Surrender of Lease
The voluntary or other surrender of this Lease Agreement by Lessee, or a mutual
cancellation of this Lease Agreement, shall not work a merger, and shall, at the option of Lessor,
terminate all or any existing subleases or subtenancies or may, at the option of Lessor, operate as
an assignment to it of any or all such subleases or subtenancies.
33.Disposition of Improvements on Termination of Lease
On termination of this Lease Agreement for any cause, Lessor shall become the owner of
any building or improvements on the Premises. If the building extends onto other property
owned by the then Lessee under this Lease Agreement, the Lessee shall convey to Lessor, on
termination, an undivided interest as tenant in common in all of the property covered by the
building which bears the same proportion to the whole as the area of the Premises bears to the
total area covered by the building. Lessor shall convey to Lessee an undivided interest as tenant
in common in the Premises that bears the same relation to the whole of the Premises as the area
covered by the building not included in the Premises bears to the whole area covered by the
building.
34.Transfer of Security If any security is given by Lessee to secure the faithful performance of all or any of the
covenants of this Lease Agreement on the part of Lessee, Lessor may transfer or deliver the
security, as such, to the purchaser of the reversion, if the reversion be sold, and then Lessor shall
be discharged from any further liability in reference to the security. 35. Waiver The waiver by lessor of, or the failure of lessor to take action with respect to, any breach
of any term, covenant, or condition contained in this lease agreement shall not be deemed to be a
waiver of such term, covenant, or condition, or subsequent breach of the same, or any other term,
covenant, or condition contained in this lease agreement. The subsequent acceptance of rent
under this lease agreement by lessor shall not be deemed to be a waiver of any preceding breach
by lessee of any term, covenant, or condition of this lease agreement, other than the failure of
lessee to pay the particular rental so accepted, regardless of lessor's knowledge of a preceding
breach at the time of acceptance of rent.
36.Effect of Lessee’s Holding Over Any holding over after the expiration of the term of this Lease Agreement, with the
consent of Lessor, shall be construed to be a tenancy from month-to-month, at the same monthly
rental as required to be paid by Lessee for the period immediately prior to the expiration of the
term of this Lease Agreement, and shall otherwise be on the terms and conditions specified in
this Lease Agreement, so far as applicable.
37.Governing Law
This Lease Agreement shall be governed by, construed, and enforced in accordance with
the laws of the State of ___________. 38.Entire Agreement This Lease Agreement shall constitute the entire agreement between the parties. Any
prior understanding or representation of any kind preceding the date of this Lease Agreement
shall not be binding on either party except to the extent incorporated in this agreement. 39.Modification of Agreement Any modification of this Lease Agreement or additional obligation assumed by either
party in connection with this Lease Agreement shall be binding only if evidenced in a writing
signed by each party or an authorized representative of each party. 40.Additional Documents The parties agree to execute whatever papers and documents may be necessary to
effectuate the terms of this Lease Agreement. 41.Mandatory Arbitration Notwithstanding the foregoing, and anything herein to the contrary notwithstanding,
any dispute under this agreement shall be required to be resolved by binding arbitration of the
parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator
and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said
dispute. The arbitration shall be governed by the rules of the American Arbitration Association
then in force and effect. WITNESS our signatures as of the day and date first above stated. ____________, INC. ______________, INC. By___________________________By___________________________(Name and Office in Corporation)(Name and Office in Corporation)Attach ExhibitsAcknowledgment (form may vary state by state)
