Lease of Vacant Property or Lot with Lessee to have
the right to Construct Improvements
Lease Agreement made on the ______ day of ______________, 20______,
between ___________________ (Name of Lessor) , 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
_____________________ (Name of Lessee) , 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 vacant 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, t he 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 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 ___________________ (d ate) , and ending on ___________________
(d ate) . 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. 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) .
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 any 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 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,
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 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 arbitrate the matter pursuant to Section 41 below.
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 non-responsibility.
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. 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.
22. 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.
23. 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 re-determined 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 re-determined 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 re-determined 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 41 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.
24. 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.
25. 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.
26. 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.
27. 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.
28. 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.
29. 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.
30. 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.
1. 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.
2. 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 5 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.
C. 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.
D. 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) .
31. 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 sub-tenancies or may, at the option
of Lessor, operate as an assignment to it of any or all such subleases or sub-tenancies.
32. 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.
33. 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.
34. 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.
35. 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.
36. Governing Law
This Lease Agreement shall be governed by, construed, and enforced in
accordance with the laws of the State of ___________.
37. 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.
38. 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.
39. Additional Documents
The parties agree to execute whatever papers and documents may be necessary
to effectuate the terms of this Lease Agreement.
40. 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.
_____________________ ____________________
(Name of Lessor) (Name of Lessee)
By___________________________ By___________________________
_____________________ _____________________
(Name and Office in Corporation) (Name and Office in Corporation)
Attach Exhibits
Acknowledgment (form may vary state by state)
