LEASE OF COMMERCIAL BUILDING NET, NET, NET
________________________________________________________________________________________
Effective Date: County &
State where property is located:
________________________________________________________________________________________
LESSOR (Name, Address & Zip) LESSEE (Name, Address &
Zip)
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ATTORNEY FOR LESSOR: ATTORNEY FOR LESSEE:
________________________________________________________________________________________
Leased Premises address or location:
________________________________________________________________________________________
Leased Premises legal description:
________________________________________________________________________________________
Alterations to be made by Lessor: (A detailed account of improvements, construction, repairs or other
alterations to be made by Lessor.)
[ ] Name of entity to make alterations:
___________________________________________________________
[ ] Plans or Specifications are attached
________________________________________________________________________________________
Alterations to be made by Lessee: (A detailed account of improvements, construction, repairs or other
alterations to be made by Lessee.)
[ ] Name of entity to make alterations:
___________________________________________________________
[ ] Plans or Specifications are attached
____________________________________________________________________________________
____
Personal Property included with the lease: (List all moveable property or property to be moved in and
attached as fixtures for Lessee.)
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____________________________________________________________________________________
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SECTION I
SPECIFIC PROVISIONS
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1. Consideration.
For valuable consideration Lessor leases to Lessee the leased premises, with improvements and personal property
described above according to the terms herein set forth, a copy of which the Lessee acknowledged receipt.
2. Term of Lease.
This lease shall be effective for the term of _______________, [ ]months [ ] weeks [ ] days [ ] years. Beginning on
__________________ and ending on ______________________.
3. Rent for Standard Lease.
Rent shall be due on the _____ day of each month. Beginning with the month of ___________________. Lessee
shall prepay the first and last months rent in advance. The total monthly amount for rent is calculated as follows:
[ ] Base monthly rent $ ______________________________; Plus
[ ] Percentage of rent of 5% of gross receipts, to the extent that the percentage rent exceeds base rent amount; Plus
[ ] Increases in the base rent amount are calculated on: [ ] Retail cost of living increase [ ] Increase in cost of fire
insurance
[ ] Increase in real estate taxes or other taxes charged by the Lessor as a result of the ownership of the building;
Plus
[ ] Sales or Transaction tax charged by any governmental entity on the rental transaction; Plus
[ ] Security deposit of $ _____________________________; Plus
[ ] Late payment penalty of _______% of each rent payment when the payment is made more than 10 days after it
is due.
4. Base Rent.
The Base Rent, as prescribed in paragraph three may be increased by percentage rent, cost of living increases,
increase in the cost of fire insurance paid by Lessor, increases in taxes paid by Lessor, taxes on the transaction of the rental,
and common area maintenance charges, if any. The base rent for the term shall be the monthly base rent multiplied by the
number of months in the term of this lease.
5. Percentage of Rent.
If paragraph three prescribes percentage rent, then this provision shall be applicable. Lessee shall pay additional
rent based upon whatever amount the percentage rent, as hereafter defined, exceeds the base rent.
Within 30 days after the end of each lease year, Lessee shall furnish to Lessor a statement in writing, certified by
Lessee to be correct, showing the total gross sales during the preceding lease year and shall accompany such statement with
a payment to Lessor equal to the designated percentage of such gross sales, less the base rent for such lease year, if
previously paid, and copies of the monthly state sales tax returns.
Lease Year as used herein shall mean each successive period of 12 calendar months commencing on the first day
of the term; provided that if the term shall commence on a day other than June 30 th
next succeeding, and each succeeding
lease year shall be a fiscal year. If the lease terms shall end on a day other than June 30 th
, the final lease year shall
commence on July 1 st
next preceding the date of the termination and shall end on such date of termination.
The term Gross Sales as used in this lease shall mean the total amount of dollars of sales and services of every kind
made upon the leased premises deducting therefrom the amount Lessee is obligated to pay for any lease year or any portion
of a lease year on account of all retail sales taxes.
Lessee shall keep full, complete and proper books, records and accounts of its daily gross sales, both for cash and
on credit, of each separate department and concession at any time operated in the leased premises. Lessee and its agents
and employees shall have the right during the regular business hours to examine and inspect all the books and records of
Lessee relating to gross sales, including any sales tax reports, tax returns, or other reports to any governmental agency, for
the purpose of investigating and verifying the accuracy of any statement of gross sales. Lessor may once in any lease year
cause an audit of the business of Lessee to be made by a certified public accountant of Lessors’s selection, and if the
statement of gross sales previously made to Lessor by Lessee shall be found to be more than ten percent less than the
amount of Lessee’s gross sales shown by such audit, then the cost of such audit shall be born by Lessee; otherwise it shall
be born by Lessor.
6. Cost of Living Escalation.
If paragraph three provides for increases in base rent because of cost of living increases, then this paragraph shall
be applicable. Since the base rent is predicated upon the retail cost of living index remaining constant, then, should this
lease be for more than one year, and should the Statistical Abstract of the United States, as published by the United States
Government, evidence that on the January next following the first year of this lease the retail cost of living index has
increased, then the amount of each rent payment shall be increased in that same percentage, beginning with the first
payment due following the date that Lessor serves written notice to Lessee of this increase, with a copy or citation of the
governmental reference reflecting and verifying the increase. Any increase in base rent from cost of living increases shall
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be retroactive to the date that the cost of living increase first became effective according to the government publication.
7. Cost of Fire and Casualty Insurance.
Because this is a triple net lease, Lessor shall have no duty to pay, process or otherwise deal with fire and casualty
insurance. Lessee shall provide fire and casualty insurance as provided in paragraph 15 (Provisions of Fire and Casualty
Insurance). Lessor may pay the same on Lessee’s behalf, and Lessee shall reimburse Lessor for the same or Lessor may
reimburse itself therefor out of the rental payable hereunder by Lessee. Lessee shall save and hold Lessor harmless on
account of any of these premiums. Lessee shall pay Lessor maximum legal interest on any monies that Lessor may advance
on behalf of Lessee until these monies are repaid.
8. Costs of Taxes and Assessments.
Because this is a triple net lease, Lessee shall be responsible for all taxes and assessments levied against the real
property, improvements thereon and personal property contained therein and all other taxes and assessments which may
relate to the real property improvements or personal property contained therein and all increases related to all of these.
Lessor may pay the same on the Lessee’s behalf, and Lessee shall reimburse Lessor for the same or Lessor may reimburse
itself therefore out of the rental payable hereunder by Lessee. Lessee shall hold harmless the Lessor on account of any of
these taxes and assessments. Lessee shall pay Lessor maximum legal interest on any monies that Lessors may advance on
behalf of Lessee until these monies are repaid.
If at any time during this lease the method or scope of taxation used at the commencement of this lease is changed
so as to cause the method of taxation to be changed in whole or in part, so that in substitution for the real-estate taxes now
assessed there may be in whole or in part a capitol levy or other imposition based on the value of the leased premises, or the
rents received therefrom, or some other form of assessment based in whole or in part on some other valuation of the
Lessor’s real property comprising the demised premises, then and in such event, substituted tax or imposition shall be
payable and discharged by the Lessee in the manner required pursuant to such la promulgated which shall authorize such
change in the scope of the taxation, and as required by the terms and conditions within the lease.
Nothing in this lease contained shall require the Lessee to pay any franchise, estate, inheritance, succession, capital
levy or transfer tax of the Lessor, or Federal Income Tax , State Income Tax, or excess profits or revenue tax, unless such
taxes are in substitution for real property taxes as a result of such change in the manner and scope of taxation.
9. Tax Protests by Lessee.
If the Lessee wishes to contest any assessment or levy of taxes on the leased premises, the Lessor covenants and
agrees that it will lend its name and execute all necessary papers to aid the Lessee in contesting or litigating said
assessment, provided, however, that said litigation or contest shall be at the cost and expense of the Lessee. Any resultant
reduction or rebate of taxes, paid or to be paid by the Lessee, shall belong to the Lessee.
10. Sales and Transaction Tax.
If paragraph three provides that Lessee shall pay sales or transaction taxes, then this paragraph is applicable.
Lessee shall pay with each rent payment the amount of any sales or transaction tax on the rental transaction. If any sales or
similar tax shall be levied or assessed by the United State of America, any state, county, city, town, district or agency or
instrumentality thereof, upon or against Lessor by reason of the execution of this lease, or upon the rentals thereby reserved,
then and in such event, Lessee shall forthwith, upon demand by Lessor, reimburse Lessor for the amount of any such taxes
or assessments paid by Lessor.
11. Security Deposit.
To insure the Lessee’s prompt and full payment of the rent, and the faithful and timely performance of all
provisions of this lease, and any extension or renewal thereof, Lessee shall pay a security deposit as set forth in paragraph 3
above. This deposit shall be provided by the purchase of an interest bearing Certificate of Depositor its equivalent or by
placing the fund in an interest bearing savings account in the joint name of the Lessor and Lessee as provided in Section 4
paragraph 2. If any default shall be made on the performance of any of the covenants on the part of Lessee herein
contained with respect to any item or items of the leased premises, Lessor shall be entitled to that portion of the fund as it is
required to cover the default. Any such releasing of money from the fund for this purpose shall not be a defense to any
action by Lessor arising out of said default; and, upon demand, Lessee shall restore the fund to the full amount set forth in
this provision. Upon the expiration or earlier termination of this lease, or any extension or renewal thereof, provided that
the Lessee has paid all the rent herein called for and fully preformed all of the other provisions of this lease on its part to be
preformed, Lessor will release to Lessee any remaining balance in the fund. The party who is eventually entitled to the
fund in whole or in part shall also be entitled to all the interest accrued or his pro rata share of the interest accrued.
12. Place of Paying Rent.
Lessee shall pay rent to the address of the Lessors as designated on page one of this lease, or to any newer address
of which Lessor gives written notice to Lessee.
13. Lessee pays all expenses.
This lease shall in all respects be treated as a triple net lease with all costs and expenses paid for by Lessee,
including, but not limited to, real and personal property taxes; fire, casualty, theft, and liability insurance; trash removal;
water, gas, electricity and other utilities; repairs and maintenance and all improvements.
14. Maximum Legal Interest.
If any monies are owed under the terms of this lease, all of the provisions of the lease notwithstanding, the parties
that the party owing sums to the other as a result of performances under the lease, shall incur as a penalty of the maximum
legal rate of interest that is in effect at the actual time of the charge. Interest thus imposed shall also be charged on any
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costs, legal fees, or any other obligations arising out of this lease. If the laws of the state which govern this lease have no
maximum legal interest rate, the rate shall be ____________%.
15. Provisions of Fire and Casualty Insurance Policies.
Lessee shall continually keep in force, during the term of this lease and during any extension or renewal thereof,
fire and extended coverage insurance in the amount of no less than 80% of the full insurable value of the leased premises.
Lessee shall provide fire insurance protection on Lessee’s stock in trade, furniture, fixtures and other property within the
leased premises, in an amount equal to the full insurable value thereof, and promise that any insurance coverage in this
regard shall contain a waiver of the insurer ’ s right of subornation against Lessor.
16. Waiver of Subornation on Casualty Insurance.
Lessor hereby releases Lessee, to the extent of its insurance coverage, from any and all liability of any loss or
damage caused by fire or any of the extended coverage casualties, notwithstanding such fire or other casualty shall be due
to the fault or negligence of Lessee or its agents, provided, however, this release shall be in full force and effect only with
respect to loss or damage occurring during such time as Lessor’s policies of fire and extended coverage insurance shall
contain a clause to the effect that this release shall not effect such policies or the right of Lessor to recover thereunder.
Lessee agrees that such insurance policies shall include such clause as long as the same is include able without extra costs.
Lessee shall promptly deliver to the Lessor, the original(s), or true and correct copies of any and all such policies of
insurance.
Lessee shall not carry any stock of goods or do or omit to do any act in or about the leased premises which will in any way
impair or invalidate the obligation of any policy of insurance on or in reference to the leased premises.
The parties shall use good faith efforts to have any and all fire, extended coverage, or any and all material damage
insurance which may be carried endorsed with the following subornation clause:
This insurance shall not be invalid should the insured waive in writing, prior to a loss, any and all right of the
coverage against any party for a loss occurring to the property described herein.
Lessor and Lessee mutually agree that any right of subornation afforded to the insurance carriers of their respective
property insurance policies of relative to real or personal property situated in or on the leased premises is waived; and the
parties undertake to give their respective insurance carriers notice of this waiver.
17. Liability Insurance.
Lessee shall, at its own cost and expense, during the term of this lease, procure and maintain in force policies of
liability insurance, with Lessor as an additional assured thereunder, insuring Lessee to the amount of
$___________________ against any loss or damage, or any claim thereof, resulting from injury or death of any one person,
and to the amount of $ __________________ against any loss or damage, or any claim thereof, resulting from the injury to
or death of any number of persons from any one accident, as a result of or by reason of the ownership by Lessee of the
leased premises, parking lot and adjacent areas owned by Lessor, and the use and occupancy thereof by Lessee; and to
procure and maintain in full force and effect, during the term herein specified, a policy or policies of insurance, with Lessor
as additional assured thereunder, in an amount not less than $___________________, insuring Lessor against any loss or
damage or any claim thereof resulting from the damage to or destruction of any property belonging to any person or persons
whomsoever, as a result or by reason of the ownership of Lessor of the leased premises, parking lot, or adjacent areas
owned by Lessor, and the use and occupancy thereof by Lessee.
Lessee shall promptly deliver to Lessor the original or originals, or a true and exact copy, of any and all such policy or
policies of insurance.
All policies shall contain a written obligation of the insurer to notify Lessor in writing at lease 10 days prior to any
cancellation thereof.
18. Non-Liability of Lessor.
Lessor shall not be liable for any damage occasioned by failure to keep the premises in repair, and shall not be
liable for any damage done or occasioned by or from plumbing, gas, water, steam, or other pipes, tanks, washstand or
wastepipe, in, above, upon or about the premises, nor for damage occasioned by water, snow, or ice being upon or coming
through the roof, skylight, trap-door, or otherwise, or of any owners or occupants of adjacent or contiguous property.
19. Indemnification.
Lessor shall not be responsible or liable for any loss, theft, or damage to property or injury to or death of Lessee or
any person on or about the leased premises, and Lessee agrees to indemnify and hold Lessor harmless therefrom unless it
was caused or resulted from the negligent or willful acts of Lessor. Lessee shall hold Lessor harmless during the term of
this lease, during any extension or renewal thereof, from and against any and all claims, suits, actions, demands and
judgments arising out of an event or events occurring after the commencement of the primary term hereof when the
proximate cause of injury to person or damage to property was not the negligence of Lessor or the negligence of an agent or
employee of Lessor or of Lessor’s successor. Lessee agrees not to make any claim against Lessor, and it will hold Lessor
harmless therefrom, for any loss or damage to any personal property belonging to Lessee or any of its guests, customers, or
occupants, or for any injuries to Lessee or any of its guests, customers, or occupants unless such loss or damage was caused
or resulted from the negligent or willful conduct of Lessor.
20. Renewal.
Lessee shall have the right to renew for an additional _________ years term upon ________ days written notice to
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Lessor upon: [ ] Same Terms [ ] Different Terms as follows:
21. Purchase Option.
Lessee shall have the right to purchase the leased premises upon the giving of ________ days written notice for the
total purchase price of $ _______________________, all in accordance with a real property purchase contract, receipt and
escrow instructions which are attached hereto.
22. Use by Lessee.
The premises shall be used for a reasonable office, warehousing, commercial or industrial use which is specifically
described as:
23. Tax on Property of Lessor.
Lessee shall pay before delinquent all taxes and assessments levied and assessed upon or against the leased
premises during the term of this lease.
24. Tax on Property of Lessee.
Lessee shall pay or cause to be paid, before delinquency, throughout the primary term of this lease and any
renewals or extensions thereof, all taxes on any and all personal property owned by Lessee and situated upon the leased
premises. If the Lessee fails to pay the taxes levied on or against its property as aforesaid when due and payable, Lessor
may pay the same on Lessee’s behalf, and Lessee shall reimburse Lessor for the same forthwith or Lessor may reimburse
itself therefore out of rental payable hereunder by Lessee, or Lessor may reimburse itself from the security deposit. Lessee
shall save and hold Lessor harmless on account of any of these taxes. Lessee shall pay the Lessor the maximum legal
interest rate per annum on any monies that Lessor may advance on behalf of Lessee until these monies are repaid.
25. Initial Construction and Repairs.
Lessor shall cause the leased premises to be completed or repaired in accordance with any plans, specifications and
agreements provided for on page one of this lease. Lessor will not be obligated to construct or install at its expense any
improvements or facilities of any kind other than those called for on page one of this lease. Lessor agrees to commence and
complete the construction of the building or improvements with reasonable diligence. Should no plans, specifications or
agreements for repair or construction be prescribed on page one of this lease, then Lessee has agreed to accept the leased
premises as they are at the time that this lease is executed. Any construction or repairs will comply with applicable
building codes.
26. Additional Space.
Lessor agrees that, in the event that Lessee desires to lease additional space from Lessor during the term of this
lease, and provided that lease shall not be in default under the provisions of this lease, and provided that Lessor shall have
space available, Lessor shall provide additional space upon the following terms and conditions:
a. Space will be provided in other buildings belonging to Lessor, if any, that may be hereafter described;
b. The terms of the lease for the additional space shall be negotiated between Lessor and Lessee at the time the
space is provided;
c. Lessee shall deliver written notice in writing to Lessor of the needed for additional space not less than 180 days
before the space is provided to the Lessor.
27. Reasonable Rules and Regulations.
In the interest of uniformity, to conform to such reasonable and non-discriminatory rules and regulations in the use of the
leased premises as may be established from time to time by Lessor for the general use of the premises, Lessee agrees to
abide by all rules and regulations of the building imposed by the Lessor.
The regulations are imposed for the cleanliness, good appearance, proper maintenance, good order and reasonable use of
the premises and the building.
The rules and regulations may be changed from time to time on reasonable notice to Lessee. Breach of building rules and
regulations shall not be termination of the lease unless Lessee continues to breach them after ten days written notice by
Lessor, and then in the event such rules and regulations have been made for the above-stated purpose.
28. Common Areas and parking.
The term Common Area means the entire area designated for common use or benefit within the outer property
limits of the building area, including but not limited to, parking lots, landscaped and vacant areas, passages for trucks and
other vehicles, areaways, roads, walks, curbs, garden court and arcades, together with public stairs, ramps, shelters, porches,
bus stations and loading docks, with facilities appurtenant to each, if any such areas exist or may later exist on the real
property of Lessor, but excluding any area which the Lessor may have designated as a restricted area.
Subject to reasonable rules and regulations to be promulgated by Lessor, the public portions of the common area
are hereby made accessible to the Lessee and its employees, agents, customers, and invitees for reasonable use in common
with Lessor for the purposes for which constructed.
Lessor hereby grants to Lessee and Lessee’s agents, employees and invitees the right during the term hereof, to
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use, in common with others entitled to the use thereof, such truckways, service corridors, service elevators and loading
docks subject to such reasonable regulations as Lessor shall make from time to time.
Lessee further agrees to receive and deliver goods and merchandise and to remove all garbage and refuse only by
way of the truckways and loading docks designated by Lessor for Lessee’s use.
Lessor from time to time temporarily close portions of the common areas, erect private boundary marks or take
further appropriate action to prevent the acquisition of public rights and such action shall not be deemed an eviction or
disturbance of Lessee’s use of the leased premises.
Lessee shall have, and is hereby granted, such possession and control over all portions of the entire common area,
whether at the front or rear of the leased premises, as will authorize Lessee to exclude therefrom all persons who are not
customers or patrons of the Lessee of the building area, who are or who may be creating a nuisance or disturbance thereon,
and in particular as will authorize Lessee to maintain an action in trespass against such persons who are not patrons or
customers and who are or who may be picketing thereon.
Subject to reasonable rules and regulations of the Lessor, Lessee and its employees, agents, customers and invitees
shall have the use of parking areas specifically designated by Lessor for that purpose. Lessee agrees that upon written
notice from Lessor, it will, within five days, furnish to Lessor the automobile license numbers assigned to Lessee’s vehicles
and the vehicles of all of its agents and employees.
Lessee agrees that it shall not at any time park or permit the parking of its trucks or vehicles of others in truck
passages or adjacent loading docks so as to interfere in any way with the use thereof.
Lessee, in common with Lessor and the patrons and customers of Lessee and Lessor shall have the right to use for
parking purposes the parking areas adjacent to the building(s) located on the real property hereinbefore described. Nothing
herein contained shall be construed in such manner as to imply that any portion of that parking area is hereby leased to that
Lessee.
29. Construction and Repairs.
Lessor shall not be responsible for construction or repairs during this lease except as otherwise provided on page
one of this lease.
30. Maintenance of Heater, Cooler, Drinking Water and Locks.
Lessee shall, at its own expense, be responsible for the installation, care, maintenance and replacement of all
refrigerated air conditioning, coolers, and heating equipment and parts thereof saving the leased premises whether or not
such equipment is located on the leased premises and whether such equipment was installed by Lessee or Lessor.
Lessee shall be responsible for locks and maintenance of locks and doors.
SECTION II
GENERAL PROVISIONS FOR COMMERCIAL LEASES
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1. Quiet Possession.
Lessor agrees that Lessee, upon paying the rentals and on performing all terms of this lease, shall peaceably have
the leased premises during the term of this lease. Lessee agrees that in the event of the inability of Lessor to deliver to
Lessee possession of the leased premises within 60 days of the commencement of the term as above specified, Lessor shall
not be liable for any damage caused thereby, nor shall this lease be void, but the term hereof shall be extended for a period
of equal to the delay in such delivery, but Lessee shall not be liable for rent until such time as Lessor offers to deliver
possession of the leased premises to the Lessee. By occupying the leased premises as a tenant, or installing fixtures,
facilities, or equipment or performing finished work, Lessee shall be deemed to have accepted the same and to have
acknowledged that the premises are in the condition required by this lease. In the event of any dispute, the certificate of
Lessor’s architect or contractor shall be conclusive that the leased premises are in the condition required by this lease and
are ready for occupancy.
2. Use of Premises.
Lessee has examined and knows the condition of the leased premises, and has received the same in good order and
repair, and agrees:
1. To use these premises for reasonable office, warehousing, commercial or industrial uses which do not materially
damage the leased premises.
2. To surrender possession of these leased premises at the expiration of this lease without further notice to quit, in as good
condition as reasonable use will permit.
3. To keep the premises in good condition and repair at Lessee’s own expense and not to commit or permit any waste or
nuisance.
4. Not to use the leased premises for living quarters or residence.
5. Not to make any unlawful, immoral or improper use of the leased premises, or any occupancy thereof
contrary to law or contrary to any directions, rules, regulations, regulatory bodies, or officials having
jurisdiction thereof or which shall be injurious to any person or property.
3. Damages to Interior or Structure
Lessee shall pay (a) for any expense, damage or repair occasioned by the stopping of waste pipes or overflow from
bathtubs, closets, washbasins, basins or sinks, and (b) for any damage to window panes, window shades, curtain
rods, wallpaper, furnishings, or any other damage to the interior of the leased premises.
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4. Repairs, Maintenance and Alterations by Lessee.
The Lessee has promised that the leased premises shall at all times be kept in good order, condition and repair
by Lessee, at its own expense and in accordance with all laws, directions, rules and regulations of regulatory bodies
or officials having jurisdiction.
If Lessee refuses or neglects to commence repairs within 10 days after receipt of written demand from Lessor, or
adequately to complete such repairs without liability to Lessor for any loss or damages that may accrue to Lessee’s stock or
business by reason thereof, and if Lessor shall make such repairs, Lessee shall pay to Lessor, on demand, as additional rent,
the costs thereof with interest at the maximum legal rate from the date of commencement of those repairs.
Lessee shall make no changes, improvements, alterations, or additions to the leased premises unless such changes,
improvements, alterations, or additions: (a) are first approved in writing by Lessor; (b) are not in violation of restrictions
placed thereon by the investor financing the construction of the building; and (c) will not materially alter the character of
such premises and will not substantially lessen the value thereof. Lessor may not unreasonably withhold approval, and if
there is a dispute as to reasonableness, it shall be determined by arbitration.
If structural alterations become necessary because of the application to the business carried on by Lessee of any law,
ordinance, rule or regulation of any regulatory body, or because of any act or default on the part of Lessee, or because
Lessee has overloaded any electrical or other facility, Lessee shall make such structural alterations at its own cost and
expense, after first obtaining Lessor’s written approval of plans and specifications and furnishing such indemnification
against liens, costs, damages and expenses as Lessor may reasonably require.
Lessee may place partitions and fixtures (including light fixtures) and make improvements and other alterations in
the interior of the leased premises at its own expense. These improvements or alterations installed or made by Lessee, other
than those of a structural nature, shall remain the property or the Lessee provided, however, that prior to commencing any
such work Lessee shall first obtain the written consent of Lessor to the proposed work.
Lessor may require that such work be done by Lessor’s own employees or under Lessor’s direction but at the expense
of the Lessee, and Lessor may, as a condition to consenting to such work, require that Lessee give security that the premises
will be completed, free and clear of liens and in a matter satisfactory to Lessor, and that the premises will be repaired by
Lessee or restored by Lessee to its former condition at the termination of the lease at Lessee’s sole cost and expense.
5. Mechanics and Other Liens Imposed by Lessee
Lessee shall keep the leased premises and the improvements thereon at all times during the term hereof free of
mechanics and materialmen’s liens and other liens of like nature, other than liens created and claimed by reason of any
work done by or at the instance of Lessor, and at all times shall fully protect and indemnify Lessor against all such liens or
claims and against all attorneys’ fees and other costs and expenses growing out of or incurred by reason or on account of
any such liens or claims. Should Lessee fail to fully discharge any such lien or claim, Lessor, at its option, may pay the
same or any part thereof, and Lessor shall be the sole judge of the validity of such lien or claim.
All amounts so paid by Lessor, together with interest thereon at the maximum legal rate from the time of payment by
Lessor until repayment by Lessee, shall be paid by Lessee upon demand, and if not so paid, shall continue to bear interest at
the aforesaid rate, interest payable monthly, as additional rent.
6. No Signs without Approval of Lessor.
Any and all signs placed by or for Lessee on the exterior of the leased premises, or on the real property on which the
leased premises are located, shall be so placed and allowed to remain in place only with the approval of Lessor in writing.
Nor shall Lessor, or its successor or the owner of the leased premises, be charged with the costs of installing,
maintaining, changing, or removing such sign or signs. Lessor shall have the right to approve the design, type, size,
lettering and location of every sign to be erected in, upon or about the leased premises.
Any signs placed upon or about such leased premises shall, upon the end of the term of the lease or upon the earlier
termination thereof, be removed by Lessee, and Lessee shall repair any damage to the leased premises which shall be
occasioned thereto by reason of such removal.
7. No Exterior Paint Without Lessor Approval.
Lessee shall not decorate or paint the exterior of the leased premises, or any part thereof, except in the manner, and of a
color, approved by Lessor.
8. Trash Control
Lessee shall provide and maintain sanitary and rat-proof receptacles with covers at or about the leased premises in
which to place any and all refuse or trash, and to place this refuse and trash in receptacles. Lessee shall make Lessee’s own
arrangements and pay for garbage and trash pick-up service on or from the leased premises, and shall not permit the same to
accumulate and remain on the premises except during reasonable intervals between pick-up service.
9. Sidewalk Maintenance
At all times, Lessee shall keep the sidewalks in front of the leased premises clean and in a sightly and sanitary
condition, and not exhibit or display any goods, wares or merchandise thereon.
10. Replacement of Glass
At Lessee’s own cost and expense, Lessee shall replace all glass in, upon or about the leased premises that shall be
broken during the term herein specified unless caused by Lessor, an agent or employee of Lessor, or Lessor’s successor.
11. Right of Re-Entry.
Lessor shall have the right, by itself or agent or with others, to enter the premises at reasonable hours to examine or
exhibit the premises, or to make such repairs and alterations as shall be deemed necessary for the safety and preservation of
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the building, to inspect and examine, to post such notices as Lessor may deem necessary to protect Lessor against loss from
liens of laborers, materialmen or others, and for the purpose of permitting or facilitating Lessor’s performance of its
obligations hereunder, or for any other reasonable purpose which does not materially diminish Lessee’s enjoyment or use of
the leased premises.
Lessee expressly waives any claim for damages, including loss of business, resulting from Lessor’s entry, from the
erecting of scaffolding or other structures to facilitate repairs, or from Lessor’s other reasonable activities for the purpose of
altering, improving, or repairing the leased premises in conformity herewith.
Lessee agrees to permit Lessor, at any time within 60 days prior to the expiration of this lease, to place upon or in the
window of the leased premises any usual or ordinary For Rent or similar sign and to allow prospective tenants, applicants or
agents of Lessor to enter and examine the leased premises during the last 60 days of the term hereof, and to permit Lessor
or Lessor’s agents, at any time during the term hereof, to conduct prospective purchasers through the leased premises during
reasonable business hours.
12. Assignment or Sub-Letting
No assignment, sublease or sale of this lease or any interest therein may be made by Lessee without the written
consent of Lessor having first been obtained thereto, which consent Lessor shall grant unless Lessor has a valid reason,
which can be substantiated. If there is a dispute as to whether Lessor has a valid reason for withholding consent, it shall be
determined by arbitration.
Any attempted assignment, sublease or sale of this lease or any interest therein shall be null and void and have no
effect unless such consent shall have been obtained. Any assignment by operation of law shall be subject to the same
conditions and restrictions as an assignment by Lessee. If such consent is given by Lessor, any and all sub-Lessees shall be
responsible tenants, and Lessee shall not be relieved of any liability hereunder by Lessee’s assignment, vacation or
subletting thereof.
It is agreed that one of the conditions moving Lessor to make this lease is the personal confidence reposed by it in
Lessee, combined with the belief that Lessee will be a tenant and occupant satisfactory to Lessor.
Nothing herein shall prevent the Lessor from assigning its interest under this lease, provided, however, that any
assignee shall be subject to the same obligations and duties as the original Lessor.
13. Right of Lessor to Pay Obligations of Lessee to Others.
If Lessee shall fail or refuse to pay any sums due to be paid by it under the provisions of this lease, or fail or refuse to
maintain the leased premises or any part thereof as herein provided, then, and in such event, Lessor, after 10 days notice in
writing by Lessor to Lessee, shall have the right to pay any such sum or sums due to be paid by Lessee and to do and
perform any work necessary to the proper maintenance of the leased premises; and the amount of such sum or sums paid by
Lessor for the account of Lessee and the cost of any such work, together with interest thereon at the maximum legal rate
from the date of payment thereof by Lessor until the repayment thereof to Lessor by Lessee, shall forthwith be paid by
Lessee upon demand in writing.
The payment by Lessor of any such sum or sums or the performance by Lessor of any such work shall be prima
facie evidence of the necessity therefor.
14. Surrender and Return of Leased Premises
On the last day of the term hereby created or on the sooner termination thereof, Lessee shall peaceably surrender the
leased premises in good order, condition and repair, broom clean-fire and other unavoidable casualty, reasonable wear and
tear only excepted. On or before the last day of the term hereby created or on the sooner termination thereof, Lessee shall,
at its expense, remove its trade fixtures, signs and carpeting from the leased premises and any property not removed shall be
deemed abandoned.. All alternations, additions, improvements and fixtures (other than Lessee’s trade fixtures, signs and
carpeting) which shall have been made or installed by either Lessor or Lessee upon the leased premises and all hard surface
bonded or adhesively affixed flooring shall, without charge, remain upon and be surrendered with the leased premises as a
part thereof, without disturbance, molestation or injury.
If the leased premises be not surrendered on the last day of the term hereby created or on the sooner termination
thereof, Lessee shall indemnify Lessor against loss or liability resulting from delay by Lessee in so surrendering the
premises, including, without limitation, claims made by any succeeding tenant founded on such delay. Lessee shall
promptly surrender all keys for the leased premises, at the place then fixed for payment of rent and shall inform Lessor of
combinations on any locks and safes on the leased premises.
15. Event of Default
Each of the following shall be deemed an Event of Default:
1. Default in the payment of rent or other payments hereunder.
b. If Lessee shall default in the performance or observance of any covenant or condition of this lease by the
Lessee to be performed or observed, or if Lessee shall fail to make reasonable efforts in the light of the surrounding
circumstances to keep substantially all the premises occupied and open for business following the expiration of the period
of 10 days giving notice of such default or defaults or failure to Lessee by Lessor.
c. Abandonment of the premises.
d. The filing or execution or occurrence of:
(1) A petition in bankruptcy by or against Lessee.
(2) A petition or answer seeking a reorganization, arrangement, composition, readjustment,
liquidation, dissolution or other relief of the same or different kind under any provision of the Bankruptcy
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Act.
(3) Adjudication of Lessee as a bankrupt or insolvent: or insolvency in the bankruptcy equity sense.
(4) An assignment for the benefit of creditors whether by trust, mortgage, or otherwise.
(5) A petition or other proceeding by or against Lessee for, or the appointment of, a trustee, receiver,
guardian, conservator or liquidator of Lessee with respect to all or substantially all its property.
(6) A petition or other proceeding by or against Lessee for its dissolution or liquidation, or the taking of
possession of the property of the Lessee by any governmental authority in connection with dissolution or
liquidation.
(7) The taking by any person of the leasehold created hereby or any part thereof upon execution,
attachment, or other process of law or equity.
16. Fair Notice of Default
The parties are desirous of giving one another fair notice of any default before sanctions are imposed. In the event of
an act of default with respect to any provision of this lease, neither party can institute legal action with respect to such
default without first complying with the following conditions:
a. Notice of such event of default must be in writing and mailed to the other party by U.S. Certified Mail, return
receipt requested;
b. Such written notice shall set forth the nature of the alleged default in the performance of the terms of this lease
and shall designate the specific paragraph(s) therein which relate to the alleged act of default;
c. Such notice shall also contain a reasonably understandable description of the action to be taken or performed by
the other party in order to cure the alleged default and the date by which the default must be remedied, which date can be
not less than ten business days from the date of mailing the notice of default.
17. Termination
Upon occurrence of any Event of Default, and after proper notice of default has been given, Lessor may, at its option,
in addition to any other remedy or right given hereunder or by law;
a. Give notice to Lessee that this lease shall terminate upon the date specified in the notice, which date shall not
be earlier than five days after the giving of such notice; or,
b. Immediately after ten days of default, and without further notice or demand, enter upon the leased premises or
any part thereof, in the name of the whole, and upon the date specified in such notice, or any other notice pursuant to law,
or upon such entry, this lease and the term thereof shall terminate.
18. Repossession
Upon termination of this lease as hereinabove provided, or pursuant to statute, or by summary proceedings or
otherwise, the Lessor may enter forthwith, without further demand or notice upon any part of the premises, in the name of
the whole, if he has not theretofore done so, and resume possession wither by summary proceedings, or by action at law or
in equity, or by force or otherwise, as Lessor may determine, without being liable in trespass or for any damages. In no
event shall such re-entry or resumption of possession or reletting as hereafter provided be deemed to be acceptance or
surrender of this lease or a waiver of the rights or remedies of Lessor hereunder.
19. Court Action, Attorneys ? Fees and Costs
If, upon failure of either party to comply with any of the covenants, conditions, rules or regulations of and in this lease,
suit or arbitration should be brought for damages on account thereof, or to enforce the payment of rent herein stipulated, or
to recover possession of the premises or to enforce any provision hereof, the losing party agrees to pay to the prevailing
party reasonable costs and expenses incurred in prosecuting these suits or arbitration, as determined by the court or
arbitrator, including attorneys ? fees and the value of time lost by the prevailing party or any of its employees in preparing
for or participating in any arbitration or litigation in connection therewith. Interest shall accrue on that award at the
maximum legal rate on all monetary amounts awarded for principal, interest, attorney fees, costs and all other amounts,
from the date of that award until paid.
20. Default by Lessor
In the event of any default by Lessor, Lessee, before exercising any rights that it may have at law to cancel this lease,
must first send notice by registered or certified mail to Lessor, and shall have offered Lessor fifteen (15) days in which to
correct and cure the default or commence a good faith effort to cure such default.
21. Reletting after Termination
Upon termination of this lease in any manner above provided, Lessor shall use reasonable efforts to relet the premises.
Lessor shall be deemed to use reasonable efforts if it leases the whole or any part of the premises, separately, or with
other premises, for any period equal to or less than or extending beyond the remainder of the original term, for any sum or
to any Lessee or for any use it deems reasonably satisfactory or appropriate.
22. Damages
Upon termination of this lease in any manner above provided, or by summary proceedings or otherwise, Lessee shall
pay to Lessor forthwith without demand or notice the sum of the following:
a. All rent, additional rent and other payments accrued to the date of such termination and a proportionate part of
the rent otherwise payable payable for the month in which such termination occurs.
b. The costs of making all repairs, alterations and improvements required to be made by Lessor hereunder, and of
performing all covenants of Lessee relating to the condition of the premises during the term and upon expiration or sooner
termination of this lease, such costs to be deemed prima facie to be the costs estimated by a reputable architect or contractor
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selected by Lessor or the amounts actually expended or incurred thereafter by Lessor.
c. The attorneys’ fees and other costs detailed in paragraph 19 (Court Action, Attorneys’ Fees and Costs).
d. An amount equal to liquidation damages or indemnity payments whichever is larger, determined and payable as
set forth below:
(1) Liquidation damages means an amount equal to the excess of the rent, additional rent and other
payments reserved in this lease for the portion of the term remaining after termination of the lease (Hereinafter referred to
as the unexpired term) over the then fair and reasonable rental value of the premises for such period of the term.
(2) Indemnity payments means all the rent, additional rent and other payments reserved under this lease
which would have become due and owing thereunder from time to time during the unexpired term, less, to the extent not
previously deducted or credited, the rent, additional rent and other payments actually collected and allocable to the
premises or to the portions thereof relet by Lessor, and plus, to the extent not previously charged, the costs and expenses,
including but not limited to reasonable attorneys ? and brokers ? fees and expenses, paid or incurred by Lessor in connection
with:
(a) Obtaining possession of the premises.
(b) Removal and storage of Lessee’s or other occupant’s property.
(c) Care, maintenance and repair of the premises while vacant.
(d) Reletting the whole or any part of the premises (which reletting may be for
a period or periods of time less than the unexpired term hereof or extending beyond the term
hereof.)
(e) Repairing, altering, renovating, partitioning, enlarging, remodeling or
otherwise putting the premises, either separately or as part of larger premises, into condition
acceptable to, and reasonably necessary to obtain new tenants.
Such costs and expenses shall be deemed prima facie to be the amounts therefor invoiced to Lessor or actually expended or
incurred therefor by Lessor.
Lessee shall, without prior demand or notice, make indemnity payments monthly on arrears with respect to such portion
thereof as includes rent (as distinguished from additional rent and other payments) and upon the respective dates provided
therefor in the lease with respect to additional rent and other payments. Lessor may sue for all such indemnity payments as
they accrue without waiting until the date fixed in the lease as the expiration date thereof. Any action or proceeding to
recover liquidated damages shall not be a waiver of Lessor’s right to recover indemnity payments and vice versa, but in any
action or proceeding to recover indemnity payments to the extent that they include rent (as distinguished from additional
rent and other payments), brought contemporaneously with or after an action or proceeding to recover liquidated damages
which has not been discontinued, there shall be deducted from the claim for indemnity payments (to the extent not
previously deducted or credited) such portion of the liquidated damages as is in the same proportion to such liquidated
damages as the portion of the unexpired term from which monthly indemnity payments have accrued bears to the
unexpired term.
23. Operating Costs
All operating expenses of Lessee of whatever nature, are the sole obligation of Lessee.
24. Landlord’s Lien
Upon the termination of this lease in any of the manners herein provided, or upon default by Lessee under any
of the provisions hereof, Lessor may enter the leased premises and remove any and all personal property of Lessee and may
retain possession of such personal property until all charges of any kind, including rent, storage or damages, shall be paid in
full.
25. Abandonment
If Lessee shall be in default in the payment of the rental and shall vacate or abandon the premises or any part thereof
(an absence of Lessee therefrom for a period of five days after such default shall be considered such an abandonment
thereof), Lessor may, if it so elects, re-enter the leased premises and remove the contents and take possession of the leased
premises and relet the same or any part thereof, at such rental and upon such terms and conditions as it may deem proper
and apply the proceeds thereof, less the expenses, including the usual agent ’ s commission so incurred, upon the amount due
from Lessor hereunder, and Lessee shall be liable for any deficiency.
If Lessor shall take possession of the premises and relet the same, such reletting shall not operate as a termination of
this lease unless Lessor so elects, such election to be evidenced by written notice to Lessee; nor shall such action by Lessor
operate as a waiver of any rights or remedies or Lessor hereunder.
26. Holdover
If Lessee shall holdover after the expiration of the term hereof, with the consent of Lessor, express or implied, such
tenancy shall be from month to month only, and not a renewal hereof; and Lessee agrees to pay rent and all other charges as
hereinabove provided, and also to comply with all covenants of this lease for the time Lessee holds over. If Lessee shall
hold over without the consent of Lessor, express or implied, then Lessee shall be construed to be a tenant at sufferance at
double the rent herein provided, prorated by the day until possession is returned to Lessor. If Lessee shall hold over with
the consent of Lessor, Lessee shall be entitled to possession until Lessor has given Lessee 30 days notice that such month to
month tenancy shall be terminated; otherwise, notice is only required as hereinafter provided as notice of default.
27. Destruction of Leased Premises
If the leased premises shall, at any time during the term herein specified, be damaged or destroyed by fire or other
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unavoidable casualty to the extent that the leased premises shall be unfit for occupancy and use by Lessee, and to the extent
that the same cannot be rebuilt or restored by Lessor within 120 days thereafter, then and in such event, either Lessor or
Lessee may, at their respective option, terminate this lease by notice in writing to the other of them within ten days after
such damage or destruction; provided, however if the leased premises can be rebuilt or restored within 120 days, Lessor
shall, at its own cost and expense and with due diligence, rebuild and restore the leased premises, and a just and
proportionate part only of the rentals hereby reserved shall be paid by Lessee to Lessor until such work shall have been
completed. During such reconstruction, should the Lessee be forced to lease other premises, such amount paid for the other
premises shall be deducted from the amount owed to Lessor, provided that such deduction shall not exceed the amount
owed Lessor.
If Lessor shall rebuild or restore the leased premises, then and in such event, the full amount of the insurance payable
under policies of fire insurance shall be paid to Lessor for use in the rebuilding and restoration of the leased premises.
28. Removal of Trade Fixtures
Lessee shall have the right, upon the expiration of the term of this lease, or at any time during such term if Lessee shall
not be in default, to remove from the leased premises all fixtures and equipment placed thereon by Lessee, even though
permanently affixed to the leased premises; provided, however, that Lessee, in effecting removal, shall restore the leased
premises to a good, safe, sound, orderly and sightly condition.
29. Eminent Domain
If the leased premises or any part thereof shall be taken by eminent domain, which taking shall render the remainder of
the leased premises unsuitable for occupancy and use by Lessee for the purpose intended by Lessee, then and in such event,
the full current amount payable to the date of taking, or the prorated amount of that month ’ s rent to the date of taking, shall
be paid to Lessor, and this lease shall terminate as of the date of taking.
If only a part of the leased premises shall be taken by eminent domain, and such taking shall not unduly interfere with
the occupancy and use of the leased premises for the purpose intended by Lessee, then and in such event, the full amount
payable for and upon such taking shall be paid to Lessor, and from and after the date of such taking only a just and
proportionate part of the rentals for the leased premises hereby reserved shall be paid by Lessee.
Lessee shall have the right to claim and recover from the condemning authority, but not from Lessor, such
compensation as may be separately awarded or recoverable by Lessee in Lessee’s own right on account of any and all
damage to Lessee’s leasehold interest, to Lessee’s business by reason of the condemnation, and for or on account of any
cost or loss to which Lessee might be put in removing Lessee’s merchandise, furniture, fixtures, leasehold improvements
and equipment.
30. Subordination
If Lessor shall desire at any time, and from time to time to secure a loan or loans upon the security of the real property
and the improvements thereon, including the leased premises, then and in such event, Lessee hereby agrees to make and
enter into a subordination agreement or agreements with any responsible lending agency that Lessor shall designate,
wherein and whereby Lessee’s rights, titles and interests in and to the real property and the improvements are subordinated
to the lien of any mortgage or mortgages to be made, executed and delivered by Lessor as security for that loan or loans;
provided, however, that the subordination shall be upon the following conditions:
a. The execution of the subordination agreement or agreements by Lessor shall impose no personal liability
whatsoever upon Lessee.
b. Any such mortgage or mortgages shall provide that the mortgagee shall agree to give to Lessee all notices
required to be given to Lessor as mortgagor under the terms and conditions of those mortgages, or any loan agreement or
agreements, or under the laws of the state where the leased premises are situated.
c. The mortgage or mortgages shall further provide that in the event of any default on the part of Lessor under the
terms and conditions thereof or the obligation secured, Lessee may, at its own election, cure such default, and any amount
expended by Lessee in so doing shall be paid by Lessor to Lessee, with interest thereon at the maximum legal rate per
annum from the time or times any expenditure or expenditures for such purpose were made, upon demand by Lessee
therefor.
d. Lessor shall indemnify and hold harmless the Lessee of and from any and all liability, cost or expense to which
Lessee may be put by reason of the failure of Lessor to keep and perform any of the covenants and agreements set forth and
contained in such mortgage or mortgages and the obligations thereby secured.
31. Sale by Lessor
In the event of a sale or conveyance by Lessor of all or part of the leased premises, the same shall operate to release
Lessor from any future liability upon any of the covenants or
