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LEASE OF COMMERCIAL BUILDING NET, NET, NET
________________________________________________________________________________________
Effective Date: County & State where property is located:________________________________________________________________________________________
LESSOR (Name, Address & Zip) LESSEE (Name, Address & Zip) ________________________________________________________________________________________
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.) ________________________________________________________________________________________ SECTION I
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SPECIFIC PROVISIONS
________________________________________________________________________________________
1. Consideration. For valuable consideration Lessor leases to Lessee the leased premises, with improveme nts 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. B eginning 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 fi re 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, c ost of living increases, increase in the
cost of fire insurance paid by Lessor, increases in taxes paid by Lessor, taxes on the transac tion 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. Lesse e 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 sta tement 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 lea se 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 c ommencing 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 sale s, both for cash and on credit,
of each separate department and concession at any time operated in the lea sed 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 ye ar 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 sa les 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, the n this paragraph shall be
applicable. Since the base rent is predicated upon the retail cost of living inde x 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 i ndex 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 refe rence reflecting and verifying the increase. Any
increase in base rent from cost of living increases shall 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 ot herwise 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 Le ssor 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 monie s are repaid.
8. Costs of Taxes and Assessments.
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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 a ll of these. Lessor may pay the same on the
Lessee’s behalf, and Lessee shall reimburse Lessor for the same or Lessor may reimburse i tself therefore out of the rental payable
hereunder by Lessee. Lessee shall hold harmless the Lessor on account of any of these taxe s 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 com mencement 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 di scharged by the Lessee in the manner required
pursuant to such la promulgated which shall authorize such change in the scope of the t axation, and as required by the terms and
conditions within the lease.
Nothing in this lease contained shall require the Lessee to pay any franchise, estat e, 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 pa ragraph 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 a gency or instrumentality thereof, upon or against
Lessor by reason of the execution of this lease, or upon the rentals thereby reserved, then and i n 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 timel y performance of all provisions of this
lease, and any extension or renewal thereof, Lessee shall pay a security deposit as se t 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 pa ragraph 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 ful ly preformed all of the other provisions of this lease on
its part to be preformed, Lessor will release to Lessee any remaining balance i n 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 a ccrued.
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 lia bility 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 lea se 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 shal l also be charged on any costs, legal fees, or any other
obligations arising out of this lease. If the laws of the state which govern this lea se 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 ext ension or renewal thereof, fire and
extended coverage insurance in the amount of no less than 80% of the full insurable value of t he leased premises. Lessee shall provide
fire insurance protection on Lessee’s stock in trade, furniture, fixtures and other property withi n the leased premises, in an amount
equal to the full insurable value thereof, and promise that any insurance coverage i n 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 casualt y shall be due to the fault or negligence of
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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 c ontain a clause to the effect that this release shall
not effect such policies or the right of Lessor to recover thereunder. Lessee agrees tha t 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 i nsurance.
Lessee shall not carry any stock of goods or do or omit to do any act in or about the lea sed 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 l oss, 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 c arriers of their respective property insurance
policies of relative to real or personal property situated in or on the leased premise s 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 m aintain 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 am ount 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 t he 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 premi ses 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 wa stepipe, 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 duri ng the term of this lease, during any
extension or renewal thereof, from and against any and all claims, suits, actions, de mands and judgments arising out of an event or
events occurring after the commencement of the primary term hereof when the proximat e cause of injury to person or damage to
property was not the negligence of Lessor or the negligence of an agent or employee of L essor 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 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 writt en 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:
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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 paya ble, Lessor may pay the same on Lessee’s behalf,
and Lessee shall reimburse Lessor for the same forthwith or Lessor may reimburse itself the refore 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 pe r 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 wi th any plans, specifications and
agreements provided for on page one of this lease. Lessor will not be obligated to const ruct or install at its expense any improvements
or facilities of any kind other than those called for on page one of this lease. Le ssor agrees to commence and complete the
construction of the building or improvements with reasonable diligence. Should no plans, specificat ions 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 tha t 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 L essor and Lessee at the time the space is
provided;
c. Lessee shall deliver written notice in writing to Lessor of the needed for addit ional 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 regulat ions 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 orde r and reasonable use of the premises
and the building.
The rules and regulations may be changed from time to time on reasonable notice t o Lessee. Breach of building rules and regulations
shall not be termination of the lease unless Lessee continues to breach them a fter 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 wi thin 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 exi st 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 invite es 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 t he term hereof, to use, in
common with others entitled to the use thereof, such truckways, service corridors, service e levators 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 ga rbage 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 priva te 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 there from 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 disturbanc e 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 tha t upon written notice from Lessor, it will,
within five days, furnish to Lessor the automobile license numbers assigned to Lessee’s vehic les and the vehicles of all of its agents
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and employees.Lessee agrees that it shall not at any time park or permit the parking of it s 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 ha ve 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, maintenanc e and replacement of all refrigerated air
conditioning, coolers, and heating equipment and parts thereof saving the leased premise s 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 le ase, shall peaceably have the leased
premises during the term of this lease. Lessee agrees that in the event of the i nability of Lessor to deliver to Lessee possession of the
leased premises within 60 days of the commencement of the term as above specifie d, 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 possessi on 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 whi ch 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 pipe s 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.
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 writte n demand from Lessor, or adequately to
complete such repairs without liability to Lessor for any loss or damages that may a ccrue to Lessee’s stock or business by reason
thereof, and if Lessor shall make such repairs, Lessee shall pay to Lessor, on demand, as a dditional 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 violati on 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 the re is a dispute as to reasonableness, it
shall be determined by arbitration.
If structural alterations become necessary because of the application to the busine ss 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 Le ssee, or because Lessee has overloaded any
electrical or other facility, Lessee shall make such structural alterations a t its own cost and expense, after first obtaining Lessor’s
written approval of plans and specifications and furnishing such indemnification against lie ns, costs, damages and expenses as Lessor
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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 installe d 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 gi ve security that the premises will be
completed, free and clear of liens and in a matter satisfactory to Lessor, and tha t 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 ti mes during the term hereof free of mechanics and
materialmen’s liens and other liens of like nature, other than liens created a nd claimed by reason of any work done by or at the
instance of Lessor, and at all times shall fully protect and indemnify Lessor aga inst 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 lega l 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 writi ng.
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, siz e, 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 lea se or upon the earlier termination
thereof, be removed by Lessee, and Lessee shall repair any damage to the leased prem ises 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 t hereof, 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. Lesse e 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 a t 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 the building, to
inspect and examine, to post such notices as Lessor may deem necessary to protect Le ssor against loss from liens of laborers,
materialmen or others, and for the purpose of permitting or facilitating Lessor’s performanc e 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 act ivities 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 re ason, 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 sha ll 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
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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 pe rsonal 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, howe ver, 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 thi s 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 L essor for the account of Lessee and the cost
of any such work, together with interest thereon at the maximum legal rate from the da te 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, Lesse e shall peaceably surrender the leased
premises in good order, condition and repair, broom clean-fire and other unavoidable casualty, reasona ble wear and tear only
excepted. On or before the last day of the term hereby created or on the sooner terminat ion 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 surfac e bonded or adhesively affixed flooring shall,
without charge, remain upon and be surrendered with the leased premises as a part thereof, without disturbance, molestat ion 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 thi s lease by the Lessee to be
performed or observed, or if Lessee shall fail to make reasonable efforts in the light of t he surrounding circumstances to keep
substantially all the premises occupied and open for business following the expiration of the pe riod 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, liqui dation, dissolution
or other relief of the same or different kind under any provision of the Bankruptcy 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, rec eiver, 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, a ttachment, 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 lega l 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 perform ance 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 acti on 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, L essor may, at its option, in addition
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to any other remedy or right given hereunder or by law;a. Give notice to Lessee that this lease shall terminate upon the date spec ified 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, ente r 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 procee dings 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 shal l 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 regul ations of and in this lease, suit or
arbitration should be brought for damages on account thereof, or to enforce the payment of rent herei n stipulated, or to recover
possession of the premises or to enforce any provision hereof, the losing party agrees to pay to the pre vailing party reasonable costs
and expenses incurred in prosecuting these suits or arbitration, as determined by the court or a rbitrator, 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 fifte en (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 origina l 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, Le ssee 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 te rmination 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 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, dete rmined 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 rese rved under this lease which
would have become due and owing thereunder from time to time during the unexpired term, le ss, to the extent not previously deducted
or credited, the rent, additional rent and other payments actually collected and a llocable 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 l imited 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 pe riod 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, a nd reasonably necessary to
obtain new tenants.
Such costs and expenses shall be deemed prima facie to be the amounts therefor invoi ced 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
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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 pa yments 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 proc eeding 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 disc ontinued, 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 indem nity 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 aba ndonment 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 appl y 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 Le ssor, express or implied, such tenancy shall
be from month to month only, and not a renewal hereof; and Lessee agrees to pay rent a nd 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 sha ll 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 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 L essor 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 he reby reserved shall be paid by Lessee to Lessor
until such work shall have been completed. During such reconstruction, should the Lessee be force d 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 a mount 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 a ny 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 t aking 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 taki ng shall not unduly interfere with the
occupancy and use of the leased premises for the purpose intended by Lessee, then and in suc h 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 a ll damage to Lessee’s leasehold interest,
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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 here by 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 l oans; 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 agre ement 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 t he part of Lessor under the terms and
conditions thereof or the obligation secured, Lessee may, at its own election, cure suc h 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 liabilit y, 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 agre ements 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 conditions, express or implied, herein containe d in favor of Lessee, and in such event
Lessee agrees to look solely to the responsibility of the successor in interest of Lessor in and to this lease. This lease shall not be
affected by any such sale, and Lessee agrees to attorn to the purchaser or assignee.
32. Applicable Law
This lease shall be subject to and governed by the laws of the state where the lea sed premises are situated, regardless of the fact
that one or more of the parties now is or may become a resident of a different state.
33. Assignment of Personal Property Warranties
Lessor hereby assigns to Lessee any and all rights it has under any manufacturers’ or dealers’ warranties covering the personal
property and fixtures leased herein.
34. If any prorations are required to be made under the terms of this lease, the prorations shal l be made as of the first day of the lease
term.
SECTION III
GENERAL LEASE PROVISIONS
1. Arbitration
At the option of either party, disputes may be settled by arbitration. The manner of arbitration shall be as fol lows:
The parties adopt by reference the provisions of the Uniform Arbitration Act and agree that, should any bona fide disputes arise out
of this agreement or out of the agreed performances of the parties pursuant thereto, the part ies may elect to arbitrate that dispute by the
Lessor and Lessee selecting and agreeing upon a disinterested attorney to serve as arbitrator.
Should one of the
