COMMERCIAL LEASE AGREEMENT

(Alabama – For Use With Non-Residential Property)

[// GUIDANCE: This template conforms to Alabama commercial real-estate practice and is intentionally conservative/landlord-protective. Modify bracketed placeholders and optional language to reflect the parties’ negotiations before execution.]

TABLE OF CONTENTS

Article I Basic Lease Data
Article II Definitions
Article III Premises; Lease Term
Article IV Rent and Other Charges
Article V Use; Compliance; Rules
Article VI Maintenance; Alterations
Article VII Insurance; Indemnification; Liability Allocation
Article VIII Assignment and Subletting
Article IX Environmental Matters
Article X Default; Remedies
Article XI Damage, Destruction & Condemnation
Article XII Dispute Resolution
Article XIII Miscellaneous
Execution Page
Exhibit A – Legal Description of Land
Exhibit B – Landlord’s Rules & Regulations
Exhibit C – Form of Estoppel Certificate
Exhibit D – Guaranty (if applicable)

ARTICLE I

BASIC LEASE DATA

1.1 Landlord: [LANDLORD LEGAL NAME], a [STATE & ENTITY TYPE]
1.2 Tenant: [TENANT LEGAL NAME], a [STATE & ENTITY TYPE]
1.3 Premises: Approximately [SQUARE FEET] rentable square feet within the Building located at [STREET ADDRESS, CITY, AL ZIP]; see Exhibit A.
1.4 Building: [NAME OR ADDRESS OF BUILDING OR PROJECT]
1.5 Lease Term:
(a) Commencement Date: [COMMENCEMENT DATE]
(b) Expiration Date: 11:59 p.m. on [EXPIRATION DATE]
1.6 Base Rent:
(a) Rate: $[AMOUNT] per rentable square foot per annum, payable in equal monthly installments of $[AMOUNT].
(b) Escalations: [INSERT ESCALATION FORMULA OR “None.”]
1.7 Security Deposit: $[AMOUNT]
1.8 Permitted Use: [DESCRIBE PERMITTED COMMERCIAL USE]
1.9 Tenant’s Pro Rata Share of Operating Expenses/Taxes: [PERCENTAGE %]
1.10 Guarantor(s): [IF ANY – NAME(S); OTHERWISE “None.”]
1.11 Option Rights: [RENEWAL / EXPANSION / FIRST REFUSAL – IF ANY]
1.12 Notices:
To Landlord: [ADDRESS / EMAIL / ATTENTION]
To Tenant: [ADDRESS / EMAIL / ATTENTION]
1.13 Governing Law: State of Alabama
1.14 Forum: State courts sitting in [COUNTY, AL] (subject to Section 12.1)

[The foregoing constitutes a summary; each item is subject to the detailed provisions that follow.]

ARTICLE II

DEFINITIONS

The following capitalized terms shall have the meanings set forth below and shall apply equally to singular and plural forms. Cross-references are provided for convenience only.

“Additional Rent” – Any and all amounts due under this Lease other than Base Rent, including Operating Expenses (see §4.3) and late charges (§4.6).
“Affiliate” – With respect to a party, any entity controlling, controlled by, or under common control with such party.
“Building Systems” – The structural, mechanical, electrical, plumbing, HVAC, life-safety, and other operating systems serving the Building.
“Business Day” – Any day other than Saturday, Sunday, or a legally recognized Alabama state holiday.
“Environmental Laws” – All federal, state, and local statutes, regulations, ordinances, and common-law duties relating to pollution or protection of the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §9601 et seq.) and the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.).
“Event of Default” – Any default described in §10.1.
“Hazardous Materials” – Any substance regulated by Environmental Laws, including petroleum and petroleum products.
“Land” – The parcel more particularly described on Exhibit A.
“Lease Year” – Each 12-month period commencing on the Commencement Date (or anniversary thereof).
“Operating Expenses” – As defined in §4.3.
“Permitted Liens” – Mechanics’ or materialmen’s liens bonded or discharged in accordance with §6.4.
“Premises” – As set forth in §1.3.
“Project” – The Land, Building, and all improvements, common areas, and appurtenances.
“Rent” – Collectively, Base Rent and Additional Rent.
“Tenant Parties” – Tenant, its employees, agents, contractors, invitees, licensees, subtenants, and anyone claiming by or through Tenant.

[// GUIDANCE: Add additional defined terms as needed for specialized transactions.]

ARTICLE III

PREMISES; LEASE TERM

3.1 Demise. Landlord hereby leases the Premises to Tenant, and Tenant hereby leases same from Landlord, upon the terms and conditions herein.

3.2 Measurement; Acceptance. The rentable square footage set forth in §1.3 shall be conclusive. Tenant accepts the Premises “AS IS, WHERE IS,” without representations or warranties, except as expressly set forth in this Lease.

3.3 Possession; Early Access. Landlord shall tender possession on the Commencement Date. [OPTIONAL EARLY ACCESS CLAUSE.]

3.4 Lease Term; Holding Over. Upon expiration or earlier termination, any holdover shall be deemed a tenancy at sufferance at 150% of the Rent then in effect, plus all other terms hereof. Nothing shall be construed as Landlord’s consent to holdover.

ARTICLE IV

RENT AND OTHER CHARGES

4.1 Payment of Base Rent. Tenant shall pay Landlord the monthly installment of Base Rent in advance, without demand, offset, or deduction, on the first Business Day of each month.

4.2 Prorations. If the Commencement Date falls other than on the first day of a calendar month, or the Expiration Date other than on the last, Rent shall be prorated on a per-diem basis.

4.3 Operating Expenses & Taxes.
(a) Definition. “Operating Expenses” means all costs of owning, operating, managing, repairing, replacing, and maintaining the Project, including but not limited to ad valorem real estate taxes, insurance premiums, utilities for common areas, maintenance contracts, and reasonable management fees (not to exceed [___] %).
(b) Payment. Tenant shall pay Tenant’s Pro Rata Share of Operating Expenses as Additional Rent, monthly in advance based on Landlord’s estimate, with annual reconciliation within 120 days after each Lease Year.

4.4 Late Charges; Interest. Any Rent not received within five (5) Business Days after due shall bear interest at the lesser of 12% per annum or the maximum lawful rate, and Tenant shall pay a late charge equal to 5% of the delinquent amount to compensate Landlord for administrative costs.

4.5 Net Lease. This Lease is absolutely net to Landlord, and except as otherwise stated herein, Tenant shall bear all costs and obligations relating to the Premises.

4.6 Security Deposit. Tenant shall deliver the Security Deposit upon execution. Landlord may apply it to cure any Tenant default, without prejudice to other remedies, and shall return any unapplied balance (without interest) within 60 days after Tenant vacates in accordance with this Lease.

ARTICLE V

USE; COMPLIANCE; RULES

5.1 Permitted Use. Tenant shall use the Premises solely for the Permitted Use stated in §1.8 and for no other purpose without Landlord’s prior written consent.

5.2 Legal Compliance. Tenant, at its sole cost, shall comply with all federal, state (including the commercial eviction and landlord-tenant statutes of Alabama), and local laws, ordinances, regulations, and orders applicable to the Premises and Tenant’s use thereof, including Environmental Laws and the Americans with Disabilities Act (to the extent arising from Tenant’s specific use or Alterations).

5.3 Prohibited Activities. Tenant shall not:
(a) Generate excessive noise, odors, or vibrations;
(b) Permit any use that would invalidate insurance or increase premiums (unless Tenant pays such increase);
(c) Commit waste or create a nuisance; or
(d) Use the Premises for any residential, agricultural, or illegal purpose.

5.4 Rules & Regulations. Tenant and Tenant Parties shall comply with Landlord’s Rules & Regulations, attached as Exhibit B and any reasonable amendments delivered to Tenant.

ARTICLE VI

MAINTENANCE; ALTERATIONS

6.1 Landlord’s Obligations. Landlord shall maintain the Building’s structure and Building Systems in good working order, except to the extent damage is caused by Tenant Parties in violation of §6.3.

6.2 Tenant’s Obligations. Tenant shall, at its sole cost, keep the Premises (including all interior, non-structural elements and trade fixtures) in first-class condition, ordinary wear and tear excepted.

6.3 Damage Caused by Tenant. Tenant shall promptly repair (or, at Landlord’s option, reimburse Landlord for repairing) any damage to the Project caused by Tenant Parties.

6.4 Alterations.
(a) Consent. Tenant shall not make any alterations, additions, or improvements (“Alterations”) without Landlord’s prior written consent, which shall not be unreasonably withheld as to non-structural Alterations.
(b) Conditions. All Alterations shall be performed: (i) in a good and workmanlike manner, (ii) in compliance with all laws, and (iii) free of liens. Tenant shall furnish Landlord with plans, permits, and proof of insurance before commencement.
(c) Removal. Upon Lease expiration or earlier termination, Landlord may require Tenant to remove any Alterations and restore the Premises to their original condition, reasonable wear and tear excepted.

6.5 Liens. Tenant shall keep the Premises free of mechanics’ and materialmen’s liens. If any lien attaches, Tenant shall bond or discharge it within ten (10) days.

ARTICLE VII

INSURANCE; INDEMNIFICATION; LIABILITY ALLOCATION

7.1 Tenant’s Insurance. Throughout the Term, Tenant shall maintain, at its sole cost:
(a) Commercial General Liability insurance with limits of not less than $1,000,000 per occurrence and $2,000,000 aggregate, naming Landlord and its mortgagee(s) as additional insureds;
(b) All-Risk property insurance covering Tenant’s personal property and trade fixtures, replacement cost basis;
(c) Workers’ compensation per statutory limits; and
(d) [OTHER COVERAGES AS APPLICABLE].

Policies shall be issued by carriers rated A-VII or better by A.M. Best, be primary and non-contributory, and waive subrogation against Landlord.

7.2 Landlord’s Insurance. Landlord shall maintain property insurance on the Building (replacement cost) and liability insurance customary for comparable properties.

7.3 Indemnification. Tenant shall indemnify, defend, and hold harmless Landlord, its Affiliates, and their respective officers, directors, employees, and agents (“Landlord Indemnitees”) from and against any and all claims, damages, liabilities, losses, costs, and expenses (including reasonable attorneys’ fees) arising from or related to:
(a) Tenant’s use or occupancy of the Premises or Project;
(b) Any act or omission of Tenant Parties;
(c) Any breach of Tenant’s representations, warranties, or covenants; and
(d) The presence, release, or transportation of Hazardous Materials introduced by Tenant Parties.
This indemnity shall survive expiration or earlier termination of the Lease.

7.4 Limitation of Liability. [PLACEHOLDER – INSERT NEGOTIATED CAP OR “No monetary cap; Landlord’s liability shall in no event exceed its interest in the Project.”]

7.5 Waiver of Subrogation. Each party waives, and shall cause its insurers to waive, all rights of subrogation against the other party to the extent losses are covered (or required to be covered) by insurance carried under this Lease.

ARTICLE VIII

ASSIGNMENT AND SUBLETTING

8.1 Restriction. Tenant shall not, voluntarily or by operation of law, assign, transfer, mortgage, pledge, or otherwise encumber this Lease, or sublet all or any part of the Premises (collectively “Transfer”), without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed, subject to §8.2.

8.2 Conditions to Consent. Landlord’s consent may be conditioned upon:
(a) Delivery of executed Transfer documents in form reasonably satisfactory to Landlord;
(b) The proposed transferee’s creditworthiness, use, and reputation;
(c) Receipt of an assumption agreement whereby the transferee agrees to be bound by all Lease terms; and
(d) Payment of Landlord’s reasonable legal and administrative fees (not to exceed $[AMOUNT]) incurred in connection with the Transfer.

8.3 Excess Rent. Tenant shall pay Landlord fifty percent (50%) of any consideration received from a Transfer that exceeds, in the aggregate, Tenant’s Rent and reasonable transaction costs.

8.4 Permitted Transfers. Notwithstanding §8.1, Tenant may, without Landlord’s consent (but with prior written notice), assign this Lease to (i) an Affiliate controlling, controlled by, or under common control with Tenant, or (ii) a successor to Tenant by merger, consolidation, or sale of substantially all assets, provided the transferee has a tangible net worth at least equal to that of Tenant on the Commencement Date and assumes this Lease in writing.

8.5 No Release. No Transfer shall release or relieve Tenant from any obligation under this Lease unless Landlord expressly agrees in writing.

[// GUIDANCE: Alabama law imposes no statutory prohibition on commercial assignment; this section contractually governs.]

ARTICLE IX

ENVIRONMENTAL MATTERS

9.1 Tenant’s Covenants. Tenant shall not cause or allow the generation, storage, use, or disposal of Hazardous Materials in or about the Premises, except for minimal quantities customary for the Permitted Use and in compliance with all Environmental Laws.

9.2 Notification and Remediation. Tenant shall promptly notify Landlord of any actual or threatened release of Hazardous Materials. Tenant shall, at its sole cost, perform any investigation, cleanup, or remediation necessary to return the Premises to the condition existing prior to such release, in each case to Landlord’s reasonable satisfaction and in compliance with Environmental Laws.

9.3 Environmental Indemnity. In addition to §7.3, Tenant shall indemnify Landlord Indemnitees from claims, costs, or liabilities (including diminution in Project value, study and remediation expenses, and attorneys’ fees) arising from Tenant Parties’ breach of this Article.

9.4 Access for Environmental Inspections. Landlord may, upon reasonable prior notice (except in emergencies), enter the Premises to conduct environmental inspections or testing.

ARTICLE X

DEFAULT; REMEDIES

10.1 Events of Default. The occurrence of any of the following shall constitute a default by Tenant:
(a) Failure to pay any Rent within five (5) Business Days after written notice that such amount is past due;
(b) Violation of §8 (Assignment/Subletting) or §9 (Environmental) after written notice;
(c) Failure to perform any other covenant within thirty (30) days after written notice, provided such period shall be extended up to ninety (90) days if cure cannot reasonably be completed within thirty (30) days and Tenant commences and diligently pursues cure;
(d) Insolvency, bankruptcy, or appointment of a receiver for Tenant’s assets;
(e) Abandonment or vacatur of the Premises for more than fifteen (15) consecutive days.

10.2 Landlord’s Remedies. Upon an Event of Default, Landlord may, in addition to all other rights and remedies at law or in equity (which are cumulative and not exclusive):
(a) Terminate this Lease by written notice and recover possession in accordance with the commercial eviction procedures set forth in Title 6, Chapter 6, and Title 35 of the Code of Alabama;
(b) Continue the Lease in effect and sue for all Rent and damages as they accrue;
(c) Re-enter the Premises peaceably or pursuant to court order and remove Tenant;
(d) Accelerate the Rent for the balance of the Term, discounted to present value at 6% per annum;
(e) Seek injunctive or other equitable relief, including but not limited to immediate eviction; and/or
(f) Recover all reasonable attorneys’ fees and costs incurred in enforcing this Lease.

10.3 Landlord’s Duty to Mitigate. Landlord shall use commercially reasonable efforts to mitigate its damages following Tenant’s default, consistent with Alabama law.

10.4 Waiver of Certain Damages. Except as expressly provided in §10.2(d), neither party shall be liable for punitive or consequential damages (including lost profits) arising out of this Lease, except to the extent caused by that party’s willful misconduct or matters covered by indemnities.

ARTICLE XI

DAMAGE, DESTRUCTION & CONDEMNATION

11.1 Casualty. If the Premises are damaged by fire or other casualty:
(a) If repair can reasonably be completed within 270 days, Landlord shall promptly restore and Rent shall be equitably abated for the portion rendered unusable.
(b) If repair cannot reasonably be completed within 270 days, or if more than 40% of the Building is damaged, either party may terminate the Lease on thirty (30) days’ written notice.

11.2 Condemnation. If all or a substantial part (defined as at least 25% of the rentable area) of the Premises is taken by eminent domain, this Lease shall terminate as of the date of possession by the condemning authority; otherwise, Rent shall be equitably abated for the portion taken, and the Lease shall continue. All awards shall belong to Landlord, except Tenant may pursue a separate claim for relocation costs and loss of personal property, provided such claim does not diminish Landlord’s award.

ARTICLE XII

DISPUTE RESOLUTION

12.1 Governing Law; Forum. This Lease shall be governed by the laws of the State of Alabama, without regard to conflict-of-law rules. Subject to §12.2 [and §12.3], any action arising out of or related to this Lease shall be brought exclusively in the state courts located in [COUNTY], Alabama, and each party irrevocably submits to such jurisdiction.

[OPTION A – Arbitration (Include if the parties elect arbitration)]
12.2 Optional Arbitration. Any dispute not resolved within thirty (30) days after written notice may, upon mutual written agreement, be submitted to binding arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules. The arbitration shall be conducted in [CITY], Alabama before a single arbitrator who is a licensed attorney with at least ten (10) years’ experience in commercial real estate law. Judgment upon the award may be entered in any court having jurisdiction.

[OPTION B – Jury Waiver (Include if elected)]
12.3 Jury Trial Waiver. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT WITH RESPECT TO THIS LEASE.

12.4 Injunctive Relief for Eviction. Notwithstanding §12.2, Landlord may seek immediate injunctive or other equitable relief (including eviction or unlawful detainer) in any court of competent jurisdiction.

ARTICLE XIII

MISCELLANEOUS

13.1 Estoppel Certificates. Within ten (10) Business Days after Landlord’s written request, Tenant shall execute and deliver an estoppel certificate in the form attached as Exhibit C (or any other customary form).

13.2 Subordination; Attornment. This Lease is and shall be subordinate to any mortgage or deed of trust now or hereafter encumbering the Project, provided the holder thereof delivers a commercially reasonable subordination, non-disturbance, and attornment agreement (“SNDA”). Tenant shall attorn to any foreclosure purchaser.

13.3 Quiet Enjoyment. So long as Tenant timely performs its obligations, Tenant shall peaceably and quietly enjoy the Premises without interference from Landlord or any person lawfully claiming through Landlord.

13.4 Notices. All notices shall be in writing and deemed given: (a) upon personal delivery, (b) on the first Business Day after deposit with a nationally recognized overnight courier, or (c) three (3) days after mailing by certified U.S. mail, return receipt requested, to the addresses set forth in §1.12 (or as changed by notice).

13.5 Force Majeure. Neither party shall be liable for delays due to acts of God, war, terrorism, civil commotion, pandemics, governmental action, or other causes beyond its reasonable control, except Tenant’s obligation to pay Rent and maintain insurance.

13.6 Amendments; Waivers. No amendment or waiver shall be binding unless in writing and signed by the party against whom enforcement is sought. Waiver of any breach shall not be deemed a waiver of any subsequent breach.

13.7 Successors and Assigns. This Lease shall bind and inure to the benefit of the parties and their respective successors and permitted assigns.

13.8 Severability. If any provision is held invalid or unenforceable, the remainder shall remain in full force, and the invalid provision shall be reformed to the extent necessary to give effect to the parties’ intent.

13.9 Merger Clause. This Lease (including all Exhibits) constitutes the entire agreement of the parties and supersedes all prior or contemporaneous oral or written agreements regarding the Premises.

13.10 Counterparts; Electronic Signatures. This Lease may be executed in counterparts, each of which is deemed an original, and all of which constitute one instrument. Signatures transmitted electronically (.pdf, DocuSign, or similar) shall be deemed originals.

13.11 Time of Essence. Time is of the essence with respect to every provision of this Lease in which a time for performance is specified.

13.12 Interpretation. Headings are for convenience only and shall not affect interpretation. “Including” means “including without limitation.” The parties were each represented by counsel (or had opportunity to be) and this Lease shall not be construed against either party as drafter.

EXECUTION PAGE

IN WITNESS WHEREOF, the parties hereto have executed this Commercial Lease Agreement as of the Effective Date first written below.

[Corporate acknowledgement / notary block if required by Alabama recording statutes.]

EXHIBIT A

LEGAL DESCRIPTION OF LAND
[INSERT METES AND BOUNDS OR PLAT DESCRIPTION]

EXHIBIT B

RULES & REGULATIONS
1. Deliveries shall be scheduled to minimize disruption.
2. No trash or refuse shall be left in common areas.
3. Smoking is prohibited within 25 feet of building entrances.
[Add project-specific rules.]

EXHIBIT C

FORM OF ESTOPPEL CERTIFICATE
[One-page estoppel addressing key Lease facts.]

EXHIBIT D

GUARANTY
[Include if §1.10 lists a Guarantor.]

[// GUIDANCE: Prior to execution, confirm that the insurance requirements, limitation of liability, and dispute resolution options align with the parties’ negotiated risk allocation, and that all blank placeholders are completed accurately. Consider recording a memorandum of lease if the Term exceeds five (5) years.]