Commercial Lease Agreement

COMMERCIAL LEASE AGREEMENT

(State of Hawaii — Comprehensive Template)

Use gate. Complete the property, premises, ownership, permitted-use,
occupancy, construction, zoning, access, environmental, insurance, expense,
tax, security, notice, default, possession, recording, and dispute schedules
before signature. Do not use this form for a dwelling, mixed residential use,
ground lease, agricultural tenancy, public property, licensed facility, or
another specially regulated occupancy without tailored terms.

TABLE OF CONTENTS

1. Document Header
2. Definitions

3. Operative Provisions
   3.1 Premises & Term
   3.2 Rent & Additional Charges
   3.3 Security Deposit
   3.4 Use of Premises
   3.5 Condition Precedent

4. Representations & Warranties

5. Covenants & Restrictions
6. Defaults & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

Commercial Lease Agreement (“Agreement”) made and entered into as of [EFFECTIVE DATE] (“Effective Date”) by and between:

(a) [LANDLORD LEGAL NAME], a [STATE OF FORMATION] [ENTITY TYPE] (“Landlord”), having its principal place of business at [ADDRESS]; and

(b) [TENANT LEGAL NAME], a [STATE OF FORMATION] [ENTITY TYPE] (“Tenant”), having its principal place of business at [ADDRESS].

Recitals
A. Landlord is the fee owner of certain real property commonly known as [PROPERTY NAME/ADDRESS] (the “Property”).
B. Tenant desires to lease a portion of the Property, and Landlord desires to lease the same to Tenant, all upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below. Defined terms appear in alphabetical order and, unless otherwise indicated, shall be interpreted consistently throughout this Agreement.

“Additional Rent” – Any amounts payable by Tenant other than Base Rent, including but not limited to Operating Expenses, Taxes, and Late Fees.

“Base Rent” – The monthly rental amount set forth in Section 3.2(a).

“Business Days” – Any day other than Saturday, Sunday, or a date excluded in the notice-and-deadline schedule.

“Commencement Date” – The date on which the Term begins, as determined under Section 3.1(c).

“Environmental Requirements” – The current requirements, permits, reports, orders, restrictions, and allocation instructions identified by environmental counsel or consultants in Exhibit E.

“Event of Default” – Any of the occurrences enumerated in Section 6.1.

“Hazardous Materials” – The materials, wastes, products, equipment, and conditions identified in Exhibit E for the Property, Premises, and Permitted Use.

“Operating Expenses” – All costs, expenses, and disbursements incurred by Landlord in connection with the operation, maintenance, repair, and replacement of the Property, as more fully described in Section 3.2(d).

“Premises” – The portion of the Property depicted on Exhibit A and legally described on Exhibit B.

“Rent” – Collectively, Base Rent and Additional Rent.

“Term” – The entire duration of the leasehold estate created hereunder, as set forth in Section 3.1.

3. OPERATIVE PROVISIONS

3.1 Premises & Term

(a) Lease Grant. Landlord hereby leases the Premises to Tenant, and Tenant hereby accepts the Premises from Landlord, for the Term and upon the conditions stated herein.

(b) Initial Term. The Term shall be [NUMBER] ([##]) years, commencing on the Commencement Date and expiring at 11:59 p.m. local time on the last day of the Term, unless earlier terminated pursuant to this Agreement.

(c) Commencement Date. The Commencement Date shall be the earlier of (i) the date Tenant first takes possession of the Premises for the conduct of business, or (ii) [DATE CERTAIN]. Upon determination of the Commencement Date, the Parties shall execute a Commencement Memorandum in the form attached as Exhibit C.

(d) Renewal Options. Tenant shall have [NUMBER] renewal option(s) of [TERM LENGTH] each, exercisable by written notice to Landlord not fewer than [##] days prior to the expiration of the then-current Term. All terms and conditions shall remain unchanged during any renewal term, except Base Rent, which shall adjust in accordance with Section 3.2(b).

3.2 Rent & Additional Charges

(a) Base Rent. Tenant shall pay to Landlord Base Rent of $[AMOUNT] per month, payable in advance on or before the first (1st) Business Day of each calendar month.

(b) Base Rent Adjustments. Beginning on the first anniversary of the Commencement Date, and on each anniversary thereafter, Base Rent shall increase by [PERCENTAGE] %.

(c) Late Charges & Interest — Select After Counsel Review. ☐ No late charge or interest. ☐ Late charge of [____] after [____] days. ☐ Simple interest on undisputed overdue amounts at [____]% per year, not exceeding an applicable limit. ☐ Other: [________________________________].

(d) Additional Rent — Operating Expenses & Taxes. Tenant shall pay its Pro Rata Share of all Operating Expenses and Taxes in accordance with Exhibit D. Payments shall be made monthly with Base Rent, based on Landlord’s good-faith estimate, subject to annual reconciliation.

3.3 Security Deposit

On or before the Commencement Date, Tenant shall deliver a security deposit of $[AMOUNT]. Exhibit F shall state custody, commingling or segregation, permitted applications, replenishment, accounting, transfer, interest treatment, return conditions, itemization, deadline, delivery method, and any letter-of-credit alternative. The Parties select a contractual return deadline of [____] days after [define the triggering events: ______________________________].

3.4 Use of Premises

(a) Permitted Use. Tenant shall use the Premises solely for [DESCRIBE PERMITTED USE] and for no other purpose without Landlord’s prior written consent.

(b) Prohibited Uses. Tenant shall not conduct an activity outside the approved use, occupancy, insurance, permit, environmental, access, loading, hours, signage, storage, or other limits in Exhibit E.

(c) Compliance Matrix. Exhibit E shall allocate responsibility for each current use, occupancy, accessibility, safety, fire, environmental, licensing, privacy, employment, signage, building, and other requirement identified for the completed transaction. A generic “comply with all laws” clause does not allocate structural work, preexisting conditions, capital work, or changes in law.

3.5 Conditions Precedent

The obligations of Landlord to deliver, and Tenant to accept, the Premises are conditioned upon (a) Tenant’s delivery of the Security Deposit, (b) proof of insurance required under Section 7.2, and (c) execution of any estoppel certificates or other documents reasonably required by Landlord’s lender.

4. REPRESENTATIONS & WARRANTIES

4.1 Mutual Representations. Each Party represents and warrants that:
(a) It is duly formed, validly existing, and in good standing under the laws of its state of formation;
(b) It has full power and authority to enter into and perform this Agreement;
(c) The individuals executing this Agreement on its behalf have been duly authorized; and
(d) The execution and performance of this Agreement do not violate any charter documents, agreement, or court order binding on the Party.

4.2 Landlord’s Additional Representations. Landlord further represents that, as of the Effective Date:
(a) Landlord holds the estate or leasing authority described in Schedule 4.2(a), subject to the disclosed title exceptions, lender rights, declarations, easements, and superior agreements;
(b) Landlord has delivered the environmental, condition, permit, violation, and other reports listed in Exhibit E, without making an unstated compliance conclusion;
(c) No uncured notice of violation relating to the Premises or Property has been received from any governmental authority.

4.3 Tenant’s Additional Representations. Tenant further represents that:
(a) Tenant intends to occupy the Premises for the Permitted Use and no other;
(b) Tenant is not the subject of any bankruptcy or insolvency proceeding; and
(c) All financial information provided to Landlord is true, correct, and complete in all material respects.

4.4 Survival. All representations and warranties shall survive the execution of this Agreement and, where context so requires, the expiration or earlier termination of the Term.

5. COVENANTS & RESTRICTIONS

5.1 Tenant Covenants (Affirmative). Tenant shall:
(a) Pay Rent when due;
(b) Maintain the Premises in good order and repair, reasonable wear and tear excepted;
(c) Keep the Premises clean, orderly, and free of trash and debris;
(d) Promptly provide Landlord with copies of any governmental notices relating to the Premises; and
(e) Upon request, execute subordination, non-disturbance, and attornment agreements (“SNDAs”) reasonably required by Landlord’s lender.

5.2 Tenant Covenants (Negative). Tenant shall not:
(a) Bring, use, store, release, transport, or dispose of a Hazardous Material except as expressly listed and allocated in Exhibit E;
(b) Commit or allow any waste, nuisance, or unlawful act;
(c) Place exterior signage without Landlord’s prior written approval; or
(d) Assign this Agreement or sublet any portion of the Premises except in strict accordance with Section 5.4.

5.3 Landlord Covenants. Landlord shall:
(a) Maintain the structural elements, roof, and exterior walls of the Premises;
(b) Provide and maintain common areas in a clean and safe condition;
(c) Maintain property insurance consistent with Section 7.2; and
(d) Not unreasonably interfere with Tenant’s quiet enjoyment, provided Tenant is not in Default.

5.4 Assignment & Subletting.
(a) Consent Requirement. Tenant shall not assign, transfer, mortgage, or otherwise encumber this Agreement, nor sublet all or any portion of the Premises, without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed.
(b) Conditions of Consent. Landlord may condition its consent upon, among other things, (i) receipt of financial statements demonstrating the proposed assignee/subtenant’s creditworthiness, (ii) execution of a commercially-reasonable assignment or sublease agreement, (iii) payment of a review fee not to exceed [AMOUNT], and (iv) Landlord’s written assumption by the assignee of Tenant’s obligations.
(c) Profit-Sharing. [OPTIONAL] Landlord shall be entitled to [PERCENTAGE]% of any net profit realized by Tenant from an assignment or sublease.
(d) No Release. No assignment or sublease shall release or discharge Tenant from any liability or obligation under this Agreement unless expressly agreed in writing by Landlord.

6. DEFAULTS & REMEDIES

6.1 Events of Default

The occurrence of any of the following shall constitute an “Event of Default”:
(a) Monetary Default. Failure to pay any Rent within five (5) Business Days after written notice;
(b) Non-Monetary Default. Failure to perform any non-monetary obligation within thirty (30) days after written notice, or such longer period as is reasonably necessary provided Tenant commences cure within said thirty (30) days and diligently prosecutes completion;
(c) Abandonment. Abandonment or vacation of the Premises for more than ten (10) consecutive days without notice to Landlord;
(d) Insolvency Event. An insolvency-related event identified by counsel in Exhibit G, only to the extent the selected consequence is enforceable in the actual proceeding;
(e) Fraud or Misrepresentation. Any material misrepresentation by Tenant in connection with this Agreement.

6.2 Landlord Remedies

Exhibit G shall identify each default, required notice, cure or termination date, service method, waiver rule, monetary remedy, possession route, mitigation or reletting treatment, property-handling procedure, fee provision, and evidence requirement. Landlord may recover possession only through Tenant's voluntary surrender or lawful court process and execution; Landlord shall not use lockout, property removal, essential-service interruption, or another dispossession self-help method. No future-rent acceleration, automatic fee award, administrative surcharge, injunction, or exclusive remedy applies unless a completed, counsel-approved clause expressly and lawfully provides it.

Landlord may perform a specifically identified maintenance or safety obligation after the notice and access procedure in Exhibit G and charge only the documented, allocated cost. This cure right does not authorize interference with possession.

6.3 Tenant Remedies

Exhibit G shall identify Tenant's notice, repair, access, abatement, setoff, termination, damages, performance, and other selected remedies. This form does not create or waive a remedy by implication.

7. RISK ALLOCATION

7.1 Indemnity Selection

☐ No contractual indemnity. ☐ Tenant indemnity. ☐ Landlord indemnity. ☐ Mutual, risk-specific indemnities. Exhibit H must identify covered third-party claims, premises or activity nexus, negligence allocation, exclusions, notice, defense control, settlement consent, cooperation, insurance interaction, shared fault, and survival.

7.2 Insurance

Exhibit H shall identify for each Party the required policy, insureds and additional insureds, limits, deductibles or retentions, covered property and activities, valuation method, endorsements, primary or excess position, waiver of subrogation, evidence, notice, lapse, casualty proceeds, restoration, lender requirements, and advisor approval. The completed schedule must separately address any worker, automobile, pollution, builder's-risk, business-interruption, cyber, or other coverage relevant to the actual use.

7.3 Limitation of Liability

☐ No aggregate contractual cap. ☐ Cap of $[________]. ☐ Different caps by claim type in Exhibit H. Exhibit H shall state any excluded damage categories and carve-outs after review of rent, deposits, title, possession, personal injury, property damage, environmental, accessibility, confidentiality, indemnity, fraud, and willful-misconduct risks.

7.4 Force Majeure

Exhibit H shall identify covered events, excluded obligations, notice, mitigation, extension, access, restoration, insurance, rent, termination, and allocation consequences. This form states no automatic five-day notice, thirty-day untenantability, rent-abatement, or excuse rule.

8. DISPUTE RESOLUTION

8.1 Governing Law

The Parties select Hawaii law after reviewing the Property, Premises, Parties, use, performance locations, and any mandatory or overriding requirement.

8.2 Forum Selection

☐ Court with jurisdiction where the Premises are located. ☐ Another counsel-approved forum: [________________________________]. The selection does not create jurisdiction or override a mandatory possession or recording venue.

8.3 Arbitration

☐ No predispute arbitration clause.
☐ Counsel-approved arbitration rider attached, identifying administrator, rules, seat, scope, excluded possession or recording proceedings, arbitrator count, interim-relief route, fees, confidentiality, appeal or review, and judgment procedure.

8.4 Jury Provision

☐ No predispute jury waiver. ☐ Counsel-approved jury-waiver rider attached after review of the Parties, claims, forum, formation process, and presentation.

8.5 Attorneys’ Fees

☐ Each Party bears its own fees and costs. ☐ Counsel-approved fee provision: [________________________________]. ☐ A tribunal may allocate fees only under authority independently applicable to the dispute.

9. GENERAL PROVISIONS

9.1 Amendments and Waivers. No modification or waiver of any provision shall be effective unless in a writing signed by both Parties. A waiver of any default shall not be a waiver of any other default.

9.2 Successors and Assigns. Subject to Section 5.4, this Agreement shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns.

9.3 Severability. If a provision is unenforceable, the tribunal shall determine whether the remaining provisions can operate consistently with the Parties' material bargain; this clause does not authorize rewriting a material term.

9.4 Entire Agreement. This Agreement, together with all exhibits, schedules, and riders, constitutes the entire understanding between the Parties and supersedes all prior or contemporaneous oral or written agreements.

9.5 Counterparts; Signature Method. The Parties may sign counterparts. They select ☐ wet signatures ☐ an identified electronic-signature process: [________________________________]. Counsel shall confirm any formality applicable to the lease term, property, parties, guarantees, acknowledgments, recording, and exhibits.

9.6 Notices. All notices required or permitted hereunder shall be in writing and deemed given when delivered (i) personally, (ii) by nationally recognized overnight courier with signature required, or (iii) by certified United States mail, return receipt requested, postage prepaid, to the addresses set forth below (or such other address as a Party may designate by notice).

Landlord: [NOTICE ADDRESS]
Tenant: [NOTICE ADDRESS]

9.7 No Recording. Tenant shall not record this Agreement or any memorandum thereof without Landlord’s prior written consent.

9.8 Time of the Essence. Time is of the essence for every obligation herein.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties hereto have executed this Commercial Lease Agreement as of the Effective Date.

LANDLORD:
[LANDLORD LEGAL NAME]
By: ________________________________
Name: ______________________________
Title: ______________________________

Date: ______________________________

TENANT:
[TENANT LEGAL NAME]
By: ________________________________
Name: ______________________________
Title: ______________________________

Date: ______________________________

Exhibits & Schedules (Attach as Needed)

• Exhibit A – Floor Plan / Site Plan
• Exhibit B – Legal Description of Premises
• Exhibit C – Commencement Memorandum
• Exhibit D – Operating Expenses & Taxes Allocation
• Schedule 4.2(a) – Title Exceptions
• Schedule 8.3 – Arbitration Election
• Exhibit E – Use, Condition, Environmental, Accessibility, Permit, and Compliance Matrix
• Exhibit F – Security Deposit or Letter of Credit
• Exhibit G – Notices, Defaults, Cure, Possession, Property, and Remedies
• Exhibit H – Insurance, Casualty, Condemnation, Indemnity, Liability, Force Majeure, and Disputes