COMMERCIAL LEASE AGREEMENT

(STATE OF ILLINOIS)

[// GUIDANCE: This template is drafted for use with Illinois commercial real estate. Customize all bracketed, ALL-CAP placeholders before execution.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
   3.1 Premises & Term
   3.2 Rent & Additional Rent
   3.3 Security Deposit
   3.4 Use; Compliance; Environmental Matters
   3.5 Condition Precedent
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

COMMERCIAL LEASE AGREEMENT (“Agreement”) dated as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

• [LANDLORD LEGAL NAME], a [STATE & ENTITY TYPE], with its principal place of business at [ADDRESS] (“Landlord”); and
• [TENANT LEGAL NAME], a [STATE & ENTITY TYPE], with its principal place of business at [ADDRESS] (“Tenant”).

Landlord hereby leases to Tenant, and Tenant hereby takes from Landlord, the Premises (defined below) upon the terms and subject to the conditions set forth herein, for good and valuable consideration, the receipt and sufficiency of which are acknowledged.

2. DEFINITIONS

The following capitalized terms shall have the indicated meanings. Terms defined in the singular include the plural and vice-versa.

“Additional Rent” – All sums (other than Base Rent) payable by Tenant under this Agreement, including Operating Expenses, Taxes, late charges, and indemnity payments.
“Base Rent” – The fixed monthly rental payable per Section 3.2(a).
“Building” – The structure located at [PROPERTY STREET ADDRESS], City of [CITY], County of [COUNTY], Illinois.
“Commencement Date” – The date set forth in Section 3.1(b).
“Environmental Laws” – All federal, state, and local statutes, regulations, ordinances, and common-law duties pertaining to pollution, waste management, hazardous substances, or environmental protection, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., and the Illinois Environmental Protection Act, 415 ILCS 5/1 et seq.
“Event of Default” – Any of the occurrences described in Section 6.1.
“Forcible Entry and Detainer Act” – 735 ILCS 5/9-101 et seq.
“Operating Expenses” – All expenses of operating, maintaining, repairing, and managing the Building and Common Areas, as more fully defined in Exhibit B.
“Premises” – Approximately [SQUARE FOOTAGE] rentable square feet located in the Building and depicted on Exhibit A.
“Taxes” – Real estate taxes, assessments, and impositions on the Building/Land, allocated pursuant to Exhibit B.
“Term” – The Lease term established under Section 3.1.

[// GUIDANCE: Add additional defined terms (e.g., “Common Areas”, “Guarantor”) as necessary.]

3. OPERATIVE PROVISIONS

3.1 Premises & Term

(a) Lease Grant. Landlord leases the Premises to Tenant for the Term.
(b) Commencement & Expiration. The Term shall commence on [COMMENCEMENT DATE] (“Commencement Date”) and expire on [EXPIRATION DATE], unless sooner terminated.
(c) Delivery Condition. Landlord shall deliver the Premises broom-clean and free of occupants. Tenant’s taking possession (other than for fixturing) constitutes conclusive acceptance, except for latent defects timely noticed.
(d) Option(s) to Renew. [OPTIONAL – INSERT renewal rights, rental adjustments, notice deadlines.]

3.2 Rent & Additional Rent

(a) Base Rent. Tenant shall pay Base Rent of $[AMOUNT] per month, in advance, on or before the first (1st) day of each calendar month during the Term.
(b) Adjustments. Base Rent shall escalate [PERCENT]% annually, commencing on the first anniversary of the Commencement Date.
(c) Additional Rent. Tenant shall pay its Proportionate Share (defined in Exhibit B) of Operating Expenses and Taxes, together with any other sums due, all as Additional Rent.
(d) Payment Mechanics. All Rent shall be paid to [PAYEE] at [ADDRESS / ACH INSTRUCTIONS] or as Landlord may otherwise direct, without set-off or deduction.
(e) Late Payment. If any Rent is not received within [5] days after due, Tenant shall pay (i) a late fee of the greater of 5 % of the overdue amount or $[AMOUNT], and (ii) interest at the lesser of [12 %] per annum or the maximum lawful rate from the due date until paid.

3.3 Security Deposit

Tenant shall deposit with Landlord $[AMOUNT] (“Security Deposit”) upon execution. Landlord may commingle and apply the Security Deposit toward any unpaid Rent or damage. Landlord shall replenish any draw; return of the balance (without interest) shall occur within [45] days after Tenant has vacated and satisfied all obligations.

3.4 Use; Compliance; Environmental Matters

(a) Permitted Use. Tenant shall use the Premises solely for [SPECIFIC COMMERCIAL USE] and for no other purpose without Landlord’s prior written consent.
(b) Legal Compliance. Tenant shall comply with all Laws (including zoning, building, fire, accessibility, and Environmental Laws) applicable to the Premises and Tenant’s operations.
(c) Environmental Covenants. Tenant shall not cause or permit the release of Hazardous Substances on or about the Premises. Tenant shall immediately notify Landlord of any environmental incident and shall remediate in accordance with Environmental Laws.
(d) Environmental Indemnity. See Section 7.2(a).
(e) Certifications/Estoppels. Tenant shall, upon request, complete and deliver any environmental questionnaires or estoppel certificates reasonably required by Landlord or Landlord’s mortgagee.

3.5 Conditions Precedent

Landlord’s obligations are conditioned on (i) receipt of the Security Deposit and first month’s Base Rent, (ii) delivery of certificates of insurance meeting Section 7.3 requirements, and (iii) (if applicable) guaranty(ies) executed by [GUARANTOR NAME(S)].

4. REPRESENTATIONS & WARRANTIES

4.1 Mutual Reps. Each Party represents that:
(a) it is duly organized, validly existing, and in good standing in its jurisdiction of formation;
(b) it has full power and authority to execute and perform this Agreement; and
(c) execution does not violate any agreement binding on it.

4.2 Landlord Reps. As of the Effective Date:
(a) Landlord has fee simple or leasehold title sufficient to enter into this Agreement;
(b) to Landlord’s Knowledge, there is no pending condemnation affecting the Premises; and
(c) Landlord has received no written notice of material violation of law that remains uncured.

4.3 Tenant Reps. Tenant further represents that:
(a) it is not insolvent and is able to pay its debts as they mature;
(b) Tenant’s intended use does not require zoning variances; and
(c) Tenant has reviewed and accepts the condition of the Premises, subject to Landlord’s delivery obligations.

4.4 Survival. Representations and warranties shall survive the expiration or earlier termination of the Term for [12] months.

5. COVENANTS & RESTRICTIONS

5.1 Affirmative Covenants
(a) Maintenance by Tenant. Tenant shall maintain the Premises (excluding structural elements and building systems outside the Premises) in good order, reasonable wear excepted.
(b) Access. Tenant shall provide Landlord and its agents reasonable access on at least 24 hours’ notice (except in emergencies).
(c) Signage. Subject to Landlord’s approval and applicable Laws.

5.2 Negative Covenants
(a) Waste & Nuisance. Tenant shall not commit waste, create nuisance, or overload building systems.
(b) Liens. Tenant shall keep the Premises free of mechanics’ and other liens, bonding off any lien within [10] days of notice.
(c) Assignment & Subletting. Tenant shall not assign, sublet, license, or otherwise transfer (collectively, “Transfer”) without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed, subject to Section 5.3.

5.3 Assignment/Subletting Procedures
(a) Notice. Tenant shall give Landlord at least [30] days’ prior written notice of any proposed Transfer, including financials and business description of the transferee.
(b) Recapture Right. Landlord may, within [15] days after notice, elect to recapture the Premises (or applicable portion) effective on the proposed effective date of Transfer.
(c) Excess Rent. Fifty percent (50 %) of any Transfer Consideration in excess of Tenant’s Rent obligations shall be paid to Landlord as Additional Rent.
(d) Permitted Transfers. Transfers to (i) an Affiliate in connection with a merger or sale of substantially all assets, or (ii) a publicly traded parent, shall be permitted with notice but without consent, provided the assignee has a net worth equal to or greater than Tenant’s on the Effective Date.

6. DEFAULT & REMEDIES

6.1 Events of Default

Any of the following shall constitute an “Event of Default”:
(a) Failure to pay Rent within [5] days after written notice (provided, no notice is required more than twice in any 12-month period);
(b) Breach of any non-monetary covenant not cured within [20] days after notice;
(c) Insolvency, assignment for benefit of creditors, or commencement of bankruptcy;
(d) Abandonment of the Premises for [30] consecutive days;
(e) Material misrepresentation by Tenant.

6.2 Remedies

Upon an Event of Default, Landlord may, subject to the Forcible Entry and Detainer Act (735 ILCS 5/9-101 et seq.):
(a) Terminate this Agreement by written notice and recover damages;
(b) Re-enter and repossess the Premises, with or without terminating;
(c) Accelerate all Rent due for the remainder of the Term;
(d) Perform Tenant’s obligations on Tenant’s behalf and at Tenant’s expense; and/or
(e) Pursue any other remedy available at law or equity, including injunctive relief and specific performance.

6.3 Notice & Cure

All default notices shall specify the nature of default and required cure. Where the default cannot reasonably be cured within the stated period, Tenant may commence cure within such period and diligently pursue to completion.

6.4 Attorneys’ Fees

The prevailing Party in any action or proceeding arising under this Agreement shall be entitled to recover its reasonable attorneys’ fees and costs.

7. RISK ALLOCATION

7.1 Insurance

(a) Tenant Insurance. Throughout the Term, Tenant shall maintain:
(i) Commercial General Liability: $[1,000,000] per occurrence / $[2,000,000] aggregate;
(ii) Property (all-risk) covering Tenant’s personal property and improvements;
(iii) Workers’ Compensation per statutory limits;
(iv) Business auto liability (if applicable).
(b) Landlord Insurance. Landlord shall maintain commercial property and liability insurance customary for comparable buildings.
(c) Waiver of Subrogation. Each Party waives subrogation against the other to the extent of insurance recoveries.

7.2 Indemnification

(a) Tenant Indemnity. Tenant shall indemnify, defend, and hold harmless Landlord and its affiliates against any claim, damage, or liability arising out of (i) Tenant’s use or occupancy of the Premises, (ii) Tenant’s breach of this Agreement, or (iii) the presence or release of Hazardous Substances introduced by Tenant or its agents.
(b) Landlord Indemnity. Landlord shall indemnify Tenant against claims arising from (i) gross negligence or willful misconduct of Landlord, or (ii) breach of Landlord’s obligations.
(c) Procedure. The indemnified Party shall promptly notify the indemnifying Party and tender defense; failure to promptly notify does not relieve the indemnifying Party except to the extent prejudiced.

7.3 Limitation of Liability

Landlord’s liability shall be limited to Landlord’s interest in the Building, and no personal liability shall attach to Landlord’s members, partners, shareholders, or agents. [OPTIONAL – INSERT aggregate monetary liability cap of $[AMOUNT] if desired.]

7.4 Force Majeure

Neither Party shall be liable for failure to perform (other than monetary obligations) due to causes beyond its reasonable control, including acts of God, government orders, war, terrorism, or pandemics, provided the affected Party gives prompt notice and resumes performance as soon as practicable.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to conflict-of-laws principles.

8.2 Forum Selection. The state courts located in [COUNTY], Illinois shall have exclusive jurisdiction over any litigation arising hereunder. Each Party irrevocably submits to such courts and waives objections based on venue or forum non conveniens.

8.3 Arbitration. [OPTIONAL – If selected, insert an AAA Commercial Arbitration clause detailing rules, selection of arbitrator(s), limited discovery, and enforcement.]

8.4 Jury Trial Waiver. [OPTIONAL – “EACH PARTY HEREBY WAIVES ITS RIGHT TO TRIAL BY JURY…”]

8.5 Injunctive Relief. Nothing herein shall limit Landlord’s right to seek immediate possession or injunctive relief pursuant to the Forcible Entry and Detainer Act.

9. GENERAL PROVISIONS

9.1 Amendments & Waivers. No modification shall be binding unless in writing and signed by both Parties. No waiver is effective unless in writing and relates only to the specific instance.

9.2 Entire Agreement. This instrument, including Exhibits A–D, constitutes the entire agreement, superseding all prior negotiations and understandings.

9.3 Severability. If any provision is unenforceable, it shall be reformed to effectuate the Parties’ intent, and the remainder shall remain in full force.

9.4 Successors & Assigns. This Agreement binds and benefits the Parties and their permitted successors and assigns.

9.5 Notices. All notices shall be in writing and deemed given when delivered (i) personal delivery, (ii) recognized overnight courier, or (iii) certified mail, return receipt requested, to the addresses stated above (or as changed by notice).

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts and by electronic signatures (e.g., PDF, DocuSign), each of which is deemed an original.

9.7 Recording. Neither Party shall record this Agreement; however, upon either Party’s request, the Parties will execute a memorandum of lease in recordable form.

9.8 OFAC Compliance. Each Party represents it is not on any prohibited persons list promulgated under applicable anti-terrorism laws.

10. EXECUTION BLOCK

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

[OPTIONAL NOTARY BLOCK – Illinois does not require notarization for enforceability between the Parties, but notarize if a memorandum is to be recorded.]

EXHIBIT A – FLOOR PLAN / PREMISES DESCRIPTION

[Attach scaled drawing or legal description.]

EXHIBIT B – OPERATING EXPENSES & TAX ALLOCATION

[Detail expense categories, methods of allocation, and audit rights.]

EXHIBIT C – RULES & REGULATIONS

[Building rules, parking, loading docks, security requirements.]

EXHIBIT D – FORM OF SNDA / ESTOPPEL CERTIFICATE

[If property is financed.]

[// GUIDANCE: Review state and local requirements (e.g., Chicago energy benchmarking, Cook County lease taxes) and tailor further as needed.]