COMMERCIAL LEASE AGREEMENT

(State of New York)

[// GUIDANCE: This template is drafted for a fee-simple landlord and a single commercial tenant in the State of New York. All bracketed text must be customized. Delete guidance comments before execution.]

TABLE OF CONTENTS

1. Definitions
2. Lease of Premises; Term
3. Rent, Additional Rent & Security Deposit
4. Use of Premises; Compliance With Laws
5. Tenant Improvements; Alterations
6. Maintenance, Repairs & Utilities
7. Insurance
8. Representations & Warranties
9. Covenants
10. Assignment & Subletting
11. Environmental Matters
12. Events of Default & Remedies
13. Risk Allocation
14. Dispute Resolution
15. General Provisions
16. Execution & Acknowledgment

1. DOCUMENT HEADER

THIS COMMERCIAL LEASE AGREEMENT (this “Lease”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

[LANDLORD LEGAL NAME], a [STATE] [ENTITY TYPE] (“Landlord”), and
[TENANT LEGAL NAME], a [STATE] [ENTITY TYPE] (“Tenant”).

Recitals

A. Landlord is the fee-simple owner of certain real property commonly known as [STREET ADDRESS / PROPERTY NAME], located in the [CITY], County of [COUNTY], State of New York, together with the improvements thereon (collectively, the “Property”).

B. Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord, a portion of the Property described in this Lease (the “Premises”) upon the terms and conditions set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions contained herein, the parties agree as follows:

2. DEFINITIONS

The following terms (in alphabetical order) have the meanings indicated below. Defined terms appear in quotation marks and are used throughout this Lease with initial capital letters.

“Additional Rent” – All amounts other than Base Rent payable by Tenant under this Lease, including but not limited to Operating Expenses, Taxes, utilities, late fees, and indemnification payments.

“Base Rent” – The fixed rent payable pursuant to Section 3.1.

“Building” – The improvements constituting the structure in which the Premises are located.

“Business Days” – Any day other than Saturday, Sunday, or a State of New York legal holiday.

“Event of Default” – Any of the occurrences described in Section 12.1.

“Hazardous Materials” – Any substance, material, or waste regulated under applicable Environmental Laws, including but not limited to petroleum products, asbestos, polychlorinated biphenyls, and any substance listed or defined as “hazardous” or “toxic” under the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §§ 9601 et seq.) or analogous state statutes.

“Lease Year” – Each consecutive twelve-month period commencing on the Commencement Date or any anniversary thereof.

“Operating Expenses” – The expenses described in Section 3.3.

“Premises” – Approximately [SQUARE FOOTAGE] rentable square feet of space, shown cross-hatched on the floor plan attached hereto as Exhibit A.

“Taxes” – All real estate taxes, assessments, and governmental impositions allocated to the Property as provided in Section 3.4.

[// GUIDANCE: Add or delete defined terms as appropriate for the transaction.]

3. OPERATIVE PROVISIONS

3.1 Lease of Premises; Term

(a) Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Landlord, for a term beginning on the “Commencement Date” (the earlier of (i) [DATE], or (ii) the date Tenant first commences business operations in the Premises) and ending at 11:59 p.m. on the last day of the month in which the [NUMBER]-year anniversary of the Commencement Date occurs (the “Term”), unless sooner terminated pursuant to this Lease.

(b) Tenant shall have [OPTION NUMBER] option(s) to renew the Term for periods of [LENGTH OF EACH RENEWAL TERM] each, exercisable by written notice delivered to Landlord not less than [NOTICE PERIOD] prior to the expiration of the then-current Term, on the same terms and conditions except that Base Rent shall be adjusted in accordance with Section 3.2(b).

3.2 Base Rent

(a) Tenant shall pay to Landlord Base Rent in the following amounts, without set-off or deduction and in advance on or before the first Business Day of each calendar month:

• Lease Year 1: $[AMOUNT] per month ($[ANNUAL] per annum)
• Lease Year 2: $[AMOUNT] per month ($[ANNUAL] per annum)
• [ADD SCHEDULE THROUGH LEASE YEAR X]

[// GUIDANCE: Escalation may be stated as fixed dollars or percentage increases.]

(b) Upon each renewal, Base Rent shall equal the greater of (i) 102% of the Base Rent in effect during the final month of the preceding Term, or (ii) the then-prevailing fair market rental rate for comparable Class [A/B/C] properties in [SUBMARKET], as determined under the appraisal procedure of Section 3.2(c).

3.3 Operating Expenses (Triple-Net Structure)

(a) Tenant shall pay, as Additional Rent, Tenant’s “Proportionate Share” (Premises rentable square footage ÷ Building rentable square footage) of all costs, expenses, and disbursements incurred by Landlord in connection with the ownership, operation, repair, replacement, and maintenance of the Property (collectively, “Operating Expenses”), including without limitation:

(i) utilities for Common Areas;
(ii) maintenance and repair of Building systems;
(iii) insurance premiums; and
(iv) management fees not to exceed [PERCENTAGE]% of gross receipts.

(b) Landlord shall deliver to Tenant an annual statement of Operating Expenses within 120 days following the end of each calendar year, and Tenant shall pay any deficiency (or receive a credit for any overpayment) within 30 days after receipt.

3.4 Taxes

Tenant shall pay, as Additional Rent, Tenant’s Proportionate Share of Taxes. Landlord shall have the right to contest Taxes, and Tenant shall cooperate in good faith.

3.5 Security Deposit

Upon execution of this Lease, Tenant shall deposit with Landlord the sum of $[AMOUNT] (the “Security Deposit”), to secure the faithful performance of Tenant’s obligations hereunder. The Security Deposit may be in the form of cash or an irrevocable, unconditional, automatically-renewing standby letter of credit meeting the requirements of Exhibit B. Landlord may apply the Security Deposit to cure any Event of Default, without prejudice to other remedies.

4. USE OF PREMISES; COMPLIANCE WITH LAWS

4.1 Permitted Use
Tenant shall use the Premises solely for [SPECIFIC USE—e.g., general office, retail sales of ____, light manufacturing], and for no other purpose without Landlord’s prior written consent.

4.2 Legal Compliance
At Tenant’s sole cost, Tenant shall comply with all present and future federal, state, and local laws, ordinances, regulations, codes, and orders applicable to the Premises, including but not limited to the Americans with Disabilities Act (if applicable), building codes, fire codes, and all Environmental Laws.

4.3 Parking; Common Areas
Tenant and its invitees shall have the non-exclusive right to use [NUMBER] parking spaces and the Common Areas, subject to Landlord’s rules and regulations attached as Exhibit C (as amended by Landlord on not less than 30 days’ prior notice, provided such rules are uniformly enforced).

5. TENANT IMPROVEMENTS; ALTERATIONS

5.1 Initial Improvements
Tenant shall perform the tenant improvement work described in the work letter attached hereto as Exhibit D (the “Work Letter”) in a good and workmanlike manner and in compliance with all applicable laws.

5.2 Alterations
Tenant shall not make any alterations, additions, or improvements (“Alterations”) to the Premises without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed. All Alterations shall be performed only by licensed contractors approved by Landlord and shall become Landlord’s property upon installation unless Landlord elects otherwise in writing at the time of approval.

6. MAINTENANCE, REPAIRS & UTILITIES

6.1 Tenant Obligations
Tenant shall, at its sole cost, keep the Premises (including interior walls, floors, ceilings, doors, and windows) in good order, condition, and repair, ordinary wear and tear excepted.

6.2 Landlord Obligations
Landlord shall maintain the structural elements of the Building, the roof membrane, and Building systems serving the Premises, except to the extent maintenance is required due to Tenant’s misuse or negligence.

6.3 Utilities
Tenant shall contract for and pay before delinquency all separately metered utilities serving the Premises. If utilities are not separately metered, Tenant shall pay Tenant’s Proportionate Share as Additional Rent.

7. INSURANCE

7.1 Tenant Insurance
Tenant shall maintain, at Tenant’s expense:
(a) Commercial general liability insurance with minimum limits of [LIMIT] per occurrence and [AGGREGATE] aggregate, naming Landlord, its property manager, and any mortgagee as additional insureds;
(b) Property insurance on an “all-risk” basis covering Tenant’s personal property and Alterations to a value of full replacement cost;
(c) Workers’ compensation as required by law; and
(d) Business interruption insurance for not less than six (6) months of Rent.

7.2 Landlord Insurance
Landlord shall maintain property insurance on the Building in the amount of full replacement cost and commercial general liability insurance with limits deemed commercially reasonable by Landlord.

7.3 Certificates of Insurance
Each party shall deliver certificates evidencing required coverages prior to occupancy and upon each renewal. All policies shall provide for at least 30 days’ prior written notice of cancellation or material modification (10 days for non-payment of premium).

8. REPRESENTATIONS & WARRANTIES

8.1 Landlord
(a) Landlord is duly organized, validly existing, and in good standing under the laws of the state of its formation and has full power and authority to execute and perform this Lease.
(b) Subject to Section 11.1, Landlord has no actual knowledge of the presence of any Hazardous Materials in or about the Premises in violation of applicable Environmental Laws.
(c) As of the Effective Date, the execution, delivery, and performance of this Lease do not violate any agreement to which Landlord is a party.

8.2 Tenant
(a) Tenant is duly organized, validly existing, and in good standing under the laws of the state of its formation and has full power and authority to execute and perform this Lease.
(b) Tenant has obtained all governmental approvals necessary to conduct the Permitted Use.
(c) Tenant is not the subject of any pending bankruptcy proceeding.

8.3 Survival
All representations and warranties shall survive the execution of this Lease.

9. COVENANTS

9.1 Affirmative Covenants of Tenant
(a) Pay Rent and perform all obligations when due.
(b) Maintain insurance as required under Section 7.
(c) Provide prompt written notice to Landlord of any condition that could reasonably be expected to result in material property damage or personal injury.

9.2 Negative Covenants of Tenant
Tenant shall not:
(a) Permit any liens against the Premises or the Building;
(b) Use the Premises for any unlawful purpose or violate any Legal Requirement;
(c) Create excessive noise, odors, or vibrations that unreasonably interfere with other occupants.

10. ASSIGNMENT & SUBLETTING

10.1 Landlord’s Consent Required
Tenant shall not assign this Lease or sublet all or any part of the Premises (each a “Transfer”) without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed, subject to the provisions of this Section 10.

10.2 Request for Consent
Any request for consent shall include (i) the proposed effective date, (ii) a description of the premises to be transferred, (iii) the terms of the Transfer, (iv) financial statements of the proposed transferee, and (v) such other information as Landlord may reasonably request. Landlord shall approve or disapprove in writing within 30 days after receipt of a complete request.

10.3 Landlord Recapture Right
Within such 30-day period Landlord may, in its sole discretion, elect to recapture the Premises or portion thereof proposed to be transferred, in which event this Lease shall terminate as to the space recaptured as of the proposed effective date of the Transfer.

10.4 Conditions of Consent
As conditions to any consent: (a) Tenant shall remain fully liable; (b) the transferee shall execute an assignment and assumption in a form reasonably acceptable to Landlord; and (c) Tenant shall pay to Landlord [PERCENTAGE]% of any excess rent or other consideration paid to Tenant in connection with the Transfer.

10.5 Permitted Transfers
Notwithstanding the foregoing, Tenant may, upon 15 days’ prior written notice to Landlord, assign this Lease to (i) an affiliate controlling, controlled by, or under common control with Tenant, or (ii) a successor by merger, consolidation, or purchase of substantially all of Tenant’s assets, provided that the transferee has a tangible net worth at least equal to that of Tenant on the Effective Date.

[// GUIDANCE: Section 10 reflects New York’s statutory scheme requiring commercial landlords to act in good faith and not unreasonably withhold consent to assignment/subletting, consistent with N.Y. Real Prop. Law. If a fully “sole discretion” standard is desired, revise and explicitly disclaim the statutory overlay.]

11. ENVIRONMENTAL MATTERS

11.1 Tenant Obligations
Tenant shall not cause or permit any Hazardous Materials to be generated, used, released, stored, or disposed of on, under, or about the Premises except for customary quantities of standard office or cleaning supplies used in compliance with all Environmental Laws.

11.2 Environmental Indemnity
Tenant shall indemnify, defend, and hold Landlord harmless from and against any and all claims, liabilities, losses, damages, costs, and expenses (including reasonable attorneys’ fees) arising out of or related to Tenant’s use, handling, storage, or disposal of Hazardous Materials in or about the Premises, including any violation of Environmental Laws. This indemnity shall survive expiration or earlier termination of this Lease.

11.3 Environmental Inspections
Landlord shall have the right, upon reasonable prior notice, to conduct environmental inspections and testing of the Premises. If such inspection reveals contamination caused by Tenant, Tenant shall promptly, at Tenant’s expense, perform all remediation required by applicable law.

12. EVENTS OF DEFAULT & REMEDIES

12.1 Events of Default
Each of the following constitutes an “Event of Default”:
(a) Failure to pay any installment of Rent within five (5) Business Days after written notice;
(b) Failure to perform any non-monetary obligation within 15 Business Days after written notice (or such longer period as is reasonably required so long as Tenant commences cure within such 15-day period and diligently pursues completion);
(c) An assignment for the benefit of creditors, or the filing of a bankruptcy petition by or against Tenant that is not dismissed within 60 days;
(d) Abandonment or vacation of the Premises for more than 10 consecutive Business Days;
(e) Any material default under Section 11 (Environmental Matters).

12.2 Landlord Remedies
Upon any Event of Default, Landlord may, subject to the summary eviction procedures of Article 7 of the New York Real Property Actions and Proceedings Law, exercise one or more of the following remedies:
(i) Terminate this Lease by written notice and recover all damages allowable under law;
(ii) Re-enter and repossess the Premises, with or without terminating this Lease, and relet the Premises on Tenant’s account;
(iii) Accelerate and declare immediately due and payable all Rent that would have become due through the stated expiration of the Term, discounted to present value at 4% per annum;
(iv) Seek injunctive relief, specific performance, and any other equitable remedy; and
(v) Recover reasonable attorneys’ fees and costs incurred in enforcing Tenant’s obligations.

12.3 Mitigation
Landlord shall use commercially reasonable efforts to mitigate damages to the extent required under New York law.

13. RISK ALLOCATION

13.1 Tenant Indemnification
Tenant shall indemnify, defend, and hold Landlord, its agents, and employees harmless from and against all claims, losses, and liabilities arising from (i) Tenant’s use or occupancy of the Premises, (ii) the conduct of Tenant’s business, (iii) any act, omission, or negligence of Tenant or Tenant’s Representatives, and (iv) any breach of this Lease by Tenant.

13.2 Landlord Indemnification
Landlord shall indemnify, defend, and hold Tenant harmless from and against claims, losses, and liabilities arising from the gross negligence or willful misconduct of Landlord or Landlord’s Representatives, except to the extent caused by Tenant.

13.3 Limitation of Liability
Except for (a) indemnification obligations under Sections 11 and 13 and (b) claims arising from a party’s gross negligence or willful misconduct, each party’s aggregate liability to the other for damages under this Lease shall not exceed [LIABILITY CAP DOLLAR AMOUNT OR “NONE”]. In no event shall either party be liable to the other for consequential, special, or punitive damages, including lost profits.

13.4 Waiver of Subrogation
Each party waives any and every claim against the other, and releases the other from any liability for loss or damage to property, to the extent such loss or damage is covered by the releasing party’s property insurance.

13.5 Force Majeure
Neither party shall be liable for failure to perform any obligation (other than monetary obligations) when prevented from doing so by causes beyond such party’s reasonable control, including acts of God, war, terrorism, epidemic, riot, or governmental action, provided the affected party gives prompt notice and uses diligent efforts to resume performance.

14. DISPUTE RESOLUTION

14.1 Governing Law
This Lease shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts-of-law principles.

14.2 Forum Selection
Subject to Section 14.3, each party irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY] County, New York for all actions arising under this Lease.

14.3 Optional Arbitration
At either party’s election, any dispute (other than (i) non-payment of Rent, or (ii) summary proceedings for possession) shall be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, by a single arbitrator with not less than 10 years’ experience in commercial real estate law. Judgment on the award may be entered in any court of competent jurisdiction. Either party may seek provisional injunctive relief in court pending arbitration to preserve the status quo or prevent irreparable harm.

14.4 Jury Trial Waiver
Each party knowingly, voluntarily, and irrevocably waives trial by jury in any action, proceeding, or counterclaim brought by either party related to this Lease.

14.5 Attorneys’ Fees
In any action or proceeding to enforce this Lease, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs.

15. GENERAL PROVISIONS

15.1 Amendment & Waiver
No provision of this Lease may be amended or waived except by a written instrument signed by authorized representatives of both parties. No waiver shall be deemed a continuing waiver unless expressly so stated.

15.2 Notices
All notices shall be in writing and delivered (i) by hand, (ii) by reputable overnight courier, or (iii) by certified mail, return receipt requested, to the addresses set forth below (or such other address a party designates by notice). Notices shall be deemed given upon receipt or refusal.

15.3 Relationship of Parties
Landlord and Tenant are independent contracting parties. Nothing in this Lease creates any partnership, joint venture, or agency relationship.

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

15.5 Severability
If any provision is determined to be invalid or unenforceable, the remainder shall continue in full force, and the invalid provision shall be reformed to effectuate the parties’ intent to the maximum lawful extent.

15.6 Entire Agreement
This Lease (including all exhibits and schedules) constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior understandings. No representation or statement not contained herein shall bind either party.

15.7 Counterparts; Electronic Signatures
This Lease may be executed in counterparts, each of which shall be deemed an original and all of which together constitute one instrument. Electronic signatures shall be deemed originals and fully enforceable.

16. EXECUTION & ACKNOWLEDGMENT

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed by their duly authorized representatives as of the Effective Date.

[// GUIDANCE: Add notary acknowledgment blocks if the Lease (or memorandum thereof) will be recorded, or if required by local practice or lender.]

Exhibits

Exhibit A – Floor Plan of Premises
Exhibit B – Letter of Credit Requirements
Exhibit C – Building Rules & Regulations
Exhibit D – Work Letter

[END OF LEASE]