COMMERCIAL LEASE AGREEMENT

(Pennsylvania – Court-Ready Template)

[// GUIDANCE: This template is drafted for use with Pennsylvania commercial real property. It incorporates the Pennsylvania Landlord and Tenant Act of 1951, 68 P.S. § 250.101 et seq., and common commercial-practice provisions (including an optional warrant of attorney for confession of judgment). Confer with Pennsylvania-licensed counsel before execution, especially if recording, financing, or environmental risk is material.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
   3.1 Lease of Premises & Term
   3.2 Rent, Additional Rent & Security
   3.3 Conditions 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

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

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

Recitals

A. Landlord is the fee simple owner of the real property located at [STREET ADDRESS, CITY, COUNTY, PA ZIP], together with the improvements, fixtures, and appurtenances thereon (collectively, the “Premises”).
B. Tenant desires to lease the Premises from Landlord upon the terms and subject to the conditions set forth herein.
C. In consideration of the mutual covenants 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 ease of reference, the following capitalized terms shall have the meanings set forth below. Undefined capitalized terms have the meanings ascribed elsewhere herein.

“Additional Rent” – All sums (other than Base Rent) payable by Tenant under this Agreement, including but not limited to Operating Expenses, Late Charges, and any indemnity obligations.

“Applicable Law” – All federal, state, county, municipal, and other governmental statutes, codes, ordinances, rules, regulations, and orders, including without limitation the Pennsylvania Landlord and Tenant Act of 1951, 68 P.S. § 250.101 et seq., and all Environmental Laws.

“Base Rent” – The fixed rent payable under Section 3.2(A), as adjusted in accordance with this Agreement.

“Business Days” – Any day other than Saturday, Sunday, or a Pennsylvania-recognized legal holiday.

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

“Environmental Laws” – All Applicable Laws relating to industrial hygiene, environmental protection, hazardous substances, and health and safety (including, without limitation, CERCLA and RCRA).

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

“Force Majeure” – Any cause beyond the reasonable control of a party, as further defined in Section 7.4.

“Indemnified Parties” – Landlord and Landlord’s partners, members, shareholders, officers, directors, agents, and employees, and their respective successors and assigns.

“Lease Term” – The period beginning on the Commencement Date and expiring on the Expiration Date, as specified in Section 3.1(B).

“Operating Expenses” – The expenses described in Section 3.2(D).

“Premises” – The real property described in Recital A and Exhibit A attached hereto.

“Security Deposit” – The amount described in Section 3.2(C).

3. OPERATIVE PROVISIONS

3.1 Lease of Premises & Term

A. Lease Grant. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, together with the non-exclusive right to use common areas serving the Premises, for the purposes and on the terms herein stated.
B. Term.
1. Lease Term: [NUMBER] years.
2. Commencement Date: [COMMENCEMENT DATE OR FORMULA].
3. Expiration Date: The last day of the Lease Term, unless sooner terminated pursuant hereto.
C. Renewal Options. Tenant shall have [NUMBER / “no”] option(s) to extend the Lease Term for successive periods of [YEARS] each, exercisable by written notice delivered not less than [MONTHS] months prior to the then-current Expiration Date, on the terms set forth in Exhibit B.
[// GUIDANCE: If recording a memorandum of lease (recommended for terms > 3 years), ensure acknowledgment and legal description compliance with 21 P.S. § 403.]

3.2 Rent, Additional Rent & Security

A. Base Rent:
• Year 1–[YEAR]: $[AMOUNT] per annum, payable in equal monthly installments of $[AMOUNT].
• Escalations: [e.g., 3% annually / CPI-based / fixed schedule in Exhibit C].
B. Payment Terms. Rent is due in advance on or before the first (1st) Business Day of each calendar month, without notice, demand, set-off, or deduction, at [PAYMENT ADDRESS / ACH INSTRUCTIONS].
C. Security Deposit. Tenant shall deliver $[AMOUNT] concurrently with execution, to be held and applied in accordance with 68 P.S. § 250.511a and Section 3.2(C)(3) herein.
D. Additional Rent. Tenant shall reimburse Landlord, as Additional Rent, for: (i) Taxes, (ii) insurance premiums, (iii) utilities not metered directly to Tenant, (iv) maintenance and repair costs of common areas, and (v) any other amounts expressly designated herein.
E. Late Charge & Interest. Any Rent not paid within [5] Business Days after due shall bear interest at the lesser of [12% per annum] or the maximum lawful rate, and shall be subject to a late charge of [5%] of the overdue amount.

3.3 Conditions Precedent

A. Delivery of Insurance Certificates under Section 7.3.
B. Tenant’s proof of authority and, if required, corporate resolution.
C. [Any build-out completion terms in Exhibit D.]

4. REPRESENTATIONS & WARRANTIES

4.1 By Landlord.
A. Authority. Landlord is duly organized, validly existing, and in good standing; execution of this Agreement is duly authorized.
B. Ownership. Landlord holds fee simple title to the Premises, free of monetary liens other than those disclosed on Exhibit E.
C. Compliance. To Landlord’s Knowledge, the Premises are not in material violation of Applicable Law.
D. No Conflicts. Execution and performance will not breach any agreement to which Landlord is a party.

4.2 By Tenant.
A. Organization & Authority. Tenant is duly organized, validly existing, and in good standing; execution of this Agreement is duly authorized.
B. Financial Capacity. Tenant is solvent and able to meet its obligations as they come due.
C. Use Compliance. Tenant’s intended use (Section 5.1) will comply with all Applicable Laws.
D. Hazardous Materials. Tenant has not been subject to any enforcement action relating to Hazardous Materials within the past [NUMBER] years.
E. Survival. All representations and warranties survive the Commencement Date for [12] months.

5. COVENANTS & RESTRICTIONS

5.1 Permitted Use

Tenant shall use the Premises solely for [SPECIFIC USE (e.g., “general office and light warehouse”)] and for no other purpose without Landlord’s prior written consent, which consent may be withheld in Landlord’s sole discretion if the proposed use: (i) is inconsistent with Applicable Law; (ii) increases insurance premiums; or (iii) conflicts with any exclusive granted to another tenant.

5.2 Prohibited Activities

Tenant shall not:
A. Generate, store, or dispose of Hazardous Materials except for nominal quantities customarily used and stored in compliance with Environmental Laws;
B. Permit any lien to attach to the Premises;
C. Exceed permitted floor load or structural capacity;
D. Conduct any auction, fire-sale, or similar event.

5.3 Maintenance & Repairs

A. Tenant Responsibility. Tenant, at its sole cost, shall maintain the Premises (including all HVAC serving exclusively the Premises) in a first-class condition, reasonable wear and tear excepted.
B. Landlord Responsibility. Landlord shall maintain structural elements and Building Systems not exclusively serving the Premises, the cost of which shall be included in Operating Expenses.
C. Right of Entry. Landlord may enter the Premises upon not less than 24 hours’ notice (except in emergencies) to inspect, show, or make repairs.

5.4 Alterations

Tenant shall not make any Alterations without Landlord’s prior written consent. All Alterations become Landlord’s property upon installation unless Landlord elects removal as a condition to consent.

5.5 Assignment & Subletting

A. Consent Requirement. Tenant shall not assign, mortgage, pledge, encumber, or sublease any interest without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed, subject to Section 5.5(B).
B. Permitted Transfers. Consent is not required for (i) an assignment to a Tenant Affiliate, or (ii) a transfer by merger or consolidation, provided Tenant delivers reasonable documentation establishing net worth equal to or greater than that of Tenant as of the Commencement Date.
C. Recapture Right. Landlord may, within 30 days after receipt of Tenant’s request for consent, elect to recapture the space proposed for transfer, terminating this Agreement with respect thereto.
D. Excess Rent. One-half (50%) of any consideration received by Tenant for a permitted transfer in excess of Rent due shall be paid to Landlord as Additional Rent.

5.6 Environmental Compliance

A. Tenant Covenants. Tenant shall: (i) comply with all Environmental Laws; (ii) promptly notify Landlord of any Environmental Claim; (iii) cure any violation caused by Tenant; (iv) provide copies of all correspondence with governmental authorities relating to the Environmental Condition of the Premises.
B. Landlord Rights. Landlord may conduct environmental inspections; Tenant shall cooperate and reimburse Landlord for inspections revealing Tenant-caused violations.

6. DEFAULT & REMEDIES

6.1 Events of Default

A. Monetary Default. Failure to pay any Rent within [10] days after written notice.
B. Non-Monetary Default. Breach of any non-monetary covenant not cured within [30] days after notice (or such longer period as is reasonably required, provided cure commenced within such 30-day period and diligently pursued).
C. Insolvency. Filing of petition in bankruptcy or assignment for benefit of creditors.
D. Abandonment. Vacating the Premises for more than [30] consecutive days.

6.2 Remedies

Upon an Event of Default, Landlord may, at its option and in addition to any and all rights under Applicable Law:
1. Terminate Tenant’s right of possession and/or this Agreement;
2. Accelerate all Rent due for the remainder of the Term, discounted to present value at 5%;
3. Enter and repossess the Premises in accordance with Pennsylvania commercial eviction procedures or by self-help if lawful;
4. [OPTIONAL WARRANT OF ATTORNEY FOR CONFESSION OF JUDGMENT – SEE SECTION 6.3];
5. Draw upon the Security Deposit;
6. Recover all reasonable attorneys’ fees and costs incurred.

6.3 OPTIONAL – CONFESSION OF JUDGMENT

[ONLY INCLUDE IF DESIRED; Pennsylvania requires bold, conspicuous language.]

TENANT HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD OF THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR FOR TENANT AND CONFESS JUDGMENT AGAINST TENANT, FOR ALL RENT AND OTHER MONIES DUE OR TO BECOME DUE UNDER THIS LEASE, WITH COSTS OF SUIT AND REASONABLE ATTORNEYS’ COMMISSION OF TEN PERCENT (10%), AND FOR POSSESSION OF THE PREMISES, WITH RELEASE OF ALL ERRORS, AND WAIVER OF APPEAL, INQUISITION, AND RIGHT TO STAY OF EXECUTION.

[// GUIDANCE: Pennsylvania confessions of judgment are strictly construed. Ensure font size ≥ 14 pt, bold, and conspicuous; deliver a separate written notice (Pa.R.C.P. 2952).]

7. RISK ALLOCATION

7.1 Indemnification

A. Tenant Indemnity. Tenant shall indemnify, defend, and hold harmless the Indemnified Parties from and against any and all claims, liabilities, damages, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to (i) Tenant’s use or occupancy of the Premises, (ii) the conduct of Tenant’s business, (iii) any breach of this Agreement by Tenant, or (iv) the negligent or willful acts or omissions of Tenant or its agents, employees, contractors, or invitees, except to the extent caused by Landlord’s gross negligence or willful misconduct.
B. Landlord Indemnity. Landlord shall indemnify Tenant for claims arising from Landlord’s gross negligence or willful misconduct.

7.2 Limitation of Liability

The aggregate liability of Landlord under this Agreement shall not exceed [CAP AMOUNT OR “NO CAP”], and Tenant waives all claims to consequential, special, or punitive damages. Liability is limited to Landlord’s interest in the Premises and rent proceeds.

7.3 Insurance

Tenant shall maintain, at its sole cost, (i) Commercial General Liability insurance with limits of not less than $[2,000,000] per occurrence and $[4,000,000] aggregate, naming Landlord and any Mortgagee as additional insureds on ISO form CG 20 11 04 13 (or equivalent); (ii) All-Risk property coverage on Tenant’s personal property and improvements; (iii) Workers’ compensation as required by statute. Certificates evidencing the foregoing shall be delivered prior to occupancy and upon renewal.

7.4 Force Majeure

Neither party shall be liable for failure to perform caused by Force Majeure, provided the affected party gives notice within 10 days after the Force Majeure event, and performance is resumed promptly thereafter. Rent abatement for Force Majeure is limited to periods during which the Premises are rendered unusable.

8. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to its conflict-of-laws principles.

8.2 Forum Selection

Each party irrevocably submits to the exclusive jurisdiction of the state courts located in the county in which the Premises are situated, and waives any objection based on inconvenient forum.

8.3 Arbitration – Optional

[CHOOSE ONE]
Option A (Arbitration): Any dispute not resolved within 30 days after written notice shall be finally settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, conducted in [COUNTY, PA], by a single arbitrator. Judgment on the award may be entered in any court of competent jurisdiction.
Option B (No Arbitration): Section 8.3 intentionally omitted.

8.4 Jury Trial Waiver – Optional

EACH PARTY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS AGREEMENT.

8.5 Injunctive Relief

Nothing herein shall limit Landlord’s right to seek injunctive relief, including eviction or ejectment, to preserve the status quo or prevent irreparable harm.

9. GENERAL PROVISIONS

9.1 Amendments & Waivers. No amendment or waiver is binding unless in writing and signed by the party to be charged. A waiver on one occasion is not a waiver on subsequent occasions.

9.2 Notices. All notices shall be in writing and deemed given when (a) delivered in person, (b) sent by nationally recognized overnight courier, or (c) deposited in U.S. certified mail, return-receipt requested, postage prepaid, addressed to the parties at the addresses set forth on the signature page (or such other address designated by notice).

9.3 Assignment of Landlord’s Interest. Landlord may freely sell, assign, or convey its interest; upon any such transfer and assumption by the transferee, Landlord is relieved of all further liability.

9.4 Severability. If any provision is determined invalid or unenforceable, the remainder shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to effectuate the parties’ intent.

9.5 Entire Agreement; Merger. This Agreement (including exhibits and schedules) constitutes the entire agreement and supersedes all prior negotiations and understandings.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Electronic and facsimile signatures constitute originals.

9.7 Successors & Assigns. Subject to the restrictions herein, this Agreement binds and benefits the parties and their respective successors and permitted assigns.

9.8 No Recording; Memorandum. Tenant shall not record this Agreement, but either party may record a memorandum in form reasonably acceptable to both parties.

9.9 Brokers. Each party represents that it has dealt with no broker except [BROKER NAMES OR “none”], whose commission shall be paid by [PARTY] pursuant to separate agreement.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties 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: ________

[Corporate Acknowledgments / Notary Certificates]
[Witness Lines if required by Landlord’s internal policy]

EXHIBITS (Attach as Applicable)

Exhibit A – Legal Description of Premises
Exhibit B – Renewal Option Terms
Exhibit C – Rent Schedule / Escalations
Exhibit D – Work Letter (Landlord or Tenant Improvements)
Exhibit E – Permitted Encumbrances
Exhibit F – Rules & Regulations

[// GUIDANCE: Ensure each exhibit is completed prior to execution. For terms exceeding three (3) years, prepare a notarized Memorandum of Lease for potential recording to preserve priority against third parties (21 P.S. § 403). Verify local zoning/use compliance and obtain any required occupancy permits prior to the Commencement Date.]