Commercial Lease Agreement

COMMERCIAL LEASE AGREEMENT

(Utah)

TABLE OF CONTENTS

1. Definitions
2. Lease of Premises
3. Term; Possession; Holding-Over
4. Rent and Other Charges
5. Taxes, Utilities, and Operating Expenses
6. Use; Compliance; Environmental Matters
7. Maintenance, Repairs, and Alterations
8. Assignment and Subletting
9. Insurance; Waiver of Subrogation
10. Indemnification; Limitation of Liability
11. Default and Remedies
12. Dispute Resolution
13. Estoppel; Subordination; Attornment; SNDA
14. Miscellaneous
15. Execution Block

COMMERCIAL LEASE AGREEMENT

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 & TYPE OF ENTITY] (“Landlord”); and
• [TENANT LEGAL NAME], a [STATE & TYPE OF ENTITY] (“Tenant”).

Landlord and Tenant may be referred to individually as a “Party” and collectively as the “Parties.”

RECITALS

A. Landlord is the fee simple owner of certain real property and improvements located at [PROPERTY ADDRESS], Salt Lake County, Utah, commonly known as “[BUILDING NAME]” (the “Building”).
B. Tenant desires to lease from Landlord, and Landlord desires to lease to Tenant, a portion of the Building described herein, upon the terms and conditions set forth below.

NOW, THEREFORE, 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:

1. DEFINITIONS

For ease of reference, the following terms shall have the meanings set forth below. Capitalized terms used in more than one Section are cross-referenced in parentheses.

“Additional Rent” – Any monetary obligation other than Base Rent payable by Tenant under this Lease, including but not limited to Operating Expenses, Taxes, late charges, and Landlord’s costs of enforcement. (See §4.4)

“Base Rent” – The fixed monthly rental amount set forth in §4.1.

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

“Commencement Date” – The date on which the Term begins, as determined under §3.1.

“Environmental Laws” – All federal, state, and local statutes, regulations, ordinances, and common-law duties relating to health, safety, or environmental protection, including the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601 et seq., and the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901 et seq.

“Hazardous Materials” – Any substance regulated by Environmental Laws, including asbestos, PCBs, petroleum products, and “Hazardous Substances” as defined in CERCLA.

“Operating Expenses” – All costs of operating, maintaining, repairing, and managing the Building and Common Areas, subject to the exclusions in §5.3.

“Premises” – The rentable area containing approximately [#] rentable square feet located on the [FLOOR NUMBER] floor of the Building, as outlined on the floor plan attached hereto as Exhibit A.

“Taxes” – Real estate taxes, assessments (general and special), and other governmental charges imposed on the Building or Landlord with respect thereto.

“Term” – The period during which this Lease is in effect, as more particularly described in §3.

2. LEASE OF PREMISES

2.1 Lease Grant. Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Landlord, together with the non-exclusive right to use the Common Areas of the Building, subject to the terms and conditions of this Lease.

2.2 Condition of Premises. Tenant acknowledges that, except as expressly provided herein or in any Work Letter attached as Exhibit B, Tenant accepts the Premises “AS IS,” “WHERE IS,” and “WITH ALL FAULTS.”

2.3 Quiet Enjoyment. So long as Tenant is not in Default, Tenant shall peaceably and quietly enjoy the Premises without interference by Landlord or any person claiming by, through, or under Landlord, subject to the terms of this Lease.

3. TERM; POSSESSION; HOLDING-OVER

3.1 Term. The Term shall commence on the Commencement Date and continue for ☐ (__) full calendar months thereafter (the “Expiration Date”), unless sooner terminated pursuant to this Lease.

3.2 Commencement Date Confirmation. Within ten (10) Business Days after the Commencement Date, Landlord may deliver to Tenant a Commencement Date Memorandum substantially in the form of Exhibit C, which Tenant shall execute and return, confirming the Commencement Date and Expiration Date.

3.3 Holding-Over. Any occupancy of the Premises after the Expiration Date without Landlord’s written consent shall be a tenancy at sufferance subject to all provisions of this Lease except that Base Rent shall be [150%] of the rate in effect immediately prior to expiration, plus Additional Rent. Acceptance of rent thereafter shall not waive Landlord’s rights to recover possession.

4. RENT AND OTHER CHARGES

4.1 Base Rent. Tenant shall pay to Landlord the Base Rent set forth below, in advance, without set-off, deduction, or counterclaim, on or before the first (1st) day of each calendar month during the Term:

4.2 First Month’s Rent; Security Deposit. Upon execution hereof, Tenant shall pay (a) the first month’s Base Rent in the amount of $[___] and (b) a security deposit of $[___] (the “Security Deposit”), to be held by Landlord as security for Tenant’s performance.

4.3 Late Charge; Interest. If any rent is not received within five (5) days after due, Tenant shall pay a late charge equal to [5%] of the past-due amount plus interest at the lesser of [12%] per annum or the maximum rate permitted by law.

4.4 Additional Rent. All amounts other than Base Rent that Tenant is required to pay shall be deemed “Additional Rent,” and Landlord shall have the same remedies for nonpayment thereof as for Base Rent.

4.5 Net Lease. This Lease is intended to be absolutely net to Landlord. Tenant shall be responsible for all expenses relating to the Premises unless expressly provided otherwise.

5. TAXES, UTILITIES, AND OPERATING EXPENSES

5.1 Taxes. Tenant shall pay Tenant’s Proportionate Share of Taxes within thirty (30) days after receipt of Landlord’s billing statement.

5.2 Utilities. Tenant shall contract for and pay directly all utilities serving the Premises. Landlord may, at its election, furnish any utility and bill Tenant as Additional Rent.

5.3 Operating Expenses. Tenant shall pay Tenant’s Proportionate Share of Operating Expenses, which shall exclude (a) capital expenditures (except those reducing costs or mandated by law, amortized), (b) principal and interest on debt, and (c) costs reimbursed by insurance.

6. USE; COMPLIANCE; ENVIRONMENTAL MATTERS

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

6.2 Legal Compliance. Tenant shall at all times comply with (a) all applicable federal, state, and local statutes, ordinances, rules, and regulations (collectively, “Laws”), including Utah commercial building codes and health regulations, and (b) all covenants, conditions, and restrictions of record.

6.3 Environmental Matters.
(a) 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 reasonable quantities customarily used in Tenant’s business and in strict compliance with Environmental Laws.
(b) Tenant shall promptly notify Landlord of (i) any release of a Hazardous Material in, on, or about the Premises, (ii) any regulatory inquiry or inspection concerning the Premises, or (iii) any claim relating to environmental conditions.
(c) Landlord shall have the right to conduct environmental inspections at reasonable times. Tenant shall remediate any environmental condition caused by Tenant or its agents, at Tenant’s sole cost, using a consultant acceptable to Landlord and in accordance with Environmental Laws.

6.4 Governmental Action. If any governmental authority requires an alteration to the Premises due to Tenant’s specific use, Tenant shall perform such alteration at its own cost and in compliance with §7.

7. MAINTENANCE, REPAIRS, AND ALTERATIONS

7.1 Tenant Obligations. Tenant, at its sole cost, shall keep the Premises (including all interior portions, doors, windows, and mechanical, electrical, and plumbing systems within the Premises) in good order, condition, and repair, reasonable wear and tear excepted.

7.2 Landlord Obligations. Landlord shall maintain the structural elements of the Building and Common Areas in substantially the same condition as of the Effective Date, subject to reimbursement through Operating Expenses.

7.3 Alterations. Tenant shall not make any alterations, additions, or improvements (“Alterations”) without Landlord’s prior written consent, which shall not be unreasonably withheld. All Alterations shall be performed (a) in a good and workmanlike manner, (b) in compliance with Laws, and (c) free of liens.

7.4 Surrender. Upon expiration or earlier termination, Tenant shall surrender the Premises broom-clean and in good condition, ordinary wear and tear and approved Alterations excepted, and shall remove any Hazardous Materials introduced by Tenant.

8. ASSIGNMENT AND SUBLETTING

8.1 Restriction. Tenant shall not assign, mortgage, pledge, or otherwise transfer this Lease, nor sublet all or any portion of the Premises, without Landlord’s prior written consent, which consent may be withheld in Landlord’s sole but reasonable discretion consistent with Utah Code and prevailing commercial standards.

8.2 Recapture Right. Landlord may elect, in lieu of consenting, to recapture the space proposed to be transferred, effective on the prospective assignment or sublease commencement date.

8.3 Profit Sharing. If the consideration received by Tenant in connection with a permitted assignment or sublease exceeds the Rent allocable to the transferred space, Tenant shall pay Landlord fifty percent (50%) of such excess as Additional Rent.

8.4 Permitted Transfers. Notwithstanding §8.1, Tenant may assign this Lease or sublet the Premises, without Landlord’s consent, to (a) an Affiliate, or (b) a successor by merger or acquisition, provided Tenant provides at least fifteen (15) days’ prior written notice and the transferee has net worth equal to or greater than Tenant’s net worth immediately prior to the transfer.

9. INSURANCE; WAIVER OF SUBROGATION

9.1 Tenant Insurance. Tenant shall maintain, at its sole cost and throughout the Term:
(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 as additional insureds on ISO Form CG 20 11 or equivalent;
(b) Property insurance on all Tenant’s personal property and Alterations, on a Special Form basis, covering full replacement cost; and
(c) Workers’ compensation as required by Utah law.

9.2 Landlord Insurance. Landlord shall maintain property insurance on the Building (excluding Tenant’s property) at replacement cost value and may maintain commercial liability insurance in such amounts as Landlord deems appropriate, the cost of which may be included in Operating Expenses.

9.3 Certificates. Prior to occupancy and annually thereafter, Tenant shall deliver certificates of insurance evidencing the required coverages.

9.4 Waiver of Subrogation. Each Party waives, and shall cause its insurers to waive, all rights of recovery against the other Party for any loss covered (or required to be covered) by property insurance under this Lease.

10. INDEMNIFICATION; LIMITATION OF LIABILITY

10.1 Tenant Indemnification. To the fullest extent permitted by law, Tenant shall indemnify, defend, and hold harmless Landlord, its agents, and mortgagees from and against any and all claims, demands, liabilities, losses, damages, fines, penalties, and expenses (including reasonable attorneys’ fees) arising out of or relating to:
(a) the use or occupancy of the Premises by Tenant or its agents, employees, contractors, invitees, or licensees;
(b) any breach of this Lease by Tenant; or
(c) any negligent or wrongful act or omission of Tenant or its agents.

10.2 Landlord Indemnification. Landlord shall indemnify Tenant for bodily injury or property damage to the extent caused by the gross negligence or willful misconduct of Landlord or its agents.

10.3 Limitation of Liability. EXCEPT FOR (i) FRAUD, (ii) WILLFUL MISCONDUCT, OR (iii) OBLIGATIONS EXPRESSLY EXCLUDED FROM THIS LIMITATION, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE DAMAGES. LANDLORD’S AGGREGATE LIABILITY SHALL NOT EXCEED [CAP DOLLAR AMOUNT OR “NO CAP”] DURING THE TERM.

11. DEFAULT AND REMEDIES

11.1 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) days after written notice;
(b) 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 such 30-day period and diligently pursues completion);
(c) abandonment or vacating of the Premises for more than fifteen (15) consecutive days;
(d) insolvency, assignment for benefit of creditors, or commencement of bankruptcy proceedings by or against Tenant.

11.2 Landlord Remedies. Upon Default, Landlord may, subject to applicable Utah commercial eviction procedures:
(a) terminate this Lease and recover possession;
(b) continue this Lease in effect, relet the Premises, and recover the deficiency;
(c) accelerate all Rent due for the remainder of the Term;
(d) perform Tenant’s obligations at Tenant’s expense; and
(e) pursue any other remedy available at law or in equity, including injunctive relief and summary eviction.

11.3 Attorney Fees. The prevailing Party in any action or proceeding to enforce this Lease shall be entitled to recover its reasonable attorney fees and costs.

12. DISPUTE RESOLUTION

12.1 Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of Utah, without regard to its conflicts-of-laws rules.

12.2 Forum Selection. Any suit arising out of or relating to this Lease shall be instituted exclusively in a state court of competent jurisdiction located in [COUNTY], Utah, and each Party irrevocably submits to the jurisdiction of such courts.

12.3 Optional Arbitration. At either Party’s election, any dispute (other than actions for possession or injunctive relief) may be resolved by binding arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules. The arbitration shall be conducted in [CITY], Utah, before a single arbitrator experienced in commercial real estate. Judgment on the award may be entered in any court of competent jurisdiction.

12.4 Optional Jury Waiver. TO THE EXTENT PERMITTED BY LAW, EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS LEASE.

12.5 Equitable Relief. Nothing in this Article shall limit either Party’s right to seek temporary, preliminary, or permanent injunctive relief or summary eviction in a court of law.

13. ESTOPPEL; SUBORDINATION; ATTORNMENT; SNDA

13.1 Estoppel Certificate. Within ten (10) Business Days after Landlord’s request, Tenant shall execute and deliver an estoppel certificate in the form reasonably requested by Landlord or its mortgagee.

13.2 Subordination and Attornment. This Lease is and shall be subordinate to any mortgage now or hereafter recorded against the Building, provided that the mortgagee agrees not to disturb Tenant’s possession so long as Tenant is not in Default. Tenant shall attorn to any successor-in-interest to Landlord.

13.3 SNDA. Upon request, Tenant shall execute a commercially reasonable Subordination, Non-Disturbance, and Attornment agreement in favor of Landlord’s lender.

14. MISCELLANEOUS

14.1 Notices. All notices shall be in writing and delivered by (a) personal delivery, (b) nationally recognized overnight courier, or (c) certified mail (return receipt requested) to the addresses set forth below (or such other address as a Party may designate by notice). Notice is deemed given upon receipt or first refusal.

14.2 Force Majeure. Neither Party shall be deemed in default to the extent performance is delayed or prevented by causes beyond its reasonable control, including acts of God, fire, flood, epidemic, war, terrorism, or governmental action (“Force Majeure”); provided, however, that financial inability shall not be deemed Force Majeure and this Section shall not excuse Tenant’s obligation to pay Rent.

14.3 Amendment and Waiver. No provision of this Lease may be modified except by a writing signed by authorized representatives of both Parties.

14.4 Severability. If any provision is declared invalid or unenforceable, the remainder of this Lease shall remain in full force, and the invalid provision shall be deemed reformed to the minimum extent necessary to render it enforceable.

14.5 Successors and Assigns. This Lease shall bind and benefit the Parties and their respective successors and permitted assigns.

14.6 Entire Agreement. This Lease, together with all Exhibits and any Work Letter, constitutes the entire agreement between the Parties with respect to the subject matter and supersedes all prior proposals and negotiations.

14.7 Counterparts; Electronic Signatures. This Lease may be executed in multiple counterparts, each of which shall be deemed an original. Electronic signatures or signatures transmitted by PDF shall be deemed original for all purposes.

15. 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: _____________________________

NOTARY ACKNOWLEDGMENTS

[Include Utah-compliant notary blocks if Lease will be recorded or if notarization is otherwise required by the Parties.]

EXHIBITS

Exhibit A – Floor Plan of Premises
Exhibit B – Work Letter (if applicable)
Exhibit C – Commencement Date Memorandum