Form 25-3

Office Lease

Basic Information

Date:

Landlord:

Landlord’s Address:

Tenant:

Tenant’s Address:

[Include if applicable: Guarantors: [see guaranty agreement at form 25-22 in this chapter]]

[Include if applicable: Guarantors’ Addresses:]

Premises

Approximate square feet:

Name of Building:

Street address/suite:

City, state, zip:

Term (months):

Commencement Date:

Termination Date:

Base Rent (monthly):

Security Deposit:

Tenant’s Pro Rata Share: [percent] percent ([percent]%)

Permitted Use:

Tenant’s Insurance: As required by Insurance Addendum

Landlord’s Insurance: As required by Insurance Addendum

Tenant’s Rebuilding Obligations: If the Premises are damaged by fire or other elements, Tenant will be responsible for repairing or rebuilding the following leasehold improve­ments: [see section 25.1:4]

A.Definitions

A.1.“Agent” means agents, employees, officers, directors, members and partners of the principal, and, to the extent under the control of the principal, invitees.

A.2.“Building Operating Hours” means 8:00 a.m. to 6:00 p.m. Monday through Fri­day, except holidays.

A.3.“Common Areas” means all facilities and areas of the Building [include if appli­cable: and Parking Facilities] and the related land that are intended and designated by Land­lord from time to time for the common, general, and nonexclusive use of all tenants of the Building. Landlord has the exclusive control over and right to manage the Common Areas.

A.4.“Essential Services” means the following services: (a) air-conditioning and heating to the Premises reasonable for the Permitted Use (exclusive of air-conditioning or heating for electronic data-processing or other specialized equipment) during Building Oper­ating Hours and at such other times at such additional cost as Landlord and Tenant may agree on, (b) hot and cold water for lavatory and drinking purposes, (c) janitorial service and peri­odic window washing, (d) elevator service, if necessary, to provide access to and from the Premises, (e) electric current for normal office machines and the Building’s standard lighting reasonable for the Permitted Use, and (f) lighting in Common Areas and fluorescent lights in the Building’s standard light fixtures on the Premises.

A.5.“Injury” means (a) harm to or impairment or loss of property or its use, (b) harm to or death of a person, or (c) “personal and advertising injury” as defined in the form of liabil­ity insurance Tenant is required to maintain.

A.6.“Lienholder” means the holder of a deed of trust encumbering the Premises.

A.7.“Operating Expenses” means all reasonable expenses, including real property taxes, that Landlord pays in connection with the ownership, operation, and maintenance of the Building, except principal and interest on any debt, expenditures classified as capital expendi­tures for federal income tax purposes, and expenses for which Tenant is required to reimburse Landlord.

A.8.“Parking Facility” means the facility or area described in the attached parking facility rider.

A.9.“Rent” means Base Rent plus any other amounts of money payable by Tenant to Landlord.

B.Tenant’s Obligations

B.1.Tenant agrees to—

B.1.a.Lease the Premises for the entire Term beginning on the Commencement Date and ending on the Termination Date.

B.1.b.Accept the Premises in their present condition “AS IS,” the Premises being cur­rently suitable for the Permitted Use.

B.1.c.Obey (i) all laws relating to Tenant’s use, maintenance of the condition, and occupancy of the Premises and Tenant’s use of any Common Areas in the Building; (ii) any requirements imposed by utility companies serving or insurance companies covering the Premises or Building; and (iii) any rules and regulations for the Building and Common Areas adopted by Landlord.

B.1.d.Pay monthly, in advance, without demand, on the first day of the month, the Base Rent to Landlord at Landlord’s Address.

B.1.e.Pay a late charge of 5 percent of any Rent not received by Landlord by the tenth day after it is due.

B.1.f.Obtain and pay for all utility services used by Tenant and not provided by Land­lord.

B.1.g.Pay (i) monthly, in advance, Tenant’s Pro Rata Share of the monthly estimated Operating Expenses and (ii) annually, any amount by which the actual Operating Expenses exceed the estimated Operating Expenses, within thirty days of receiving notice of such dif­ference from the Landlord.

B.1.h.Allow Landlord to enter the Premises to perform Landlord’s obligations, inspect the Premises, and show the Premises to prospective purchasers or tenants.

B.1.i.Repair, replace, and maintain any part of the Premises that Landlord is not obli­gated to repair, replace, or maintain, normal wear excepted.

B.1.j.Submit in writing to Landlord any request for repairs, replacement, and mainte­nance that are the obligations of Landlord.

B.1.k.If requested, deliver to Landlord a financing statement perfecting the security interest created by this lease.

B.1.l.Vacate the Premises and return all keys to the Premises on the last day of the Term.

B.1.m.On request, execute an estoppel certificate that states the Commencement Date and Termination Date of the lease, identifies any amendments to the lease, describes any rights to extend the Term or purchase rights, lists defaults by Landlord, and provides any other information reasonably requested.

B.1.n.Arrange with Landlord in advance for any heating, air-conditioning, or electri­cal needs in excess of the services provided by Landlord and pay for such additional services as billed by Landlord.

B.1.o.Indemnify, defend, and hold Landlord, Lienholder, and their respec­tive Agents, successors, and assigns harmless from any Injury (and any result­ing or related claim, action, loss, liability, or reasonable expense, including attorney’s fees and other fees and court and other costs) occurring, either before or after the end of the Term, in any portion of the Premises if caused, in whole or in part, by the acts or omissions of Tenant, its Agents, successors, and assigns, or those acting on Tenant’s behalf, including in whole or in part by their negligent acts or omissions. The indemnity contained in this paragraph (i) is independent of Tenant’s Insurance, (ii) will not be limited by comparative negligence statutes or damages paid under the Workers’ Compensation Act or similar employee benefit acts, (iii) will survive the end of the Term, and (iv) will apply even if an Injury is caused in part by the ordinary negligence or strict liability of Landlord, Lienholder, or their respective Agents, suc­cessors, and assigns but will not apply to the extent an Injury is caused, in whole or in part, by the gross negligence or willful misconduct of Land­lord, Lienholder, or their respective Agents, successors, and assigns.

B.2.Tenant agrees not to—

B.2.a.Use the Premises for any purpose other than the Permitted Use.

B.2.b.Create a nuisance.

B.2.c.Interfere with any other tenant’s normal business operations or Landlord’s man­agement of the Building.

B.2.d.Permit any waste.

B.2.e.Use the Premises in any way that would increase insurance premiums or void insurance on the Building.

B.2.f.Change Landlord’s lock system.

B.2.g.Alter the Premises.

B.2.h.Allow a lien to be placed on the Premises.

B.2.i.Assign this lease or sublease any portion of the Premises without Landlord’s written consent.

C.Landlord’s Obligations

C.1.Landlord agrees to—

C.1.a.Lease to Tenant the Premises for the entire Term beginning on the Commence­ment Date and ending on the Termination Date.

C.1.b.Obey all laws relating to Landlord’s operation of the Building and Common Areas.

C.1.c.Provide the Essential Services.

C.1.d.Repair, replace, and maintain the (i) roof, (ii) foundation, (iii) Common Areas,
(iv) structural soundness of the exterior walls, doors, corridors, and windows, and (v) other structures or equipment serving the Premises.

C.1.e.Return the Security Deposit to Tenant, less itemized deductions, if any, on or before the sixtieth day after the date Tenant surrenders the Premises.

C.1.f.Provide Tenant promptly after receipt of a written request from Tenant with a reconciliation of Tenant’s Pro Rata Share of the actual Operating Expenses incurred by Land­lord during the preceding calendar year and the estimated Operating Expenses paid by Tenant for the same period and reimburse Tenant for the amount of any estimated Operating Expenses paid by Tenant in excess of Tenant’s Pro Rata Share of actual Operating Expenses for the preceding calendar year.

C.1.g.Provide Tenant with detailed invoices for all heating, air-conditioning, and elec­trical charges in excess of the Essential Services for which Landlord requests reimbursement.

C.1.h.Indemnify, defend, and hold Tenant and its Agents, successors, and assigns harmless from any Injury and any resulting or related claim, action, loss, liability, or reasonable expense, including attorney’s fees and other fees and court and other costs, occurring, either before or after the end of the Term, in the Common Areas if caused, in whole or in part, by the acts or omissions of Landlord, its Agents, successors, and assigns, or those acting on Landlord’s behalf, including in whole or in part by their negligent acts or omissions. The indemnity contained in this paragraph (i) is independent of Landlord’s Insur­ance, (ii) will not be limited by comparative negligence statutes or damages paid under the Workers’ Compensation Act or similar employee benefit acts, (iii) will survive the end of the Term, and (iv) will apply even if an Injury is caused in part by the ordinary negligence or strict liability of Tenant or its Agents, successors, and assigns but will not apply to the extent an Injury is caused, in whole or in part, by the gross negligence or willful misconduct of Tenant or its Agents, successors, and assigns.

C.2.Landlord agrees not to—

C.2.a.Interfere with Tenant’s possession of the Premises as long as Tenant is not in default.

C.2.b.Unreasonably withhold consent to a proposed assignment or sublease.

D.General Provisions

Landlord and Tenant agree to the following:

D.1.Alterations.      Any physical additions or improvements to the Premises made by Tenant will become the property of Landlord. Landlord may require that Tenant, at the end of the Term and at Tenant’s expense, remove any physical additions and improvements, repair any alterations, and restore the Premises to the condition existing at the Commencement Date, normal wear excepted.

D.2.Abatement.      Tenant’s covenant to pay Rent and Landlord’s covenants are inde­pendent. Except as otherwise provided, Tenant may not abate Rent for any reason.

D.3.Insurance.      Tenant and Landlord will maintain the respective insurance cover­ages described in the attached Insurance Addendum.

D.4.Release of Claims/Subrogation.      Landlord and Tenant release each other, Lienholder, and their respective Agents, successors, and assigns from all claims or liabilities for damage to the Premises or Building, damage to or loss of personal property within the Building, and loss of business or revenues that are insured by the releasing party’s property insurance or that would have been insured by the required insurance if the party fails to maintain the property coverages required by this lease. The party incurring the damage or loss will be responsible for any deductible or self-insured retention under its property insurance. Landlord and Tenant will notify the issuing property insurance com­panies of the release set forth in this paragraph and will have the property insurance policies endorsed, if necessary, to prevent invalidation of coverage. This release will not apply if it invalidates the property insurance coverage of the releasing party. The release in this paragraph will apply even if the dam­age or loss is caused, in whole or in part, by the ordinary negligence or strict liability of the released party or its Agents, successors, and assigns but will not apply to the extent the damage or loss is caused in whole or in part by the gross negligence or willful misconduct of the released party or its Agents, successors, and assigns.

D.5.Casualty/Total or Partial Destruction

D.5.a.If the Premises are damaged by casualty and can be restored within ninety days, Landlord will, at its expense, restore the roof, foundation, Common Areas, and structural soundness of the exterior walls of the Premises and any leasehold improvements within the Premises that are not within Tenant’s Rebuilding Obligations to substantially the same condi­tion that existed before the casualty and Tenant will, at its expense, be responsible for replac­ing any of its damaged furniture, fixtures, and personal property and performing Tenant’s Rebuilding Obligations. If Landlord fails to complete the portion of the restoration for which Landlord is responsible within ninety days from the date of written notification by Tenant to Landlord of the casualty, Tenant may terminate this lease by written notice delivered to Land­lord before Landlord completes Landlord’s restoration obligations.

D.5.b.If the Premises cannot be restored within ninety days, Landlord has an option to restore the Premises. If Landlord chooses not to restore, this lease will terminate. If Landlord chooses to restore, Landlord will notify Tenant of the estimated time to restore and give Tenant an option to terminate this lease by notifying Landlord within ten days. If Tenant does not terminate this lease, the lease will continue and Landlord will restore the Premises as pro­vided in D.5.a. above.

D.5.c.To the extent the Premises are untenantable after the casualty, the Rent will be adjusted as may be fair and reasonable.

D.6.Condemnation/Substantial or Partial Taking

D.6.a.If the Premises cannot be used for the purposes contemplated by this lease because of condemnation or purchase in lieu of condemnation, this lease will terminate.

D.6.b.If there is a condemnation or purchase in lieu of condemnation and this lease is not terminated, Landlord will, at Landlord’s expense, restore the Premises, and the Rent pay­able during the unexpired portion of the Term will be adjusted as may be fair and reasonable.

D.6.c.Tenant will have no claim to the condemnation award or proceeds in lieu of condemnation.

D.7.Uniform Commercial Code.      Tenant grants Landlord a security interest in Tenant’s personal property now or subsequently located on the Premises. This lease is a secu­rity agreement under the Uniform Commercial Code. Landlord may file financing statements or continuation statements to perfect or continue the perfection of the security interest.

D.8.Default by Landlord/Events.      Defaults by Landlord are failing to comply with any provision of this lease within thirty days after written notice and failing to provide Essen­tial Services to Tenant within ten days after written notice.

D.9.Default by Landlord/Tenant’s Remedies.      Tenant’s remedies for Landlord’s default are to sue for damages and, if Landlord does not provide an Essential Service within thirty days after default, terminate this lease. Tenant may not terminate under this paragraph while in arrears for Rent.

D.10.Default by Tenant/Events.      Defaults by Tenant are (a) failing to pay Rent timely, (b) abandoning the Premises or vacating a substantial portion of the Premises, and (c) failing to comply within ten days after written notice with any provision of this lease other than the defaults set forth in (a) and (b).

D.11.Default by Tenant/Landlord’s Remedies.      Landlord’s remedies for Tenant’s default are to (a) enter and take possession of the Premises and sue for Rent as it accrues; (b) enter and take possession of the Premises, after which Landlord may relet the Premises on behalf of Tenant and receive the Rent directly by reason of the reletting, and Tenant agrees to reimburse Landlord for any expenditures made in order to relet; (c) enter the Premises and perform Tenant’s obligations; and (d) terminate this lease by written notice and sue for dam­ages. Landlord may enter and take possession of the Premises by self-help, by picking or changing locks if necessary, and may lock out Tenant or any other person who may be occu­pying the Premises, until the default is cured, without being liable for damages.

D.12.Default/Waiver.      All waivers must be in writing and signed by the waiving party. Landlord’s failure to enforce any provisions of this lease or its acceptance of late installments of Rent will not be a waiver and will not estop Landlord from enforcing that pro­vision or any other provision of this lease in the future.

D.13.Landlord’s Recovery of Rent and/or Damages for Tenant’s Default

D.13.a.      If Tenant is in arrears on the payment of Rent and Landlord has terminated Tenant’s possession, Landlord may sue Tenant for Rent as it accrues and periodically take judgments without prejudice to sue for Rent that may accrue in the future. Landlord has a duty to mitigate Rent as follows: within thirty days of Landlord taking possession, (i) place a “For Lease” sign at the Premises, (ii) place the leased Premises on Landlord’s inventory of avail­able space, (iii) make Landlord’s inventory available to area brokers on a monthly basis, (iv) advertise the Premises for lease in a suitable trade journal or newspaper in the county where the Premises are located at least once per month, and (v) show the Premises to prospec­tive tenants who request to see it. Landlord is only under a duty to show the Premises as built and for the remainder of the Term of the lease. If Landlord has made these mitigation efforts, Landlord and Tenant agree that Landlord has made objectively reasonable efforts to mitigate the loss of Rent as a result of the default of Tenant.

D.13.b.      If Tenant has anticipatorily breached the lease and Landlord has terminated the lease, Landlord may sue Tenant for damages for Rent that may accrue for the remainder of the Term of the lease. The measure of damages is the difference between the Rent for the remainder of the Term and the fair market value of the Premises discounted to its present value. Nothing in this section shall prevent Landlord from suing for Rent as it accrues under D.13.a. above and suing for damages for Rent that will accrue through the end of the lease Term under this section.

D.14.Security Deposit.      If Tenant defaults, Landlord may use the Security Deposit to pay arrears of Rent, to repair any damage or injury, or to pay any expense or liability incurred by Landlord as a result of the default.

D.15.Holdover.      If Tenant does not vacate the Premises following termination of this lease, Tenant will become a tenant at will and must vacate the Premises on receipt of notice from Landlord. No holding over by Tenant, whether with or without the consent of Landlord, will extend the Term.

D.16.Alternative Dispute Resolution.      Landlord and Tenant agree to mediate in good faith before filing a suit for damages.

D.17.Attorney’s Fees.      If either party retains an attorney to enforce this lease, the party prevailing in litigation is entitled to recover reasonable attorney’s fees and other fees and court and other costs.

D.18.Venue.      Exclusive venue is in the county in which the Premises are located.

D.19.Entire Agreement.      This lease and its exhibits, addenda, and riders are the entire agreement of the parties concerning the lease of the Premises by Landlord to Tenant. Landlord has not made and does not make any representations about the commercial suitability, physical condition, layout, footage, expenses, or operation of the Premises or any other matter affecting or relating to the Premises and this agreement, except as specifically set forth in this lease. As an inducement to Landlord to enter into this lease, Tenant expressly acknowledges and warrants that no such representations have been made and Tenant is not relying on any representations not contained in this lease and any exhibits, addenda, and riders.

D.20.Amendment of Lease.      This lease may be amended only by an instrument in writing signed by Landlord and Tenant.

D.21.Limitation of Warranties.      There are no implied warranties of suitabil­ity, of merchantability, of fitness for a particular purpose, or of any other kind arising out of this lease, and there are no warranties that extend beyond those expressly stated in this lease.

D.22.Notices.      Any notice required or permitted under this lease must be in writing. Any notice required by this lease will be deemed to be given (whether received or not) the ear­lier of receipt or three business days after being deposited with the United States Postal Ser­vice, postage prepaid, certified mail, return receipt requested, and addressed to the intended recipient at the address shown in this lease. Notice may also be given by regular mail, per­sonal delivery, courier delivery, or e-mail and will be effective when received. Any address for notice may be changed by written notice given as provided herein.

D.23.Use of Common Areas.      Tenant will have the nonexclusive right to use the Common Areas subject to any reasonable rules and regulations that Landlord may prescribe.

D.24.Abandoned Property.      Landlord may retain, destroy, or dispose of any prop­erty left on the Premises at the end of the Term.

   
[Name of landlord]

   
[Name of tenant]