COMMERCIAL LEASE AGREEMENT

(State of Hawai‘i)

[// GUIDANCE: This template is drafted for a single-tenant, fee-owned commercial property. Remove or adapt provisions for multi-tenant or ground-lease structures.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Demise & Premises
4. Term & Possession
5. Rent & Additional Charges
6. Security Deposit
7. Permitted Use & Operating Standards
8. Improvements & Alterations
9. Maintenance, Repairs & Utilities
10. Representations & Warranties
11. Covenants & Restrictions
12. Environmental Compliance
13. Insurance
14. Indemnification & Liability Allocation
15. Default & Remedies
16. Dispute Resolution
17. General Provisions
18. Execution Block

1. DOCUMENT HEADER

COMMERCIAL LEASE AGREEMENT (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [LANDLORD LEGAL NAME], a [ENTITY TYPE & JURISDICTION], having an address at [LANDLORD ADDRESS] (“Landlord”), and [TENANT LEGAL NAME], a [ENTITY TYPE & JURISDICTION], having an address at [TENANT ADDRESS] (“Tenant,” and together with Landlord, each a “Party,” and collectively, the “Parties”).

RECITALS

A. Landlord is the fee simple owner of certain real property located at [PROPERTY ADDRESS], County of [COUNTY], State of Hawai‘i, together with all improvements thereon (the “Property”).
B. Tenant desires to lease from Landlord, and Landlord desires to lease to Tenant, a portion of the Property described herein, upon the terms and conditions set forth below and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below. All capitalized terms not defined in this Section shall have the meanings ascribed to them elsewhere in this Agreement.

“Additional Rent” – All monetary obligations of Tenant other than Base Rent, including but not limited to Taxes, Operating Expenses, late charges, and any indemnity payments.

“Affiliate” – Any entity controlling, controlled by, or under common control with a Party.

“Base Rent” – The fixed rental payments specified in Section 5.1.

“Building” – The improvements situated upon the Land, including the [BUILDING NAME/NUMBER] comprising approximately [SQUARE FOOTAGE] rentable square feet.

“Commencement Date” – The date on which the Term begins, as established in Section 4.1.

“Environmental Laws” – All federal, state, and local statutes, regulations, and ordinances governing or relating to Hazardous Materials, including but not limited to 42 U.S.C. §§ 9601 et seq. (CERCLA) and Haw. Rev. Stat. §§ 342L-1 et seq.

“Event of Default” – Any of the occurrences enumerated in Section 15.1.

“Force Majeure Event” – As defined in Section 17.8.

“Hazardous Materials” – Any substance regulated by Environmental Laws, including petroleum products, asbestos-containing materials, and polychlorinated biphenyls.

“Land” – The parcel(s) of real estate legally described in Exhibit A.

“Lease Year” – Each consecutive twelve-month period beginning on the Commencement Date.

“Permitted Use” – The purpose(s) set forth in Section 7.1.

“Premises” – The portion of the Building demised to Tenant, outlined on the floor plan attached as Exhibit B, containing approximately [RSF] rentable square feet.

“Rent” – Collectively, Base Rent and Additional Rent.

“Security Deposit” – The deposit described in Section 6.1.

“Summary Possession” – The expedited eviction remedy under Haw. Rev. Stat. ch. 666.

3. DEMISE & PREMISES

3.1 Lease of Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, together with a non-exclusive right to use the Common Areas (as defined in Exhibit C) subject to the terms herein.

3.2 Condition of Premises. Tenant acknowledges that it has inspected the Premises and accepts the same in “AS-IS, WHERE-IS” condition, except for Landlord’s Work (if any) described in Exhibit D.

4. TERM & POSSESSION

4.1 Term. The term of this Lease (the “Term”) shall commence on the Commencement Date and continue for [NUMBER] ([##]) years, unless sooner terminated pursuant to this Agreement.

4.2 Possession. Landlord shall deliver possession on the Commencement Date with all Building systems in good working order.

4.3 Option(s) to Extend. Tenant shall have [NUMBER] renewal option(s) of [LENGTH] years each, exercisable by written notice to Landlord at least [##] days prior to the expiration of the then-current Term, subject to no Event of Default.

5. RENT & ADDITIONAL CHARGES

5.1 Base Rent. Tenant shall pay Base Rent in the amounts and on the schedule set forth below:

All Rent is due in advance on the first day of each calendar month.

5.2 Operating Expenses & Taxes. Tenant shall pay its proportionate share ( “Tenant’s Share”) of (a) real property taxes and assessments (“Taxes”) and (b) the Building’s operating, maintenance, and utility costs (“Operating Expenses”) as Additional Rent, within thirty (30) days after Landlord’s statement. [// GUIDANCE: Insert gross vs. triple-net structure as required.]

5.3 Late Charge & Interest. Any Rent not paid within five (5) days after due shall accrue a late charge of five percent (5%) of the overdue amount plus interest at the lesser of eight percent (8%) per annum or the maximum lawful rate.

5.4 Security Deposit. See Section 6.

6. SECURITY DEPOSIT

6.1 Amount; Use. Upon execution, Tenant shall deposit with Landlord the Security Deposit in the sum of \$[AMOUNT], to secure Tenant’s performance. Landlord may, without prejudice to other remedies, apply the Security Deposit to cure any Event of Default, and Tenant shall promptly replenish same.

6.2 Return. Provided Tenant has performed all obligations and surrendered the Premises as required, the unapplied balance shall be returned within forty-five (45) days after Lease termination.

7. PERMITTED USE & OPERATING STANDARDS

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

7.2 Compliance with Laws. Tenant shall comply with all applicable federal, state, and local laws, statutes, regulations, and ordinances, including the Hawai‘i Fire Code, Building Code, and Haw. Rev. Stat. ch. 666 regarding Summary Possession.

7.3 Nuisance; Hazardous Activities. Tenant shall not use or permit the Premises to be used for any unlawful or hazardous activity or create a nuisance or waste.

8. IMPROVEMENTS & ALTERATIONS

8.1 Landlord’s Work. If applicable, Landlord shall perform the work described in Exhibit D (“Landlord’s Work”) at Landlord’s cost.

8.2 Tenant’s Work & Alterations. Tenant shall not make any alterations, additions, or improvements (“Alterations”) without Landlord’s prior written consent (not unreasonably withheld). All Alterations shall (a) be performed by licensed contractors, (b) comply with all laws, and (c) become Landlord’s property upon installation unless Landlord elects removal.

8.3 Liens. Tenant shall keep the Property free from mechanic’s liens and shall indemnify Landlord therefrom.

9. MAINTENANCE, REPAIRS & UTILITIES

9.1 Landlord Obligations. Landlord shall maintain structural elements, roof, and Building systems (HVAC, electrical, plumbing) in good repair, except to the extent damaged by Tenant.

9.2 Tenant Obligations. Tenant shall maintain interior, non-structural portions of the Premises, including finishes, doors, and fixtures, in a clean, safe condition.

9.3 Utilities. Tenant shall pay directly (or reimburse Landlord for) all utility charges attributable to the Premises.

10. REPRESENTATIONS & WARRANTIES

10.1 Mutual Authority. Each Party represents and warrants that (a) it is duly organized, validly existing, and in good standing, and (b) it has full authority to enter into and perform this Agreement.

10.2 Landlord’s Title. Landlord represents that it holds fee simple title to the Property, free of encumbrances that would materially interfere with Tenant’s rights.

10.3 Survival. The representations and warranties set forth herein shall survive the execution hereof and any termination of this Agreement.

11. COVENANTS & RESTRICTIONS

11.1 Affirmative Covenants of Tenant. Tenant covenants to:
a. Pay Rent timely;
b. Maintain required insurance;
c. Promptly comply with governmental orders;
d. Provide access for inspections upon reasonable prior notice.

11.2 Negative Covenants of Tenant. Without Landlord’s prior consent, Tenant shall not:
a. Assign this Lease or sublet the Premises except as permitted in Section 11.3;
b. Use the Premises for residential purposes;
c. Permit any lien to attach to the Property.

11.3 Assignment & Subletting.
a. Procedure. Tenant may assign or sublet only with Landlord’s prior written consent, not to be unreasonably withheld, conditioned, or delayed.
b. Permitted Transfers. Notwithstanding the foregoing, no consent is required for a Transfer to an Affiliate or for a merger resulting in no change in ultimate control.
c. Recapture. Landlord shall have a [###-DAY] recapture option upon receipt of Tenant’s Transfer notice.
d. Liability. Tenant remains primarily liable after any Transfer.

[// GUIDANCE: Hawai‘i law does not impose a statutory reasonableness standard for commercial assignments; insert one if desirable for market.]

12. ENVIRONMENTAL COMPLIANCE

12.1 Tenant Obligations. Tenant shall, at its expense, (a) comply with all Environmental Laws, (b) obtain and maintain any required permits, and (c) not Release (as defined in CERCLA) Hazardous Materials on or about the Property.

12.2 Landlord Rights. Landlord may conduct environmental audits upon prior notice and shall keep results confidential, subject to legal disclosure requirements.

12.3 Indemnity. Tenant shall defend, indemnify, and hold harmless Landlord from all claims, costs, and liabilities arising from Tenant’s breach of this Section or the presence of Hazardous Materials introduced by Tenant.

12.4 Remediation. Tenant shall promptly remediate any contamination caused by Tenant in accordance with Environmental Laws and a plan approved by Landlord and the Hawai‘i Department of Health.

13. INSURANCE

13.1 Tenant Insurance. Tenant shall maintain at its sole cost:
a. Commercial General Liability: \$[LIMIT] combined single limit per occurrence;
b. Property/Business Interruption: full replacement cost;
c. Workers’ Compensation: statutory limits;
d. Environmental Impairment Liability (if applicable): \$[LIMIT].

13.2 Landlord Insurance. Landlord shall maintain all-risk property insurance on the Building (excluding Tenant’s personal property) and commercial liability insurance. Landlord may include Tenant’s Share of premiums in Operating Expenses.

13.3 Policy Requirements. All policies shall (a) name Landlord, its property manager, and mortgagee as additional insureds (except Workers’ Comp), (b) be primary and non-contributory, and (c) provide thirty (30) days’ prior written notice of cancellation.

14. INDEMNIFICATION & LIABILITY ALLOCATION

14.1 Tenant Indemnity. Tenant shall defend, indemnify, and hold harmless Landlord and its Affiliates from and against any and all claims, losses, damages, and expenses (including reasonable attorneys’ fees) arising out of (a) Tenant’s use or occupancy of the Premises, (b) any act or omission of Tenant or its agents, contractors, or invitees, or (c) any breach of this Lease by Tenant.

14.2 Landlord Indemnity. Landlord shall indemnify and hold harmless Tenant for claims arising from Landlord’s gross negligence or willful misconduct.

14.3 Limitation of Liability. [CAP TO BE NEGOTIATED: “In no event shall either Party’s aggregate liability exceed \$[CAP AMOUNT], except with respect to (a) indemnification obligations for third-party bodily injury or property damage, (b) fraud, or (c) matters covered by insurance.”]

14.4 Waiver of Consequential Damages. Except for damages arising from a Party’s willful misconduct or matters covered by Section 12, neither Party shall be liable for lost profits, diminution in value, or other consequential damages.

15. DEFAULT & REMEDIES

15.1 Events of Default. Each of the following constitutes an “Event of Default”:
a. Tenant’s failure to pay any Rent within five (5) days after written notice;
b. Tenant’s breach of any non-monetary covenant not cured within thirty (30) days after written notice (or such longer period as reasonably required so long as Tenant diligently pursues cure);
c. Tenant’s abandonment or vacation of the Premises;
d. Insolvency or bankruptcy of Tenant.

15.2 Landlord Remedies. Upon an Event of Default, Landlord may, subject to Haw. Rev. Stat. ch. 666:
a. Terminate this Lease and recover possession via Summary Possession;
b. Accelerate all Rent due for the balance of the Term, discounted to present value at five percent (5%);
c. Relet the Premises and recover deficiency;
d. Recover all reasonable attorneys’ fees and costs.

15.3 Tenant’s Remedies. If Landlord fails to perform an obligation and such failure continues for thirty (30) days after notice, Tenant may (a) perform the obligation and deduct reasonable costs from Rent (not to exceed the lesser of one month’s Base Rent or \$[CAP]), or (b) seek injunctive relief.

16. DISPUTE RESOLUTION

16.1 Governing Law. This Agreement shall be governed by and construed in accordance with the real property laws of the State of Hawai‘i.

16.2 Forum Selection. The Parties submit to the exclusive jurisdiction of the state courts located in the First Circuit, State of Hawai‘i.

16.3 Optional Arbitration. Either Party may elect, by written notice given within ten (10) days after service of a complaint, to submit any dispute (except Summary Possession or injunctions) to binding arbitration administered by Dispute Prevention & Resolution, Inc. (Honolulu) under its Commercial Rules. Judgment on the award may be entered in any court of competent jurisdiction.

16.4 Jury Waiver. [OPTIONAL: “The Parties hereby waive trial by jury in any action arising out of or relating to this Agreement.”]

16.5 Injunctive Relief. Notwithstanding Section 16.3, either Party may seek temporary or permanent injunctive relief (including eviction via Summary Possession) in a court of competent jurisdiction.

17. GENERAL PROVISIONS

17.1 Amendments. No amendment or waiver shall be effective unless in writing signed by both Parties.

17.2 Notices. All notices shall be in writing and deemed given upon (a) personal delivery, (b) certified mail, return receipt requested, or (c) nationally recognized overnight courier, addressed to the Parties at their addresses first above written (or such other address as may be designated).

17.3 Successors & Assigns. This Agreement shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns.

17.4 Severability. If any provision is held invalid, the remainder shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to effectuate the Parties’ intent.

17.5 Merger. This Agreement supersedes all prior negotiations and constitutes the entire agreement regarding the Premises.

17.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Electronic signatures shall be deemed originals for all purposes.

17.7 Estoppel Certificates. Each Party shall, within ten (10) days after request, execute an estoppel certificate containing customary information.

17.8 Force Majeure. Neither Party shall be liable for delays due to acts of God, governmental action, labor disputes, or other causes beyond its reasonable control, excluding financial inability.

18. EXECUTION BLOCK

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

LANDLORD:
[LANDLORD LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________

TENANT:
[TENANT LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________

NOTARY ACKNOWLEDGMENTS
[// GUIDANCE: Attach Hawai‘i notary blocks as required by Haw. Rev. Stat. ch. 456 if this Lease will be recorded (e.g., term ≥ one year).]

EXHIBITS

A. Legal Description of Land
B. Floor Plan of Premises
C. Common Areas Description & Rules
D. Landlord’s Work (If Any)
E. Insurance Requirements Detail

[// GUIDANCE: Confirm accuracy of square footage, rent schedule, and exhibits before execution. Review lender requirements for SNDA or recognition agreements if Landlord’s property is encumbered.]