AI Generated American Commercial Lease Renewal Agreement
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This Commercial Lease Renewal Agreement is made and entered into as of the effective date specified herein by and between the Landlord and the Tenant.

The Landlord and the Tenant entered into a Commercial Lease Agreement No. 2020-001 dated 2020-06-15 for the lease of certain premises described therein.

The Landlord and the Tenant now desire to renew the lease upon the terms and conditions set forth in this Commercial Lease Renewal Agreement.

"Base Rent" means the fixed periodic payment specified in Section 4 for the use of the Premises.

"CAM" or "Common Area Maintenance" means the Tenant’s pro-rata share of expenses for the operation, maintenance, and repair of the common areas of the Property.

"Default" means any failure by a party to perform any obligation under this Agreement or the Lease that continues beyond any applicable notice and cure period.

"Landlord" means ABC Retail Properties LLC, a California limited liability company, whose address for notices is 123 Main Street, Suite 100, Los Angeles, CA 90001.

"Lease" means the original Commercial Lease Agreement No. 2020-001 dated June 15, 2020, between Landlord and Tenant, a copy of which is attached hereto as Exhibit A and incorporated by reference.

"Operating Expenses" means all reasonable and necessary expenses incurred by Landlord in operating, maintaining, and repairing the Property, excluding capital expenditures unless amortized.

"Permitted Use" means the retail sale of clothing and accessories.

"Premises" means the approximately 2,500 square feet of retail space located at 456 Retail Plaza, Suite 10, Los Angeles, CA 90001, as more particularly described in Exhibit B.

"Property" means the building and land of which the Premises are a part.

"Renewal Term" means the five-year period commencing on January 1, 2024, and ending on December 31, 2028.

"Tenant" means XYZ Retail Inc., a California corporation, whose address for notices is 789 Business Avenue, Los Angeles, CA 90001.

This Agreement is entered into between Landlord: ABC Retail Properties LLC, a California limited liability company with its principal place of business at 123 Main Street, Suite 100, Los Angeles, CA 90001, and Tenant: XYZ Retail Inc., a California corporation with its principal place of business at 789 Business Avenue, Los Angeles, CA 90001.

The Premises consist of approximately 2,500 square feet of retail space located at 456 Retail Plaza, Suite 10, Los Angeles, CA 90001, as shown on the site plan and legal description attached as Exhibit B.

The original Lease dated June 15, 2020, is incorporated herein by reference as if fully set forth. A copy of the original Lease is attached as Exhibit A.

Notices shall be sent to the addresses set forth in the Definitions section or to such other address as a party may designate by written notice.

The Landlord hereby leases to the Tenant and the Tenant hereby leases from the Landlord the Premises for the Renewal Term of five (5) years commencing on January 1, 2024, and ending on December 31, 2028.

This Agreement shall become effective on the date it is fully executed by both parties (the "Execution Date"). The renewal of the Lease shall be effective as of January 1, 2024 (the "Effective Date").

The Tenant shall have the option to renew the Lease for one (1) additional term of five (5) years upon providing written notice to the Landlord not less than six (6) months prior to the expiration of the Renewal Term, on the same terms and conditions except that Base Rent shall be adjusted to fair market value.

The Tenant shall pay to the Landlord a Base Rent in the fixed amount of $25.50 per square foot of the Premises (equaling $5,312.50 per month) during the Renewal Term.

The Base Rent shall be payable in equal monthly installments in advance on the first day of each calendar month during the Renewal Term.

The Base Rent shall be subject to annual escalation of three percent (3\%) on each anniversary of the commencement of the Renewal Term.

Tenant has previously deposited with Landlord the sum of $15,000.00 as a security deposit (the "Security Deposit"), which Landlord shall continue to hold during the Renewal Term.

The Security Deposit is not a non-refundable fee. It is intended to secure Tenant’s faithful performance of all terms, covenants, and conditions of the Lease and this Agreement.

Landlord may, but is not obligated to, apply all or any portion of the Security Deposit to cure any default by Tenant. Landlord shall not commingle the Security Deposit with its general funds and, to the extent required by California Civil Code Section 1950.5, shall deposit it in a separate account.

Within sixty (60) days after the expiration or termination of the Lease and Tenant’s vacation of the Premises, Landlord shall return the Security Deposit to Tenant, less any amounts deducted for (i) unpaid rent, (ii) the cost of repairing any damage to the Premises caused by Tenant beyond normal wear and tear, (iii) cleaning costs to return the Premises to the condition at the commencement of the original Lease, and (iv) any other sums owed under the Lease or this Agreement. Landlord shall provide Tenant with an itemized statement of any deductions.

No interest shall accrue on the Security Deposit unless required by applicable California law, in which case it shall accrue at the rate required by law.

The Tenant shall use the Premises solely for the Permitted Use and for no other purpose.

The Tenant confirms that the proposed use of the Premises complies with all applicable local zoning laws and shall comply with all other applicable laws.

Each party shall comply with all applicable federal, state, and local laws, ordinances, and regulations relating to its respective obligations under this Agreement and the Lease.

Landlord represents that, to the best of its knowledge, the Premises and the Property currently comply with all applicable laws, including the Americans with Disabilities Act (ADA) as it applies to the common areas and structural elements. Tenant shall be responsible for compliance with the ADA as it relates to Tenant’s alterations, improvements, and specific use of the Premises.

Tenant shall not use, store, generate, or dispose of any Hazardous Materials in or about the Premises except in compliance with all applicable environmental laws. Tenant shall indemnify, defend, and hold Landlord harmless from any claims, damages, or costs (including attorneys’ fees) arising from Tenant’s violation of environmental laws or the presence of Hazardous Materials introduced by Tenant.

Landlord represents that, to its knowledge, there are no Hazardous Materials on the Property in violation of applicable laws as of the Effective Date.

In addition to the Base Rent, the Tenant shall pay to the Landlord as additional rent the Tenant’s share of Operating Expenses during the Renewal Term.

The Tenant shall pay to the Landlord as additional rent the Tenant’s share of CAM charges during the Renewal Term.

The Tenant shall pay to the Landlord as additional rent the Tenant’s pro-rata share of property taxes during the Renewal Term.

The Tenant’s share of Operating Expenses and CAM charges shall be calculated based on the ratio of the square footage of the Premises (2,500 square feet) to the total rentable square footage of the building (15,000 square feet), or approximately 16.67\%.

The Tenant shall pay the Tenant’s share of Operating Expenses and CAM charges monthly in advance along with the Base Rent, subject to annual reconciliation based on actual costs.

The Tenant shall be responsible for paying all charges for electricity, gas, and trash removal utilities and services during the Renewal Term.

The Landlord shall be responsible for paying all charges for water, sewer, and janitorial services for the common areas during the Renewal Term.

Landlord shall be responsible for the maintenance and repair of the building HVAC system serving the Premises, except for any supplemental HVAC units installed by Tenant, which shall be Tenant’s responsibility.

The responsibilities for utilities and services under this Agreement shall control over any conflicting provisions in the original Lease.

Landlord shall be responsible for maintenance and repairs to the structural elements of the building, including the roof, foundation, exterior walls, and building systems (except as provided in Section 10).

Tenant shall be responsible for the routine maintenance and repairs of the interior of the Premises, its trade fixtures, and any supplemental systems installed by Tenant.

Tenant shall not make any alterations, additions, or improvements to the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld. All alterations shall be performed in a workmanlike manner, in compliance with all applicable laws and building permits, and shall not create any liens on the Property. Tenant shall provide Landlord with lien waivers from all contractors.

At the expiration or termination of the Renewal Term, Tenant shall surrender the Premises in the same condition as received, reasonable wear and tear excepted, and shall remove all of its personal property and any alterations Landlord requires to be removed.

Tenant shall provide Landlord with at least thirty (30) days prior written notice before undertaking any major repairs or alterations (except in emergencies). In the event of emergency repairs necessary to prevent damage to the Premises, Tenant may proceed without notice but shall notify Landlord as soon as practicable and shall not be entitled to reimbursement unless the repair is Landlord’s responsibility under this Agreement.

Tenant shall, at its sole cost, procure and maintain during the Renewal Term: (i) commercial general liability insurance with limits of not less than $1,000,000 per occurrence and $2,000,000 aggregate; (ii) commercial property insurance covering Tenant’s improvements, inventory, and personal property in amounts not less than full replacement cost; (iii) business interruption insurance; and (iv) such other coverages as may be reasonably required by Landlord.

All policies shall be written on an occurrence basis with insurers rated A-VII or better by A.M. Best, shall name Landlord and any mortgagee as additional insureds, and shall provide that they may not be canceled or modified without at least thirty (30) days’ prior written notice to Landlord. Tenant shall deliver certificates of insurance to Landlord prior to the Effective Date and upon each renewal.

Landlord shall maintain commercial property insurance on the building (excluding Tenant’s improvements and personal property) and commercial general liability insurance in commercially reasonable amounts. Tenant shall reimburse Landlord for Tenant’s pro-rata share of the premiums for such insurance as part of Operating Expenses, which share shall be auditable by Tenant upon reasonable notice.

If Tenant fails to obtain or maintain the required insurance, Landlord may (but is not obligated to) procure such insurance and charge Tenant the cost thereof plus a reasonable administrative fee.

Landlord and Tenant each waive any rights of subrogation and release the other from any and all claims arising from perils that are or could be covered by the insurance required hereunder, to the extent of insurance proceeds received (or that would have been received had the waiving party carried the required insurance). Each party shall cause its insurers to issue appropriate waivers of subrogation.

If the Premises are damaged by fire or other casualty, Tenant shall immediately notify Landlord. If the damage is not more than twenty-five percent (25\%) of the replacement cost of the Premises and can be repaired within one hundred eighty (180) days, Landlord shall repair the Premises (except for Tenant’s personal property and alterations) with due diligence, and Base Rent shall abate proportionately during the repair period to the extent the Premises are untenantable.

If the damage exceeds twenty-five percent (25\%) of replacement cost or cannot be repaired within one hundred eighty (180) days, either party may terminate this Agreement by written notice within thirty (30) days after the casualty, in which case rent shall abate from the date of the casualty. Insurance proceeds for the building shall belong to Landlord; proceeds for Tenant’s property shall belong to Tenant.

If all or a material part of the Premises is taken by condemnation or eminent domain, either party may terminate this Agreement effective as of the date of taking, with a proportionate abatement of rent. Any award shall belong to Landlord, except that Tenant may claim any separate award for its moving expenses, trade fixtures, or loss of business.

For a temporary taking of less than one (1) year, this Agreement shall not terminate, but rent shall abate proportionately for the period of the taking to the extent the Premises are untenantable.

Tenant shall indemnify, defend, and hold harmless Landlord from and against all claims, liabilities, damages, and expenses (including reasonable attorneys’ fees) arising from Tenant’s use of the Premises or any negligence or willful misconduct of Tenant or its agents, except to the extent caused by Landlord’s negligence or willful misconduct.

Landlord shall indemnify, defend, and hold harmless Tenant from and against all claims, liabilities, damages, and expenses (including reasonable attorneys’ fees) arising from Landlord’s negligence or willful misconduct with respect to the Property or common areas.

The indemnified party shall give prompt notice of any claim to the indemnifying party, and the indemnifying party shall have the right to control the defense, provided that the indemnified party may participate at its own expense.

The Tenant may assign this Agreement or sublet the Premises only with the prior written consent of the Landlord, which consent shall not be unreasonably withheld, conditioned, or delayed.

The Tenant shall provide the Landlord with at least thirty (30) days written notice before requesting approval for any assignment or subletting, together with information regarding the proposed assignee or subtenant.

The Tenant shall remain primarily liable for all obligations under this Agreement and the Lease after any approved assignment or subletting.

Any transfer without Landlord’s consent shall constitute a Default under this Agreement.

In addition to failure to pay rent when due, the following shall constitute events of Default by Tenant: (i) failure to maintain required insurance; (ii) assignment or subletting without consent; (iii) creation of any lien on the Premises not discharged within thirty (30) days; (iv) abandonment of the Premises; or (v) bankruptcy or insolvency proceedings.

Tenant shall have a grace period of five (5) days after written notice to cure any monetary Default, and thirty (30) days after written notice to cure any non-monetary Default (or such longer time as may be reasonably necessary if the Default cannot reasonably be cured within thirty (30) days, provided Tenant has commenced cure and is diligently pursuing it).

If Landlord defaults in the performance of any obligation under this Agreement, Tenant shall give Landlord written notice specifying the default. Landlord shall have thirty (30) days after receipt of such notice to cure the default (or longer if the default cannot reasonably be cured within that time and Landlord is diligently pursuing cure). If Landlord fails to cure, Tenant may pursue any remedies available at law or in equity, including but not limited to self-help (after further notice), rent offset for the reasonable cost of curing Landlord’s default, or termination of this Agreement.

Upon Tenant’s Default, Landlord may, in addition to other remedies: (i) terminate this Agreement and recover possession; (ii) re-enter and relet the Premises; (iii) accelerate and recover the present value of all remaining Base Rent and additional rent for the balance of the Renewal Term (discounted at the Federal Reserve discount rate); and (iv) recover damages, including the costs of reletting and any deficiency in rent.

Landlord may impose late fees equal to five percent (5\%) of any overdue payment. The prevailing party in any action to enforce this Agreement shall be entitled to recover its reasonable attorneys’ fees and costs from the non-prevailing party. This provision is mutual.

This Agreement shall be subordinated to any existing or future mortgages or deeds of trust on the Property, provided that Landlord obtains a commercially reasonable subordination, non-disturbance, and attornment agreement from the lender protecting Tenant’s rights hereunder.

The Tenant shall provide an estoppel certificate to the Landlord within ten (10) days after request, confirming the status of the Lease, rent payments, and any known defaults.

The original Lease commenced on June 15, 2020.

Each party represents and warrants that there are no existing defaults under the original Lease as of the Execution Date.

Each party represents that, to its knowledge, the other party is not in default under the original Lease.

The parties represent that the original Lease is in full force and effect without any unrecorded modifications or amendments.