DIRECT LEASE AGREEMENT

DIRECT LEASE AGREEMENT

BY AND BETWEEN

[insert name] (“Landlord”)

AND

[insert name] (“Tenant”)

PROPERTY:

[insert details of property/premises to be leased]

DATED:                     , 2021

This Lease (“Lease”), is made and entered into this      day of             , 2021 (the “Effective Date”, defined as the last date that any party to this Lease executes the same), between the Landlord and the Tenant hereinafter name:

WHEREAS, the Landlord is the registered owner of all that parcel of land known as _____________ measuring approximately _______________ and situated at _____________, Hawaii. (the “Property”)

WHEREAS, the Tenant wishes to lease from the Landlord, and the Landlord has agreed to lease to the Tenant the Property and certain assets for the purpose of operating an outdoor fitness center, all on the terms and subject to the conditions set forth in this Agreement; .

NOW, THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the rents, covenants, and agreements hereinafter reserved and contained on the part of the Tenant to be paid, observed and performed, the parties hereto hereby covenant and agree with each other as follows.

ARTICLE I PROPERTIES FOR LEASE

1. In consideration of the Rent agreed to be paid and of the covenants and agreements made by the respective parties hereto and the terms and conditions of this Lease, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord the Property, upon the terms and conditions herein provided.
2. The Landlord hereby further grants to the Tenant a Lease of the all equipment, furniture, materials, decorations and other items located in the Leased Premises (the “Fitness Center Assets”) as of the date of this Lease and used in connection with the outdoor fitness center business to be operated from the Leased Premises for the duration of the Term and otherwise on the terms and conditions set forth in this Agreement.
3. The Tenant acknowledges and confirms that it has agreed to lease the Property and the Fitness Center Assets after having examining them and confirmed that they are, as of the date of this Agreement, in a good state of repair and suitable for the Business. The Tenant accepts the Leased Premises and the Fitness Center Assets under this Agreement entirely as they are as of the date hereof.
4. Condition Precedent. – It is a condition precedent for the effectivity of this Lease Agreement that the Tenant submits to the Landlord a copy of its Articles of Incorporation and By-Laws and latest General Information Sheet including a Board Resolution specifically authorizing the corporation and the person representing the same in this instance to enter into this lease agreement with the Landlord under the terms and conditions contained herein.

ARTICLE II CONSIDERATION

1. Rental Payment – Within the first five (5) days of each quarter, the Tenant shall pay the Landlord rent for the upcoming quarter calculated as follows: monthly rent at the rate of [insert amount] per square meter or the total amount of [insert total amount].
2. Advance Rental Payment. -Within five (5) days from the signing of this Lease Agreement, the Tenant shall remit to the Landlord an amount equivalent to three (3) months’ rent or the total sum of [insert amount] to be applied as rental payment for the last two (3) months of this contract.
3. Security Deposit. – Within five (5) days upon the signing of this Lease Agreement, the Tenant shall remit to the Landlord an amount equivalent to three (3) month’s rent or [insert amount] to serve as security deposit for any unpaid utility bills such as electricity, water, telephone, sanitation, sewerage and others, and to answer for any damages which the Property and the Fitness Center Assets may suffer as well as to cover any unpaid monthly rent; interests or penalties. This amount is refundable to the Tenant free of any interest sixty (60) days after the termination of this Lease Agreement subject to deduction for whatever utility bills and monthly rentals, interests, penalties that have remained unpaid and damages that may have been incurred, provided, that the Tenant shall still be liable for any and all bills, rentals, interests, penalties and damages that may exceed this security deposit. The Tenant shall not be allowed to offset or use its security deposit as its monthly rental payment.
4. Late Charge – A late charge of five percent (5%) of the Rent payment shall be added to each and every Rent payment which is not received by Landlord on or prior to the fifth (5^th) day of the month for which such payment is due.
5. Quiet Enjoyment – Tenant, upon paying all sums due from Tenant to Landlord and performing and observing all of the terms, covenants and conditions of this Lease on Tenant’s part to be performed and observed, shall peaceably and quietly have, hold and enjoy the Property and the Fitness Center Assets during the Lease Term without interference from Landlord or its representatives subject nevertheless to the terms of this Lease and to any mortgages, ground or underlying leases, agreements and encumbrances to which this Lease is or may be subordinated.

ARTICLE III TERM OF LEASE

1. Term. – Unless earlier terminated for reasons specified herein, the term of this Lease Agreement shall be for five (5) years to start on _____________ and end on _____________, and shall be renewable upon mutual agreement of the parties.

ARTICLE IV PURPOSE OF THE LEASE

1. Use of the Property and Fitness Center Assets. – The Tenant shall use the Property and Fitness Center Assets strictly and exclusively as an outdoor fitness Center. If the Property and the Fitness Center Assets is used for other purposes, the Landlord has the choice to:

(i)Rescind the Lease Agreement; or

(ii)Increase the rent; or

(iii)Compel the Tenant to stop the new activities.

The Tenant covenants to use the Property and the Fitness Center Assets solely for the purpose of operating the Business. The Tenant will not, and will not permit any other person to use or occupy the Property and the Fitness Center Assets or any part thereof for any illegal or unlawful purpose or for any business or purpose not specifically authorized by the Landlord in this Agreement or otherwise in writing in advance.

• Sub-Lease. – The Tenant may sub-lease the Property; provided, that it has secured the prior express written consent of the Landlord and that the provisions of this Lease Agreement is incorporated by reference in the proposed sub-lease; provided, further, that the purpose of the sub-lease will be substantially similar to that of the original lease provided, finally, that if the Landlord so consents to the sub-lease, the Landlord shall receive a fixed percentage of ten (10%) of the sub-lease rates over and above the regular rent already collected under this Lease Agreement. 

It is understood that the Tenant shall act as the surety of the sub-Tenant for purposes of this Lease Agreement. The Tenant shall provide Landlord with a copy of the sub-lease agreement not later than ten (10) days after the execution of the sub-lease agreement. In addition, the Tenant shall remit Landlord’s percentage participation in the sub-lease rentals within the first five (5) days of each calendar month.

ARTICLE V LANDLORD’S DEFAULT

1. Should Landlord be in default under any of the terms of this Lease, Tenant shall give Landlord prompt written notice thereof and Tenant shall allow Landlord a reasonable length of time (in any event, not less than thirty (30) days from the date of such notice) in which to cure such default.
2. A default hereunder shall be deemed cured if Landlord in good faith commences to cure the same within thirty (30) days after receipt of notice and thereafter continuously and with reasonable diligence proceeds to complete the cure of such default.
3. If Landlord shall fail to perform any covenant, term or condition of this Lease upon Landlord’s part to be performed, Tenant may not terminate the Lease, and Tenant’s sole remedy shall be money damages, and further, Tenant hereby waives any and all rights or claims to consequential or special damages.
4. Notwithstanding anything herein contained to the contrary, it is specifically understood and agreed that there shall be no personal liability for any deficiency or otherwise on the part of Landlord, its agents, representatives, employees, or any of its constituent members, partners or shareholders, or their respective legal representatives, heirs, successors and assigns as the case may be, with respect to any of the terms, provisions, covenants and conditions of this Lease or otherwise, and that Tenant shall look solely to the estate, property and equity of Landlord (or such successor in interest) in the Property and subject to the prior rights of any mortgagees for the satisfaction of each and every remedy of Tenant in the event of any breach of any of the terms, provisions, covenants and conditions of this Lease to be performed by Landlord, or in the event of any other claim which Tenant may allege against Landlord, its agents, representatives, employees, constituent members, partners or shareholders, or their respective legal representatives, heirs, successors and assigns, which exculpation of personal liability shall be absolute and without exception. In the event of the sale or other transfer of Landlord’s right, title and interest in the Property, Landlord shall be released from all liability and obligations hereunder.

ARTICLE VI TENANT’S REPAIRS

1. Tenant agrees to keep the interior of the Property in good condition and repair, and agrees to replace damaged items, and shall make all necessary repairs, except repairs which are the express responsibility of Landlord under this Lease or which are made necessary by reason of fire and other unavoidable casualties to the extent covered by Landlord’s property insurance, and excepting reasonable wear and tear.

ARTICLE VII LANDLORD’S REPAIRS

1. Except as may otherwise be provided in this Lease, Landlord shall repair and maintain the exterior of the Building, including the roof, gutter, downspouts, masonry walls, foundation and structural members, in good condition and repair. Landlord shall repair any portion of the Common Areas at any time when Landlord determines it necessary; provided, however, that Landlord shall not be obligated to make or pay for any repairs to the Building or Common Areas rendered necessary by the fault, act or negligence of Tenant or any of its servants, agents, employees, contractors, assignees, sublessees, licensees or concessionaires except in the case of damage by fire or the elements, or other casualty to the extent covered by Landlord’s property insurance.
2. If Landlord makes any repairs necessitated by reason of Tenant’s negligent acts or omissions to act or by Tenant’s employees, contractors. agent’s, assignee’s, sublessee’s, concessionaire’s, or licensee’s negligent acts or omissions to act, then Tenant shall pay Landlord’s costs for making such repairs plus ten percent (10%) for overhead, upon presentation of a bill therefore, as Additional Rent. Such bill shall include interest at a rate equal to the lesser of (i) the highest permissible rate under applicable law, or (ii) twelve percent (12%) per annum on the cost from the date of completion of repairs by Landlord.

ARTICLE VIII TENANT’S DUTY OF CARE

1. Tenant shall at all times keep the Property in a neat, orderly and safe condition.

ARTICLE IX CANCELLATION

1. Grounds for Cancellation. – The Landlord may cancel or terminate this Lease Agreement, upon the happening of any of the following events:
   1. The Tenant fails to pay rent when the same falls due, and fails to remedy the same upon 30 days’ notice.
   1. The Tenant fails to remit Landlord’s percentage participation in the sub-lease rentals, if any, when the same falls due.
   1. The Tenant uses the Property and the Fitness Center Assets for purposes other than those specified herein, without prejudice to the options available to Landlord under Section 1, Article IV hereof.
   1. The Tenant violates any of the other terms and conditions of this Lease Agreement or fails to get the necessary permits from the national and/or local government units / agencies.

ARTICLE X CONFIDENTIALITY

1. Tenant and its agents, employees, officers, directors, accountants and attorneys agree to keep the financial terms of this Lease strictly confidential, and shall not disclose, directly or indirectly, such terms to any person or entity without first obtaining the prior written consent of Landlord; provided, however, that Landlord’s consent shall not be required for any disclosure (i) to Tenant’s officers, directors, employees, lenders, accountants, attorneys or current or potential investors in, or purchasers of Tenant’s business; or (ii) when compelled by applicable laws, regulations or court orders.

ARTICLE XI MISCELLANEOUS

1. Insurance. – The Tenant shall obtain insurance coverage for the Property, against all insurable risks applicable from a duly accredited and reputable insurance company in an amount equal to the maximum insurable value of the Property. The Landlord shall be the Beneficiary of the required Insurance. In case of complete loss or damage to the Property, and/or the improvements therein, during the term of this lease, the Landlord shall have the option to reconstruct or restore the lost or damaged Leased Properties, and/or the improvements therein, to their original condition or to consider this lease automatically terminated. In case of damage in part, rental shall be reduced in proportion to the remaining tenantable or useable area.
2. Utilities. – All expenses for water, electricity, telephone, sanitation, sewerage, gas and other public utility services shall be for the account of the Tenant. The cost of installation of utilities within the Property, such as water and electricity, shall be for the account of the Tenant; provided that any installation shall be under the control and supervision of the Landlord and the latter has the right to indicate where the meter connections shall be placed.
3. Improvements. – The Tenant shall not make any structural changes, alterations, additions or improvements on the Property without the prior written consent of the Landlord. Any alterations or improvements made or introduced by the Tenant on the Property with the written consent of the Landlord shall, upon the termination of this Lease Agreement, automatically be owned by the Landlord without any obligation on the part of the Landlord to pay or refund its value or cost to the Tenant, provided that such changes, alterations, additions or improvements are intended to be permanent fixtures on the Property.
4. Signs and Advertisements. – Subject to prior written consent of the Landlord, the Tenant may install, erect or affix upon the Property, signs or advertisements as may be necessary to promote and/or advertise the business in which it is engaged in. In requesting the approval of the Landlord, Tenant should submit a description and the specification of its proposed sign or advertisement.
5. Care of Leased Properties. – The Tenant shall, at its own expense, maintain the Property and the Fitness Center Assets in a clean and sanitary condition free from noxious odors, disturbing noises or other nuisances. The Tenant, its employees, agents or representatives shall not in any manner damage or deface any part of the Property and the Fitness Center Assets .

The Tenant shall comply with any and all reasonable rules and safety regulations which may be promulgated from time to time by the Landlord, together with all the rules, regulations, ordinances or laws made by the duly constituted authorities; either by the National or City government or any of its agencies and instrumentalities, arising from or regarding the use, occupancy and sanitation of the Property and the Fitness Center Assets .

• General Maintenance, Sanitation, Repairs and Safety. – The cost of general maintenance and upkeep of the Property and the Fitness Center Assets shall be for the account of the Tenant. The Tenant shall keep the Property in a clean, safe and sanitary condition and introduce all the needed repairs at all times. The Tenant shall dispose all its garbage, waste, and other pollutants in accordance with the rules promulgated by the national or local government. All repairs resulting from damages not attributable to the Tenant’s negligence shall be for the account of the Landlord.

In case of damage to the Property or its appurtenances by fire, earthquake, volcanic eruption, war or any unforeseen cause, the Tenant shall give notice to the Landlord within a reasonable time. In the event that the Tenant through its own fault or negligence or that of its employees, agents or representatives, damages the Property and the Fitness Center Assets, and Tenant fails to repair the damage within a reasonable time, then the Tenant shall be liable to Landlord for liquidated damages in an amount equivalent to six months rent without prejudice to such other amounts as may be due Landlord under this Lease Agreement and/or the law.

• Fire Hazard and Obnoxious Substances. – The Tenant shall not introduce, keep, deposit or store in the Property any obnoxious substance or inflammable material or substance not reasonably connected with the herein stated purpose of the lease which might constitute a fire hazard, without the prior written consent of the Landlord.
• Inspection of Premises. – The Landlord reserves the right to enter and inspect the Property at reasonable times during business hours and with prior notice. The Tenant agrees to cooperate with the Landlord in keeping the Property in good and tenantable condition.
• Assignment. – The Landlord reserves the right to assign, transfer or encumber any of its rights and interests under this Lease Agreement to any entity without the need of obtaining the consent of the Tenant except to notify the latter of the same. In the event of such transfer, assignment or encumbrance, the rights and interest of the Tenant under this Lease Agreement shall be respected and observed in its entirety by such assignee, transferee or mortgagee, and for the entire term hereof unless otherwise mutually agreed upon by the parties including the Tenant.
• Return of Premises. – Upon the termination of this Lease Agreement for any reason whatsoever, the Tenant shall peacefully and immediately vacate the Property and return possession thereof to the Landlord in good and tenantable condition, devoid of all occupants, equipment and effects of any kind. Failure of the Tenant to return the Property as provided herein shall make it liable to pay liquidated damages to the Landlord in an amount equivalent to six (6) months rent without prejudice to such other amounts as may be due Landlord and/or such other remedies available to the Landlord under this Lease Agreement and/or under the law.
• Right to Enter the Premises to Recover Actual Possession.- Upon the failure of the Tenant, or the sub-Tenant as the case may be, to comply with any of the terms and conditions of this lease or its failure to vacate and return the premises as provided herein, the Landlord or her authorized representative(s) shall have the right, upon fourteen (14) days written notice to the Tenant, or upon written notice posted at the entrance of the Property for the same period, to enter and take possession of the said premises, without need of resorting to any court action, holding, taking custody and impounding such possessions and belongings of the Tenant found therein after conducting an inventory of the same in the presence of witnesses, until such time that all the rentals, interests, penalties, unpaid utility bills, damages or other amounts due to the Landlord has been fully settled by the Tenant. All these acts being hereby agreed to by the Tenant as tantamount to his voluntary vacation of the leased premises without necessity of suit in court and authorizing Landlord to use all necessary and reasonable force to break open doors and to enter the premises and take actual possession thereof, and such entry and use of reasonable force should not be regarded as trespass, nor be sued as such, or in any wise be considered as unlawful.
• Transfer of Rights. – The Tenant shall not assign, or transfer or encumber its rights under this lease without the prior written consent of the Landlord and no right, title or interest thereto or therein shall be conferred on or vested in any other party other than the Tenant without such written consent.
• Indemnity. – The Tenant shall hold Landlord free and harmless from any loss, damage, injury suffered by the Tenant, its agents or employees, clients, guests or customers or other third persons arising out of the use of the Property and the Fitness Center Assets by Tenant, its agents, employees, clients, guests, or customers including but not limited to, claims for property damage, personal injury or wrongful death, or losses or damages occasioned by reason of any event or cause which could not be foreseen, or which, though foreseen, were inevitable such as but not limited to fire, earthquake, lightning, typhoons, flood, volcanic eruption, robbery, theft or other crimes. In addition, the Landlord shall not be liable nor responsible:
• For the presence of bugs, vermin, rats, insects, or other similar creatures, if any, in the Property:
• For the failure of electrical and/or water supply due to causes beyond Landlord’s control;
• For any injury, loss or damage which the Tenant, its agents or employees, might sustain while in the Property due to causes attributable to the fault of said Tenant, employees, agents and/or representatives, or those of its clients, guests or customers;
• For any damage done or occasioned by, or arising from the plumbing, gas, water, and/or other pipes or air-conditioning system or for the bursting, leaking or destruction of any tank, cistern, washers, and water closets or waste pipelines in, above, upon, or about said Leased Properties, nor for any damage arising from or attributable to acts of negligence of the Tenant or its agents, employees, representatives or any and all other persons over which the Landlord has no control.
• Non-Waiver. – The failure of the Landlord or Tenant to insist upon a strict performance of any of the terms, conditions and covenants hereof shall not be deemed a relinquishment or waiver of any of the rights or remedies that the Landlord or LESEE may have, nor shall it be construed as a waiver of any subsequent breach or default of its terms, conditions and covenants which shall continue to be in full force and effect. No waiver by the Landlord or Tenant of its rights under this Lease Agreement shall be deemed to have been made unless expressed in writing and signed by the Landlord or Tenant as the case may be.
• Force Majeure. – If either party hereto shall be delayed or hindered in or prevented from the performance of any non-monetary act by Force Majeure (defined to mean a material delay beyond the reasonable control of the delayed party caused by labor strikes, lock-outs, industry-wide inability to procure materials, extraordinary restrictive governmental laws or regulations (such as gas rationing), mass riots, war, military power, terrorist acts, sabotage, material fire or other material casualty, or an extraordinary and material act of God, but excludes inadequacy of insurance proceeds, litigation or other disputes, financial inability, lack of suitable financing, delays of the delayed party’s contractor and failure to obtain approvals or permits unless otherwise caused by an event of Force Majeure), then performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. Delays or failures to perform resulting from lack of funds (monetary impairments) shall not be deemed delays beyond the reasonable control of a party. The provisions of this Section shall not operate to excuse Tenant from the prompt payment of Rent or any other payments required by the terms of this Lease and shall not operate to delay or extend the Lease Term.
• Amendments. – Any amendments or additional terms and conditions to this Lease Agreement must be in writing.
• Dispute Resolution. – The Parties agree to attempt initially to solve all claims, disputes or controversies arising under, out of or in connection with this Agreement by conducting good faith negotiations. If the Parties are unable to settle the matter between themselves, the matter shall thereafter be resolved by a final and binding arbitration. Whenever a Party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other Party. The Party giving such notice shall refrain from instituting the arbitration proceedings for a period of sixty (60) days following such notice. During such period, the Parties shall make good faith efforts to amicably resolve the dispute without arbitration. Any arbitration hereunder shall be conducted under the rules of the American Arbitration Association. Each such arbitration shall be conducted by an arbitrator agreed upon by the Parties. Any such arbitration shall be held in Arizona. The arbitrators shall have the authority to grant specific performance. Judgment upon the award so rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be. Each Party shall bear its own costs in any such arbitration.
• Governing Law. – The construction, validity and performance of this Lease shall be governed in all respects by the Laws of the state of Hawaii.

IN WITNESS WHEREOF, each of the Parties has executed this Lease, both Parties by its duly authorized representatives, as of the day and year set forth below.