Legal Kit

ATTORNEY LETTER DEMANDING PAYMENT

[Law Firm or Attorney Letterhead]

[Date]

Mr. Joe Smith
President
Deadbeat, Inc.
777 Reno Ave.
San Francisco, CA

Re: Legal Action Against Your Company

We are legal counsel for ABC Suppliers, Inc., a California corporation ("ABC"). As you may know, ABC entered into a contract on April 15, 1998 (the "Contract") providing for the delivery to you of various equipment. All of that equipment has been timely delivered to you under the terms of the Contract and ABC has otherwise fully performed under the terms of the Contract.

However, certain amounts due by you under the Contract have not been paid. Indeed, this amount has been overdue for over 120 days. Under the terms of the Contract, the amount owed incurs late interest at the rate of 1½% per month and a late fee of 5% of the principal amount owed if not paid within 30 days of the date owed. So as of September 15, 1998, your overdue amount is equal to $15,000.

As you may also remember from the Contract, there is an attorneys’ fees clause...

CHECKLIST FOR OFFICE LEASES

1. Space:

(a) What is the rentable square footage?
(b) What is the usable square footage?
(c) Is rent based on usable or rentable square footage?
(d) Verify square footage number provided by the landlord.

2. Permitted Uses of the Premises:

(a) What uses of the premises are permitted?
(b) Is the permitted use clause broad enough for possible changes in the business?
(c) Is the permitted use clause broad enough for potential assignments or subleases?
(d) Can the use clause be drafted to include “any lawful purposes”?
(e) Can uses be changed with landlord’s consent, which consent can’t be unreasonably withheld or delayed?

3. Primary lease term:

(a) What is the commencement date of the lease?
(b) What happens if the space is not ready on the commencement date? Is there rent abatement, monetary damages, right to cancel the lease, or other remedies specified?
(c) What is the termination date?
(d) Does the landlord have the right to terminate early without cause?
(e) Does the tenant have the right to terminate early by payment of a fee?

4. Rentals:

(a) What is the base rent for the primary term?
(b) Are there escalation clauses?
(c) Are there cost of living increases?
(d) Is there a cap on any rent increases?
(e) Is there a reasonable grace period and written notice before a late charge is imposed?

5. Common area maintenance, HVAC, and Operating costs:

(a) What does the tenant have to contribute for common area maintenance, ventilating, heating, air conditioning, and other building operation costs?
(b) Is there a cap?
(c) Can the amount be increased each year?
(d) Real estate taxes and other impositions:
     (i) Does the tenant have to pay a portion of the real estate taxes?
     (ii) What increases over base year are allowed?
     (iii) Is there a cap on tax increases?
     (iv) Does the tenant have to pay increased taxes that may occur on sale of the building?
(e) Are there any special provisions or exceptions on the payment of these expenses?
(f) When is payment due?
(g) What detailed reports does the landlord have to provide the tenant showing the actual expenses?
(h) What audit rights does the tenant have to review the landlord’s books and records?
(i) Are there provisions made for weekend and holiday service? What are the charges?
(j) Does the tenant have a remedy for service interruption?

6. Tenant Improvements:

(a) What tenant improvements will be necessary?
(b) What is the cost?
(c) How much time will it take to complete the tenant improvements?
(d) Will the landlord contribute to the cost for the tenant improvements?
(e) What approvals will be necessary?
(f) What permits will be necessary?
(g) Does the landlord or the tenant own any improvements?

7. Repairs and replacements:

(a) What responsibility does the tenant have for repairs or replacements?
(b) What responsibility does the landlord have for repairs or replacements?
(c) At the end of the tenancy, is tenant’s obligation to return the premises in same condition at the beginning of tenancy, excluding (1) ordinary wear and tear, (2) damage by fire and other unavoidable casualty, and (3) alterations previously approved by landlord?

8. Utilities:

(a) Direct supply or individually metered?
(b) Method of computing payment?

9. Assignment and subletting:

(a) Is the landlord’s written approval required?
(b) What standard is there for approval? absolute discretion? reasonable approval?
(c) Does the landlord have the right to cancel the lease if notified of a proposed assignment of sublease?
(d) If the assignment or sublet is at a higher price than the base rent, who keeps the excess? or what split is there?
(e) Can the lease be assigned to affiliates of the tenant without landlord approval?
(f) Can the landlord terminate the lease if the stock ownership of the tenant changes?

10. Subordination and attornment:

(a) All present or future mortgages?
(b) Execution of estoppel certificates required?
(c) Tenant agrees to attorn to landlord’s successor in interest?

11. Destruction:

(a) Is there a right of cancellation for the tenant in the event of destruction?
(b) What obligation does the landlord have to rebuild?
(c) Does the tenant share in any proceeds from insurance?

12. Indemnity and Disclaimer:

(a) Indemnity mutual or tenant only?
(b) Waiver of claims mutual or tenant only?
(c) Waiver of subrogation?
(d) Landlord liability limited to interest in property?

13. Default:

(a) Does the tenant have a cure period after notice of a breach?
(b) What remedies are available for breach?

14. Landlord’s warranties:

(a) Quiet enjoyment of premises by the tenant?
(b) First...

CHECKLIST OF ISSUES IN NEGOTIATING A LOAN

Many banks and lending institutions have their own form of complex loan agreements when they make loans. These is no "standard" loan agreement, and there are many issues to consider when determining whether to accept a loan and in negotiating the loan terms. This is a checklist of some of these issues.

1. What is the interest payable?
2. How is the interest rate calculated? (Calculations based on a 360 day year are more unfavorable for the borrower than those based on a 365-day year.)
3. What is the default rate of interest and is it competitive?
4. Is the interest rate coupled with all fees, competitive with other available loans?
5. Is the interest rate fixed or variable?

2, Payment Terms

1. What are the monthly or other periodic payment obligations?
2. When is the final principal payment due?
3. Is there a right to extend the due date of the loan?

3. Fees

1. Are there any loan fees, commitment fees, placement fees, points payable upfront?
2. Are there any ongoing fees or charges during the life of the loan?

4. Use of Loan Proceeds

1. Are the loan proceeds restricted for certain uses? Are the uses broad enough?

5. Representations and Warranties of the Borrower

1. Due organization of the borrower
2. Duly qualified to do business
3. Authorization to do the loan
4. Enforceability of the loan agreement
5. Accuracy of the borrower’s financial statements
6. No litigation
7. Compliance with laws
8. Payment of all taxes and filing of all tax returns
9. No adverse change in the business
10. Valid corporate existence of the borrower
11. List of subsidiaries
12. Compliance with ERISA
13. Good and marketable title assets without liens and encumbrances other than those disclosed
14. Obtaining of all required consents
15. No violation environmental problems
16. Ownership of....

1. Identity of Parties

• Name
• Type of entity of each party (corporation, LLC, etc.)
• Addresses

2. Recitals

• Background of agreement
• Purpose for entering into the contract
• Key assumptions for the contract

3. Obligations of the Parties

• What is each side required to do?
• By what date?
• If something has to be delivered, whose obligation is it and at who’s cost?

4. Terms of the Contract

• Is the contract a one-shot situation or will it last for some designated time period?
• How can the term be renewed or extended?

5. Price

• What is the price for the product or service?
• Is it a fixed price, determined by a formula, by a project fee, or some other manner?
• Who pays any tax?

6. Payment Terms

• When is payment due?
• Will there be installment payments?
• Will interest be charged?
• Is there a penalty for late payment?

7. Representations and Warranties

• What representations and warranties are to be made by the parties?
• Are certain warranties disclaimed (e.g., merchantability or fitness for a particular purpose)?
• How long are any warranties good for?

8. Liability

• What limitations of liability exist (e.g., no liability in excess of payment received, or no liability for consequential damage or lost profits)?
• Under what circumstances is one party liable (e.g., material breach of agreement or grossly negligent in performing services)?

9. Termination of Contract

• When can one party terminate the contract early?
• What are the consequences....

GENERAL POWER OF ATTORNEY

When Recorded Mail To:

________________________

________________________

________________________

GENERAL POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, _________________ [name], of __________________________ [address], State of ______________________, nominate _________________________ [name], residing at _____________________ [street address], City of _________________, constitute, and appoint ____________________ [name], residing at _____________________ [street address], City of __________________, County of ______________________, State of __________________________, my true and lawful attorney in fact, for me and in my name, place, and stead, and for my use and benefit;

To ask, demand, sue for, recover, collect, and receive all sums of money, debts, dues, accounts, legacies, bequests, interest, dividends, annuities, and demands of every type that are now or may later become due, owing, payable or belonging to me and have, use, and take all lawful ways and means in my name or otherwise for the recovery thereof, by attachments, arrest, distress, or otherwise, and to compromise and agree for them and acquittances or other sufficient discharges for them;

For me and in my name, to make, seal, and deliver, to bargain, contract, agree for, purchase, receive, and take lands, and tenements, hereditaments, and accept the possession of all lands, and all deeds and other assurances, in the law therefor, and to lease, let, demise, bargain, sell, release, convey, mortgage, and hypothecate lands, tenements, and hereditaments on the terms and conditions and under the covenants as [he] [she] thinks fit;

Also to bargain and agree for, buy, sell, mortgage, hypothecate, and in any and every way and manner deal in and with goods, wares, and merchandise, choses in action, and other property in possession or in action, and to make, do, and transact all and every kind of business of every nature and kind;

And also for me and in my name, and as my act and deed, to sign, seal, execute, deliver, and acknowledge the deeds, leases, mortgages, hypothecations, contracts, charter, bills of lading, bills, bonds, notes, receipts, evidence or debt, releases and satisfaction of mortgage, judgments and other debts, and other instruments in writing of every kind and nature that may be necessary or proper in the premises;

GIVING AND…

IMPORTANT BOILERPLATE PROVISIONS FOR CONTRACTS

1. Choice of Law. This Agreement, and any dispute arising from the relationship between the parties to this Agreement, shall be governed by [e.g., California] law, excluding any laws that direct the application of another jurisdiction’s laws.
2. Attorney Fees Provision. In any litigation, arbitration, or other proceeding by which one party either seeks to enforce its rights under this Agreement (whether in contract, tort, or both) or seeks a declaration of any rights or obligations under this Agreement, the prevailing party shall be awarded its reasonable attorney fees, and costs and expenses incurred.
3. Notice. Any notices required or permitted to be given hereunder shall be given in writing and shall be delivered (a) in person, (b) by certified mail, postage prepaid, return receipt requested, (c) by facsimile, or (d) by a commercial overnight courier that guarantees next day delivery and provides a receipt, and such notices shall be addressed as follows:

or to such other address as either party may from time to time specify in writing to the other party. Any notice shall be effective only upon delivery, which for any notice given by facsimile shall mean notice which has been received by the party to whom it is sent as evidenced by confirmation slip.

1. Modification of Agreement. This Agreement may be supplemented, amended, or modified only by the mutual agreement of the parties. No supplement, amendment, or modification of this Agreement shall be binding unless it is in writing and signed by all parties.
2. Entire Agreement. This Agreement and all other agreements, exhibits, and schedules referred to in this Agreement constitute(s) the final, complete, and exclusive statement of the terms of the agreement between the parties pertaining to the subject matter of this Agreement and supersedes all prior and contemporaneous understandings or agreements of the parties. This Agreement may not be contradicted by evidence of any prior or contemporaneous statements or agreements. No party has been induced to enter into this Agreement by, nor is any party relying on, any representation, understanding, agreement, commitment or warranty outside those expressly set forth in this Agreement.
3. Severability of Agreement. If any term or provision of this Agreement is determined to be illegal, unenforceable, or invalid in whole or in part for any reason, such illegal, unenforceable, or invalid provisions or part thereof shall be stricken from this Agreement, and such provision shall not affect the legality, enforceability, or validity of the remainder of this Agreement. If any provision or part thereof of this Agreement is stricken in accordance with the provisions of this section, then this stricken provision shall be replaced, to the extent possible, with a legal, enforceable, and valid provision that is as similar in tenor to the stricken provision as is legally possible.

1. Contracts

¨ yes ¨ no Are all of the company’s important agreements in writing?

¨ yes ¨ no Are there good form contracts in place?

¨ yes ¨ no Do the contracts provide for disputes to be resolved in courts in the city where the company’s principal office is located?

¨ yes ¨ no Is there an attorney’s fees clause in each contract?

¨ yes ¨ no Does the contract say that amendments to the contract may only be made in writing?

¨ yes ¨ no Are there provisions in the company’s standard form contracts regarding limiting the company’s liability?

¨ yes ¨ no Is the company complying with the terms of its contracts and leases?

2. Corporate Minute Book

¨ yes ¨ no Do the Articles of Incorporation provide for sufficient authorized number of shares?

¨ yes ¨ no Is a copy of the Articles in the Minute Book?

¨ yes ¨ no Is a copy of the Bylaws in the Minute Book?

¨ yes ¨ no Are there minutes for all meetings of shareholders?

¨ yes ¨ no ....