OL 26800 - 01 Writing Assignment #2 - Contract Analysis You work for Small Business, Inc. a start-up company that wants to open its doors to the public on June 1, 2020. To do that, it needs to be in its offices by April 1, 2020. Your boss, Trudy Trusting, has a good friend who works for Giant Landlord who has assured your boss that she has the perfect office space for Small Business, Inc. She has provided your boss with a Lease Agreement and, because Ms. Trusting is, in fact, so trusting, she is inclined to sign the Lease without having it reviewed by legal counsel. Plus, in addition to being trusting, Trudy is cheap and does not want to incur the expense of legal counsel. Knowing the pitfalls that can lay in a contracts terms, you ask your boss if you can at least review the document to be certain its terms are fair. She grudgingly agrees. But, she tells you not to worry too much about what the Lease terms actually say because her friend (the Giant Landlord employee) has assured her that this is just a boilerplate lease that is used for all Giant Landlords tenants but that Giant Landlord has a soft spot for start ups and, therefore, wont actually hold Small Business to all its terms. Trudy specifically mentions that her friend has assured her that Giant Landlord will take care of all repairs to the premises. From your general discussions with your boss you know that she has some of the usual concerns about starting a business. Trudy simply cant know if it will be a success. She wants to have the security of building her reputation in a good location but doesnt want to be stuck in a lease if her business fails. Yet, if it is a success, she doesnt want to give up the benefits of an established location. (Hint: Think about lease term, termination options, renewal options, assignment/subletting options). Trudy wants to be certain that there is adequate signage and parking for her business so that her business is noticed and accessible. As is often true with a startup, money is tight and so Trudy wants to be certain she wants to control what she is paying in rent and expenses. (She has formed a corporation so that her personal assets will be protected in case the business ultimately does fail). It is imperative that Small Business have possession of the property by April 1, 2020 so as to be ready for the June 1, 2020 opening. With those concerns in mind, and using what you have learned in class and from reading chapter 12 in your textbook, write a memo to your boss regarding the advisability of entering into the proposed lease agreement. There is no need to comment on every lease provision. Be certain to address all the issues of which you are aware, as outlined above. And, if anything else seems particularly important, feel free to comment on that as well. This assignment should be in memo format. I will have a sample memo posted on blackboard. The assignment is worth 100 points.

LEASE AGREEMENT

This Lease is made between Giant Landlord (Lessor), and Small Business, Inc. (Tenant). Tenant hereby offers to lease from Lessor 3042 square feet of the Real Property located in the City of Fort Wayne, State of Indiana, with a common address of 1234 Run Down Lane as shown on Exhibit A to this Lease, (the Premises), upon the following terms and conditions. (This document shall hereafter be referred to as the Lease).

TERMS AND CONDITIONS

1. Term and Rent. Lessor leases to Tenant the Premises for a term of two years, commencing on June 1, 2020, and terminating on May 31, 2022, or sooner as provided herein at the annual rental of Twenty-One Thousand Two Hundred Ninety-Four Dollars ($21,294.00), payable in equal installments in advance on the first day of each month for that months rental, during the term of this Lease. 2. Use. Tenant shall use and occupy the Real Property for commercial purposes only. 3. Care and Maintenance of Real Property. Tenant acknowledges that the Real Property is in good order and repair, unless otherwise indicated herein. Tenant shall, at his own expense and at all times, maintain the Real Property in good and safe condition, including plate glass, electrical wiring, plumbing and heating and cooling installations and any other system or equipment upon the Real Property and shall surrender the same, at termination hereof, in as good condition as received, normal wear and tear excepted. Tenant shall also maintain in good condition such portions adjacent to the Premises on the Real Property, such as sidewalks, driveways, lawns and shrubbery. Lessor shall be responsible for repairs to roof and exterior walls only. 4. Alterations. Tenant shall not, without first obtaining the written consent of Lessor, make any alternations, additions, or improvements, in, to or about the Premises Real Property. 5. Ordinances and Statutes. Tenant shall comply with all statutes, ordinances, regulations, covenants, conditions and requirements of all municipal, state and federal authorities now in force, or which may hereafter be in force, pertaining to the Premises Real Property, occasioned by or affecting the use thereof by Tenant. 6. Utilities. All applications and connections for necessary utility services for the Premises shall be made in the name of Tenant only, and Tenant shall be solely liable for utility charges as they become due, including those for sewer, water, gas, electricity, and telephone services.

7. Insurance. If the Premises or any other party of the Real Property is damaged by fire or other casualty resulting from any act or negligence of Tenant or any of Tenant's agents, employees or invitees, rent shall not be diminished or abated while such damages are under repair, and Tenant shall be responsible for the costs of repair not covered by insurance. Lessor shall maintain fire and extended coverage insurance on the Real Property and the Premises in such amounts as Lessor shall deem appropriate. Tenant shall be responsible, at its expense, for fire and extended coverage insurance on all of its personal property, including removable trade fixtures, located in the Premises. Tenant and Lessor shall, each at its own expense, maintain a policy or policies of comprehensive general liability insurance with respect to the respective activities of each in the Real Property with the premiums thereon fully paid on or before due date, issued by and binding upon some insurance company approved by Lessor, such insurance to afford minimum protection of not less than $1,000,000 combined single limit coverage of bodily injury, property damage or combination thereof. Lessor shall be listed as an additional insured on Tenant's policy or policies of comprehensive general liability insurance, and Tenant shall provide Landlord with current Certificates of Insurance evidencing Tenant's compliance with this Paragraph. Tenant shall obtain the agreement of Tenant's insurers to notify Lessor that a policy is due to expire at least (10) days prior to such expiration. Lessor shall not be required to maintain insurance against thefts within the Premises.. 8. Entry and Inspection. Tenant shall permit Lessor or Lessors agents to enter upon the Real Property at reasonable times and upon reasonable notice, for the purpose of inspecting the same, and will permit Lessor at any time within ninety (90) days prior to the expiration of this Lease, to place upon the Real Property any usual To Let or "For Lease signs, and permit persons desiring to lease the same to inspect the Real Property thereafter. 9. Possession. If Lessor is unable to deliver possession of the Real Property at the commencement hereof, Lessor shall not be liable for any damage caused thereby, nor shall this Lease be void or voidable, but Tenant shall not be liable for any rent until possession is delivered. Tenant may terminate this Lease if possession is not delivered within one hundred twenty days of the commencement of the term hereof. 10. Property Taxes. Lessor shall pay, prior to delinquency, all general real estate taxes and installments of special assessments coming due during the Lease term on the Premises, and all personal property taxes with respect to Lessors personal property, if any, on the Premises. Tenant shall be responsible for paying all personal property taxes with respect to Tenant's personal property at the Premises. 11. Common Area Expenses. Tenant agrees to pay Tenants pro-rata share of maintenance, taxes, and insurance for the common area of the real property in which the Premises is located. All such obligations of Tenant hereafter shall be added to and become a part of the rent paid under this Lease.

12. Attorneys Fees. In case suit should be brought for recovery of the Premises, or for any sum due hereunder, or because of any act which may arise out of the possession of the Premises, by either party, the prevailing party shall be entitled to all costs incurred in connection with such action, including a reasonable attorneys fee. 13. Waiver. No failure of Lessor to enforce any term hereof shall be deemed to be a waiver. 14. Signs. Following Lessors consent, Tenant shall have the right to place on the Premises and the Real Property, at locations selected by Tenant, any signs which are permitted by applicable zoning ordinances and private restrictions. Lessor may refuse consent to any proposed signage that is in Lessor's opinion too large, deceptive, unattractive or otherwise inconsistent with or inappropriate to the Premises or use of any other tenant. Lessor shall assist and cooperate with Tenant in obtaining any necessary permission from governmental authorities or adjoining occupants for Tenant to place or construct the foregoing signs. 15. Parking. During the term of this Lease, Tenant shall have the non-exclusive use in common with Lessor, other tenants of the Real Property, their guests and invitees, of the non-reserved common automobile parking areas, driveways, and footways, subject to rules and regulations for the use thereof as prescribed from time to time by Lessor. Lessor reserves the right to designate parking areas within the Real Property or in reasonable proximity thereto, for Tenant and Tenant's agents and employees. Tenant shall provide Landlord with a list of all license numbers for the cars owned by Tenant, its agents and employees. 16. Building Rules. Tenant will comply with the rules of the Building adopted and altered by Lessor from time to time and will cause all of its agents, employees, invitees and visitors to do so; all changes to such rules will be sent by Lessor to Tenant in writing. The initial rules for the Building are attached hereto as Exhibit "B" and incorporated herein for all purposes. 17. Sublease and Assignment. Tenant shall not sublease all or any part of the Premises, or assign this Lease in whole or in part without Lessor's effective written consent, which shall not be unreasonably withheld. 18. Default. If default shall at any time be made by Tenant in the payment of rent when due to Lessor as herein provided, and if said default shall continue for fifteen (15) days after written notice thereof shall have been given to Tenant by Lessor, or if default shall be made in any of the other conditions to be kept, observed and performed by Tenant, and such default shall continue for thirty (30) days after notice thereof in writing to Tenant by Lessor without correction thereof then having been commenced and thereafter diligently prosecuted, Lessor may declare the term of this Lease ended and terminated by giving Tenant written notice of such intention, and if possession of the Premises is not surrendered, Lessor may reenter said premises. Lessor shall have, in addition to the remedy

above provided, any other right or remedy available to Landlord on account of any Tenant default, either in law or equity. 19. Security Deposit. A Security Deposit in the amount of one-twelfth the yearly rent shall be held by Lessor without liability for interest and as security for the performance by Tenant of Tenant's covenants and obligations under this Lease, it being expressly understood that the Security Deposit shall not be considered an advance payment of rental or a measure of Lessor's damages in case of default by Tenant. Unless otherwise provided by mandatory non-waivable law or regulation, Lessor may commingle the Security Deposit with Landlord's other funds. Lessor may, from time to time, without prejudice to any other remedy, use the Security Deposit to the extent necessary to make good any arrearages of rent or to satisfy any other covenant or obligation of Tenant hereunder. Following any such application of the Security Deposit, Tenant shall pay to Lessor on demand the amount so applied in order to restore the Security Deposit to its original amount. If Tenant is not in default at the termination of this Lease, the balance of the Security Deposit remaining after any such application shall be returned by Lessor to Tenant. 20. Waiver. No waiver of any default of Lessor or Tenant hereunder shall be implied from any omission to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the express waiver and that only for the time and to the extent therein stated. One or more waivers by Lessor or Tenant shall not be construed as a waiver of a subsequent breach of the same covenant, term or condition. 21. Headings. The headings used in this Lease are for convenience of the parties only and shall not be considered in interpreting the meaning of any provision of this Lease. 22. Compliance with Law. Tenant shall comply with all laws, orders, ordinances and other public requirements now or hereafter pertaining to Tenant's use of the Premises. Lessor shall comply with all laws, orders, ordinances and other public requirements now or hereafter affecting the Premises. 23. Final Agreement. This Lease Agreement is the complete agreement between the Lessor and Tenant and terminates and supersedes all prior understandings or agreements on the subject matter hereof. This Lease may be modified only by a further writing that is duly executed by both parties. IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year first above written.