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Commercial Real Estate Letter Of Intent

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Commercial Real Estate Letter Of Intent Powered By Docstoc
					This Letter of Intent is addressed to a seller of commercial property from a buyer. The
Letter of Intent sets out the terms of the deal between the two parties for the purchase
of commercial property and includes such terms as the purchase price to be paid and
the anticipated closing date of the purchase and sale. This letter can be customized to
fit the needs of the drafting parties and is ideal for use by potential sellers and buyers of
commercial property who wish to have a record of the terms they have already agreed
upon.
      LETTER OF INTENT – COMMERCIAL REAL ESTATE

Date: _____________ [Instruction: insert date]

__________________
__________________
__________________
[Instruction: insert property owner’s name and address]

Attention: ______________________ [Instruction: if there is a particular person whose
attention this letter should be addressed, insert that person’s name here]

Dear Sir/Madam:
Re:    Proposal to Purchase ___________________ [Instruction: insert address or other
description of the property]

        Legal Description: To be provided at a later date [Instruction: insert if the Legal
Description of the property is not known, leave the bolded language as is (but remove
yellow highlight); if the Legal Description is known, delete the bolded language and replace
it with the legal description]

        We understand that ____________________ [Instruction: insert name of the owner of
the commercial real property] (the “Seller”) is the owner of the commercial real property,
located at ____________________ [Instruction: insert address or other location description
of the property] (the “Property”). The Property is currently Zoned ___________ [Instruction:
insert the zoning designation of the property].

         This letter confirms our discussions to date and our mutual understanding with respect to
the potential acquisition (the “Proposed Transaction”) by _________________ [Instruction:
insert name of proposed purchaser] (the “Purchaser”) of the Property. Specifically, this
letter sets out the general terms and parameters of our initial discussions regarding the Proposed
Transaction, including certain terms and conditions that are proposed to be included in a
definitive purchase agreement with respect to the Proposed Transaction (the “Definitive
Agreement”).
 1.      Purchase Price. The Purchaser will on the Closing Date (as defined below) purchase
         the Property. The purchase price (the “Purchase Price”) for the Property will be
         $___________, [Instruction: insert proposed purchase price] and shall include
         ________________________________ [Instruction: insert additional proposed
         inclusions].

 2.      Deposit. Upon execution of this letter of intent, the Purchaser shall pay to the Seller a
         deposit of _______________ ($__________) [Instruction: insert initial deposit
         amount] to be applied on account of the payment of the Purchase Price on the Closing
         Date. Upon execution of the Definitive Agreement, the Purchaser will pay to the Seller
         a further deposit (together with the first deposit and with accrued interest, the
     “Deposits”) in an amount equal to _____________ ($__________) [Instruction: insert
     additional deposit amount] to be applied on account of the payment of the Purchase
     Price on the Closing Date. If the closing of the Proposed Transaction (the “Closing”)
     does not occur:

     (a)     due to a default or breach by the Purchaser of any of its covenants, agreements,
             representations or warranties under the Definitive Agreement (a “Purchaser’s
             Default”), the Deposits paid or due at the time of default will be forfeited and
             retained by the Seller as liquidated damages and not as a penalty; and

     (b)     due to a default or breach by the Seller of any of its covenants, agreements,
             obligations, representations and warranties under the Definitive Agreement (a
             “Seller’s Default”), the Deposits paid or due at the time of default will be
             returned to the Purchaser.

     Whereupon the Definitive Agreement will be terminated and all parties will be released
     of any further obligations thereunder save and except for Section 10 hereof and any
     terms of the Definitive Agreement which are expressed to survive termination.

3.   Payment of Purchase Price. Payment of the Purchase Price will be either by all cash
     or certified check or, partly for cash and partly by way of a Seller take back mortgage
     (“VTB Mortgage”) as can be negotiated and agreed to by the parties both acting
     reasonably. Provided that any such VTB mortgage shall be a first charge upon the
     Property.

4.   Timing. Following the signing of this letter, the Purchaser and the Seller will work
     diligently and in good faith to settle the Definitive Agreement on or before
     _____________, [Instruction: insert date] with a view to completing the Proposed
     Transaction on or before ______________ [Instruction: insert closing date] (the
     “Closing Date”). The Purchaser will prepare the first draft of the Definitive
     Agreement and deliver the same to the Seller.

5.   Definitive Agreement. The Definitive Agreement will, except as set out in this letter,
     be of the type and contain covenants, representations and warranties, indemnities, terms
     and conditions typical of a transaction of the nature and size of the Proposed
     Transaction and shall be generally in accordance with the State of ____________
     [Instruction: insert state name].

6.   Effect of this Letter. Sections 1, 3, 4, 5, and 7 of this letter represent the mutual
     understanding of the Purchaser and the Seller with respect to the Proposed Transaction
     and are not intended to and do not constitute a legally binding obligations of the
     Purchaser or the Seller. The parties acknowledge and confirm that until the Definitive
     Agreement is signed, there are no legally binding obligations between the Purchaser
     and the Seller relating to the Proposed Transaction, whether set out in this letter or
     otherwise, except for the obligations set out in Section 2 and in Sections 9 through 17
     below, which for good and valuable consideration, the receipt and sufficiency of which
      is hereby acknowledged, are and shall remain legally binding on the Purchaser and the
      Seller.

7.    Confidentiality. The Purchaser and the Seller acknowledge and confirm that they shall
      keep the terms of this Letter of Intent strictly confidential and shall not disclose the
      same to any third party whatsoever save and except their respective professional
      advisors.

8.    Exclusive Dealing. The Seller acknowledges that the due diligence investigation and
      review contemplated by this letter will involve the expenditure of substantial time and
      money by the Purchaser. The Seller shall immediately suspend and cease any
      negotiations or other discussions or communications of any nature with any other party
      concerning any Alternative Transaction (as defined below). During the period from the
      date this letter is signed by the Sellers until the earlier of (i) ___________,
      [Instruction: insert date] or (ii) the date the Definitive Agreement is signed by the
      parties (the “Exclusivity Period”), the Seller shall not directly or indirectly in any
      manner (a) entertain, solicit or encourage, (b) furnish or cause to be furnished any
      information to any persons or entities other than the Purchaser, in connection with, or
      (c) negotiate or otherwise pursue, any proposal or discussions for or in connection with
      any possible sale of the Property (each of the foregoing proposals or discussions,
      whether written or oral, an “Alternative Transaction”). The Seller shall immediately
      notify the Purchaser in writing of (i) the receipt during the Exclusivity Period of any
      proposal for an Alternative Transaction or any requests for any information relating to
      the Property by any person or entity which has informed the Sellers that such person or
      entity is considering making, or has made, a proposal for an Alternative Transaction,
      and (ii) the terms of any such Alternative Transaction. The Seller shall be responsible
      for any breach by their directors, officers, trustees or beneficiaries of any of the
      provisions of this Section 9.

9.    Public Announcement. Neither the Purchaser nor the Seller shall make any public
      announcement concerning the Proposed Transaction or related negotiations without the
      other parties’ prior written approval (which approval may not be unreasonably withheld
      or delayed), except as may be required by applicable law or rule of any stock exchange.
      If such an announcement is required by law or rule of any stock exchange, the party
      required to make the announcement shall inform the other parties of the contents of the
      announcement proposed to be made and the proposed date of the announcement and
      shall use its reasonable efforts to obtain the other parties’ approval for the
      announcement, which approval may not be unreasonably withheld or delay

      Except as may be required by applicable law or rule of any stock exchange, in no event
      shall any announcement be made until the Definitive Agreement has been signed by all
      parties.

10.   Expenses. Each party shall be responsible for and bear all of their own costs and
      expenses incurred in connection with the Proposed Transaction, including any broker’s
      or finder’s fees and expenses of their respective Representatives, incurred at any time in
      connection with pursuing or consummating the Proposed Transaction.
 11.     Assignment. No party shall assign any of its rights and obligations provided for or
         referred to in this letter without the prior written consent of the other parties.

 12.     Termination. Sections 8, 10 and 11 shall survive termination of this letter. Other than
         such sections, this letter shall terminate without liability on the earlier of: (i) the date
         the Definitive Agreement is signed by the parties; (ii) the date following the Exclusivity
         Period that a party provides written notice to the other parties terminating negotiations;
         and (iii) the date the parties agree in writing to terminate negotiations.

 13.     Counterparts. This letter may be signed in one or more counterparts, each of which
         shall be deemed an original, and all of which together shall constitute one and the same
         instrument. Counterparts may be delivered by facsimile or PDF e-mail.

 14.     Governing Law. The binding parts of this letter shall be governed by and construed in
         accordance with the laws of the State of _____________ [Instruction: insert state
         name].

         To confirm the foregoing, please sign and return one copy of this letter.

                                                      Yours very truly,

                                                      ____________________         [Instruction:
                                                      insert proposed purchaser’s name]
                                                      Per:

                                                      _______________________________
                                                      Name:             ______________________
                                                      [Instruction: insert name of individual
                                                      who will sign this letter on behalf of
                                                      proposed purchaser]
                                                      Title:           _______________________
                                                      [Instruction: insert title of individual who
                                                      will sign this letter on behalf of proposed
                                                      purchaser]
                                                      I have authority to bind the Company.

Confirmed this ___ day of __________, 2________.

__________________________ [Instruction: insert proposed seller’s name]
Per:


Name:
Title:
I have authority to bind the Company.
SCHEDULE “A”
 See Attached
                       SCHEDULE “B”
See Standard Commercial Agreement of Purchase and Sale Attached

				
DOCUMENT INFO
Description: This Letter of Intent is addressed to the seller of a commercial property from the buyer. The Letter of Intent sets out the terms of the deal between the two parties for the purchase of commercial property and includes such terms as the purchase price to be paid and the anticipated closing date of the purchase and sale. This letter can be customized to fit the needs of the drafting parties and is ideal for use by potential sellers and buyers of commercial property who wish to have a record of the terms they have already agreed upon.
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