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.
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
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