Appendix A

Form of Letter of Intent

Notes: The Letter of Intent, also known as an “LOI” or “Term Sheet,”
is generally prepared by the Purchaser and submitted to the Seller. The
description of the Property need not be a detailed legal description but
should consider any unique aspects of the assets being acquired that may
merit attention. The Deposit often is delivered in stages, with a portion
perhaps due upon execution of the Purchase Agreement and a portion due
upon expiration of the Due Diligence Period. If Due Diligence activities
begin before the parties execute a Purchase Agreement, it would be wise
for them to execute an agreement that addresses the rules governing access
to the Property and confidentiality of any documents that are reviewed.
The amount and allocation of closing costs vary widely from jurisdiction
to jurisdiction, so the parties should consider local custom when address-
ing this issue. The parties should also be careful that they do not inadver-
tently create an obligation to negotiate in good faith or even negotiate at all.
Remember that legal requirements vary from state to state and that this
document will probably need to be modified to comply with the require-
ments of any particular jurisdiction.

[Purchaser Letterhead]

___________, 20__
[Seller] _________________________________

Re: Sale of ______________________________

Dear _____:
This letter of intent (“Letter of Intent”) sets forth the general terms
and conditions upon which , a (and/or
an entity affiliated with it) (“Purchaser”) would purchase the Property
described below from the existing owner (“Seller”). Except as expressly set
forth below, this Letter of Intent does not create any legally binding obliga-
tions upon Seller or Purchaser.
Property: The property (“Property”) consists of fee simple title to the
property commonly known as , including all improve-
ments thereon, all easements, rights of way, and appurtenances thereto,
all ­fixtures, furnishings, equipment, and other personal property owned
by Seller and used in connection therewith, and all leases, licenses, and
contracts related thereto.

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 Purchase Price: The purchase price (“Purchase Price”) would be $_____.
The Purchase Price would be paid in immediately available funds at Clos-
ing (defined below).
Deposit: Upon execution of the Purchase Agreement (defined below), Pur-
chaser would deposit in escrow with a title company a deposit of $_____
(“Deposit”). If Purchaser defaults in its obligation to close under the Pur-
chase Agreement, the Deposit would be released to Seller as liquidated
damages.
Due Diligence Period: During the period commencing on the date of exe-
cution of the Purchase Agreement and expiring at 6:00 p.m. on the date
that is __ days thereafter (“Due Diligence Period”), Purchaser would have
the right to conduct such tests, inspections, and investigations regarding
the Property as Purchaser determines in its sole discretion are necessary
or desirable. If Purchaser is not satisfied with respect to the results of such
due diligence, it may elect, prior to the expiration of the Due Diligence
Period, to terminate the Purchase Agreement, in which event the Deposit
would be returned to Purchaser.
Closing: Settlement of the purchase and sale of the Property (“Closing”)
would occur within __ days after expiration of the Due Diligence Period,
or on such earlier date as Purchaser may designate by __ days’ prior writ-
ten notice to Seller.
Closing Costs: Seller would pay the [Transfer Tax] and Seller’s attorneys’
fees. Purchaser would pay (i) the [Recordation Tax], (ii) all costs of Pur-
chaser’s due diligence, (iii) the title insurance premium, (iv) the settlement
fee of the title company, and (v) Purchaser’s attorneys’ fees. Normal and
customary property expenses would be prorated as of Closing.
Broker: Purchaser and Seller each acknowledges that no broker, finder, or
other party entitled to a commission, other than _________ (“Broker”), has
represented it in connection with the transaction described in this Letter
of Intent. Seller shall pay the commission of Broker pursuant to a separate
agreement.
Purchase Agreement: Purchaser would deliver to Seller a proposed Pur-
chase and Sale Agreement (“Purchase Agreement”) within __ days after
execution of this Letter of Intent by Seller and Purchaser. Seller and Pur-
chaser would endeavor to negotiate and execute the Purchase Agreement
on or before the date that is _____ days after execution of this Letter of
Intent by Seller and Purchaser (“Outside Date”). If the Purchase Agree-
ment is not executed by Purchaser and Seller on or before the Outside
Date (as the same may be extended by written agreement of Purchaser and
Seller) then either Purchaser or Seller may thereafter terminate this Letter
of Intent.

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 Exclusivity: Seller agrees that so long as this Letter of Intent is in effect,
Seller shall not (i) market or offer the Property (or any interest therein) for
sale or other transfer, or (ii) negotiate, solicit, or entertain any offers to pur-
chase or transfer the Property (or any interest therein).
Confidentiality: Except as otherwise required by law, Purchaser and Seller
shall not disclose the terms of this Letter of Intent to any other person
or entity except for (i) members, partners, shareholders, directors, offi-
cers, employees, and agents of each of their constituent entities, (ii) their
respective legal counsel and advisors, and (iii) consultants and contractors
retained by Purchaser in connection with the transaction and Purchaser’s
prospective lenders and investors. All persons described in the forego-
ing clauses (i) through (iii) shall be informed by Purchaser or Seller of the
confidential nature of such information and shall be directed to keep such
information confidential. The obligations of Seller and Purchaser under
this paragraph shall survive any termination of this Letter of Intent.
Binding Effect: The provisions of the paragraphs captioned “Exclusivity”
and “Confidentiality” shall constitute legally binding obligations of Pur-
chaser and Seller. Except as set forth in the preceding sentence, this Letter
of Intent shall not give rise to any legally binding obligations on the part
of either Seller or Purchaser, and no such obligations with respect to the
purchase and sale of the Property shall arise unless and until the Purchase
Agreement has been duly executed by Purchaser and Seller.
If this Letter of Intent sets forth our mutual understanding, please sign and
return to me one copy of this Letter of Intent. If this Letter of Intent is not
accepted within five days after the date hereof, this Letter of Intent shall be
deemed to be withdrawn.
Very truly yours,

By:

ACCEPTED AND AGREED:

By:
Its:
Date:

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