Letter of Intent to Form a Limited Partnership
_____________________ (Date of Letter)
_____________________
(Name of Address)
_________________________________________
(street address, city, county, state, zip code)
Re: _____________________ (Name of Proposed Limited Partnership)
Dear _____________________ (Name of Address)
Based on the information that you have furnished to us and on our evaluation of the
information, and subject to the approval of _____________________ (Name of
Approver) , this nonbinding letter of intent sets out the terms and conditions of a
proposal for the formation of a limited partnership (the Partnership ), to consist
of _____________________ (Name of Partner A) , a corporation organized and existing
under the laws of the state of _____________________ (name of state) , with its
principal office located at _________________________________________ (street
address, city, county, state, zip code) , referred to herein as Partner A,
_____________________ (Name of Partner B) , of
_________________________________________ (street address, city, county, state,
zip code) , referred to herein as Partner B , collectively referred to herein as the General
Partners, and _____________________ (Name of Partner C) , a corporation organized
and existing under the laws of the state of _____________________ (name of state) ,
with its principal office located at _________________________________________
(street address, city, county, state, zip code) , the limited partner and referred to herein
as Partner C. The General Partners and the Limited Partner each are referred to
collectively as the Partners, for the development, ownership, and operation of
a _____________________ (type of project) referred to herein as the Project on the
parcel of land described in Exhibit A attached hereto and made a part hereof by
reference thereto.
I. The Project. The Project will consist of a _____________________ (number) -
story building containing not less than _____________________ (number) square feet
of gross floor area and not less than _____________________ (number) square feet of
net rentable floor area, referred to herein as the Building, to be constructed on
approximately _____________________ (number) acres of land located
in _____________________ (name of county) and referred to herein as the Land. The
Project will also consist of a parking garage containing _____________________
(number) full size parking spaces to be constructed on the Land. Said parking garage is
hereinafter referred to as the Garage.
II. Purpose; Name; and Documents. The Partnership will be formed to acquire the
Land and to develop, own, and operate the Building under _____________________
(name of state) law. The name of the Partnership will be _____________________
(Name of Partnership) . The Limited Partnership Agreement, referred to herein as the
Partnership Agreement and the Certificate of Limited Partnership will be prepared on
Partner A’s standard forms for the agreements by Partner A's counsel, will be consistent
with the terms and conditions of this nonbinding letter of intent, and will be negotiated by
the Partners based on the proposal set out in this nonbinding letter of intent. The
Partnership will purchase the Land and develop the Project with funds to be obtained
from a construction loan to be provided by a lender selected by the Partnership. The
Project will be owned and operated after Substantial Completion (as defined in this
letter) with funds obtained from a permanent loan to be provided by a lender selected by
the Partnership.
III. Percentage Interests. The respective interests of the Partners in the Partnership
(the Percentage Interests ) will be:
Partner A ________ %
Partner B ________ %
Partner C (the limited partner) ________ %
IV. Development
A. The Budget. The Partnership Agreement will include a development
budget negotiated and agreed to by all of the Partners attached as Exhibit B (the
Budget). The Budget will set out all of the costs reasonably expected to be
incurred in connection with the acquisition of the Land and the development of
the entire Project prior to the date that the income from the operation of the
Project is sufficient to:
1. Pay the operating expenses of the Project and the Partnership
(including, but not limited to, the debt service on the Development Loan,
the Permanent Loan, or any additional borrowing by the Partnership); and
2. Maintain a reserve to pay the capital expenses for the repair or
replacement of major components of the Project (the Stabilization Date ).
B. All costs actually incurred in the development of the Project will be
referred to in this letter as Development Costs. The Budget will also include a line
item for operating deficits reasonably expected to be incurred by the Partnership
prior to the Stabilization Date. Without limiting the right of the Partners to approve
the Budget, the Budget will be generally consistent with the line items and
amounts set out in the preliminary budget attached and incorporated as
Exhibit C.
V. Acquisition of the Land.
A. Acquisition of the Land . The Partnership will acquire the Land
from _____________________ ( name of seller) (the Seller ) for a purchase price
of $ _____________________ with a portion of the proceeds from the first draw
of the Development Loan (as defined in this letter). The contract for the purchase
of the Land will be prepared on Partner A's standard form for the agreement by
Partner A's counsel in accord with the basic terms and conditions of this
nonbinding letter of intent and the additional terms and conditions to be
negotiated by the Partners and the Seller. The Partners have agreed that their
initial proposal to acquire the Land will include the terms and conditions set forth
below.
B. Design. The Project will be designed by a competent and reputable
architectural firm licensed to practice architecture in (name of city and state) and
is to be selected by the Partners (the Project Architect ). All of the plans and
specifications for the development of the Project (the Plan and Specifications ) will
be prepared by the Project Architect and the plans and specifications and all
changes or revisions prepared by the Project Architect or any other professional
or consultant will be subject to the review and approval of the Partners. The
contract with the Project Architect and the contracts with any other professionals
or consultants retained to assist in the design of the Project will be prepared on
Partner A's standard forms for the agreements by Partner A's counsel and will be
negotiated and approved by the Partners.
C. Construction. The Partners will select a competent and reputable general
contractor to construct the Project and will retain the other professionals and
consultants as required to complete the construction and development of the
Project. The contract with the general contractor for the construction of the
Project, and its general conditions, and the contracts with any other professionals
or consultants will be prepared on Partner A's standard forms for the agreements
by Partner A's counsel and will be negotiated and approved by the Partners.
D. Change Orders. All changes to the Plans and Specifications, the Project
Architect's contract, the general contractor's contract, and its general conditions,
or the contract of any other professional or consultant rendering services for the
development of the Project (the Change Orders ) will be subject to the review and
approval of the Partners.
E. Partner A's Representative. Partner A will be entitled to retain a Project
consultant to assist Partner A in complying with its obligations as co developer of
the Project ( Partner A's Representative ). The fee of Partner A's Representative
will be included in the Budget as a cost to be paid by the Partnership. Partner A's
Representative will be permitted to maintain an office at the Project throughout
the construction of the Project and will be granted continuous access to the
Project and all records and documents related to it.
F. Development Management. The Partners will share the responsibilities
for managing the development of the Project. Partner B will be responsible for
the day-to-day management of the design and construction of the Project
(including construction of tenant improvements) through the Stabilization Date
and the completion of all “punch list” items. Partner A will be responsible for
consulting, advising, inspecting, reviewing, and approving with respect to the
development of the Project and will participate with Partner B in the negotiation of
all contracts for the development of the Project. Partner B will be paid a
development fee of $ _____________________ and Partner A will be paid a
development fee of $ _____________________ to be paid during the
construction of the Project from the proceeds of the Development Loan in
proportion to the total dollar amount disbursed on the date of each draw of a
portion of the funds from the Development Loan divided by the total dollar
amount of the principal balance of the Development Loan (as defined in this
letter).
G. Substantial Completion. Substantial completion of the Project occurs
upon:
1. The issuance of a certificate of substantial completion by the
Project Architect;
2. The issuance of a certificate of occupancy for the Building and
Garage base building (or the “Shell”) by the governmental agency
responsible for the issuance of the certificates; and
3. The subsequent approval of the certificates by the Partners.
V. Financing and Capital Contributions.
A. Initial Capital Contributions. Each Partner will contribute an initial
contribution of capital to the Partnership in the following amounts:
Partner A $ _____________________
Partner B $ _____________________
Partner C (the limited partner) $ _____________________
B. Development Loan. The Partnership will obtain a construction loan in an
amount sufficient to pay all of the Development Costs, as set out in the Budget,
reasonably expected to be incurred by the Partnership prior to the date of the
Substantial Completion of the Project, or until the date of the closing and disbursement
of the proceeds of the Permanent Loan (the Development Loan). Partner A will have a
first right but not an obligation, to provide the Development Loan to the Partnership at a
rate and on terms and conditions reasonably comparable to the rates and terms and
conditions prevailing in the market for construction loans at the time that the Partnership
is attempting to obtain the Development Loan for the development of the Project. If
Partner A elects not to provide the Development Loan to the Partnership, Partner A will
be responsible for managing the process of seeking and obtaining the Development
Loan and negotiating the terms of the Development Loan on behalf of the Partnership at
a rate and on terms satisfactory to the Committee.
C. Permanent Loan. The Partnership will obtain a nonrecourse permanent loan
(the Permanent Loan ) in an amount sufficient to:
1. R epay the Development Loan;
2. Repay any additional borrowing by the Partnership necessary to complete
the development of the Project;
3. Distribute cash to the Partners in an amount equal to any special
contributions of capital contributed to the Partnership by the Partners as of that
date;
4. Distribute cash to the Partners in the amount of their Preference Returns
(as defined in this letter) then due and payable; and
5. Establish a reserve account in an amount sufficient to pay all
Development Costs reasonably expected to be incurred by the Partnership prior
to the Stabilization Date, or the lesser amount the Partnership may be able to
obtain, to be disbursed on the Substantial Completion of the Project.
Partner A will have a first right but not an obligation, to provide the Permanent Loan to
the Partnership at a rate and on terms and conditions reasonably comparable to the
rates, terms, and conditions prevailing in the market for permanent loans at the time that
the Partnership is attempting to obtain the Permanent Loan for the ownership and
operation of the Project. If Partner A elects not to provide the Permanent Loan to the
Partnership, Partner A will be responsible for managing the process of seeking and
obtaining the Permanent Loan and for negotiating the terms and conditions of the
Permanent Loan on behalf of the Partnership at a rate and on terms satisfactory to the
Executive Committee (as defined in this letter).
D. Additional Borrowing. The Partnership may borrow additional funds, subject to
the approval of the Executive Committee, to pay for all Development Costs in excess of
the proceeds of the Development Loan or the Permanent Loan other than funds to pay
for Development Costs that exceed the line item categories of the Budget set out in
Subparagraphs D(1) through D(3) of this Section V, which excess Development Costs
will be paid for by means of Special Capital Contributions (as defined in this letter) that
Partner B will be solely obligated to contribute to the Partnership under Paragraph E.
E. Special Capital Contributions. All of the Partners will be obligated to contribute
special contributions of capital to the Partnership (a Special Capital Contribution ) pro
rata, in proportion to their then existing Percentage Interests, to pay for overruns in line
item categories of the Budget for tenant improvements, leasing commissions, and
operating deficits incurred prior to the Stabilization Date. Partner A will be solely
responsible for contributing Special Capital Contributions to pay for overruns in line item
categories of the Budget for:
1. Interest on the Development Loan;
2. The overhead and administration costs of Partner B as co developer of the
Project; and
3. All other line item categories of the Budget for tenant improvements,
leasing commissions, and operating deficits incurred after the Stabilization Date.
Partner A will not be permitted to use savings in the line item categories for
tenant improvements, leasing commissions, or operating deficits incurred prior to
the Stabilization Date, or those line item categories set out in Subparagraphs 1
and 2 of this Paragraph E , to reduce overruns in other line item categories. The
Partners will also be required to contribute Special Capital Contributions to the
Partnership to repay to the lender any portion of the Development Loan and any
additional borrowing advanced to the Partnership at any time that the Partners
elect to terminate the development of the Project or at any time that the
Development Loan or any additional borrowing must be repaid to the lender
under the terms and conditions of the Development Loan documents, and the
Partnership has been unsuccessful in obtaining a Permanent Loan to repay the
Development Loan.
F. Additional Capital Contributions. The Partners will be required to
contribute additional contributions of capital to the Partnership, pro rata, in
proportion to their then existing Percentage Interests, at any time subsequent to
the Stabilization Date that funds are required to pay for:
1. Operating deficits of the Partnership; or
2. Capital improvements in excess of the funds available in the reserve for
capital improvements maintained by the Partnership.
VI. Loans. Any Partner may lend to the Partnership on the approval of the Executive
Committee (as defined in this letter). Such loans ( Loans ) will be an obligation of the
Partnership, repayable from the cash flow of the Partnership. No Partner will be
personally obligated to repay any Loan.
VII. Management.
A. Executive Committee of the General Partners. The management and
control of the Partnership will be vested in an Executive Committee of the
General Partners (the Committee ). The Committee will consist
of _____________________ (number) members, of
which _____________________ (number) will be appointed by Partner A
and _____________________ (number) will be appointed by Partner B. Partner
A and Partner B have the right to remove their respective Committee members
and appoint successor Committee members. A majority of the members of the
Committee will be required for a decision on all matters of Partnership business
other than matters set out in this letter of intent which are to be determined solely
by Partner A. A quorum will consist of _____________________
(number) members of the Committee; however, the _____________________
(number) Committee members must consist of at least a Committee member
from each of the General Partners.
B. Managing General Partner. Partner A will be the managing general
partner of the Partnership (the Managing General Partner ), will be paid an annual
fee of $ _____________________ for its services as Managing General Partner,
and will be reimbursed for the costs and expenses which it incurs in performing
its obligations to the Partnership as Managing General Partner. Partner A's
obligations to the Partnership as Managing General Partner will include opening
and maintaining the Partnership bank accounts, maintaining the books and
records of the Partnership, performing accounting, tax, clerical, and reporting
functions, preparing the tax returns for the Partnership, retaining employees,
professionals, and consultants to provide the services for the operation of the
Partnership, obtaining and maintaining insurance and fidelity bonds, obtaining
financing, refinancing, or loans, commencing or defending litigation on behalf of
the Partnership, maintaining records and minutes, providing written notices to the
Partners, and making distributions of cash flow to the Partners.
C. Management and Leasing of the Project. The Partnership will retain a
management agent (the Manager ) and a leasing broker (the Broker ) for the
Project under a management agreement (the Management Agreement ) and
leasing agreement (the Leasing Agreement ) to be prepared on Partner A's
standard form for the agreement by Partner A's counsel, negotiated by the
Partners and attached to the Partnership Agreement as Exhibit D. The
Management Agreement and the Leasing Agreement will require that:
1. The Manager and the Broker manage and lease the Project as
independent contractors;
2. All employees retained by the Manager or the Broker to provide services
for the benefit of the Project or the Partnership will be employees of the Manager
or of the Broker, as the case may be, and not of the Partnership; and
3. All independent contractors will be independent contractors retained by
the Manager or the Broker rather than by the Partnership.
The terms and conditions of the Management Agreement and the Leasing Agreement
will also provide that the Partnership can terminate either the Management Agreement
or the Leasing Agreement on (number) days' prior written notice to the Manager or the
Broker at any time that the Partnership determines, in the sole discretion of the
Partnership, that the Manager or the Broker is not satisfactorily performing its
responsibilities. Each Partner will be entitled to be paid a leasing commission, in the
manner set out in the Leasing Agreement for payment of the leasing commission to the
Broker, for obtaining a lease agreement with a tenant for the occupancy of space in the
Building, except that a Partner will not be entitled to a leasing commission for executing
a lease agreement for the occupancy of space in the Building by that Partner.
VIII. Taxes.
A. Tax Management. Partner A will be the tax matters partner of the
Partnership and will receive an annual fee of $ _____________________ payable
in quarterly installments for its services as tax matters partner. Partner A will be
responsible for preparing the tax returns for the Partnership and filing any tax
shelter registration statements.
B. Tax Planning. Capital accounts will be maintained for each of the
Partners, and the allocations of items of income, gain, loss, deductions, and
credits will be allocated for capital account purposes in accordance with the
requirements of Section 704 of the Internal Revenue Code ( 26 U.S.C.A. §
704 ). The Partnership will report depreciation on the Building and Garage over
the shortest period permissible on a straight-line basis and, will elect to amortize
start-up costs in accordance with Section 195 of the Internal Revenue
Code (26 U.S.C.A. § 195) and organization expenses in accordance with
section 709 of the Internal Revenue Code ( 26 U.S.C.A. § 709 ). Partner A will
make all other tax elections and reporting decisions on behalf of the Partnership.
The Partnership Agreement will contain a provision requiring the Partners to
restore any negative balances in their capital accounts on the liquidation of the
Partnership to the extent of the total amount required to pay Partnership
creditors, plus the positive capital account balances of the other Partners.
IX. Distributions.
A. Preference Return. Each Partner will be entitled to receive a preferred
return of the Partnership's cash flow of ________ % annual interest, compounded
monthly, on the amount of any contribution of capital to the Partnership
contributed by the Partner in excess of the Partner's pro rata share of the
contribution of capital to the Partnership then required to be contributed by all
Partners on the basis of their then existing respective Percentage Interests, less
all amounts of the capital returned to the Partner from time to time (a
Disproportionate Contribution ). The Preference Return of each Partner will be
cumulative to the extent that a Preference Return is not paid in the month in
which a Preference Return is due and payable to the Partner.
B. Distributions of Operating Cash Flow. Income from the operation of the
Project in excess of the operating expenses of the Project or the Partnership, and
the amount required, as established by the Committee, to maintain a reserve to
pay the capital expenses for the repair and replacement of the major components
of the Project will be distributed to the Partners each month in the following
manner:
1. First, pro rata to the Partners to pay Preference Returns currently
due and payable; provided, however, that if sufficient cash flow is not
available to pay all Preference Returns currently due and payable, the
Preference Returns will be paid in the chronological order in which the
related Disproportionate Contributions of capital to the Partnership were
contributed;
2. Second, to pay accumulated Preference Returns d ue and payable
in the manner described in Subparagraph 1 of this Paragraph B ;
3. Third, to pay interest due and payable on Loans pro rata, in
proportion to the total interest due and payable on the Loans; provided,
however, that the terms of the Loan documents will be controlling with
respect to any priority for the payment of interest; and
4. Any remaining balance to the Partners pro rata, in proportion to
their then existing respective Percentage Interests.
C. Distributions of the Proceeds from Financing, Refinancing, Sale, Exchange,
Condemnation, or Casualty. After payment of any financing or refinancing secured by
the Project and required to be repaid on the occurrence of a capital event the proceeds
from any financing, refinancing, sale, exchange, condemnation, or casualty will be
distributed to the Partners in the following manner:
1. F irst, to pay accumulated Preference Returns to the Partners in the
manner described in Subparagraph B(1) of this Section IX;
2. S econd, pro rata to the Partners, to refund any Disproportionate
Contributions of the Partners; provided, however, that if sufficient funds are not
available to refund all the Disproportionate Contributions, the funds will be
distributed in the same priority as the chronological order in which the related
Disproportionate Contributions were contributed;
3. T hird, to the Partners to pay interest due and payable, principal and any
other charges due and payable under the terms of the Loan documents on
Loans, pro rata; interest must be paid in proportion to the total interest then due
and payable on the Loans, and then, pro rata, in proportion to the total principal
balance and other charges due and payable on the Loans; provided, however,
that the terms of the Loan documents will be controlling with respect to any
priorities for the payment of interest or principal; and
4. A ny remaining balance to the Partners pro rata, in proportion to their then
existing respective Percentage Interests.
D. Development Savings.
1. Development Cost Savings. The Partnership Agreement will require that
the Executive Committee obtain an independent audit of the total Development
Costs incurred by the Partnership as of the Stabilization Date. If the total
Development Costs incurred as of the Stabilization Date are less than the lesser
of the total amount of the Development Costs set out in the Budget, or the total
Development Costs incurred prior to the Stabilization Date plus the total amount
of the funds in any reserve fund of the Partnership maintained to pay
Development Costs prior to the Stabilization Date, then the excess (the
“Development Savings”) will be distributed to the Partners pro rata, in proportion
to their then existing Percentage Interests.
2. Potential Development Savings. Notwithstanding the requirements of
Subparagraph 1 of this Paragraph D, the Partners may also require that the
Committee perform an audit of the total Development Costs incurred in the
development of the Project at any time subsequent to Substantial Completion
and prior to the Stabilization Date. The Committee can distribute the potential
Development Savings in the manner set out in Subparagraph 1 of this
Paragraph D, if the audit shows that the total amount of the Development Costs
incurred as of the date of the audit plus an estimate by the Committee of the total
funds required to pay all Development Costs through the Stabilization Date is
less than either the Costs set out in the Budget, or than the total amount of the
Development Costs incurred as of the date of the audit plus the estimate of funds
required to pay Development Costs through the Stabilization Date plus the total
amount of the funds in any reserve funds of the Partnership maintained to pay
Development Costs prior to the Stabilization Date. All of the distributions of
potential Development Savings will be conditional distributions subject to a final
determination of Development Savings after the occurrence of the Stabilization
Date. If the total of any advance distributions of potential Development Savings
received by the Partners exceeds the final distributive share of the Development
Savings to which the Partners are entitled (as determined in Subparagraph 1 of
this Paragraph D ), each Partner must contribute, as capital to the Partnership,
the difference between its respective share of the actual Development Savings to
which the Partner is entitled and the amount of the previous distributions of
potential Development Savings distributed to the Partner.
X. Transfer of Partnership Interests.
A. Prohibitions. No Partner has the right to retire or withdraw from the
Partnership, or to assign, give, pledge, collaterally assign, encumber, sell, or
otherwise dispose of or hypothecate all or any part of its interest in the
Partnership, or any portion of its rights or obligations in the Partnership, other
than as set out in the following Subparagraphs 1 and 2.
1. General Partners' Partnership Interest. Each General Partner has the
right to sell or otherwise transfer all or a portion of its interest in the Partnership
to any of its affiliates or any separate partnership of which it is the managing
general partner, and to pledge, collaterally assign, or otherwise hypothecate all
or a portion of its interest in the Partnership, or to convert all or a portion of its
interest in the Partnership to a limited partnership interest.
2. Limited Partners' Partnership Interest. Each limited partner has the
right to sell or otherwise transfer all or a portion of its interest in the Partnership
to any separate partnership of which it is the managing general partner, or to
convert all or a portion of its interest in the Partnership to a general partnership
interest.
B. Assignment. No assignment of an interest in the Partnership will be permitted if
the assignment would:
1. Operate to terminate the Partnership for federal income tax purposes,
other than an assignment which results in a termination due to the exercise of a
Partner's remedies for a default as set out in Section XI, the exercise of the buy-
sell procedure as set out in Section XII, or the exercise of the right of first refusal
as set out in Section X, Paragraph C;
2. Cause the Partnership to lose its status as a Partnership; or
3. Not comply with federal or state securities laws and regulations.
An assignee will be admitted as a subsequent or additional Partner to the
Partnership on the assignment of all of the rights and obligations appertaining to
any part of a Partner's interest in the Partnership. On assignment of all of a
Partner's Percentage Interest and the interest, rights, and obligations pertaining
to it, the Partner will be relieved of all of its obligations to the Partnership.
C. Unpermitted Transfers. Each Partner is entitled, on receipt of written notice
from any Partner that another Partner has received an offer to purchase all or any
portion of the Partner's interest in the Partnership pursuant to a sale or other transfer
which is not permitted by Paragraph A of this Section X, and of the intent of the
Partner to accept the offer, to:
1. Exercise a right of first refusal, as set out in the Partnership Agreement, to
purchase the interest of the Partner in the Partnership at the price offered to the
Partner for the purchase of all or any portion of its interest in the Partnership;
2. Permit the transfer; or
3. Exercise its remedies as set out in Section X.
XI. Remedies. The Partnership Agreement will provide that a Partner may, on the
occurrence of any of the events of default described in the Partnership Agreement, elect
to dissolve the Partnership, or exercise the buy-sell procedure described in Section XII
of this Letter. In addition, on the occurrence of an event of default which is the result of
the failure of a Partner to contribute any contribution of capital required to be contributed
to the Partnership, the other Partners are entitled to elect to contribute the contribution
to the capital of the Partnership in place of the defaulting Partner and exercise a
squeeze down of the defaulting Partner's Percentage Interest in the Partnership in an
amount sufficient to act as a substantial deterrent to the default by any of the Partners.
The Partnership Agreement will also provide that any defaulting General Partner will be
converted to a Limited Partner on the occurrence of a default by the Partner and will be
deemed to have resigned from the Committee as of the date.
XII. Buy-Sell. The Partnership Agreement will include a buy-sell provision that any
Partner has the right to initiate a buy-sell at any time by providing the other Partners
with written notice, setting out a value for the entire interests of all Partners in the
Partnership, and informing the others that the Partner is initiating the buy-sell. The
Partners receiving the notice will be entitled to cause the initiating Partner to sell its
entire interest in the Partnership to the other Partners for the amount which the initiating
Partner would be entitled to receive on the liquidation of the Partnership if the value
selected by the initiating Partner was the amount available for distribution to creditors,
secured lenders, the Partnership, and the Partners on a liquidation of the Partnership.
XIII. Liquidation. The proceeds of the liquidation of the Partnership will be applied
first to the payment of debts and liabilities of the Partnership, other than Loans made to
the Partnership by any Partner and any financing secured by the Project; second, to the
payment of the expenses of liquidation; third, to the establishment of reserves for any
contingent or unforeseen liabilities of the Partnership or of the Partners related to their
activities on behalf of the Partnership; and, finally, in the manner set out in Section IX,
Paragraphs B and C.
XIV. Notices. The address of each Partner for purposes of written notice in the
Partnership Agreement will be as follows:
Partner A: _________________________________________
(street address, city, county, state, zip code);
Partner B: _________________________________________
(street address, city, county, state, zip code); and
Limited Partner: _________________________________________
(street address, city, county, state, zip code).
XV. Miscellaneous.
A. Legal Fees. The legal fees and expenses of each Partner in connection with
preparing and negotiating this transaction are Development Costs and will be set out as
a line item category of the Budget. Each Partner will be entitled to be reimbursed by the
Partnership for the legal fees and expenses actually incurred. If Partner A elects to use
counsel employed in-house , the legal fees and expenses of Partner A will be deemed to
be equal to ________ % of the legal fees and expenses of Partner B and the Limited
Partner.
B. Commissions and Fees. Each Partner warrants to the other Partners, and
agrees to warrant again in the Partnership Agreement, that there are no claims for
brokerage or other commissions or any other fees due to any broker, agent, or other
person with respect to the transactions contemplated by this nonbinding letter of intent
and that neither Partner has had any contacts with any real estate broker or agent
which could provide the basis for a claim by the broker or agent that the Partner was
introduced to the transaction by the broker or agent. Each Partner will defend,
indemnify, and hold the other Partner harmless from any such claims.
C. Disclosure of Information. The Partners agree that no formal press releases or
similar information regarding this transaction will be released or provided by any
Partner, any affiliate of any Partner, or any employee or agent of any Partner or affiliate
to any form of mass media communication entity, or its employee, for dissemination to
the general public until the Executive Committee has reviewed the content of the
information and has given its prior written consent for the distribution of the information.
In addition, the Partnership and the Partners will not print or otherwise prepare any
advertising or public relations materials for publicizing this transaction until the materials
are reviewed and approved by the Partners.
D. Investment Representations. Each Partner will represent and warrant in the
Partnership Agreement that no other party has made any representation, warranty, or
otherwise with respect to the fair market value or income potential of the Land or the
completed Project and that the Partner has relied solely on its own independent
investigations and evaluations in making its decision to enter into this transaction.
E. Disclaimer. This nonbinding letter of intent is a proposal for the transaction set
out in it and represents a commitment by the parties, in reliance on the excellent
business reputation of each of the parties, to negotiate in good faith with each other to
complete the transaction described. This letter is not, however, a contract, does not
create any quasi-contractual relationship, and will not in any manner whatsoever create
a binding obligation between the parties. The transaction will be completed and become
legally binding only on the execution of a limited partnership agreement and the other
transaction set out by the parties and delivery of the documents to each of the parties.
If the terms and conditions of this nonbinding letter of intent are acceptable to you,
please sign this letter and return it to our office.
Very truly yours,
_____________________
(Name of Partner A)
________________________
(Signature)
_____________________
(Printed Name and Office)
We accept the terms and conditions of the above nonbinding letter of intent.
_____________________
(Name of Partner B)
________________________________
(Signature of Partner B)
_____________________
(Printed Name and Office)
_____________________
(Name of Limited Partner)
________________________
(Signature)
_____________________
(Printed Name and Office)
(Attachment of exhibits)
