Date: ________________, 2015
Mr. Thomas K. Olson
Managing Director, Brokerage Services
[CA License 00381739]
Douglas Wilson Companies
1620 Fifth Ave, Suite 400
San Diego, CA 92101
Re:
Letter of Intent (“LOI”) to purchase approximately +/-460.90 gross acres located in
Oceanside, CA known as the Singh Ranch from Singh Property Management
Company, L.P. (the “Property”)
Dear Mr. Olson:
This Letter of Intent (“LOI”) shall constitute the terms under which
_________________________________________________________________
(“Buyer”)
would purchase the above referenced Property from Singh Property Management Company,
L.P., a California Limited Partnership (“Seller”). This LOI is not intended to be a binding
contract by Seller to sell the Property, or a binding contract by Buyer to purchase the Property,
but instead is an expression of interest by Buyer in order to confirm to the Seller that Buyer
agrees upon the preliminary terms for the purchase and sale of the Property as expressed herein,
prior to the preparation, negotiation and execution of the final and binding Purchase Agreement
to be agreed upon by Seller and Buyer, each in their sole and absolute discretion, as further
specified herein.
1.
Property. The Property consists of approximately +/- 460.90 gross acres of
vacant land located in Oceanside, CA. The Singh Ranch also includes the “Packing Plant”
parcels identified as: “Parcel D of PLA 11-0004 (APNS: 122-130-38 & 157-150-63) consisting
of 22.71 acres which are not being offered for sale. The Property that is being offered for sale
consists of the following parcels:
Legal Parcel
Assessor Parcel Numbers
Parcel A of PLA 11-0004
122-130-32
122-130-34
122-130-36
122-130-40
122-310-05
Parcel C of PLA 11-0004
Parcel A of CC12-00001
2015-03-31-SPMC-LOI TEMPLATE-FINAL-V2
Gross
Acres
206.88
15.62
39.41
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Parcel 1 of PM 6529
Parcel 2 of PM 6529
Legal Parcel by old deed
Parcel A of CC 12-00002
Legal Parcel by old deed
Parcel A of PLA 12-00005
SUBTOTAL Farm
122-030-75
122-030-76
122-130-12
122-130-10
122-130-04
122-130-30
122-130-42
170-020-40
24.45
5.00
16.81
26.2
1.07
125.46
460.9
2.
Buyer’s Financial Ability. Upon Seller’s request, Buyer shall provide to Seller
proof of financial ability to close the transaction. Seller to approve of same in its sole and
absolute discretion within five (5) days of submittal.
3.
Purchase Price. The purchase price (“Purchase Price”) shall be an amount equal
to ___________________ Thousand __________ Hundred and No/100ths Dollars ($______.00)
multiplied by the actual gross acreage of the Property (“Purchase Price Calculation”), which
shall be calculated in accordance with the following provisions. Buyer and Seller estimate that
the Property consists of approximately 460.9 acres. The actual acreage of the Property shall be
determined, at Buyer’s cost and expense, by an ALTA Survey (“Survey”) to be prepared by a
surveyor mutually acceptable to both Seller and Buyer in their reasonable discretion
(“Surveyor”), who shall certify in writing to Seller and Buyer the actual acreage of the Property,
to the nearest one-hundredth (1/100) of an acre, prior to the expiration of the Due Diligence
Period (as hereinafter defined). Prior to the execution of a Purchase Agreement (if any), Buyer
shall identify for Seller’s approval the names of potential Surveyors in order that the Survey shall
commence immediately after Opening of Escrow. Buyer and Seller must approve of the
Purchase Price Calculation prior to the expiration of the Due Diligence Period, each in their
reasonable discretion, which shall be a condition to Close of Escrow for the benefit of both Seller
and Buyer. On or before the Close of Escrow, Buyer shall deposit into escrow the balance of
the purchase price in immediately available funds.
4.
Financing. [BUYER: PLEASE SPECIFY ONE OR THE OTHER IN YOUR
LOI: Buyer (does not) (or does) intend to obtain financing in order to complete the
purchase of the Property.]
5.
Sale/Lease Back. [BUYER: PLEASE SPECIFY ONE OR THE OTHER IN
YOUR LOI: Buyer (does not) (or does) desire Seller to consider a Post-Closing leaseback
agreement (“Post-Closing Lease”). If so, please specify the terms and conditions of any
such Post-Closing Lease.]
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6.
Opening of Escrow and Close of Escrow. “Opening of Escrow” shall be the date
which Escrow Holder has consented to the terms of Escrow as specified by the executed
Purchase Agreement. “Close of Escrow” or the “Closing” shall be ___ days after the Buyer’s
approval of the Due Diligence Evaluation.
7.
Due Diligence Period. Buyer shall have _________ days from Opening of
Escrow to complete its Due Diligence (“Due Diligence Period”). During the Due Diligence
Period, Buyer shall have the opportunity to evaluate the feasibility of Buyer’s ownership of the
Property (“Due Diligence Evaluation”) taking into account any and all considerations deemed
important to Buyer (as determined by Buyer in its sole and absolute discretion) including but not
limited to a physical inspection of the Property, zoning and land use requirements, the impact on
the Property of any and all applicable environmental laws, property conditions, governmental
requirements, exactions, conditions to development, ordinances, rules and regulations and the
consistency of the Property with current or future zoning and/or legal requirements of any
government agencies regarding the Property (collectively “Due Diligence”). The Close of
Escrow is conditioned upon Buyer’s written approval of the Due Diligence Evaluation, which
approval shall be in Buyer’s sole and absolute discretion, on or before the expiration of the Due
Diligence Period. In the event of Buyer’s disapproval of the Due Diligence Evaluation, Buyer’s
sole remedy shall be to cancel Escrow, return the Property Documents, and receive the return of
its First Deposit as more particularly referred to and defined in section 12 below.
8.
Buyer’s Access. Buyer shall have the right, at its sole cost and expense, to enter
onto the Property and conduct its own inspections, surveys, environmental studies, and
subsurface studies as necessary for development of the Property. Seller shall provide Buyer with
reasonable access to the Property (subject to existing farming operations and notice to Seller and
accompaniment by a representative of Seller) for these purposes, and shall cooperate with Buyer
to complete Buyer’s inspection, the incidental costs and inconvenience of which shall be borne
by Seller. Buyer shall indemnify, protect and defend (with counsel reasonably acceptable to
Seller) and hold harmless Seller for, from and against any and all claims, damages, liens,
judgments, injuries, penalties, demands, obligations, actions, costs, liabilities and losses
(including mechanics’ liens) and expenses (including, without limitation, attorneys’ fees) to the
extent arising out of any entry by Buyer or any of its agents, employees, representatives,
consultants or contractors in connection with any such entry. In the event of Buyer’s disapproval
of the Due Diligence Evaluation, the Purchase Agreement shall provide that Buyer’s indemnity
for any claims arising from Buyer’s access shall continue for one (1) year after the termination of
Escrow.
9.
Property Documents and Buyer’s Work Product. Upon the Opening of Escrow,
Seller shall deliver to Buyer a current Preliminary Report (“Preliminary Report”), and copies of
any surveys, studies and other information which Seller may have in its possession or under its
control (“Property Documents”). During the Due Diligence Period, Buyer may, at its sole
discretion and cost, order any environmental analysis, and such other studies and reports as may
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be required by Buyer. Buyer shall share with Seller copies of all reports and written information
relating to Buyer’s Due Diligence (“Buyer’s Work Product”) and Seller agrees to keep any such
information in strict confidence but it may share same with its affiliates, partners, employees,
agents, legal counsel and lenders. Buyer’s Work Product shall not include any proprietary
internal correspondence or memoranda, financial analyses or proformas, and any other
proprietary information and/or intellectual property of Buyer, loan documentation, or any
communication between Buyer and its attorneys. In the event that Buyer elects not to approve its
Due Diligence Evaluation, Buyer agrees to deliver to Seller all of Buyer’s Work Product at no
cost to Seller.
10.
Closing Costs, Prorations and Commissions. Escrow fees shall be divided equally
between Buyer and Seller. Escrow shall prorate any costs as of Closing including real estate
taxes. Seller shall pay for all documentary transfer and other taxes, and recording fees associated
with the sale of the Property, and a standard CLTA title insurance policy to be issued in favor of
Buyer in the amount of the Purchase Price. Buyer shall pay additional costs, if any, as desired by
Buyer including but not limited to the ALTA/Extended portion of any title insurance policy, any
endorsements desired by Buyer, and the Survey. Seller is responsible for payment of a broker’s
commission to Doug Wilson Company (“DWC”). Buyer shall be responsible for the payment of
a broker’s commission to any cooperating broker retained by Buyer, and Buyer hereby confirms
it agrees to indemnify, protect, defend (with legal counsel reasonably acceptable to Seller) and
holds Seller free and harmless from and against any and all costs and liabilities, including,
without limitation, reasonable attorneys’ fees and costs, for causes of action or proceedings
which may be instituted by any broker, agent or finder, licensed or otherwise, claiming through,
under or by reason of the conduct of Buyer in connection with this transaction other than DWC.
11.
Purchase and Sale Agreement. The Purchase and Sale Agreement and Mutual
Escrow Instructions (“Purchase Agreement”) shall contain provisions customary for a property
sale transaction including but not limited to escrow, actions pending closing, condition of title,
operation and maintenance of the Property, limited representations and warranties based upon
the “Actual Knowledge” of Seller without any duty of investigation or inquiry, liquidated
damages, indemnification, confidentiality and other general provisions as may be required by
either Buyer or Seller. Provided however, it is agreed that Buyer will need to rely solely upon
its own inspection, investigation, and analysis of the Property in its decision to purchase. The
final Purchase Agreement will include an extensive “As Is, Where Is, and Waiver clause.” It
will also include a clause by which Buyer acknowledges that prior to Closing, that Buyer will
have had the opportunity to inspect and review the condition of the Property, and after Closing,
Buyer will assume all risks of ownership of the Property.
12.
Deposits. Within two (2) business days after Opening of Escrow, Buyer shall
deposit _______________________ ($______________) (“First Deposit”) into Escrow. Upon
Buyer’s approval of the Due Diligence Evaluation, Buyer shall deposit
_______________________ ($______________) (“Second Deposit”) into Escrow. The First
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and Second Deposits shall be referred to herein as the “Deposits”. The Deposits plus any
accrued interest shall be credited to the Purchase Price upon the Close of Escrow or shall be
retained by the Seller as non-refundable liquidated damages in the event Buyer fails to acquire
the Property after Buyer’s approval of the Due Diligence.
13.
Escrow/Title. Escrow shall be with Stewart Title (“Escrow Holder”).
All
amounts deposited with Escrow shall be invested by Escrow Holder in an interest bearing
account selected by Buyer and with all interest accruing thereon to be credited to the Purchase
Price upon the Close of Escrow. Title Insurance shall be provided by Stewart Title (“Title
Company”). Contact information for Escrow Holder and the Title Company are as follows:
Stewart Title shall be the “Title Company”:
Stewart Title of California, Inc.
Attn: Frank Green, Advisory Title Officer
Title Order No. 01180-147714
7676 Hazard Center Drive, 14th Floor
San Diego, CA 92108,
Office: (619) 398-8035
Fax: (619) 615-2389
E-mail: fgreen@stewart.com &
SDComm@stewart.com
Stewart Title shall be the “Escrow Holder”:
Stewart Title of California, Inc.
Attn: Carla Burchard or Loretta Johnson
Stewart Title of California, Inc.
Escrow No. 01180-147714
Commercial Escrow Team
5740 Fleet Street, Suite 100
Carlsbad, CA 92008
Office: 760-602-4299
Fax: 619-923-2921
Email: cburchard@stewart.com
Email: Lojohnson@stewart.com
14.
Confidentiality. Buyer shall keep all information and reports obtained from Seller
or relating to the Property or the proposed transaction confidential and shall not disclose any
such confidential information to any other person or entity without obtaining the prior written
consent of the Seller. Provided however, Buyer may disclose pertinent information to its
affiliates, partners, employees, agents, legal counsel and lenders.
15.
No Personal Liability. No trustee, member, or partner of Seller, including but not
limited to Harry Singh, Gene Singh, and/or Krishna Singh, shall have any personal liability,
directly or indirectly, under or in connection with this LOI or any agreement made or entered
into under or in connection with the provisions of this LOI, the Purchase Agreement, or any
amendment or amendments to any of the foregoing made at any time or times, heretofore or
hereafter, including but not limited to any representations and warranties by Seller. The
obligations of Sellers are intended to be binding only on the Seller’s interest in the Property (or
their applicable trust estate) and the obligations of Seller shall not be personally binding upon,
nor shall any resort be had to, the private assets of any of Seller’s trustees, members, or partners.
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16.
Ancillary Parcels for Sale. Buyer acknowledges that parcels adjacent or near the
Property may be for sale and agrees to consider these additional parcels during the negotiation of
the Purchase Agreement with no obligation to include them in a resulting transaction.
17.
Back Up Offers. Until Close of Escrow, Seller shall have the right and intends to
continue to seek, entertain, give any information concerning or negotiate any terms of a sale,
lease or joint venture of the Property or other transaction regarding the Property with any party
other than Buyer as a backup offer to become effective in the event Buyer does not purchase the
Property.
18.
Expiration.
The terms of this LOI, shall automatically expire unless
acknowledged in writing by Seller no later than ________ (__) days after the date that this LOI
has been formally submitted to Seller’s Broker.
BUYER AND SELLER ACKNOWLEDGE THAT THIS LOI IS ONLY A PROPOSAL THAT
REFLECTS THE PRIMARY TERMS AND CONDITONS UPON WHICH BUYER IS
WILLING TO PURCHASE THE PROPERTY, IS NOT A PURCHASE AGREEMENT, IS
NOT BINDING, AND THAT IT IS INTENDED ONLY AS A BASIS FOR THE
PREPARATION OF A PURCHASE AGREEMENT. THE PURCHASE AND SALE
AGREEMENT SHALL BE SUBJECT TO SELLER’S AND BUYER’S APPROVAL, EACH
IN THEIR SOLE AND ABSOLUTE DISCRETION, AND ONLY A FULLY EXECUTED
PURCHASE AGREEMENT SHALL CONSTITUTE A BINDING PURCHASE AGREEMENT
FOR THE PURCHASE AND SALE OF THE PROPERTY.
NOTWITHSTANDING
SELLER’S ACCEPTANCE OF THIS LOI, UNTIL THE SELLER’S EXECTUION OF THE
PURCHASE AGREEMENT, THE SELLER IS NOT COMMITTED TO SELL THE
PROPERTY TO BUYER, AND NO EXECLUSIVE NEGOTATING PERIOD SHALL BE
IMPLIED, AND THE PROPERTY IS SUBJECT TO SELLER’S ELECTING TO WITHDRAW
THE PROPERTY FROM THE MARKET, OR SELLE’RS DECISION TO NOT PURSUE
NEGOTIATION OF THE PURCHASE AGREEMENT FOR ANY REASON WHATSOEVER
IN THE SOLE AND ABSOLUTE DISCRETION OF SELLER. PROVIDED HOWEVER,
BOTH BUYER AND SELLERS AGREE THAT THE CONFIDENTIALITY PROVISION
ABOVE IN SECTION 14 IS INTENDED TO BE BINDING.
Please acknowledge your agreement to these general terms by signing below.
This LOI may be executed in any number of counterparts. Facsimile signatures shall be shall be
treated as originals.
REMAINDER OF PAGE LEFT BLANK AND SIGNATURES ON FOLLOWING PAGE
BUYER:
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By:
Its:
Date: _____________, 2015
Accepted:
SINGH PROPERTY MANAGEMENT COMPANY,
a California limited partnership
By: _______________________________
Harry Singh, Jr., General Partner
Date: ______________, 2015
4818-2374-4546, v. 1
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