Letter Of Intent For The Purchase And Sale Of Property Template (Page 6 of 8) in pdf

48 | The Practical Real Estate Lawyer

May 2010

Water Rights or other Property and to provide Buyer with a copy of such notice immediately thereaf-

ter. Such notice delivered on the Agreement Effective Date shall be sufficient to trigger the running of

any period for exercise of a right of first refusal. The Purchase Agreement shall further call for Buyer

and Seller to use their best efforts and otherwise cooperate to obtain from the holder of any mineral

rights underlying the Property, for the benefit of Buyer, a waiver of all such holder’s rights to extract

minerals of any kind from the Property.

h. The close of escrow, including, without limitation, Seller’s delivery to Buyer of the Property by

warranty deed, together with such change of ownership and other documentation as is necessary to

transfer the Water Rights and/or any other parts of the Property, and Buyer’s delivery to Seller of the

Purchase Price (“Closing”), shall occur by the date set forth in Section (3)(a) above (the “Closing Date”).

Closing will be subject to the satisfaction or waiver of conditions benefiting the Seller and Buyer which

are customary in commercial transactions of the nature described herein.

i. At Closing, Buyer, as lessor, and Seller, or a member or affiliate of Seller, as lessee, shall, at Seller’s

option, enter into a lease agreement, for the lease back to Seller of the Real Property, for a lease term

of five (5) years, at a rental rate of ____________________ and 00/100 Dollars ($__________) per

year, payable, for the first year of the lease term, at Closing and, thereafter, for each of the four years

remaining in the lease term, on the anniversary of the Closing Date. The lease shall include provisions

permitting (i) Seller, as lessee, to cancel the lease, as to the entirety of the leased Real Property, upon

thirty (30) days’ advance written notice to Buyer; and (ii) Buyer, as lessor, to cancel the lease, in part,

from time to time, (x) as to some or all portions of the leased Real Property, other than the house and

the Land underlying and in the immediate vicinity of the house (collectively, the “Homestead”), as

such Homestead is described on attached Exhibit E, upon thirty (30) days’ advance written notice to

Seller, as lessee, specifying the non-Homestead portion(s), including the number of acres therein, of

the Real Property as to which the lease is being cancelled, and (y) as to the Homestead, after the ex-

piration of one (1) year from the Closing Date, upon thirty (30) days’ advance written notice to Seller,

as lessee, specifying the Homestead, including the number of acres therein, as the portion of the Real

Property as to which the lease is being cancelled. In the case of any cancellation of the Lease by Buyer,

as lessor, the amount of annual rent owed for the Real Property remaining subject to the lease shall be

reduced pro rata, effective as of the date of cancellation, based on the number of acres of Real Prop-

erty removed from the lease by such cancellation in relation to the total acreage subject to the lease at

the time of cancellation.

j. Closing costs shall be allocated in accordance with the custom in _____________________________

County, New Mexico. Seller and Buyer shall each pay the fees and expenses of their respective legal

counsel, accountants, and other consultants or advisors incurred in connection with the transaction.

Real estate taxes, assessments, and any items of income and expense shall be prorated as of the Closing

Date. Seller shall bear the cost of a standard Owner’s Policy of title insurance in favor of Buyer, in the

amount of the purchase price of the Real Property. The cost of deletions from the Owner’s Policy of

any standard exceptions in Schedule B-II of the Commitment, as well as the cost of any other affirma-

Letter Of Intent For The Purchase And Sale Of Property Template Page 6