LETTER OF INTENT / TERM SHEET FOR OFFICE LEASE
This Letter of Intent / Term Sheet (this "Term Sheet") is made at __________ on __________.
BETWEEN
__________, __________, of __________ (the "Landlord");
AND
__________, __________, of __________ (the "Prospective Tenant").
The Landlord and the Prospective Tenant are each a "Party" and together the "Parties".
RECITALS
A. The Landlord is the owner of, or is otherwise entitled to offer on lease, the premises described in clause 1 below (the "Premises").
B. The Prospective Tenant wishes to take the Premises on lease for its business, and the Parties have discussed and reached broad agreement on the commercial terms set out in this Term Sheet.
C. The Parties wish to record those terms in writing before instructing the drafting of a full, formal lease deed, so that both sides negotiate the lease deed from a common and current understanding of what has been agreed in principle.
D. The Parties record, and clause 8 states at length, that this Term Sheet is not itself a lease, an agreement to lease, or a document capable of being specifically enforced to compel a lease, and that only clauses 6, 7 and 9 bind the Parties before a lease deed is signed.
NOW THIS TERM SHEET RECORDS AS FOLLOWS.
- THE PREMISES
1.1 The Landlord proposes to let, and the Prospective Tenant proposes to take on lease, the premises known as __________, situated at __________, in __________ (the "Premises").
1.2 The Premises are proposed to admeasure approximately __________ square feet of __________, subject to joint measurement before the lease deed is finalised.
- PROPOSED RENT AND ESCALATION
2.1 The Parties propose a monthly rent of __________ for the Premises, exclusive of GST, maintenance charges and statutory outgoings, all of which shall be dealt with in the lease deed.
2.2 __________.
- PROPOSED SECURITY DEPOSIT
3.1 The Parties propose an interest-free, refundable security deposit of __________, payable in the manner and by the instalments the lease deed states, and refundable on the terms the lease deed states.
- PROPOSED FIT-OUT PERIOD AND LOCK-IN
- TARGET TERM
5.1 The Parties target a lease term of __________ years, to commence on a date to be agreed once the lease deed is settled and ready for execution.
- DUE DILIGENCE AND EXCLUSIVITY
- COST ALLOCATION
7.1 __________.
7.2 This clause 7 binds the Parties from the date of this Term Sheet, whether or not a lease deed is ever executed, and is not subject to clause 8.1.
- STATUS OF THIS TERM SHEET
8.1 This Term Sheet records the commercial terms the Parties currently propose for the lease of the Premises, is a statement of present intention only, and is NOT BINDING on either Party as to those commercial terms — the proposed area, the proposed rent, the proposed escalation, the proposed security deposit, the proposed fit-out period, the proposed lock-in period and the target lease term. Neither Party is obliged to proceed to execute a lease deed on these or any other terms, and neither Party shall have a claim against the other for declining to do so or for proposing different terms during negotiation of the lease deed, except as clause 8.2 states.
8.2 Notwithstanding clause 8.1, clause 6 (Due Diligence and Exclusivity, where an Exclusivity Period is stated in it), clause 7 (Cost Allocation) and clause 9 (Confidentiality) of this Term Sheet ARE BINDING on the Parties from the date of this Term Sheet, whether or not a lease deed is ever executed, and each Party may enforce them according to their own terms.
8.3 Nothing in this Term Sheet grants, or is agreed to be granted, possession or occupation of the Premises, or a licence, lease, sub-lease, tenancy or other interest in them. No such interest comes into existence by this Term Sheet, by anything done under it, or by the passage of time, whatever the Parties do in the meantime in reliance on it, and this Term Sheet is not to be read as a promise, enforceable in specie, to grant one. The Parties shall not hand over or take possession of the Premises, and shall not make or accept any payment described as rent, token money or advance for the Premises, under cover of this Term Sheet; any such payment or handover is outside this Term Sheet and is made and accepted entirely at the paying and receiving Party's own risk.
8.4 If the Parties execute a lease deed for the Premises, that lease deed alone governs their relationship from its date, and this Term Sheet then ceases to have effect except for an obligation under clause 6, 7 or 9 that has already accrued or that by its own terms survives.
- CONFIDENTIALITY
9.1 Each Party shall keep confidential the existence and the terms of this Term Sheet and the fact and content of the Parties' negotiations, except that either Party may disclose them to its professional advisers, financiers and group companies who need to know them for the purpose of the proposed lease, and where disclosure is required by law or by a regulator, or to enforce this Term Sheet.
9.2 This clause 9 binds the Parties from the date of this Term Sheet and survives its termination or expiry for a period of two years, whether or not a lease deed is ever executed.
- STAMP DUTY ON THE BINDING CLAUSES
10.1 This Term Sheet does not transfer, create, limit or extinguish any right, title or interest in the Premises, and clause 8.3 excludes any grant of possession or of a leasehold or licence interest, so nothing in it attracts the stamp duty charged on a lease of immovable property, whether in the State of Punjab or in the Union Territory of Chandigarh. That duty is a matter for the lease deed referred to in clause 5, is computed on the rent that deed actually states, and is dealt with in that deed and not in this Term Sheet.
10.2 What clauses 6, 7 and 9 make binding is nevertheless a written agreement between the Parties, and an agreement not otherwise specifically provided for is chargeable under Article 5 of Schedule I-A to the Indian Stamp Act, 1899 as applicable in the State of Punjab and as applicable in the Union Territory of Chandigarh, at a fixed duty rather than a duty computed on the proposed rent or deposit. The Parties should have the current figure under that Article confirmed with the Collector of Stamps or a licensed stamp vendor before this Term Sheet is signed, and should stamp it accordingly if either Party wants to be able to rely on clause 6, 7 or 9 in evidence without first paying the deficient duty and any penalty under the Indian Stamp Act, 1899.
10.3 __________ shall bear the stamp duty referred to in clause 10.2, if the Parties decide to stamp this Term Sheet.
- DISPUTE RESOLUTION AND GOVERNING LAW
11.1 __________.
11.2 The seat and venue of any proceedings under clause 11.1 is __________.
11.3 This Term Sheet is governed by the laws of India as in force at the place where the Premises are situated.
- GENERAL
12.1 This Term Sheet is the entire agreement between the Parties about its subject matter and supersedes every prior discussion, correspondence and draft about the Premises, to the extent they are inconsistent with it.
12.2 No amendment to this Term Sheet, including to the Exclusivity Period, is effective unless made in writing and signed by both Parties.
12.3 A failure or delay by a Party in enforcing clause 6, 7 or 9 is not a waiver of it.
12.4 If a provision of this Term Sheet is held invalid or unenforceable, the rest of it continues in effect.
12.5 Nothing in this Term Sheet creates a partnership, joint venture or agency between the Parties, or makes either Party the agent of the other.
IN WITNESS WHEREOF the Parties have signed this Term Sheet at __________ on __________.
FOR THE LANDLORD
__________
Signature: ______________________________
Date: ______________________________
FOR THE PROSPECTIVE TENANT
__________
Signature: ______________________________
Date: ______________________________