"Non-binding Letter of Intent Template"

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Non-Binding Letter of Intent
From: _​ _ _________________________
To:​ _ _____________________________
Sender’s Name
Recipient's Name
_________________________________
_________________________________
_________________________________
_________________________________
Sender’s Address
Recipient's Address
_________________________________
_________________________________
City, State, ZIP Code
City, State, ZIP Code
_________________________________
D ate
To Whom It May Concern,
We are writing to provide a letter of intent from [​
O ur Name Inc.​
] (hereinafter referred to
as the “[​
O ur
S horter Name​
] ”) in respect of a Transaction (hereinafter referred to as the
“Transaction”) with [​
T arget Name Inc.​
] (hereinafter referred to as the “[​
T arget Name​
] ” or
the “Company”). We appreciate the time and energy you and your team have afforded us
in discussing this opportunity and the information that has been provided thus far.
As we continue to spend time evaluating [​
T arget Name​
] , we believe that OUR NAME
will bring unique value and capabilities to the Company, accelerating the development
and growth of [​
T arget Name​
] . We believe we could drive [​
T arget Name​
] ’s growth
strategy, by doing [​
A ctivity A​
] , [​
A ctivity B​
] , and [​
A ctivity C​
] .
Transaction Overview and Structure
Based on our preliminary review of the information provided and subject to the
conditions set forth below, [​
O ur Shorter Name​
] is pleased to submit this non-binding
letter of intent (hereinafter referred to as the “Proposal”) for a Transaction with [​
T arget
Name​
] . We propose purchasing ________% of the equity of the Company, including all
assets and liabilities, in such a way that [​
T arget Name​
] still has significant exposure to
the future upside.
We believe that in order for this Transaction to be successful our interests must be
aligned. With that in mind, we have designed a compensation structure that allows all
parties to benefit from our future success in an equitable way.
© ​
T EMPLATEROLLER.COM
Non-Binding Letter of Intent
From: _​ _ _________________________
To:​ _ _____________________________
Sender’s Name
Recipient's Name
_________________________________
_________________________________
_________________________________
_________________________________
Sender’s Address
Recipient's Address
_________________________________
_________________________________
City, State, ZIP Code
City, State, ZIP Code
_________________________________
D ate
To Whom It May Concern,
We are writing to provide a letter of intent from [​
O ur Name Inc.​
] (hereinafter referred to
as the “[​
O ur
S horter Name​
] ”) in respect of a Transaction (hereinafter referred to as the
“Transaction”) with [​
T arget Name Inc.​
] (hereinafter referred to as the “[​
T arget Name​
] ” or
the “Company”). We appreciate the time and energy you and your team have afforded us
in discussing this opportunity and the information that has been provided thus far.
As we continue to spend time evaluating [​
T arget Name​
] , we believe that OUR NAME
will bring unique value and capabilities to the Company, accelerating the development
and growth of [​
T arget Name​
] . We believe we could drive [​
T arget Name​
] ’s growth
strategy, by doing [​
A ctivity A​
] , [​
A ctivity B​
] , and [​
A ctivity C​
] .
Transaction Overview and Structure
Based on our preliminary review of the information provided and subject to the
conditions set forth below, [​
O ur Shorter Name​
] is pleased to submit this non-binding
letter of intent (hereinafter referred to as the “Proposal”) for a Transaction with [​
T arget
Name​
] . We propose purchasing ________% of the equity of the Company, including all
assets and liabilities, in such a way that [​
T arget Name​
] still has significant exposure to
the future upside.
We believe that in order for this Transaction to be successful our interests must be
aligned. With that in mind, we have designed a compensation structure that allows all
parties to benefit from our future success in an equitable way.
© ​
T EMPLATEROLLER.COM
We offer a total purchase price of $________ consisting of:
● $________ of cash on closing;
● $________ – shares of [​
O ur Shorter Name​
] , issued immediately upon closing and
not subject to any vesting period representing approximately ________% of [​
O ur
Shorter Name​
] ;
● $________ of performance upside – performance shares of [​
O ur Shorter Name​
]
(an additional ________%, approximately), issued upon achieving the following
targets/milestones:
○ [​
M ilestone 1​
] in year ________;
○ [​
M ilestone 2​
] in year ________.
● The final purchase price will be adjusted for customary changes in net working
capital which will be reflected in the cash component of the purchase price.
Illustrative Timeline
Given the importance of timing for [​
T arget Name​
] in respect to this Transaction we have
proposed a high-level timeline as follows:
● [​
D ate​
] : financial due diligence and valuation work;
● [​
D ate​
] : operational due diligence and [​
O ur Shorter Name​
] visit to [​
T arget Name​
] ’s
head office;
● [​
D ate​
] onward: drafting of Definitive Agreement.
Due Diligence Process
This Transaction is of the highest priority for us, and we are prepared to proceed as
quickly as possible; it is important that you make that same commitment to us before we
expend additional time and resources pursuing this opportunity.
[​
O ur Shorter Name​
] has developed an investment thesis and an understanding of the
business through our initial due diligence, including several conversations with
management as well as a preliminary data review. We envision our remaining due
diligence would include, but would not be limited to, commercial, accounting, and
financial due diligence, as well as customary legal, tax, and regulatory work. With the
Company’s full cooperation, we believe we can expeditiously complete our due
© ​
T EMPLATEROLLER.COM
diligence, and present [​
T arget Name​
] with a definitive agreement within eight weeks
from the date our Proposal is accepted.
Exclusivity & Confidentiality
If the Company is interested in pursuing the proposed Transaction, we would require
sixty days of exclusivity (hereinafter referred to as the “Exclusivity Period”) to finalize
our due diligence and negotiate definitive documentation, subject to a ________-day
extension if [​
O ur Shorter Name​
] is working in good faith to consummate the Transaction
at the initial expiration date. In light of our Proposal’s premium valuation, we believe that
granting exclusivity at this stage will benefit the Project and its Shareholders.
In order to complete our due diligence and to secure the additional requisite capital, we
will need reasonable access to Company information and the ability to share that
information with our prospective equity partners and debt financing sources in a manner
that protects the confidentiality of your information and our discussions. A draft form of
the exclusivity and confidentiality agreement is enclosed as Exhibit A for your
consideration (hereinafter referred to as the “Exclusivity and Confidentiality
Agreement”).
We emphasize our desire to complete the proposed Transaction in an expeditious and
efficient manner and our readiness to mobilize resources to move ahead quickly. To that
end, and assuming we sign this letter in advance, we would suggest an organizational
meeting as soon as possible to agree on the work plan during the Exclusivity Period.
Non-Binding Commitment
This non-binding indication of interest is confidential and may not be disclosed other
than to you, the Company, and its advisors on a strictly need-to-know basis. It is not
intended, and shall not be deemed, to create any binding obligation on the part of [​
O ur
Shorter Name​
] , or any of its affiliates, to engage in any transaction with the Company or
to continue its consideration of any such transaction.
Subject to the immediately-following sentence, none of the parties shall be bound in any
way in connection with this letter unless and until the parties execute a definitive
agreement, and then shall be bound only in accordance with the terms of such agreement.
Notwithstanding anything to the contrary in this letter, the Exclusivity and
Confidentiality Agreement, once executed by the parties thereto, shall constitute binding
obligations of the parties hereto.
© ​
T EMPLATEROLLER.COM
We are very excited about the potential opportunity and hope that you are equally
interested in proceeding in a constructive and expeditious dialogue.
We look forward to working with you to complete this transaction.
Very truly yours,
[​
N ame of Representative​
]
[​
C ompany Name​
]
[​
S ignature of Representative​
]
Note: ​ T his Letter of Intent (LOI) template is only for educational purposes and should not be used for any
other purpose.
© ​
T EMPLATEROLLER.COM
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