"Non-binding Letter of Intent Template"

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Letter of Intent Template – Example 
  
DATE 
NAME 
ADDRESS 
  
Dear ​
N ame​
,  
We are writing to provide a letter of intent from ​
O UR NAME Inc.​
(“Shorter 
Name”) in respect of ​
a Tr​ a nsaction​
(a “Transaction”) with ​
T ARGET NAME 
Inc.​
(“TARGET 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 X, Y and Z. 
Transaction Overview and Structure 
Based on our preliminary review of the information provided and subject to 
the conditions set forth below, ​
O UR NAME​
is pleased to submit this 
non-binding letter of intent (the “Proposal”) for a ​
T ransaction ​
w ith ​
T ARGET 
NAME​
. We propose purchasing 100% of the equity of the Company, 
including all assets and liabilities, in such a way that ​
T ARGET NAME​
still 
has significant exposure to future upside. 
We believe that in order for this ​
T ransaction ​
t o 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. 
We offer a total purchase price of $​
X XX​
consisting of: 
● $​
X XX​
of cash on closing 
Letter of Intent Template – Example 
  
DATE 
NAME 
ADDRESS 
  
Dear ​
N ame​
,  
We are writing to provide a letter of intent from ​
O UR NAME Inc.​
(“Shorter 
Name”) in respect of ​
a Tr​ a nsaction​
(a “Transaction”) with ​
T ARGET NAME 
Inc.​
(“TARGET 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 X, Y and Z. 
Transaction Overview and Structure 
Based on our preliminary review of the information provided and subject to 
the conditions set forth below, ​
O UR NAME​
is pleased to submit this 
non-binding letter of intent (the “Proposal”) for a ​
T ransaction ​
w ith ​
T ARGET 
NAME​
. We propose purchasing 100% of the equity of the Company, 
including all assets and liabilities, in such a way that ​
T ARGET NAME​
still 
has significant exposure to future upside. 
We believe that in order for this ​
T ransaction ​
t o 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. 
We offer a total purchase price of $​
X XX​
consisting of: 
● $​
X XX​
of cash on closing 
● $​
X XX​
– shares of ​
O UR NAME​
, issued immediately upon closing and 
not subject to any vesting period representing approximately ​
X X​
% of 
OUR NAME​
;  
● $​
X XX​
of performance upside – performance shares of​
OUR
NAME 
(an additional ​
X X​
% , approximately), issued upon achieving the 
following targets/milestones: 
Milestone #1​
in year ​
2 0XX​
;
 
Milestone #2​
in year ​
2 0XX​
.
 
● 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 ​
w e have proposed a high-level timeline as follows: 
● Date: Financial due diligence and valuation work; 
● Date: Operational due diligence and ​
O UR NAME​
visit to ​
T ARGET 
NAME’s​
head office; 
● Date onward: Drafting of Definitive Agreement. 
Due Diligence Process 
This ​
T ransaction ​
i s 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 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 diligence, and present ​
T ARGET NAME ​
w ith 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 (the “Exclusivity Period”) to finalize 
our due diligence and negotiate definitive documentation, subject to a 
60-day extension if​
OUR NAME​
is working in good faith to consummate the 
Transaction ​
a t 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 (the “Exclusivity and Confidentiality Agreement”). 
We emphasize our desire to complete the proposed ​
T ransaction ​
i n 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 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 thereto. 
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, 
[Signature] 
Name 
Company Name 
  
Note: This letter of ​ i ntent​ (LOI) template is only for educational purposes and 
should not be used for any other purpose. 
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