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The intent of this Letter is to provide a written expression of the mutual interest of the following Parties:
| "Buyer(s)": |
and
| "Seller(s)": |
in which Buyer(s) would purchase the business, materials, services or matters set forth in this Letter from Seller(s). This Letter also outlines some of the terms and conditions that a future agreement would include, as well as the exchange of information and documents that should take place in advance of the future agreement. The future agreement would require further documentation and approvals and the preparation of a definitive agreement which would set forth the material terms and a commitment from the Buyer(s) to purchase and the Seller(s) to sell.
. Prospective Transaction
The transaction, which the Parties have expressed a mutual interest in, involves the transfer of from the Seller(s) to the Buyer(s) ("Prospective Transaction").
. Purchase Price
The Prospective Transaction would involve payment from Buyer(s) to Seller(s) under the following terms:
. Liabilities of Seller
Buyer(s) would not assume any liabilities or obligations of Seller(s). Seller(s) would remain liable for any (known or unknown) liabilities or obligations not expressly assumed by Buyer and which arose before the consummation of the final or definitive agreement, and shall pay and discharge all known liabilities and obligations prior to closing.
. Due Diligence
Buyer(s) will be entitled to inspect and analyze the Seller's assets and inventory and the Seller's business and operations, including its books and records, customer orders, liabilities and prospects until the closing, or termination, of this Letter of Intent. Seller(s) will provide all information requested by Buyer(s) and Buyer(s) agrees to execute a Confidentiality Agreement and to not contact Seller's customers or suppliers unless authorized by Seller(s).
. Contingencies
Before a final agreement can be made, Buyer(s) must be satisfied with the due diligence review and information and documents provided by Seller(s), as well as an authorization from the landlord to assume the lease, negotiation of employment contracts, environmental review (if applicable) and an agreement on the terms of the Definitive Agreement.
. Definitive Agreement
The Definitive Agreement will be structured as a purchase and sale of assets and will include customary covenants, conditions and warranties.
. Non-Binding Agreement
Except for the paragraphs entitled "Exclusivity" and "Public Announcements and Confidentiality Agreement," the provisions in this Letter of Intent are for informational purposes only and are nonbinding on all Parties. The Prospective Transaction requires further negotiation and documentation, including preparing and executing a final agreement. This letter does not require either party to proceed to the completion of a binding final agreement. The parties shall not be contractually bound to the sale, purchase or transfer listed above unless and until they enter into a formal, written final agreement, which must be in form and content satisfactory to each party and to each party's legal counsel, in their sole discretion.
. Public Announcements and Confidentiality Agreement
All parties hereby agree not to release any information to the public with regards to this letter or any potential agreement without the separate written consent of all parties involved. All parties agree that the terms of this letter of intent and any negotiations shall remain confidential between the parties and their legal representation.
. Authority to Enter Letter of Intent
The parties signing this letter affirm they are an authorized representative of their respective companies and have authority to enter into this Letter of Intent.
. Closing, Termination of Letter
Closing shall occur no later than days from the date the last signature is affixed hereto unless mutually extended by the Parties. The Letter of Intent terminates if Closing does not occur or has not been extended or if either Party provides written notice of termination. If the Letter terminates, the paragraphs entitled "Exclusivity" and "Public Announcements and Confidentiality Agreement" survives termination and continues to bind the Parties, as does any separately executed Confidentiality Agreement.
. Expenses Associated with this Letter of Intent and Due Diligence
The Parties agree to bear their own expenses, including attorney's and professional fees associated with any due diligence or any other matter associated with this Prospective Transaction.
. Governing Law
This letter shall be governed by the laws of the State of Commonwealth of .
Sincerely,
Agreed to by Buyer(s)Seller(s)
| ___________________________________ | Date: _______________ |
| ___________________________________ | Date: _______________ |
| ___________________________________ | Date: _______________ |
| ___________________________________ | Date: _______________ |
And Accepted and Agreed to by Seller(s)Buyer(s)
| ___________________________________ | Date: _______________ |
| ___________________________________ | Date: _______________ |
| ___________________________________ | Date: _______________ |
| ___________________________________ | Date: _______________ |
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___Sign this document. This document needs to be signed by:
and all other Buyers.
and all other Sellers.
For the most part, the Letter of Intent is not legally binding. However, the paragraphs entitled "Exclusivity" and "Public Announcements and Confidentiality Agreement", will become binding when signed by the recipient(s) of the Letter.
___Everyone gets a copy. Anyone named in the document should receive a copy of the signed Letter.
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Understanding what a Letter of Intent is and when to use them is a bit confusing. But basically, this letter just means you are serious about continuing towards a purchase and that you want the other party to stop entertaining other offers. Our Letter of Intent template is suitable for all states.
This document is rather simple. You should be able to make a professional agreement within a few minutes if you know a bit of basic information. Here is what you'll need:
The rest of the document is auto-filled when you submit the above information. Once created you can save, share and edit the document online. You can request an electronic signature or print the Letter of Intent for signing.
While most are not legally binding, there may still be consequences for not complying with the agreed upon portions of the letter. A Letter of Intent is often seen like purchase or crowd-sourced orders, so they are often used to help secure funding or prove the value of the business. If the other party drops out or doesn't honor "in good faith" the letter, actual financial damage may be incurred to the company. In court, most often the judge will make decisions based on what implied intent is expressed in the letter. Sometimes there can be recourse if the parties do not follow through towards an actual legal agreement. We can connect you with a lawyer if you need additional assistance or a document review.
These documents are similar and are often used interchangeably. While they vary a bit from each other, they are used for the same purpose which is to show intent and an agreement to agree. Most are considered "nonbinding" unless the wording is included to make it binding.
Letter of Intent
Letters of Intent are most often used to start the process of beginning a business deal, purchase or project. Letters of Intent are also often part of the process of applying to a University. However, our LOI template is intended to be used for business purchases.
Memorandum of Understanding (MOU)
A Memorandum of Understanding is often used at the beginning of a business partnership. It can be a short-term agreement (to agree) for a single project or between your business and another that you work with often.
Term Sheet
A Term Sheet is used to show interest in an investment opportunity. Often it is used to outline a potential agreement between an entrepreneur (or startup company) and investors. Term Sheets are used to start the process of establishing agreeable terms. Once both parties are agreed, a formal legal contract can be written.
