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Letter Of Intent Share Purchase Template for United States

A Letter of Intent for Share Purchase is a preliminary, non-binding document that outlines the proposed terms and conditions for the purchase of shares in a company. Under U.S. law, while not legally binding in its entirety, it serves as a framework for negotiations and typically includes certain binding provisions such as confidentiality and exclusivity. The document sets forth the key terms of the proposed transaction, including purchase price, payment terms, due diligence requirements, and conditions precedent to closing.

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What is a Letter Of Intent Share Purchase?

A Letter Of Intent Share Purchase is typically used in the early stages of a share acquisition transaction when parties wish to document their serious intent to proceed with a deal while maintaining flexibility for negotiation. It serves as a roadmap for the transaction and often facilitates obtaining financing and regulatory approvals. Under U.S. jurisdiction, while most provisions are non-binding, certain clauses such as confidentiality and exclusivity are typically made binding. The document includes key commercial terms, conditions precedent, timeline for completion, and framework for due diligence, helping parties align their expectations before proceeding with detailed documentation and due diligence.

What sections should be included in a Letter Of Intent Share Purchase?

1. Parties: Identification of buyer and seller with full legal names and addresses

2. Transaction Overview: Brief description of the proposed share purchase including target company and shares to be acquired

3. Purchase Price: Proposed consideration, payment terms, and any price adjustment mechanisms

4. Due Diligence: Scope and timeline of due diligence process, including access rights and information requirements

5. Closing Conditions: Key conditions that must be met before final agreement, including regulatory approvals

6. Timeline: Expected timeline for due diligence, documentation, and closing

7. Confidentiality: Confidentiality obligations of parties regarding the transaction and shared information

What sections are optional to include in a Letter Of Intent Share Purchase?

1. Exclusivity: Period during which seller cannot negotiate with other parties, including duration and terms

2. Break Fee: Fee payable if either party terminates negotiations, including amount and trigger events

3. Management Arrangements: Proposed arrangements for key management retention and compensation

4. Financing: Details of proposed financing arrangements and any related conditions

What schedules should be included in a Letter Of Intent Share Purchase?

1. Term Sheet: Detailed summary of key commercial terms and conditions

2. Due Diligence Checklist: Preliminary list of required due diligence items and documents

3. Corporate Structure Chart: Current and proposed ownership structure diagrams

4. Timeline Schedule: Detailed timeline with key milestones and deadlines

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

United States

Publisher

Genie AI

Cost

Free to use

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