Letter of Intent (LOI) Template

1. Parties and Date

This Letter of Intent (this "LOI") is made on [EFFECTIVE_DATE] by and between [BUYER_NAME], a [BUYER_ENTITY_TYPE] organized under the laws of [BUYER_JURISDICTION], with its principal place of business at [BUYER_ADDRESS] (the "Buyer"), and [SELLER_NAME], a [SELLER_ENTITY_TYPE] organized under the laws of [SELLER_JURISDICTION], with its principal place of business at [SELLER_ADDRESS] (the "Seller"). The Buyer and the Seller are each a "Party" and collectively the "Parties". This LOI is signed by both Parties to record their respective intentions in relation to the proposed transaction described below.

2. Background and Purpose (NON-BINDING)

The Parties have engaged in discussions concerning [TRANSACTION_DESCRIPTION] (the "Proposed Transaction"). The purpose of this LOI is to: (a) summarize the principal commercial terms on which the Parties intend to negotiate in good faith a definitive written agreement governing the Proposed Transaction (the "Definitive Agreement"); (b) record the Parties' respective expectations as to scope, structure, and timing; and (c) set out a limited number of binding provisions which the Parties intend to be legally enforceable from the date of this LOI, as identified in Section 11 (Binding and Non-Binding Provisions). Save for those binding provisions, this LOI does not create any legally enforceable obligation on either Party to enter into the Definitive Agreement or to proceed with the Proposed Transaction on any particular terms.

3. Proposed Transaction Summary (NON-BINDING)

The Proposed Transaction is summarized as follows. The descriptions in this Section are indicative only, are subject to satisfactory due diligence and negotiation of the Definitive Agreement, and shall not be binding on either Party until reflected in the Definitive Agreement.

(a) Subject matter: [SUBJECT_MATTER_DESCRIPTION].

(b) Indicative price or pricing structure: [PRICE_OR_PRICING_STRUCTURE], subject to adjustment based on due diligence findings.

(c) Indicative contract term or transaction term: [INDICATIVE_TERM].

(d) Key deliverables, milestones, or transaction structure: [KEY_DELIVERABLES_OR_STRUCTURE].

(e) Material conditions precedent: [CONDITIONS_PRECEDENT], which may include without limitation board approvals, regulatory clearances, financing arrangements, and third-party consents.

(f) Target signing date for the Definitive Agreement: [TARGET_SIGNING_DATE].

4. Key Terms (NON-BINDING)

The Parties currently anticipate that the Definitive Agreement will include, without limitation, the following key terms, each of which remains subject to further negotiation and the satisfactory completion of due diligence:

(a) Scope of work or transaction perimeter: [SCOPE_DESCRIPTION].

(b) Service levels, performance commitments, or warranties: [PERFORMANCE_OR_WARRANTIES].

(c) Payment terms: [PAYMENT_TERMS].

(d) Term and termination rights: [TERMINATION_RIGHTS].

(e) Liability and indemnification framework: [LIABILITY_FRAMEWORK].

(f) Intellectual property allocation: [IP_ALLOCATION].

(g) Other commercial terms material to the Proposed Transaction: [OTHER_TERMS].

5. Exclusivity (BINDING)

For the period beginning on the date of this LOI and ending on the earlier of (i) the execution of the Definitive Agreement, (ii) the Expiry Date set out in Section 10, and (iii) any earlier termination of this LOI in accordance with its terms (the "Exclusivity Period"), the Seller shall not, and shall procure that its directors, officers, employees, agents, and advisers shall not, directly or indirectly: (a) solicit, initiate, encourage, or entertain any proposal, offer, or enquiry from any third party in relation to a transaction substantially similar to the Proposed Transaction; (b) engage in any negotiations or discussions with any third party regarding such a transaction; or (c) furnish to any third party any non-public information relating to the Proposed Transaction or the Seller's business that has been or would be furnished to the Buyer in connection with the Proposed Transaction. The Seller shall promptly notify the Buyer in writing if it receives any such proposal, offer, or enquiry during the Exclusivity Period.

6. Due Diligence (NON-BINDING with limited binding elements as set out below)

During the Exclusivity Period, the Seller shall provide the Buyer and its representatives with reasonable access, during normal business hours and on reasonable prior notice, to: (a) the Seller's books, records, contracts, and personnel relevant to the Proposed Transaction; (b) the Seller's facilities and operations; and (c) any other information reasonably requested by the Buyer for the purposes of due diligence. The Buyer shall conduct its due diligence in a manner that minimizes disruption to the Seller's business. The obligations of confidentiality in Section 7 (BINDING) apply to all information disclosed pursuant to this Section. Save for the confidentiality obligations, this Section is non-binding and may be modified by mutual written agreement.

7. Confidentiality (BINDING)

Each Party (the "Receiving Party") shall hold in strict confidence, and shall not use or disclose to any third party other than its directors, officers, employees, professional advisers, and prospective financing sources who have a need to know and who are bound by equivalent confidentiality obligations, any information disclosed to it by the other Party (the "Disclosing Party") in connection with the Proposed Transaction (including the existence and terms of this LOI), other than information that: (a) is or becomes generally available to the public other than as a result of a breach of this Section; (b) was lawfully known to the Receiving Party prior to disclosure; (c) is lawfully received by the Receiving Party from a third party not under any duty of confidentiality; or (d) is independently developed by the Receiving Party without reference to the Disclosing Party's information. The Receiving Party may disclose confidential information to the extent required by law, regulation, or order of a competent court or regulatory authority, provided that, where lawfully permitted, it gives the Disclosing Party prompt prior notice to enable the Disclosing Party to seek a protective order or other appropriate remedy. The obligations under this Section shall survive the expiry or termination of this LOI for a period of [CONFIDENTIALITY_SURVIVAL_PERIOD].

8. Expenses and Costs (BINDING)

Each Party shall bear its own costs and expenses (including legal, advisory, and due diligence costs) incurred in connection with the negotiation, preparation, and execution of this LOI and the Definitive Agreement, regardless of whether the Definitive Agreement is ultimately executed. No break fee or termination payment shall be payable by either Party if the Definitive Agreement is not executed, except in cases of breach of the binding provisions of this LOI, in which case the non-breaching Party shall be entitled to recover its reasonable costs and damages directly attributable to the breach.

9. Good-Faith Negotiation (BINDING)

During the Exclusivity Period, the Parties shall negotiate the Definitive Agreement in good faith, exchange drafts on a reasonable cadence, and dedicate appropriately qualified personnel to the negotiation. Nothing in this Section requires either Party to agree to terms it considers unreasonable or commercially unacceptable, or removes either Party's right to walk away from the Proposed Transaction at any time, subject only to the binding provisions of this LOI.

10. Term and Expiry (BINDING for this Section)

This LOI takes effect on the date first written above and shall expire automatically on [EXPIRY_DATE] (the "Expiry Date") unless extended by written agreement of both Parties or earlier terminated in accordance with this Section. Either Party may terminate this LOI by written notice to the other Party if (a) the other Party commits a material breach of any binding provision and fails to remedy that breach within ten (10) Business Days of receiving written notice requiring it to do so, or (b) the Parties mutually conclude in writing that the Proposed Transaction is no longer commercially viable. Upon expiry or termination, all provisions of this LOI shall cease to have effect, save that Section 7 (Confidentiality), Section 8 (Expenses), Section 12 (Governing Law), and any accrued rights and remedies for prior breach shall survive.

11. Binding and Non-Binding Provisions (BINDING)

The Parties expressly agree and acknowledge that, with the sole exception of the Sections listed as binding below, this LOI is not legally binding and does not impose any legally enforceable obligation on either Party to enter into the Definitive Agreement or to proceed with the Proposed Transaction. The following Sections are intended to be, and shall be, legally binding and enforceable from the date of this LOI:

(a) Section 5 (Exclusivity);

(b) Section 7 (Confidentiality);

(c) Section 8 (Expenses and Costs);

(d) Section 9 (Good-Faith Negotiation);

(e) Section 10 (Term and Expiry);

(f) this Section 11 (Binding and Non-Binding Provisions); and

(g) Section 12 (Governing Law and Jurisdiction).

All other Sections of this LOI (including without limitation Sections 2, 3, 4, and 6, save for the confidentiality element of Section 6) are non-binding and reflect only the Parties' current intentions, which remain subject to satisfactory completion of due diligence and the negotiation and execution of the Definitive Agreement.

12. Governing Law and Jurisdiction (BINDING)

This LOI and any dispute or claim (whether contractual or non-contractual) arising out of or in connection with it, its subject matter, or its formation shall be governed by and construed in accordance with the laws of [GOVERNING_LAW]. The Parties irrevocably agree that the courts of [JURISDICTION] shall have exclusive jurisdiction to settle any such dispute or claim, save that either Party may seek injunctive or other equitable relief in any court of competent jurisdiction to enforce the binding provisions of this LOI.

13. Legal Disclaimer

This template is provided by ProcureSwift as a starting point and does not constitute legal advice. Please have it reviewed by qualified legal counsel before use in any contractual or commercial setting. ProcureSwift makes no warranties about its fitness for any specific purpose.