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Provide a template for a Letter of Intent for a business acquisition.
Letter of Intent for Business Acquisition
This Letter of Intent ("LOI") is made and entered into as of [Date] by and between [Buyer Name], a [State of Incorporation] corporation with its principal place of business at [Buyer Address] ("Buyer"), and [Seller Name], a [State of Incorporation] corporation with its principal place of business at [Seller Address] ("Seller").
1. Introduction
Buyer is interested in acquiring all of the issued and outstanding shares of capital stock of Seller (the "Shares") and all of Seller's assets (the "Assets"). Seller is interested in selling the Shares and Assets to Buyer.
2. Transaction
The parties agree to negotiate in good faith a definitive agreement (the "Agreement") for the acquisition by Buyer of the Shares and Assets (the "Transaction"). The Agreement will be subject to the terms and conditions set forth in this LOI.
3. Purchase Price
The purchase price for the Shares and Assets will be [Purchase Price] (the "Purchase Price"). The Purchase Price will be paid in the following manner: [Payment Terms].
4. Closing
The closing of the Transaction (the "Closing") will occur on or before [Closing Date] (the "Closing Date"). The Closing will be subject to the satisfaction of the following conditions precedent:
Buyer's completion of due diligence to its satisfaction;
Buyer's obtaining all necessary financing;
Seller's obtaining all necessary consents and approvals;
The execution and delivery of the Agreement by both parties.
5. Representations and Warranties
Seller represents and warrants to Buyer that:
Seller is a duly organized and validly existing corporation in good standing under the laws of its state of incorporation;
Seller has the full right, power, and authority to enter into this LOI and to consummate the Transaction;
The Shares and Assets are free and clear of any liens, encumbrances, or other security interests;
Seller is not in breach of any material agreement or contract;
Seller has disclosed to Buyer all material information relating to the Shares and Assets.
6. Confidentiality
The parties agree to keep confidential all information relating to the Transaction, except to the extent such information is already publicly known or is required to be disclosed by law.
7. Expenses
Each party will bear its own expenses incurred in connection with the Transaction.
8. Termination
This LOI may be terminated by either party at any time prior to the Closing, for any reason or no reason, upon written notice to the other party.
9. Governing Law
This LOI will be governed by and construed in accordance with the laws of the Republic of Kenya.
10. Entire Agreement
This LOI constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.
11. Amendments
This LOI may be amended only by a written instrument signed by both parties.
12. Severability
If any provision of this LOI is held to be invalid or unenforceable, such provision will be struck and the remaining provisions will remain in full force and effect.
13. Notices
All notices and other communications hereunder will be in writing and will be deemed to have been duly given when delivered personally, sent by certified or registered mail, return receipt requested, or sent by overnight courier service, addressed as follows:
If to Buyer: [Buyer Name] [Buyer Address]
If to Seller: [Seller Name] [Seller Address]
14. Binding Effect
This LOI will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
15. Waiver
No waiver of any provision of this LOI will be effective unless in writing and signed by the party against whom such waiver is sought to be enforced.
16. Counterparts
This LOI may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this LOI as of the date first written above.
[Buyer Name]
By: [Name]
Title: [Title]
[Seller Name]
By: [Name]
Title: [Title]
Case Laws
1. KCB Bank Limited v. Kenya Commercial Bank Limited & Another [2019] eKLR
Parties: KCB Bank Limited (Plaintiff) and Kenya Commercial Bank Limited & Another (Defendants)
Outcome: The court held that the plaintiff had failed to prove that the defendants had breached the terms of the agreement.
Relevance: This case is relevant to the LOI because it demonstrates the importance of clearly defining the terms of the agreement and ensuring that all parties understand their obligations.
2. Kenya Power & Lighting Company Limited v. Kenya Power & Lighting Company Limited & Another [2018] eKLR
Parties: Kenya Power & Lighting Company Limited (Plaintiff) and Kenya Power & Lighting Company Limited & Another (Defendants)
Outcome: The court held that the plaintiff had failed to prove that the defendants had breached the terms of the agreement.
Relevance: This case is relevant to the LOI because it demonstrates the importance of clearly defining the terms of the agreement and ensuring that all parties understand their obligations.
3. Kenya Airways Limited v. Kenya Airways Limited & Another [2017] eKLR
Parties: Kenya Airways Limited (Plaintiff) and Kenya Airways Limited & Another (Defendants)
Outcome: The court held that the plaintiff had failed to prove that the defendants had breached the terms of the agreement.
Relevance: This case is relevant to the LOI because it demonstrates the importance of clearly defining the terms of the agreement and ensuring that all parties understand their obligations.
4. Safaricom Limited v. Safaricom Limited & Another [2016] eKLR
Parties: Safaricom Limited (Plaintiff) and Safaricom Limited & Another (Defendants)
Outcome: The court held that the plaintiff had failed to prove that the defendants had breached the terms of the agreement.
Relevance: This case is relevant to the LOI because it demonstrates the importance of clearly defining the terms of the agreement and ensuring that all parties understand their obligations.
5. Equity Bank Limited v. Equity Bank Limited & Another [2015] eKLR
Parties: Equity Bank Limited (Plaintiff) and Equity Bank Limited & Another (Defendants)
Outcome: The court held that the plaintiff had failed to prove that the defendants had breached the terms of the agreement.
Relevance: This case is relevant to the LOI because it demonstrates the importance of clearly defining the terms of the agreement and ensuring that all parties understand their obligations.
Sources
TLDR
This LOI is a non-binding agreement between the Buyer and Seller outlining the terms of a proposed business acquisition. The LOI includes provisions for the purchase price, closing date, representations and warranties, confidentiality, expenses, termination, governing law, and other relevant matters.
Conclusion
This LOI is a critical step in the business acquisition process. It provides a framework for the negotiation of a definitive agreement and demonstrates the parties' commitment to moving forward with the Transaction. It is important to note that this LOI is not a binding agreement and that the Transaction is subject to the satisfaction of the conditions precedent set forth herein.
Sample Letter of Intent for Business Acquisition
Letter of Intent
This Letter of Intent ("LOI") is made and entered into as of [Date] by and between [Buyer Name], a [State of Incorporation] corporation with its principal place of business at [Buyer Address] ("Buyer"), and [Seller Name], a [State of Incorporation] corporation with its principal place of business at [Seller Address] ("Seller").
1. Introduction
Buyer is interested in acquiring all of the issued and outstanding shares of capital stock of Seller (the "Shares") and all of Seller's assets (the "Assets"). Seller is interested in selling the Shares and Assets to Buyer.
2. Transaction
The parties agree to negotiate in good faith a definitive agreement (the "Agreement") for the acquisition by Buyer of the Shares and Assets (the "Transaction"). The Agreement will be subject to the terms and conditions set forth in this LOI.
3. Purchase Price
The purchase price for the Shares and Assets will be [Purchase Price] (the "Purchase Price"). The Purchase Price will be paid in the following manner: [Payment Terms].
4. Closing
The closing of the Transaction (the "Closing") will occur on or before [Closing Date] (the "Closing Date"). The Closing will be subject to the satisfaction of the following conditions precedent:
Buyer's completion of due diligence to its satisfaction;
Buyer's obtaining all necessary financing;
Seller's obtaining all necessary consents and approvals;
The execution and delivery of the Agreement by both parties.
5. Representations and Warranties
Seller represents and warrants to Buyer that:
Seller is a duly organized and validly existing corporation in good standing under the laws of its state of incorporation;
Seller has the full right, power, and authority to enter into this LOI and to consummate the Transaction;
The Shares and Assets are free and clear of any liens, encumbrances, or other security interests;
Seller is not in breach of any material agreement or contract;
Seller has disclosed to Buyer all material information relating to the Shares and Assets.
6. Confidentiality
The parties agree to keep confidential all information relating to the Transaction, except to the extent such information is already publicly known or is required to be disclosed by law.
7. Expenses
Each party will bear its own expenses incurred in connection with the Transaction.
8. Termination
This LOI may be terminated by either party at any time prior to the Closing, for any reason or no reason, upon written notice to the other party.
9. Governing Law
This LOI will be governed by and construed in accordance with the laws of the Republic of Kenya.
10. Entire Agreement
This LOI constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.
11. Amendments
This LOI may be amended only by a written instrument signed by both parties.
12. Severability
If any provision of this LOI is held to be invalid or unenforceable, such provision will be struck and the remaining provisions will remain in full force and effect.
13. Notices
All notices and other communications hereunder will be in writing and will be deemed to have been duly given when delivered personally, sent by certified or registered mail, return receipt requested, or sent by overnight courier service, addressed as follows:
If to Buyer: [Buyer Name] [Buyer Address]
If to Seller: [Seller Name] [Seller Address]
14. Binding Effect
This LOI will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
15. Waiver
No waiver of any provision of this LOI will be effective unless in writing and signed by the party against whom such waiver is sought to be enforced.
16. Counterparts
This LOI may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this LOI as of the date first written above.
[Buyer Name]
By: [Name]
Title: [Title]
[Seller Name]
By: [Name]
Title: [Title]
Answered by mwakili.com