LOI Guidelines
To evaluate your offer fully, please address the following in your LOI
Structure
- Price: cash, stock, and any earnout provisions (if applicable)
- Structure: stock or asset purchase
- Indemnity caps, baskets
- Indemnity terms: who will be providing indemnity (stockholder, major stockholders, Seller, et. al.); will obligations be joint and several (if more than one indemnifying party)
- Survival period for reps and warranties, including categorization of fundamental vs. non-fundamental reps
- Escrow amount (if any), including time period
- Working capital framework (including adjustments and mechanics)
- Terms of employment for management (if any)
- Restrictive covenants for management (if any)
- Venue and state for conflict resolution
Process
- Internal process to approve the transaction
- Estimated start date and end date for due diligence
- Estimated date of first draft of purchase agreement
- Estimated closing date for the transaction
Please feel free to include any additional information that helps frame your LOI.