LOI Considerations
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To evaluate your offer fully, please address the following in your LOI:
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Structure
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Price: cash, stock, and any earnout provisions (if applicable)
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Structure: stock or asset purchase
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Indemnity caps, baskets
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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)
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Survival period for reps and warranties, including categorization of fundamental vs. non-fundamental reps
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Escrow amount (if any), including time period
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Working capital framework (including adjustments and mechanics)
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Terms of employment for management (if any)
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Restrictive covenants for management (if any)
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Venue and state for conflict resolution
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Process
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Internal process to approve the transaction
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Estimated start date and end date for due diligence
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Estimated date of first draft of purchase agreement
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Estimated closing date for the transaction​​
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Please feel free to include any additional information that helps frame your LOI. Please contact James Marciano at james@tuckadvisors.com or 619-277-5379 with any questions. The deadline for submission is day/month/year.
Source: https://www.tuckadvisors.com/loi-guidelines
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