Venture Deals, 4th Edition

Appendix C: Sample Letter of Intent

____________, 20______

[Seller]

[Address]

Re: Proposal to Purchase Stock of the Company

Dear Seller:

This letter is intended to summarize the principal terms of a proposal being considered by ____________ (the “Buyer”) regarding its possible acquisition of all of the outstanding capital stock of ____________ (the “Company”) from ____________ (“A”) and ____________ (“B”) ____________, who are the Company’s sole stockholders (the “Sellers”). In this letter, (i) the Buyer and the Sellers are sometimes called the “Parties,” (ii) the Company and its subsidiaries are sometimes called the “Target Companies,” and (iii) the Buyer’s possible acquisition of the stock of the Company is sometimes called the “Possible Acquisition.”

The Parties wish to commence negotiating a definitive written acquisition agreement providing for the Possible Acquisition (a “Definitive Agreement”). To facilitate the negotiation of a Definitive Agreement, the Parties request that the Buyer’s counsel prepare an initial draft. The execution of any such Definitive Agreement would be subject to the satisfactory completion of the Buyer’s ongoing investigation of the Target Companies’ business and would also be subject to approval by the Buyer’s board of directors.

Part One: Non-Binding Terms

Based on the information currently known to the Buyer, it is proposed that the Definitive Agreement include the following terms:

1. Basic Transaction

• The Sellers would sell all of the outstanding ...