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Published by Enhelion, 2019-11-16 13:10:43

MODULE_P1New_M5

MODULE_P1New_M5

LEGAL WRITING
AND CONTRACT
DRAFTING

CERTIFICATE COURSE

DEVELOPED BY

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MODULE - 5

PRELIMINARY AGREEMENT FORMS

5.1 MEMORANDUM OF
UNDERSTANDING

“Thoroughly read all your contracts. I really the given date.
mean thoroughly” þ PRACTICAL GUIDANCE/ISSUES LIST:
- Bret Michaels
Parties may wish to consider the following:
5.1.1 CHECKLIST v MOU provisions are best when short and

þ DESCRIPTION OF AGREEMENT/DOCUMENT: to the point.
Parties to a commercial transaction may v The terms should be expressed in simple
often commence negotiations on a plain
sheet of paper prior to agreeing terms. The but clear and plain English to avoid any
final agreement, as with non-binding heads dispute or misunderstanding.
of agreement, is based on the parties’ v No extensive drafting should be
memorandum setting out their attempted but the MOU should be
understanding of the proposed transaction. prepared in a manner that the
The memorandum of understanding (MOU) document adequately sets out the
sets out their expectations, understanding proposed deal.
and specific requirements without being v A plain and clearly drafted document
legally bound but as a plain language aide- enables the transaction to be ‘sold’ to
memoire. The parties usually acknowledge third parties, where relevant, as it
that neither party will be bound until the should provide a concise and useful
final agreement is settled and executed on explanation or statement of the main or
material terms of the proposed deal.
v Even if the MOU will not be binding in its
entirety or specifically in relation to the
proposed arrangements, the document
should contain some certainty.

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v The relationship of the parties other of Understanding.
than the basic outline of the proposed ‘Main Agreement’ means the agreement for
arrangements can be made certain and [specify the relevant transaction agreement
legally binding. (i.e. Share Sale Agreements, Business Asset
Sale Agreement)] in relation to which [Party
v The practical guidance and issues list X] shall [insert details of aim of main
relating to Heads of Agreement and transaction agreement] in connection with
letters of intent may contain useful the Proposed Transaction.
information.
þ SPECIFIC PROVISIONS: This Memorandum
v The document should ideally set out in sets out in basic outline the main principles
outline the agreed proposed transaction that the parties have provisionally agreed,
subject to contract. subject to contract, for Party A and Party B to
enter the proposed arrangements as further
v The parties should avoid spending time set out in detail in the Schedule.
negotiating a detailed document. The Final Agreements following approval and
Negotiations should be reserved for the execution by the parties shall supersede this
main legal agreements incorporating the Memorandum.
terms set out in the MOU. Either party may withdraw from time to time
from the negotiations at any time prior to
v It should be noted that the MOU is signature and entry into the Final Agreement
regarded as creating a moral commercial without incurring any liability to the other
commitment between the parties even party.
if not legally binding.
In preparing a memorandum of understanding
v Once a matter is set out as provisionally agreement or letter, individuals or businesses
agreed in the MOU, it can be difficult to should consider the following non-exhaustive
change during negotiations or in the matters.
final documents.

þ LAW/COMPLIANCE REQUIREMENT: The
document is intended to be non-binding and
non-contractual. To avoid any dispute, the
document should clearly state its legal status
and be marked ‘subject to contract’. Even
where not legally binding, a memorandum of
understanding can evidence the existence of
an ‘arrangement’ affecting tax matters.

þ SOME KEY DEFINITIONS: ‘Final Agreements’
means the formal final legal agreements to
be negotiated [in good faith], approved by
the parties and entered into between the
parties to this Memorandum of
Understanding in respect of the proposed
transaction as set out in the Memorandum

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ACTIONS/ISSUES: COMMENTS: []
Consider: []
keeping it simple; []
1 setting out the proposed
1.1 arrangements in outline and
full description in a schedule;
1.2

proposed legal status of the
provisions of the
memorandum of
1.3 understanding; []
[]
Consider setting out: []
2

the list of the proposed final
2.1 agreements;

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2.2 the agreed timetable (and []
making time of the essence);
[]
What is the position in respect of: []
3 []
[]
Period of exclusivity for []
3.1 negotiations? []
[]
Change of control during the
agreed exclusive negotiations
3.2 period?

Non-disclosure and
3.3 confidentiality undertakings?
Can the memorandum be terminated on:
4

Insolvency of either party?
4.1

Unremedied material breach
4.2 by the other?

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Excessive delay following a []
4.3 force majeure event? []

Inability to agree final legally []
binding documents (within an []
4.4 agreed period)? []
[]
Consider: []
5

relevant post termination
5.1 obligations;

boilerplate provisions, as
5.2 appropriate;

governing law and jurisdiction;
5.3
Review the guidance and checklist provided in relation
6 to Heads of Terms Agreement.

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5.1.2 TEMPLATE: parties (‘the Final Agreements’) in time for
SUBJECT TO CONTRACT signature by [specify parties/signatories].
Memorandum of understanding in relation to the 3. The parties anticipate that the main agreement
arrangements for and negotiation of a formal [...] in respect of the proposed arrangements will be
agreement a [insert details of agreement] agreement. The
DATED: [...] main agreement will set out in detail the [agreed
PARTIES: terms of the arrangement].
(1) Party A: [Name] of [address]
(2) Party B: [Name] of [address] 4. The Final Agreements once duly approved and
executed shall supersede this Memorandum.
INTRODUCTION
5. Either party may at any time prior to the
(A) Party A is [ ] and Party B is [ ]. execution and entry into the final legal
documents withdraw from negotiations without
(B) The parties with the intention of working incurring any liability to the other party.
together for the purpose of [ ]
with to set out in outline the basis of 6. The parties acknowledge that the commercial
principles of the proposed transaction set out in
their proposed arrangements. this Memorandum remain subject to
negotiation and approval from their respective
OPERATIVE PROVISIONS boards of directors.

BASIC OUTLINE 7. The parties will instruct their respective legal
advisers to prepare the relevant Final
1. This Memorandum sets out in basic outline the Agreements. The parties agree to make
principles that the parties have provisionally themselves available on reasonable notice for
agreed, subject to contract, for Party A and Party meetings when negotiations concerning the
B. The proposed arrangements are described in Final Agreements shall take place.
greater detail in the Schedule.
PROPOSED ARRANGEMENTS
2. During the term of this Memorandum the 1. The basic outline principles to be included in the
parties will negotiate [in good faith] formal legal
agreements with each other and with third Final Agreements include the provisions
specified in this clause [2] and the Schedule
along with such other matters as may be agreed
between the parties in order to conclude the
Final Agreements.

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2. The parties envisage that the [specify that described in this Memorandum in relation
agreement] will contain the provisions set out in to the proposed arrangements.
[specify document] and transaction will 2. [Each corporate entity which is a party
complete on or before [insert date]. undertakes that until [details] it shall not
(without the prior written permission of the
LEGAL STATUS OF MEMORANDUM other parties) enter or seek to enter into
1. Unless and until the Final Agreements are negotiations or discussions with any person,
third party or entity for [details] or for the
approved and executed between the parties disposal of shares in that party.]
then [clauses 1 and 2 and the Schedule] of this
Memorandum are not intended to and shall not CONFIDENTIALITY
create any legal obligations between the parties. 1. The undertaking set out in this clause [5] does
For the avoidance of doubt, there is no legal
obligation on either party to enter into the not extend to information which was already
proposed transactions anticipated in the Final known to one party prior to disclosure by the
Agreements. other, which is or becomes public knowledge, or
2. The parties agree and acknowledge that all which is disclosed by one party to a third party
negotiations and correspondence regarding without any obligations of confidentiality.
[clauses 1 and 2] and the Schedule shall be 2. Each party undertakes that for a period of [
subject to contract. ( )] years from the date of disclosure that it will
treat the other party’s information marked
3. Clauses [3 to 12] inclusive are intended to be “confidential” or which from its very nature is
legally binding and to create contractual obviously confidential (including all material
obligations between the parties with immediate relating to or constituting the intellectual
effect. property of [the other party]) with the same
degree of care as it employs with regard to its
EXCLUSIVE NEGOTIATIONS own confidential information of a similar type or
1. Each party undertakes that for the period of nature.
3. Neither party will intentionally disclose the
[insert period] and until [insert details] it shall other’s confidential information to third parties
not (without the prior written consent of the other than those of its employees, consultants
other parties) enter or seek to enter into and sub-contractors who need to have such
negotiations or discussions with another person information for the purposes of this Agreement,
or entity for participation in the proposed and shall ensure that such recipients shall be
arrangements or an agreement similar to the
proposed arrangements or an agreement
covering broadly the same subject matter as

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bound by the same confidentiality obligations as any delay in performing its obligations under this
are set out in this clause. Agreement if such delay is caused by
TERM AND TERMINATION circumstances beyond its reasonable control
1. This Memorandum shall continue in full force (including without limitation any delay caused
and effect until [date or detail] or until signature by any act or omission of the other party)
of the Final Agreements (if sooner) or such other provided however that any delay by a sub-
date as the parties may otherwise agree. contractor or supplier of the party so delaying
shall not relieve the party from liability for delay
2. Either party may terminate this Memorandum except where such delay is beyond the
by notice in writing with immediate effect: reasonable control of the sub-contractor or
a. if the other party is in material breach of supplier concerned.
any of the terms of this Memorandum
and such breach remains unremedied [ ] 2. Subject to the party so delaying promptly
days after receipt of notice from the notifying the other party in writing of the
terminating party that the other party is reasons for the delay (and the likely duration of
in breach; the delay), the performance of such party’s
b. if liquidation or similar proceedings are obligations shall be suspended during the period
filed by or against the other party or if that the said circumstances persist and such
any action is taken by or against the shall be granted an extension of time for
other party under any law the purpose or performance equal to the period of the delay.
effect of which is or may be to relieve
such party in any manner from its debts 3. The parties agree that unless such delay is
or to extend the time of payment thereof caused by the act or omission of the other party:
or the other party makes an assignment a. any costs arising from such delay shall be
for the benefit of creditors or makes any borne by the party incurring the same;
conveyance of any of its property which
in the opinion of the terminating party b. either party may, if such delay continues
may be to the detriment of that party’s for more than [ ] weeks, terminate this
creditors; or Agreement forthwith giving notice in
c. if a receiver or trustee or similar official writing to the other by reason of such
is appointed with authority to take termination.
possession of the other party’s property
or any part thereof. MISCELLANEOUS
1. Announcements and Publicity: Neither party
FORCE MAJEURE
1. Notwithstanding any provision to the contrary in shall make any public disclosures or
announcements regarding this Memorandum or
this Agreement, neither party shall be liable for its subject matter without the prior written
consent of the other party.

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2. Costs and Expenses: [Each party shall be 7. Entire Agreement: This Memorandum
responsible for its own costs in relation to all embodies the entire understanding and
matters arising out of this Memorandum.] agreement between the parties in connection
with the subject matter of this Memorandum
3. General Assignment: This Agreement is and neither party is relying on any
personal to the parties and neither this representations, promises, terms, conditions or
Agreement nor any rights, licences or obligations oral or written express or implied
obligations under it may be assigned by either other than those contained in this Agreement.
party without the prior written approval of the Neither party seeks to exclude liability for
other party. fraudulent misrepresentation.

4. Acquirer Assignment: Notwithstanding the 8. Variation: This Agreement may not be released,
foregoing, either party may assign this discharged, supplemented, interpreted,
Agreement to any acquirer of all or of amended, varied or modified in any manner
substantially all of such party’s equity securities, except by an instrument in writing signed by a
assets or business relating to the subject matter duly authorised officer or representative of
of this Agreement or to any entity controlled by, each of the parties.
that controls, or is under common control with
a party to this Agreement. Any attempted Notices: All notices under this Agreement shall be in
assignment in breach of this clause will be void writing and all such notices shall be deemed to have
and without effect. been duly given when delivered, if delivered by
courier or other messenger (including registered
5. Headings: The headings in the Memorandum mail) during normal business hours of the recipient;
are for reference purposes only and are not or if transmitted by fax or e-mail and a successful
intended to be taken into account in the transmission report or return receipt is generated;
interpretation of the provisions of this or on the fifth business day following mailing, if
Memorandum. mailed by national ordinary mail, postage prepaid;
or on the tenth business day following mailing, if
6. Waiver: No delay, neglect or forbearance on the mailed by airmail, postage prepaid in each case
part of either party in enforcing against the addressed to the most recent address, e-mail
other party any term or condition of this address, or facsimile number notified to the other
Agreement shall either be or be deemed to be a party.
waiver or in any way prejudice any right of that
party under this Agreement. No right, power or
remedy in this Agreement conferred upon or
reserved for either party is exclusive of any other
right, power or remedy available to that party.

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GOVERNING LAW SCHEDULE
This Agreement and all matters arising from it and
any dispute resolutions referred to below shall be SIGNED by the parties [as a deed] on the date at the
governed by and construed in accordance with top of this document.
English law
JURISDICTION SIGNED [as a deed] by …………………………….
The parties submit to the exclusive jurisdiction of
the Indian courts. []

for and on behalf of [ ]

SIGNED [as a deed] by …………………………….
[ ]
]
for and on behalf of [
THE SCHEDULE
[Insert details]

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5.2 TERM SHEET

5.2.1 TEMPLATE

Issue [Venture Capital Firm] ("VC") and/or any member of its corporate group (the VC group) will
purchase up to [AMOUNT] Series A Convertible Preferred Stock ("Series A") newly issued by
[YOUR COMPANY NAME] (the "Company") at a price per share of [PRICE] (the "Purchase
Price"). In addition other investors shall purchase at least [AMOUNT] but not more than
[AMOUNT] of newly issued Series A at the Purchase Price.

The shares of Series A will be convertible at any time at the option of the holder into common
shares of the Company ("Common Stock") on a one-for-one basis, adjusted for future share
splits.

The Purchase Price equates to a pre-money valuation of [VALUATION]. The calculation is
based on [NUMBER] fully diluted shares of Common Stock. If the number of shares issued or
stock awards/options authorized increases before the closing, the price per share for Series A
Convertible Preferred Stock shall be reduced so that the pre-money valuation is unchanged.

The Series A Convertible Preferred Stock shall be referred to herein as the "Preferred Stock".

Dividend The Preferred Stock is entitled to an annual [AMOUNT] per share dividend, payable when and
if declared by the Board of Directors, but prior to any payment on Common Stock, dividends
are not cumulative.

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Liquidation The Series A will have a liquidation preference so that proceeds on a merger, sale or
Preference liquidation (including non-cumulative dividends) will first be paid to the Series A and will
include a [%] per annum compounding guaranteed return calculated on the total amount
invested. Upon completion of an additional round of funding of at least [AMOUNT] the
compounding guaranteed return feature will expire. The liquidation preference will cease to
operate if the processes due to Series A, on a merger, sale or liquidation on an as-converted
basis, exceed the proceeds that would be due under the liquidation preference.

Use of Proceeds The funds raised by Series A will be used principally for general working capital purposes.

Voting Rights The holders of the Series A shall have the right to vote with the Common Stock on an as-if-
converted basis.

Redemption If not previously converted, the Series A is to be redeemed in three equal successive annual
installments beginning [DATE]. Redemption will be at the purchase price plus a [%] per annum
cumulative guaranteed return.

Pre-Emptive Holders of the Preferred Stock will be granted rights to participate in future equity financings
Rights of the Company based upon their pro-rata, as-if-converted, ownership of the Company.

Automatic The Preferred Stock shall be automatically converted into Common Stock at the then
Conversion applicable conversion rate (1:1 assuming no share splits) in the event of an underwritten
public offering of shares of the Company at a total offering of not less than [AMOUNT] and at
a per share public offering of not less than [AMOUNT] and at a per share public offering price
of not less than three times the Series A purchase price per share, adjusted for splits.

Anti-Dilution Series A shall have weighted average anti-dilution, based on a weighted average formula to
be agreed, for all securities purchased as part of this transaction (excluding shares, options
and warrants issued for management incentive and small issues for strategic purposes of
under [NUMBER] shares).

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Management Simultaneously with this transaction, one million new shares shall expand the Company's
Options management incentive stock option pool - bringing the total numbers of shares issued and
stock incentives (awards and options) authorized to [NUMBER OF SHARES].

Rights of First The Company and the investors will have a right of first refusal with respect to any employee's
Offer; Tag Along shares proposed to be resold. Alternatively, the investors will have the right to participate in
the sale of any such shares to a third party (co-sale rights), which rights will terminate upon a
public offering.

Information Monthly actual vs. plan and prior year. Annual budget [NUMBER] days before beginning of
Rights fiscal year. Annual audit by national firm. All recipients of financial statements to execute non-
disclosure agreement acceptable to Company counsel. The aforementioned information
rights shall be available to each holder of Preferred Stock for as long as such folder owns
[NUMBER] shares of Preferred Stock or shares of Common Stock issued upon conversion of
shares of Preferred Stock.

Negative Approval by holders of Preferred Stock of organic changes outside normal course of business
Covenants and sale, liquidation or merger, increase in board seats or change election procedures, new
shares senior to or on par with and all distributions (dividends, repurchases).

Board of The Board will consist of [NUMBER] members. The holders of the Preferred Stock will have
Directors the right to designate [NUMBER] directors, the holders of the Common (exclusive of the
investors) will have the right to designate [NUMBER] directors, and the remaining [NUMBER]
directors will be unaffiliated persons elected by the Common Stock and the Preferred Stock
voting as a single class.

Stock All present Holders of Common Stock of the Company who are employees of or consultants
Restriction to the Company will execute a Stock Resolution Agreement with the Company pursuant to

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Agreement which the Company will have an option to buy back at cost a portion of the shares of Common
stock held by such person in the event that such stockholder's employment with the Company
is terminated prior to the date if employment. [%] of the shares will be released each year
from the repurchase option based upon continued employment by the Company.

Non- Each officer and key employee of the Company designated by the investors will enter into a
competition, non-competition, proprietary information and inventions agreement in a form reasonably
Proprietary acceptable to the investors.
Information &
Inventions

Expenses The Company shall pay the reasonable expenses of legal counsel to represent the investors in
the completion of the Preferred Stock Agreement and the completion of all due diligence, up
to a maximum of [AMOUNT].

Definitive The purchase of the Series A will be made pursuant to negotiation of a definitive Series A
Purchase & Due purchase agreement. Additionally, the closing of this investment will be contingent on the
Diligence satisfactory completion of VC's due diligence reviews and final investment committee.

Closing The Company and VC agree to use their best efforts to close the transaction on or about
[DATE]. It is agreeable to have a first closing of the transaction for [AMOUNT] of Series A and
leave the transaction open for an additional [NUMBER] days post first closing to close up to
[NUMBER] of total Series A.

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Other than that the Company hereby agrees to pay þ STOCK OPTION POOL: The size of the option
investors' reasonable legal fees of up to [AMOUNT] pool that venture capital investors will look
in case a definitive agreement is not ultimately for tends to range between 15% and 30% of
reached with VC (which agreement is legally the capital structure of the company. This
binding) the undersigned acknowledge that this percentage is calculated including the shares
term sheet does not constitute a binding of Series A Preferred Stock being sold in the
agreement, but expresses an agreement in principle financing. The actual size of the pool can
covering the principal terms of an equity financing depend on a number of things, including the
and an undertaking to proceed in good faith to industry that the company is in, but is
negotiate a definitive agreement. primarily related to the number and types of
hires that the company will need to make in
This Term Sheet merely constitutes a statement of the foreseeable future. Thus, a company that
the present material intentions of the parties, but has a complete management team at the
that except as set forth under the heading time of the Series A round will likely need a
"Confidentiality", "Expense", and "Exclusivity" smaller pool than a company that has one or
above as to which the parties intend to be legally more top management hires to make (each
bound, no legally binding agreement or obligation of of whom may cost the company a significant
any party are covered by this Term Sheet. No oral amount of options or stock from the pool).
modifications to this principle shall be valid.
þ CONVERSION: Preferred stock should
The proposal remains open until [DATE], at which convert into common stock automatically at
point it will be deemed to have been withdrawn. the company's IPO. The special rights
generally accorded to preferred stock sold to
[YOUR COMPANY NAME] [VENTURE CAPITAL FIRM] early-stage investors could create problems
for a public company.
[REPRESENTED BY NAME & TITLE] [REPRESENTED BY NAME & TITLE]
þ ANTI-DILUTION: These provisions are
5.2.2 CHECKLIST designed to protect an investor against
"equity" dilution (later sales of stock at a
þ PRE-MONEY VALUATION: Equals the value price lower than what the investor paid).
the new investors are placing on the Although the "weighted average" version is
enterprise prior to their investment. Usually, the most common, an alternative is "full-
all of the outstanding stock of the company, rachet" anti-dilution protection. Full rachet
together with any outstanding options and anti-dilution protection is far more
warrants or other rights to buy stock of the advantageous to the investor (but punitive to
company any additional shares which may the company) than weighted average, but it
be reserved under the option pool, will be is usually reserved for very early-stage deals
included in this pre-money valuation. or other situations where there is significant

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concern as to whether the valuation will hold preference is a pricing term most often seen
up over the long term. Put simply, weighted- in early stage deals or in "down rounds".
average anti-dilution protection accounts
more accurately for the actual dilutive effect þ BOARD OF DIRECTORS: Working out what
which a particular issuance has on the the Board will look like following the Series A
investor's equity position in the company. round will be one of the most important
Full-rachet anti-dilution protection, on the matters to deal with. Generally, the Series A
other hand, treats all later stock issuances investors will ask for and receive
below the investor's purchase price as if they representation on the board. The questions
were the same, regardless of the number of will be how many seats they get and what
shares issued. effect will that have on the founders and
management's board representation. In the
þ VOTING RIGHTS: Although there are venture end, everybody involved will need to
capital investors that ask for other veto participate in and be satisfied with the
rights, this list covers of the most frequently decision regarding board structure.
requested veto rights. You may not have to
provide veto rights with respect to each of þ OPTIONS AND VESTING: Venture capital
these matters. The key here is to try to limit investors will likely impose a vesting
veto rights to major corporate events and to schedule on stock and options held by
try to avoid turning day-to-day operational founders, management and employees as a
matters into matters for a preferred condition to investment. if shares or options
stockholder vote. Often, a compromise may are not yet vested, they are subject to being
be reached with respect to a request for a lost if the person ceases to work for the
veto right on an operational matter by company for any reason. Venture capital
agreeing that such would be subject to the investors impose such vesting requirements
veto of the Series A Preferred Stock's in order to provide the company's people
director but not at the stockholder level. This with a reason to stay with the company. Also,
keeps the issue of shares at the board level - if a person ceases to work for the company
where it belongs. for any reason, the non-vested shares are
available for grant to his or her replacement.
þ LIQUIDATION: This is a so called "straight" The theory here is, of course, that the best
liquidation preference. An alternative is the business plan is worth nothing without the
"double dip" or "participating" liquidation people to execute it.
preference, which provides that the
preferred stock gets an amount equal to its þ REDEMPTION: This is simply a right to
money back (plus any accrued dividends if achieve liquidity in the event that the
there is an accruing dividend) and then company does not otherwise reach a sale or
participates with common stock on an "as IPO by the end of the selected time period.
converted basis." A double dip liquidation Since the company cannot redeem stock if to
do so would render the company insolvent,

Page | 17

this right becomes useful only in situations in þ CONDITION TO CLOSING: Be on the lookout
which the company has become some sort of for any exclusivity provisions in this clause.
a sideways play. Usually, the redemption Usually such exclusivity provisions require
price is the price paid for the stock plus the the company to refrain from taking an
accruing dividend, if there is one. investment from anyone else for a set period
Occasionally, venture capital firms will of time after the Term Sheet is signed. While
request that the redemption price be at the an exclusivity provision may be acceptable
greater of such price and the then fair (and is often imposed), be sure to pay
market value of the stock. The only thing to attention to the time period. It should not be
watch out for here is to make sure that the more than is necessary to complete the
company can pay the redemption out over transaction, with a little added time to
time. Usually three payments over two years account for delays. The usual industry
are common. practice ranges from 30 days to 90 days at
the utmost. Also, make sure that the
þ RIGHT OF FIRST REFUSAL: While this is exclusivity period automatically ends in the
generally asked for and received by venture event that the deal is called off before the
capital investors (who can give you a yes or period expires.
no quickly without the need for elaborate
disclosure documents to comply with the
securities laws), a company should, think
about resisting this request if it comes from
individual investors.

þ OTHER PROVISIONS: The Term Sheet should
be non-binding (with the exception only of
the exclusivity provision, if there is one, and
any provisions regarding confidentiality).

þ EXPENSES: The amount of expenses included
in this provision depends on where the
lawyers are form. Make sure that there is a
cap. You may also want to resist any request
to pay ongoing fees for the cost of complying
with requests for waivers, etc., after the
closing (except to the extent to which the
investors incur fees as a result of the
company breaching its obligations to them).

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5.3 CONFIDENTIALITY / NON-
DISCLOSURE AGREEMENT

5.3.1 TEMPLATE
AGREEMENT dated [...]200[...]
PARTIES
(1) The ‘Discloser’: [Name of individual or company] of [address];
(2) The ‘Recipient’: [Name of individual or company] of [address];
[An introduction can be provided to set the background and basis of agreement.]

IT IS AGREED as follows: and all know-how, trade secrets, tactical,
scientific, statistical, financial, commercial or
1 DEFINITIONS technical information of any kind [directly or
In this Agreement unless the context indirectly] disclosed [before or after the date
otherwise requires: of this Agreement] by the Discloser to the
‘Authorised Person’ means [specify as Recipient or any Authorised Person whether in
relevant or general as follows] any employee, existence at the date of this Agreement or
director, consultant or agent of the Recipient which subsequently comes into existence
and any other named firm, individual or including any copies, reproductions,
company engaged in providing services duplicates or notes in any form whatsoever.
directly to the Recipient [and/or] who has
been previously approved in writing by the ‘Project’ [details of Project, engagement or
Discloser. otherwise].
‘Confidential Information’ means [specifically
defined information or general as follows] 2 PROVISION OF CONFIDENTIAL INFORMATION
such information as the Discloser may from
time to time provide to the Recipient (in 2.1 The Recipient acknowledges that the
whatever form including without limitation Confidential Information has been supplied by
orally, written, in electronic, tape, disk, the Discloser in confidence, may have
physical or visual form) relating to the Project, considerable value and is of significant
importance to the Discloser.

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2.2 The Recipient further acknowledges that the notwithstanding any service of notice by the
Discloser makes no representation with Discloser under this Agreement.
respect to the accuracy or completeness of the 4 AUTHORISED DISCLOSURES
Confidential Information except to the extent 4.1 The Recipient may disclose some or all of the
agreed by the Discloser in writing. Confidential Information to any Authorised
Person provided that either:
3 INFORMATION USE AND PURPOSE 4.1.1 such Authorised Person is subject to a

3.1 The Recipient agrees to keep the Confidential general obligation of confidentiality to
Information in complete confidence and, save the Recipient which extends to such
as expressly permitted under this Agreement, information; or
not to disclose, use, copy in whole or in part or 4.1.2 Such Authorised Person has executed
modify or adapt the Confidential Information and delivered to the Recipient a written
in any way without the Discloser’s prior undertaking to comply with the terms of
written consent which may be given or this Agreement so far as they relate to
withheld in its absolute discretion, and the information provided to such
Recipient agrees that it will not use any of the Authorised Person.
Confidential Information so as to procure any 4.2 The Recipient will procure that all Authorised
commercial advantage over the Discloser. Persons to whom it discloses the Confidential
Information comply with this Agreement as if
3.2 The Recipient undertakes to the Discloser that they were parties.
it shall not use any of the Confidential 5 AVAILABLE INFORMATION
Information in any way whatsoever without The Recipient’s obligations under clause 3 do
the prior written consent of the Discloser not apply to, and the term ‘Confidential
except to the extent reasonably necessary in Information’ shall be deemed to exclude any
connection with the Recipient’s evaluation of information which the Recipient can prove:
the Confidential Information and for this 5.1 was known to the Recipient prior to any such
purpose the Discloser agrees that the disclosure to the Recipient by the Discloser;
Recipient may analyse the Confidential 5.2 was at the time of disclosure by the Discloser,
Information and disclose the Confidential or subsequently becomes, published,
Information to Authorised Persons in accessible to the public or otherwise in the
accordance with clause 4. public domain other than through any breach

3.3 Except as provided in clause 5, the obligation
to keep the Confidential Information
confidential shall survive and subsist for a
period of [specify] years from the date of each
disclosure of Confidential Information by the
Discloser pursuant to this Agreement

Page | 20

of this Agreement by the Recipient or any of this Agreement by it (including its directors,
Authorised Person; officers, agents and employees) or by any
5.3 may be required by law, regulation or order of Authorised Person and the Recipient will
a court of competent jurisdiction to be indemnify the Discloser from and against all
disclosed and the Recipient will immediately loss or damage (including but not limited to
notify the Discloser in writing of the legal costs) which may arise from the
requirement for disclosure and of all relevant unauthorised disclosure or use of any of the
surrounding circumstances. If the Recipient is Confidential Information by the Recipient or
unable so to notify the Discloser before such its directors, officers, agents or employees, or
disclosure is required it will notify the by any Authorised Person.
Discloser immediately after the disclosure has
been made. The Recipient will use its best 6.3 All the terms and conditions set out in this
endeavours to resist disclosure (and to assist Agreement shall extend to any further
the Discloser in resisting the requirement for negotiations or discussions of any kind
disclosure) and to maintain the confidentiality between the Discloser and the Recipient and
of any Confidential Information. shall continue for the period specified in
6 ACKNOWLEDGMENTS AND BREACH clause 3.3.
6.1 The Recipient acknowledges that the rights
which are sought to be protected by this 6.4 Neither the Recipient nor the Discloser will
Agreement are unique and that any breach by solicit or discourage from being employed by
it or by an Authorised Person of these terms the other party any person who was at any
would cause the Discloser irreparable and time during [specify relevant period] an
unquantifiable damage and that the Discloser employee of the other party (except that this
shall be entitled to apply for and obtain (but restriction shall only apply to employees
without prejudice to any such rights as the whose details were received as part of the
Discloser may have to obtain damages in any Confidential Information or in the course of
such respect) interlocutory and/or final negotiations between the Discloser and the
injunctive or other equitable relief against or Recipient). The obligations contained in this
in respect of any actual or threatened breach clause will expire [specify] months from the
hereof by the Recipient or any Authorised last date of any discussions or negotiations
Person. between the Discloser and the Recipient
concerning the Confidential Information or
6.2 The Recipient agrees that it shall be [specify] months from the last date of any
responsible for any breach of any of the terms disclosure of Confidential Information by the
Discloser to the Recipient pursuant to this
Agreement (whichever shall be the later).

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7 ANNOUNCEMENTS AND RETURN OF 8.2 This Agreement is binding on and shall apply
INFORMATION for the benefit of the parties’ personal
representatives, successors in title and
7.1 The Recipient may not make any public permitted assignees.
announcement in relation to the Confidential
Information and neither the Recipient nor the 8.3 This Agreement constitutes the entire
Discloser may make any public announcement agreement between the parties relating to its
of the fact that discussions between the subject matter, and supersedes all previous
Discloser and the Recipient are taking place agreements between the parties relating to
without the prior written consent of the other that subject matter.
party which consent shall not be unreasonably
withheld or delayed if such announcement is 8.4 Any variation or waiver of any of the terms of
required by law or regulation; provided that this Agreement shall not be binding unless set
the party which is subject to such legal or out in writing, expressed to amend this
regulatory requirement to make an Agreement and signed by or on behalf of each
announcement will use its best endeavours to of the parties.
resist disclosure and to assist the other party
in resisting the requirement for disclosure. 8.5 If any provision of this Agreement, or any part
of a provision of this Agreement, is found to be
7.2 The Recipient and every Authorised Person illegal, invalid or unenforceable the remaining
shall each return to the Discloser on written provisions, or the remainder of the provision
demand to the Recipient any and all written concerned, shall continue in effect.
documents or materials containing the
Confidential Information together with all 8.6 A failure or delay in enforcing compliance with
copies and if the Discloser should so require any term of this Agreement shall not be a
the Recipient shall, when returning waiver of that or any other term of this
documents or materials, provide to the Agreement.
Discloser a statutory declaration duly
executed by an officer of the Recipient 8.7 The Recipient shall execute such further
confirming that, to the best of the declarant’s documents and perform and do such further
knowledge, information and belief, the acts and things as the Discloser may
Recipient has complied with all of its reasonably request in writing in order to carry
obligations under this Agreement. the provisions of this Agreement into full
effect.
8 GENERAL
8.8 The parties to this Agreement acknowledge
8.1 None of the rights or obligations of the that this Agreement was negotiated and
Recipient under this Agreement may be executed and that such negotiations and
assigned or transferred.

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execution of this Agreement were not affected of England and the parties submit to the
by fraud, undue influence, coercion or duress exclusive jurisdiction of its courts.
or an unequal bargaining power.
8.9 All notices which are given in connection with EXECUTED in two originals on the date stated above.
this Agreement shall be in writing and shall be SIGNED by [...]
sent to the address set out on the first page of [a duly authorised officer for and on behalf of [...]
this Agreement or to such other address as the [in the presence of:] [...]
addressee may designate by notice given in
accordance with the provisions of this clause. SIGNED by [...]
Any such notice may be delivered personally [a duly authorised officer for and on behalf of [...]]
or by first class posted letter or facsimile
transmission and shall be deemed to have [in the presence of:] [...]
been served if by personal delivery when
delivered if by posted [5] days after posting 5.3.2 CHECKLIST
and if by facsimile transmission when þ DESCRIPTION OF AGREEMENT/DOCUMENT: A
despatched subject to the production by the
sender’s facsimile machine of a successful confidentiality agreement, or non-disclosure
transmission report. agreement, is a standard document in many
8.10 A person who is not a party to this Agreement commercial transactions. The agreement relates
has no rights under the Contracts (Rights of to the disclosure and protection of confidential
Third Parties) Act 1999 to enforce any term of information and confirms the relationship of
this Agreement but this does not affect any confidence between the parties. It sets out in
right or remedy of a third party which exists or detail the expectations of the discloser of
is available apart from that Act. information and the obligations undertaken by
8.11 The rights and remedies provided for in this the recipient of such information. The principal
Agreement are cumulative with and not obligations relate to the use of information for a
exclusive of any rights or remedies otherwise specific purpose and prohibition of
provided by law or in equity. unauthorized disclosures.
8.12 Neither this Agreement nor any future þ PRACTICAL GUIDANCE/ISSUES LIST: It is essential
negotiations shall commit either party to
proceed with any further transaction which is
subject to a formal written agreement being
agreed and signed by the parties.
8.13 This Agreement shall be governed by the laws

Page | 23

that owners of confidential business information the recipient enters into a written
seek appropriate practical methods of confidentiality letter or agreement
protecting such information. The following expressly dealing with the relevant rights
practical steps may be of assistance to any and obligations.
business or person seeking to protect their
information and/or provide evidence of • Produce and maintain records of costs
ownership: and expenses involved in the creation
and maintenance of the information
• Record the manner in which they obtained together with the time spent in such
or hold information. creation so as to provide, if required, an
indication of value, loss or damages.
• Mark or stamp such documents containing
relevant information with the usual “secret • Deposit a copy of a confidential report
and confidential”. setting out the information to a solicitor
or other professional for safekeeping
• Set up a confidentiality procedure or process and to assert copyright with all rights
(involving storage, monitoring of disclosure reserved.
and destruction of confidential documents).
• Maintain a list of recipients of the
• Disclose confidential documents on the confidential information or reports
basis of a sealed envelope marked “secret containing the business intelligence
and confidential” attached to a together with a record of when, how and
confidentiality letter indicating that it is not to whom it is disclosed. Provide a sealed
to be opened until the accompanying copy duly stamped and post a copy to
confidentiality letter is read, accepted and oneself by recorded or registered
signed. delivery to be kept unopened with the
date stamp as evidence of the
• Produce a record indicating dates or confidentiality and possession at the
periods when the information was relevant time by the owner.
produced and the manner of creation of
the confidential information. • Seek legal advice and guidance from an
experienced lawyer as to the best form
• Restrict access to persons under of protection and relevant or additional
obligations or confidentiality. steps.

• Ensure that any recipient of information þ LAW/COMPLIANCE REQUIREMENT: The law
understands and acknowledges that the of confidence can be found in case law and
information is regarded as confidential. breach of confidence is recognized as an
equitable wrong. The cases establish the
• Make sure that prior to any disclosure,

Page | 24

relevant elements of confidential time provide to the [Recipient] (in whatever
information, identify relationships or form including without limitation orally, written,
situations importing obligations of electronic, tape, disk, physical or visual form),
confidence and set out the position in relating to the [Project], and all know-how, trade
respect of liability and available remedies. secrets, tactical, scientific, statistical, financial,
The remedies for breach of a confidentiality commercial or technical information of any kind
agreement vary and may in relevant [directly or indirectly] disclosed [before or after
circumstances include damages, accounting the date of this Agreement] by the [Discloser] to
for profits, injunction, specific performance, the [Recipient or any Authorized Person]
disposal or delivery up of the discloser’s
property. whether in existence at the date of this
Confidentiality and non-disclosure Agreement or which subsequently comes into
agreements are used as a standard in existence including any copies, reproductions,
business to protect information which a duplicates or notes in any form whatsoever.
party considers particularly sensitive and ‘Project’ means [details of project, engagement
which that party wishes to limit the use of or otherwise].
following disclosure to a third party. This is ‘Purpose’ means the permitted purpose of
usually pursuant to a transaction or other review and evaluation of the Confidential
arrangement. Information in connection with [the proposed
It is always worthwhile to review and transaction].
consider practical measures as to how best
to protect such information. Advice should þ SPECIFIC PROVISIONS
be taken in specific or relevant situations as
the position may differ in relation to • Acknowledgement: The Recipient
employees, investors, business acknowledges that the rights which are sought
partners, consultants or inventors. to be protected by this Agreement are unique
and that any breach by it or by an Authorized
þ SOME KEY DEFINITIONS: ‘Authorized Person’ Person of these terms would cause the
means [specify as relevant or general as follows] Discloser irreparable and unquantifiable
any employee, director, consultant or agent of damage and that the Discloser shall be
the [Recipient] and any other named firm, entitled to apply for and obtain (but without
individual or company engaged in providing prejudice to any such rights as the Discloser
services directly to the [Recipient] [and/or] who may have to obtain damages in any such
has been previously approved in writing by the respect) interlocutory and/or final injunctive
[Discloser]. or other equitable relief against or in respect
‘Confidential Information’ means [specifically of any actual or threatened breach hereof by
defined information or general as follows] such the Recipient or any Authorized Person.
information as the [Discloser] may from time to

Page | 25

• Indemnity: The Recipient agrees that it shall unauthorized disclosure or use of any of the
be responsible for any breach of any of the Confidential Information by the Recipient or
terms of this Agreement by it (including its its directors, officers, agents or employees, or
directors, officers, agents and employees) or by any Authorized Person.
by any authorized Person and the Recipient In preparing a confidentiality/non-disclosure
will indemnify the Discloser from and against agreement or letter, individuals or businesses
all loss or damage (including but not limited to should consider the following non-exhaustive
legal costs) which may arise from the matters.

ACTIONS/ISSUES: COMMENTS:

1. Consider relevant parties, details and information to []
be covered, the permitted purpose together with
[]
relevant exclusions to the non-disclosure obligations. []
In particular: []
[]
1.1 consider the purpose of the agreement;

1.2 consider whether the agreement should be
unilateral or reciprocal;

1.3 consider the correct parties to the agreement;

1.4 consider whether to specify a sole contact for
each party to be responsible for handling the
information and disclosures;

Page | 26

1.5 consider whether the agreement should be []
unilateral or reciprocal; []
[]
1.6 verify the correct contracting party’s name, []
correspondence, service or business address []
together with other contact details (email and []
fax); []

1.7 state the extent of confidential information and
provide details of the product or business
process to which it relates (if applicable);

1.8 state how and in what form the information will
be disclosed (orally, written, tape, disk or other
form).

2 Consider specific undertakings from the recipient
including:

2.1 an obligation to use of the confidential
information for the permitted purpose only;

2.2 a non-competition restriction on the recipient
for a specified time from disclosure of the
information, termination of agreement or
return of the information;

Page | 27

2.3 a non-solicitation restriction on the recipient in []
respect of the discloser’s business, customers []
and employees; []
[]
2.4 a lock-out period during which the discloser will []
not be able to contract with another party []

following supply and disclosure of information Page | 28
to the recipient (or otherwise allow third parties

access to the confidential information in
connection with the proposed transaction);
2.5 an exclusivity period during which the recipient
has exclusive access to the information for
evaluation purposes in connection with a
negotiation, product review and analysis or

proposed transaction;
2.6 restrictions on the recipient copying the

information in whole or in part or otherwise
adapting the information without prior written

consent of the discloser;
2.7 indemnifying the discloser for any costs in

implementing or enforcing the agreement;
2.8 an express obligation by the recipient not to

directly or indirectly seek or procure a

commercial advantage over the discloser []
through use or disclosure of the information; []
2.9 an obligation to inform the discloser of any []
unauthorised or inadvertent disclosures by the []
[]
recipient; []
2.10 use of the confidential information and []
[]
disclosure on any other transaction specific
terms as agreed between the parties. Page | 29

3 What is the term of the agreement and for how long
will the obligations subsist? Consider:

3.1 exactly how long the specific obligations are
required to last;

3.2 commencement date of the agreement;
3.3 the appropriate period of the agreement;
3.4 any general or specific termination rights;
3.5 any required procedure for dealing with

destruction or return of information at the end of

the term; []
3.6 whether the agreement and its obligations will []

be ongoing or subject to an end date; []
3.7 any provisions which will or are intended to []
[]
survive termination of the agreement or []
expiration of the term. []
[]
4 Consider whether there will be:
4.1 a payment to the discloser;
4.2 reference to other form of value or consideration
(including exchange of information);
4.3 execution of the agreement by deed as is
necessary if there is no consideration.

5 Consider the permitted use(s) of the confidential
information. Will the information be used for:

5.1 evaluation in connection with an acquisition or
other commercial transaction?

Page | 30

5.2 intellectual property research and development? []
5.3 review and evaluation in connection with the []
[]
manufacture or distribution of a product? []
5.4 ascertaining the viability of a process, product or []
[]
transaction? []
5.5 any other specific purpose? []
6 Are there any authorised disclosures? Can the []

information be disclosed to:
6.1 any employee?
6.2 selected employees only (on a need to know

basis or those forming part of the project team)?
6.3 directors or officers of the recipient?
6.4 agents and representatives of the recipient?

Page | 31

6.5 bankers, financiers and investors? []
6.6 professional advisors of the recipient? []
6.7 any other person? []
7 Should there be an obligation: []
7.1 that information disclosed by the recipient be []
[]
disclosed only to those bound by confidentiality []
obligations to the recipient? []
[]
7.2 on the recipient to procure compliance with the
agreement by those to whom it discloses the Page | 32
information?

7.3 for subsequent recipients of the information
from the recipient to sign an acknowledgement
or express agreement? (Will this be practicable?)

7.4 to maintain a list of recipients of the confidential
information together with relevant records?

8 Exclude the right or ability of the recipient to acquire

any rights in the disclosed information. []
9 What is the status of the information supplied to the
[]
recipient by the discloser? Can the document or
information be copied? Are there any notification or []
[]
further record keeping requirements? []
10 Consider the specific purpose of disclosing the []
[]
information and whether sufficient restrictions have
been imposed on the recipient as to use and to whose
benefit? Are there any transaction specific restrictions

required?
11 Consider what the consequences of unauthorised

disclosure will be for the business and review available
legal remedies including:

11.1 damages;
11.2 injunction;
11.3 account for profits;
11.4 destruction or return of property;

Page | 33

11.5 specific performance; []
11.6 any indemnities for loss or enforcement of the []
[]
agreement by the discloser. []
12 Specify or consider agreed terms as to: []
[]
12.1 storage and security of the information; []
12.2 delivery of information; []
12.3 contribution to or payment of legal costs for the []

preparation, negotiation and implementation of Page | 34
the agreement;

12.4 confirmation that the recipient does not already
have the confidential information or similar
information.

13 Review and consider the circumstances in which the
discloser can be forced to disclose the information to
third parties?

14 Consider disclosure of information by the recipient to

relevant bodies including regulatory authorities or []
agencies such as the Inland Revenue and Customs & []
[]
Excise in connection with the payment of tax. []
[]
15 Consider the effect and consequences of breach of the []
agreement or publication of the information by the
recipient or its representatives. []

16 Review relevant arrangements as to termination,
return or destruction of the information and the basis
upon which such a request can be made.

17 How will the confidential information be delivered?
Consider use of a sealed envelope attached to the non-
disclosure letter.

18 Consider the authority of the signatory proposed on
behalf of the recipient.

19 Are there any other specific requirements in relation to
maintaining the information?

20 Exclude liability for errors in the information, its
completeness, currency or accuracy. Consider

excluding any commitment to proceed with further
transaction as a result of the supply of information.

21 Include acknowledgements by the recipient that no

Page | 35

representations, expressions or opinions are made in []
relation to the information.
[]
22 Provide that the discloser can decline to provide []
further information and reserves the right to require []
the return of all information at anytime. []

23 Consider whether the rights under the agreement will []
be assignable. []

24 Consider:

24.1 restrictions on announcements;

24.2 entire agreement provision setting out that
document contains the whole agreement
between the parties and supersedes prior
agreements;

24.3 notice provision setting out manner of and
address for service of notices;

24.4 which clause or provision will survive
termination if incorporated into another
agreement;

Page | 36

24.5 further assurance provision requiring a party to []
sign further documents or do other things to []
further implement the agreement; []
[]
24.6 governing law and jurisdiction clause; []
[]
24.7 a provision relating to consent (where required,
can it be unreasonably withheld or delayed?); []

24.8 waiver, variation and severance provisions. []

25 Where forced disclosure is required by law, court or
appropriate body:

25.1 can the information be disclosed without further
reference to the discloser or will there be an
obligation on the recipient to notify the
discloser?

25.2 will there be an undertaking by the recipient to
assist the discloser (if required) to resist
disclosure?

26 Include an acknowledgement of the importance of the
information and that breach of the agreement will
cause irreparable and unquantifiable harm.

Page | 37

27 Include acknowledgement that the discloser may []
obtain injunctive or other relief. []
[]
28 Is a guarantee required or necessary?
29 Are there any obligations on the discloser? Is the []
[]
discloser subject to an obligation to keep the
confidential information a secret?

30 Seek confirmation of the authority of person signing
on behalf of the recipient or any other party.

31 Consider whether there are any applicable legal
requirements in any jurisdiction where the agreement
may need to be enforced.

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5.4 LETTER OF INTENT

A letter of intent is a business document that may purchase agreement, sales agreement, joint

be used to outline an agreement between two or venture agreement, asset purchase agreement etc.
more parties before the partied finalize the Format of letter of intent will be same as that of a
business letter.
contract. It may be used for the agreements like hire

5.4.1 TEMPLATE will remain the same. Given below is draft template
of the basic structure of a letter of Intent
While the structure and content will differ in writing the letter].
accordance to the type of intent letters, the basics In this paragraph you will write your intent for
writing this letter or state what you have decided to
[Your Street Address] respond in response to etc. In this paragraph you will
[Your City, ST Zip Code] write your intent for writing this letter and any
additional information that you would wish to
[Month Day, Year] provide.
[If required add more paragraphs, but please note
[Recipient Name] that the best practice is to keep the letter as concise
[Title] as possible]
[Company Name] [Valediction – Sincerely/Regards/Best Regards]
[Street Address of Company]
[City, ST Zip Code of Company]

[Salutation: Dear Mr/Ms/Mrs/Name]

This letter is written for [Introduce yourself and
come straight to the point as to the purpose of
[Signature] [Your Name]

Page | 39

5.2.2 CHECKLIST þ LANGUAGE: Letters of intent must be succinct
þ OBJECTIVE: When drafting your letter of intent, and formal in tone and language. Examine each
sentence and clear up any points that are vague,
make sure to summarize the purpose of your and avoid using jargon or speaking with
letter in one sentence at the beginning. Avoid hyperbole. When numbers or percentages are
complex statements that would result in involved, always use exact figures rather than
confusing the reader. The summarized line that rounding up or down or summarizing.
is simple and captures the intent of writing the
letter would serve as a guide for the drafting of þ OFFER TO DRAFT: If possible, offer to draft the
the remainder of the letter. The key elements letter of intent. This provides an immediate
that you have to consider is that the letter advantage and leveraging ability. Clearly specify
should be is crisp, clear and concise. that all purchase prices be paid upon closing the
agreement, rather than allowing a portion of the
þ SECTIONS: Decide on the sections you want to price to be paid at a later date after other
use to break down the terms of the agreement conditions are met. Also, consider including a
into manageable pieces. The sections will differ confidentiality agreement or non-solicitation
depending on your agreement, but may include agreement that goes beyond the expiration date
conditions, financial information, and of the letter of intent. Review the draft to make
confidentiality, consequences for failure to fulfill sure that all terms are as specific as possible and
any requirements on behalf of both party and a detail each step of the transaction.
timeline.
þ DISCUSS FUTURE NEGOTIATIONS: Decide up
þ OUTLINE: Create an outline before writing your front how much information will be contained in
letter to help organize your thoughts. Begin by the letter of intent and what information will be
listing your sections in the order that flows most withheld and negotiated for the final agreement.
logically, then adding more information as Importantly, lay out the conditions to finalizing
necessary. When you are ready to write the the end agreement. For example, will the letter
letter, use your outline as a reference, expanding of intent be binding, nonbinding, or partially
each section into its own paragraph. binding, and when will the final negotiations
take place? Consider including a clause in the
letter of intent allowing for its termination
should final negotiations fail to produce an
agreement.

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