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Letter Of Intent Share Purchase for Philippines

Letter Of Intent Share Purchase Template for Philippines

A Letter of Intent for Share Purchase under Philippine law is a preliminary document that outlines the proposed terms and conditions for the purchase of shares in a company. This document, while primarily non-binding except for specific provisions like confidentiality and exclusivity, serves as a framework for further negotiations and due diligence. It typically includes key terms such as purchase price, payment terms, conditions precedent, and timeline, while adhering to Philippine corporate law requirements and securities regulations. The document acts as a stepping stone toward the final Share Purchase Agreement.

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What is a Letter Of Intent Share Purchase?

A Letter Of Intent Share Purchase is commonly used in the Philippines as a preliminary step in corporate acquisitions and investments. It serves to document the serious intent of parties to proceed with a share purchase transaction while maintaining flexibility for negotiations. The document typically precedes the more detailed Share Purchase Agreement and is particularly important in the Philippine context where business relationships and preliminary commitments carry significant weight. It should comply with Philippine corporate laws, including the Revised Corporation Code and Securities Regulation Code. While mostly non-binding, it often includes binding provisions on confidentiality, exclusivity, and good faith negotiations. This document is essential for establishing clear communication between parties and securing initial commitments before proceeding with detailed due diligence and final documentation.

What sections should be included in a Letter Of Intent Share Purchase?

1. Date and Addresses: Opening of letter with current date and proper addresses of both parties

2. Subject Line: Clear identification of the document as a Letter of Intent for Share Purchase

3. Introduction: Opening paragraph identifying the parties and their roles (seller and purchaser)

4. Transaction Overview: Brief description of the proposed transaction, including the target company and shares to be purchased

5. Purchase Price: Proposed purchase price and payment terms

6. Due Diligence: Overview of the due diligence process and timeline

7. Timeline: Proposed timeline for completing the transaction

8. Exclusivity: Terms of exclusivity period if applicable

9. Confidentiality: Reference to existing or inclusion of new confidentiality provisions

10. Binding Provisions: Clear statement of which provisions are intended to be binding

11. Closing: Signature blocks and formal closing of the letter

What sections are optional to include in a Letter Of Intent Share Purchase?

1. Conditions Precedent: Major conditions that must be met before proceeding with the transaction - include if there are specific regulatory or third-party approvals needed

2. Break Fee: Include if parties agree to a break fee arrangement for withdrawal from negotiations

3. Financing: Include if the purchase is subject to financing arrangements

4. Management Retention: Include if there are specific arrangements or requirements regarding current management

5. Post-Closing Covenants: Include if there are specific post-closing obligations to be highlighted

6. Governing Law and Jurisdiction: Include if parties want to specify jurisdiction different from default Philippine law

What schedules should be included in a Letter Of Intent Share Purchase?

1. Price Calculation: Detailed breakdown of purchase price calculation if complex

2. Transaction Timeline: Detailed timeline with key milestones and deadlines

3. Key Terms Sheet: Summary of key commercial terms for quick reference

4. Target Company Information: Basic information about the target company and shares to be purchased

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Philippines

Cost

Free to use

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