Letter of Intent: 50/50 Joint Venture

by Practical Law Corporate & Securities

A Standard Document outlining a letter of intent (LOI) for a US joint venture (JV) structured through a newly formed US limited liability company (LLC) with two members (JV parties), each holding a 50% membership interest in the LLC. The document details the principal terms of the proposed JV transaction, including the JV parties' contributions, the LLC's management structure, and a buy-sell deadlock resolution mechanism. The document calls for the LLC to be managed by a board of managers, with each member appointing an equal number of managers. It anticipates the negotiation of definitive JV agreements to be signed at closing, including the LLC agreement, a contribution agreement, and any ancillary agreements that may be required. The document outlines conditions precedent to closing the JV transaction and includes clauses covering JV termination rights, default remedies, transfer restrictions, and restrictive covenants, among others. The LOI, while generally non-binding, includes binding provisions related to exclusivity, confidentiality, and expenses. This LOI provides a comprehensive roadmap for the JV parties to negotiate and finalize the definitive JV agreements.