M&A Activity -- Expect a Surge in Mergers

A "Letter of Intent to Purchase" (LOI) is mostly non-binding except for language describing the term of the "stand still" that stops a seller from negotiating with another buyer and for confidentiality provisions. It is generally a 3-10 page document that is signed by both parties. It usually sets forth the major economic and legal terms and conditions of the proposed transaction. It defines the buyer's timing for, and practices for, conducting due diligence. In some cases it may contain a Break Up Fee provision providing that a penalty be paid by the party who abandons the transaction.