Letter of Intent and Term Sheet Limited Partnership

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This Letter of Intent and Term Sheet is for use by parties who have discussed entering into a limited partnership relationship.

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This Letter of Intent and Term Sheet confirms the discussions between a corporation (who will act as a general partner for the purposes of the transaction) and potential investor regarding a limited partnership relationship they intend to enter. This letter specifies the interests the investor will purchase and the agreement to pay certain expenses of counsel. It also sets forth that this letter is a statement of mutual intent and not a formal and final agreement.

A Term Sheet attached as a Schedule to the Letter of Intent is included. This document summarizes the proposed terms of the limited partnership interests including the offering, date of closing, minimum investment and voting interests. It also sets forth how net profits will be distributed.

This Letter of Intent and Term Sheet contains the following:
  • Parties: Identifies the corporation/general partner and the potential investors;
  • Partnership Interests: Sets forth the number of units of partnership interests the investors desire to purchase;
  • Special Counsel: Specifies the reasonable expenses to be paid to a special counsel in regard to this transaction;
  • Signatures: This agreement is signed by the general partner and "agreed and accepted" by the investor.
  • Term Sheet: Term sheet which sets out a complete summary of the proposed terms of the offering of limited partnership interests.

Protect yourself and your rights by using our attorney-prepared forms.

This attorney-prepared packet contains:
  1. General Information
  2. Instructions and Checklist
  3. Letter of Intent and Term Sheet
State Law Compliance: This form complies with the laws of all states
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Letter of Intent and Term Sheet
Limited Partnership
 

 

[General Partners Letterhead]
 
________ , 20__
 
[Name and address of Investors]
________
________
 
Dear ________ :
 
This letter of intent (Letter”) confirms our prior discussions regarding a definitive limited partnership agreement (Agreement”) to be entered into by you, ______________Corporation (the General Partner”) and other investors (Investors”) in ______________Partners, a ________  limited partnership (the Partnership”) for the purchase of Limited Partnership Interests (Interests”) of the Partnership. It is our intention to further negotiate and enter into the Agreement which will include the following terms:
 
1.   Purchase of Limited Partnership Interests.
 
You will purchase ________  Units ($________ ) of Interests of the Partnership, contingent upon completion of appropriate documentation fully satisfactory in form and substance to each of the Investors, the General Partner and to our respective counsel. It is hereby agreed that such documentation shall contain terms mutually satisfactory to each of us, specifically including the terms set forth in Schedule A attached hereto, as well as other provisions customary for transactions of this type, all of which shall be commemorated in the Agreement.
 
2.   Expenses of Special Counsel.
 
It is understood that whether or not the proposed transaction is consummated, the Partnership hereby agrees to pay all expenses in connection therewith, including without limitation, the reasonable fees and expenses of such special counsel, up to a maximum of $________ .
 
This Letter is accepted by the parties merely as a statement of mutual intention at this time to conduct further negotiations along the lines indicated above, and it is understood that the proposed Agreement is subject to further negotiation by the parties and review and approval thereof by their respective counsel and the General Partner of the Partnership. It is understood that neither you nor the Partnership is bound to the other by this Letter for damages, expenses, failure to finally agree upon a formal and final Agreement, or in any other way.
 
If the foregoing correctly sets forth our general intentions, kindly so indicate by signing and returning the enclosed copy of this Letter.
 
Very truly yours,
 
______________PARTNERS
 
By: ______________CORPORATION
 
(General Partner)
 
By: ________  
 
(Authorized Officer)
 
AGREED AND ACCEPTED AS OF THE DATE OF THIS LETTER:
 
_______________
(Investor)
 
SCHEDULE A TO
 
LETTER OF INTENT
 
______________PARTNERS
 
(a _______________  Limited Partnership)
 
SUMMARY OF PROPOSED PRINCIPAL TERMS OF
 
OFFERING OF LIMITED PARTNERSHIP INTERESTS
 
Offering:
Limited Partnership Interests up to _______ Units
 
 
 
Amount:
$___________ to $___________, consisting of ___ to _____ Units of Limited Partnership Interests, at a purchase price of $__________per Unit.
 
 
 
Closing:
On or before _______________ , 20__ ; (which may be extended by the General Partner) for the minimum offering of $_________, with subsequent closings for an aggregate offering of up to $____________.
 
 
 
Minimum  
Investment:
_____ Units ($_________) except as otherwise approved by the General Partner.
 
 
 
Allocation of Profits and Losses:
Generally, Net Profits and Losses will be allocated ________ % to the Partners (in proportion to their Unit interests) and ________ % to the General Partner. Losses will be allocated_______% to the Limited Partners and ____% to the General Partner. See Section _______________  of the Partnership Agreement for specific details as to the allocation of Profits and Losses.
 
 
 
Distributions:
In each calendar year, distributions of net profits, if any, will be distributed in the following manner: ________ % to the Limited Partners, (in proportion to their Unit interests) and ________ % to the General Partner. See Section ________  of the Partnership Agreement for further details on distributions.
 
 
 
Information Rights:
Each holder of Limited Partnership Interests will be furnished with the following financial reports:
 
 
 
 
(1)
Annual reviewed financial statements, within 90 days following the end of each fiscal year.
 
 
 
 
(2)
Quarterly financial statements from books and records, within 30 days following the end of each quarter.
 
 
 
Covenants:
The General Partner represents and warrants that:
 
 
 
 
(1)
A Business Plan submitted to investor(s) has been prepared in good faith and, to the best knowledge of the General Partners management, does not contain any untrue statements.
 
 
 
 
(2)
The General Partner owns all rights to its property and assets.
 
 
 
 
(3)
All material agreements and transactions will be disclosed in the Business Plan or supplements thereto.
 
 
 
 
(4)
There are no agreements which limit the Partnerships freedom to compete in any line of business in any geographic area.
 
 
 
Voting Rights:
The Limited Partners shall be entitled to vote on certain matters as specified in the Partnership Agreement, including:
 
 
 
 
(1)
A decision to continue the business after an event of dissolution.
 
 
 
 
(2)
Transfer of a Limited Partnership Interest.
 
 
 
 
(3)
Amendment of the Limited Partnership Agreement.
 
 
 
 
(4)
Compromise of the obligation of a Limited Partner to make a capital contribution or to return money or property paid or distributed in breach of the Partnership Agreement.
 
 
 
 
These matters will require the affirmative vote of a majority of Limited Partnership Interests.
 
 
 
Dissolution:
Upon dissolution, after payment of all debts and liabilities of the Partnership, the net assets will be distributed first to the Partners in accordance with positive capital accounts.
 
 
 
Transfers of Interest &
Assignments:
Transfers of Limited Partnership Interests are subject to restrictions, including the consent of the General Partner.
 
 
 
Management Fees:
The General Partner will receive an annual Management Fee of $________  adjusted for inflation based on the CPI Index and payable quarterly in advance. The Management Fee will cover all expenses incurred by the General Partner in providing its services to the Partnership, including the costs and expenses of its employees in administering the Partnership. Expenses borne by the General Partner will include, but not be limited to, compensation of legal advisors, accountants, consultants, and professional and clerical employees, and office overhead.
 
 
 
Organizational Expenses:
The Partnership will be responsible for expenses incurred in its organization, including legal and accounting fees, brokers and finders fees and other out-of-pocket expenses incurred by the General Partner. The General Partner and its affiliates will not receive any such fees, but will be reimbursed for the allowable expenses paid by the General Partner, up to a maximum of $________ .
 
 
 
Term of  
Partnership:
________  years, with options to extend for up to ________  consecutive one-year periods with the consent of the General Partner and a majority in interest of the Limited Partners.
 
 
 
 
 
 
 
 
 
Number of Pages9
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#43665
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Letter of Intent and Term Sheet
Limited Partnership
 

 

[General Partners Letterhead]
 
________ , 20__
 
[Name and address of Investors]
________
________
 
Dear ________ :
 
This letter of intent (Letter”) confirms our prior discussions regarding a definitive limited partnership agreement (Agreement”) to be entered into by you, ______________Corporation (the General Partner”) and other investors (Investors”) in ______________Partners, a ________  limited partnership (the Partnership”) for the purchase of Limited Partnership Interests (Interests”) of the Partnership. It is our intention to further negotiate and enter into the Agreement which will include the following terms:
 
1.   Purchase of Limited Partnership Interests.
 
You will purchase ________  Units ($________ ) of Interests of the Partnership, contingent upon completion of appropriate documentation fully satisfactory in form and substance to each of the Investors, the General Partner and to our respective counsel. It is hereby agreed that such documentation shall contain terms mutually satisfactory to each of us, specifically including the terms set forth in Schedule A attached hereto, as well as other provisions customary for transactions of this type, all of which shall be commemorated in the Agreement.
 
2.   Expenses of Special Counsel.
 
It is understood that whether or not the proposed transaction is consummated, the Partnership hereby agrees to pay all expenses in connection therewith, including without limitation, the reasonable fees and expenses of such special counsel, up to a maximum of $________ .
 
This Letter is accepted by the parties merely as a statement of mutual intention at this time to conduct further negotiations along the lines indicated above, and it is understood that the proposed Agreement is subject to further negotiation by the parties and review and approval thereof by their respective counsel and the General Partner of the Partnership. It is understood that neither you nor the Partnership is bound to the other by this Letter for damages, expenses, failure to finally agree upon a formal and final Agreement, or in any other way.
 
If the foregoing correctly sets forth our general intentions, kindly so indicate by signing and returning the enclosed copy of this Letter.
 
Very truly yours,
 
______________PARTNERS
 
By: ______________CORPORATION
 
(General Partner)
 
By: ________  
 
(Authorized Officer)
 
AGREED AND ACCEPTED AS OF THE DATE OF THIS LETTER:
 
_______________
(Investor)
 
SCHEDULE A TO
 
LETTER OF INTENT
 
______________PARTNERS
 
(a _______________  Limited Partnership)
 
SUMMARY OF PROPOSED PRINCIPAL TERMS OF
 
OFFERING OF LIMITED PARTNERSHIP INTERESTS
 
Offering:
Limited Partnership Interests up to _______ Units
 
 
 
Amount:
$___________ to $___________, consisting of ___ to _____ Units of Limited Partnership Interests, at a purchase price of $__________per Unit.
 
 
 
Closing:
On or before _______________ , 20__ ; (which may be extended by the General Partner) for the minimum offering of $_________, with subsequent closings for an aggregate offering of up to $____________.
 
 
 
Minimum  
Investment:
_____ Units ($_________) except as otherwise approved by the General Partner.
 
 
 
Allocation of Profits and Losses:
Generally, Net Profits and Losses will be allocated ________ % to the Partners (in proportion to their Unit interests) and ________ % to the General Partner. Losses will be allocated_______% to the Limited Partners and ____% to the General Partner. See Section _______________  of the Partnership Agreement for specific details as to the allocation of Profits and Losses.
 
 
 
Distributions:
In each calendar year, distributions of net profits, if any, will be distributed in the following manner: ________ % to the Limited Partners, (in proportion to their Unit interests) and ________ % to the General Partner. See Section ________  of the Partnership Agreement for further details on distributions.
 
 
 
Information Rights:
Each holder of Limited Partnership Interests will be furnished with the following financial reports:
 
 
 
 
(1)
Annual reviewed financial statements, within 90 days following the end of each fiscal year.
 
 
 
 
(2)
Quarterly financial statements from books and records, within 30 days following the end of each quarter.
 
 
 
Covenants:
The General Partner represents and warrants that:
 
 
 
 
(1)
A Business Plan submitted to investor(s) has been prepared in good faith and, to the best knowledge of the General Partners management, does not contain any untrue statements.
 
 
 
 
(2)
The General Partner owns all rights to its property and assets.
 
 
 
 
(3)
All material agreements and transactions will be disclosed in the Business Plan or supplements thereto.
 
 
 
 
(4)
There are no agreements which limit the Partnerships freedom to compete in any line of business in any geographic area.
 
 
 
Voting Rights:
The Limited Partners shall be entitled to vote on certain matters as specified in the Partnership Agreement, including:
 
 
 
 
(1)
A decision to continue the business after an event of dissolution.
 
 
 
 
(2)
Transfer of a Limited Partnership Interest.
 
 
 
 
(3)
Amendment of the Limited Partnership Agreement.
 
 
 
 
(4)
Compromise of the obligation of a Limited Partner to make a capital contribution or to return money or property paid or distributed in breach of the Partnership Agreement.
 
 
 
 
These matters will require the affirmative vote of a majority of Limited Partnership Interests.
 
 
 
Dissolution:
Upon dissolution, after payment of all debts and liabilities of the Partnership, the net assets will be distributed first to the Partners in accordance with positive capital accounts.
 
 
 
Transfers of Interest &
Assignments:
Transfers of Limited Partnership Interests are subject to restrictions, including the consent of the General Partner.
 
 
 
Management Fees:
The General Partner will receive an annual Management Fee of $________  adjusted for inflation based on the CPI Index and payable quarterly in advance. The Management Fee will cover all expenses incurred by the General Partner in providing its services to the Partnership, including the costs and expenses of its employees in administering the Partnership. Expenses borne by the General Partner will include, but not be limited to, compensation of legal advisors, accountants, consultants, and professional and clerical employees, and office overhead.
 
 
 
Organizational Expenses:
The Partnership will be responsible for expenses incurred in its organization, including legal and accounting fees, brokers and finders fees and other out-of-pocket expenses incurred by the General Partner. The General Partner and its affiliates will not receive any such fees, but will be reimbursed for the allowable expenses paid by the General Partner, up to a maximum of $________ .
 
 
 
Term of  
Partnership:
________  years, with options to extend for up to ________  consecutive one-year periods with the consent of the General Partner and a majority in interest of the Limited Partners.
 
 
 
 
 
 
 
 
 

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