LOI Funding for Canada

LOI Funding Template for Canada

This document serves as a preliminary agreement outlining the proposed terms and conditions for a funding arrangement under Canadian law. It establishes the framework for negotiations while typically maintaining a non-binding nature, except for specific provisions such as confidentiality and exclusivity. The document addresses key aspects including investment structure, due diligence requirements, conditions precedent, and timeline for completion, all within the context of Canadian federal and provincial regulations governing business transactions and securities.

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What is a LOI Funding?

The LOI Funding agreement is a crucial preliminary document used in Canadian business transactions to outline the proposed terms of a funding arrangement before proceeding to definitive agreements. This document type is particularly relevant when parties need to establish clear parameters for negotiation while maintaining flexibility before final commitment. The LOI Funding agreement typically includes provisions for investment structure, due diligence processes, and key commercial terms, while ensuring compliance with Canadian securities regulations and financial laws. It serves as a roadmap for the transaction, helping parties align their expectations and outline the path to definitive agreements while providing certain binding provisions where necessary, such as confidentiality and exclusivity clauses.

What sections should be included in a LOI Funding?

1. Parties: Identification of all parties involved in the funding arrangement, including full legal names and addresses

2. Background: Context of the funding arrangement, including brief description of the parties and purpose of the intended funding

3. Definitions: Key terms used throughout the LOI that require specific definition for clarity

4. Proposed Investment Structure: Overview of the proposed funding arrangement, including amount, type of funding (equity, debt, etc.), and basic terms

5. Key Terms: Principal commercial terms of the proposed funding, including payment structure, timing, and key conditions

6. Due Diligence: Outline of the due diligence process, timeline, and requirements

7. Conditions Precedent: Key conditions that must be satisfied before the funding arrangement can be finalized

8. Exclusivity: Terms of exclusive negotiation period, if applicable

9. Confidentiality: Provisions regarding the confidential treatment of information exchanged

10. Binding and Non-Binding Provisions: Clear identification of which provisions are binding and which are non-binding

11. Timeline: Expected timeline for completion of definitive agreements and closing

12. Execution: Signature blocks and execution details

What sections are optional to include in a LOI Funding?

1. Break Fee: Terms of any break fee payable if the transaction doesn't proceed, used in larger funding arrangements

2. Regulatory Approvals: Section outlining required regulatory approvals, included when the funding arrangement requires specific regulatory oversight

3. Material Adverse Change: Provisions dealing with significant changes in circumstances, included in more complex arrangements

4. Representations and Warranties: Basic representations about authority to enter into the LOI, included in more formal LOIs

5. Governing Law and Jurisdiction: Specification of applicable law and jurisdiction, included when parties are in different jurisdictions

6. Costs and Expenses: Allocation of costs and expenses, included in larger transactions

7. Public Announcements: Terms regarding public communications about the funding, included when public disclosure may be relevant

What schedules should be included in a LOI Funding?

1. Term Sheet: Detailed summary of key commercial and legal terms of the proposed funding

2. Due Diligence Requirements: List of required due diligence items and documentation

3. Timeline Schedule: Detailed timeline for the transaction including key milestones and deadlines

4. Corporate Information Schedule: Basic corporate information about the parties involved

5. Permitted Disclosures: List of permitted disclosures and authorized recipients of confidential information

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Document Type

Letter of Intent

Cost

Free to use
Relevant legal definitions
Relevant Industries

Technology

Manufacturing

Financial Services

Healthcare

Real Estate

Energy

Infrastructure

Clean Technology

Biotechnology

Mining

Agriculture

Telecommunications

Transportation

Education

Professional Services

Relevant Teams

Legal

Finance

Corporate Development

Investment

Treasury

Compliance

Risk Management

Business Development

Corporate Secretariat

Due Diligence

Executive Leadership

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Investment Director

Corporate Development Manager

Finance Director

Legal Counsel

Investment Manager

Business Development Director

Treasury Manager

Financial Controller

Compliance Officer

Risk Manager

Corporate Secretary

Investment Analyst

Due Diligence Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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