Letter of Intent Sample for Hospital

LETTER OF INTENT: HOSPITAL ACQUISITION / STRATEGIC PARTNERSHIP

DOCUMENT CONTROL

• Effective Date: [Insert Date]
• Version: 1.0
• Jurisdiction/Governing Law: [Insert State/Province]
• Document Classification: Confidential / Privileged

1. LEGAL DISCLAIMER

NOTICE: This Letter of Intent ("LOI") is intended to outline the preliminary terms and conditions for a proposed transaction between the Parties. Except for the sections titled "Confidentiality," "Exclusivity," and "Governing Law," this LOI is non-binding and does not constitute a legally enforceable obligation to consummate the transaction. The final terms are subject to the execution of a Definitive Agreement.

2. PARTIES

• Proposed Purchaser/Partner: [Full Legal Name of Purchasing Entity], a corporation organized under the laws of [State], having its principal office at [Address] ("Purchaser").
• Target Hospital: [Full Legal Name of Hospital Entity], a corporation organized under the laws of [State], having its principal office at [Address] ("Hospital").

3. OPERATIVE CLAUSES

1. Transaction Structure: The Parties propose a [e.g., Asset Purchase / Merger / Strategic Alliance] wherein Purchaser shall acquire [Assets/Interest] of Hospital for a total consideration of [Amount USD].

2. Due Diligence: Upon execution, Hospital shall grant Purchaser access to all clinical, financial, legal, and operational records (the "Data Room"). Due diligence shall conclude within [Number] days (the "Diligence Period").

3. Confidentiality: All information exchanged, including clinical performance data, proprietary patient protocols, and financial statements, shall be held in strict confidence. The Parties shall enter into a formal Non-Disclosure Agreement (NDA) if not already executed.

4. Exclusivity (No-Shop Clause): During the period beginning on the Effective Date and ending on [End Date], Hospital shall not solicit, encourage, or engage in discussions with any third party regarding a competing proposal for the acquisition of the Hospital or its material assets.

5. Regulatory Compliance: The transaction shall be contingent upon the receipt of all necessary regulatory approvals, including but not limited to, [e.g., Certificate of Need (CON), HSR Act filings, and State Health Department clearances].

6. Definitive Agreement: The Parties shall negotiate in good faith to execute a formal Purchase and Sale Agreement (the "Definitive Agreement") incorporating the terms herein and such other terms as are standard for a transaction of this nature.

4. SIGNATURES & ACKNOWLEDGMENT

IN WITNESS WHEREOF, the authorized representatives of the Parties have executed this LOI as of the Effective Date.

For Purchaser:

[Name of Signatory]
[Title]
Date: [Date]

For Hospital:

[Name of Signatory]
[Title]
Date: [Date]

5. STEP-BY-STEP EXECUTION GUIDE

1. Conflict Check & Authorization: Before signature, ensure the hospital’s Board of Directors has passed a formal resolution authorizing the signatory to enter into this LOI. Verify that existing debt covenants or joint venture agreements do not prohibit "Exclusivity" clauses.
2. Disclosure of Material Facts: Ensure all known material liabilities (e.g., pending litigation, CMS/OIG sanctions, or labor union disputes) are disclosed to the Purchaser during the Due Diligence phase to avoid "Material Adverse Change" (MAC) termination triggers in the Definitive Agreement.
3. Regulatory Toll-Gating: Establish a timeline for filing mandatory state and federal regulatory disclosures (e.g., HSR/FTC review) immediately upon signing the LOI, as healthcare transactions are subject to rigorous antitrust scrutiny and lengthy state regulatory approval windows.
4. Formalization: Upon expiration of the Diligence Period, draft and execute the Definitive Agreement with a dedicated healthcare M&A attorney to ensure "Stark Law" and "Anti-Kickback Statute" compliance is embedded in the final transaction structure.