Letter Agreements . . .

are binding contracts that appear in correspondence form. Often, they are used to facilitate the immediate transfer to a company of some portion of a larger financing. Like letters of intent, which are generally binding in only a few particulars, letter agreements often contemplate additional documentation before additional funding is provided. For example, an investor may agree to lend a company $1 million of which $100,000 is needed immediately. This amount can be advanced when the letter agreement is signed while the remaining $900,000 is held pending completion of the final documentation. The $100,000 will be covered by the letter agreement until the longer, final agreements are completed and signed. See: Bridge Loans, Investment Memorandums, Letters of Intent, Financing Agreements.