This Letter of Intent ("LOI") is submitted by [BUYER FULL NAME] ("Buyer"), to [SELLER FULL NAME] ("Seller"), regarding Buyer's proposal to acquire the business operating under the name [BUSINESS NAME] (the "Business"), including substantially all of its assets, intellectual property, customer relationships, and going-concern value, on the terms and subject to the conditions set forth herein.
This LOI is intended to express the mutual interest of Buyer and Seller in proceeding toward a definitive transaction and is not intended to create binding legal obligations, except as expressly stated in Sections 6 (Exclusivity), 7 (Confidentiality), and 10 (Governing Law).
Buyer proposes to acquire the Business for a total purchase price of [PURCHASE PRICE] (the "Purchase Price"), payable as follows:
The Purchase Price is subject to adjustment based on the results of Buyer's due diligence review, including verification of revenue, Seller's Discretionary Earnings (SDE), and net operating cash flows for the trailing twelve (12) and thirty-six (36) month periods. The implied acquisition multiple is approximately [X.Xx SDE / EBITDA].
Within [5 / 7 / 10] business days following mutual execution of this LOI, Buyer shall deposit an earnest money deposit of [DEPOSIT AMOUNT — typically 1–3% of purchase price] (the "Deposit") into escrow with a mutually agreed-upon third-party escrow agent (the "Escrow Agent").
The Deposit shall be applied toward the Purchase Price at Closing. In the event Buyer terminates this LOI during the Due Diligence Period for any reason, or if Buyer's SBA financing is not approved through no fault of Buyer (see Section 4), the Deposit shall be returned to Buyer in full within five (5) business days. In the event Buyer fails to proceed to Closing for reasons other than those set forth herein, Seller shall be entitled to retain the Deposit as liquidated damages, which the parties agree represents a reasonable estimate of Seller's damages in such event.
Buyer shall have [30 / 45 / 60] calendar days following the date of mutual execution of this LOI (the "Due Diligence Period") to conduct a thorough review of the Business, including but not limited to:
Seller agrees to provide Buyer with reasonable access to the Business's books, records, personnel (if any), and systems during the Due Diligence Period. Buyer may terminate this LOI for any reason or no reason during the Due Diligence Period by delivering written notice to Seller, in which case the Deposit shall be returned pursuant to Section 2.
This transaction is contingent upon Buyer obtaining a commitment for financing through the SBA 7(a) loan program (the "Financing Contingency"). Buyer agrees to submit a complete loan application to an SBA Preferred Lender Partner ("PLP") within [10] business days of the expiration of the Due Diligence Period and to diligently pursue approval thereafter.
In the event Buyer is unable to obtain SBA financing approval within [30] calendar days following submission of a complete lender package (the "Financing Deadline"), Buyer may terminate this LOI by providing written notice to Seller, and the Deposit shall be returned to Buyer in full. The Financing Contingency shall be deemed waived upon Buyer's receipt of an SBA loan authorization or written commitment letter from the lender.
The proposed transaction shall be structured as an [Asset Purchase / Stock Purchase]. In the case of an asset purchase, the acquired assets shall include all intellectual property, domain names, website content, customer lists, social media accounts, email lists, software, goodwill, trade names, and all other intangible assets used in the operation of the Business, as enumerated in the definitive Asset Purchase Agreement.
Excluded assets shall include [cash on hand, accounts receivable pre-closing, or other agreed exclusions], unless otherwise agreed. Seller shall retain all pre-closing liabilities, trade payables, and tax obligations accrued prior to the Closing Date, unless otherwise specified in the definitive agreement.
In consideration of Buyer's investment of time and resources in pursuing this acquisition, and as an inducement to Buyer to proceed, Seller agrees that for a period of thirty (30) calendar days following the date of mutual execution of this LOI (the "Exclusivity Period"), Seller shall not, and shall cause its agents, brokers, and representatives not to:
This Exclusivity provision shall be binding upon execution and shall survive any termination of the non-binding provisions of this LOI during the Exclusivity Period. The Exclusivity Period may be extended by mutual written consent of both parties.
Each party agrees to keep confidential all non-public information disclosed by the other party in connection with this potential transaction, including financial data, customer information, operational processes, and the existence and terms of this LOI (collectively, "Confidential Information"). Neither party shall disclose Confidential Information to any third party without the prior written consent of the disclosing party, except (a) to such party's advisors, attorneys, and lenders who have a need to know in connection with the transaction and are bound by equivalent confidentiality obligations, or (b) as required by applicable law or court order.
The confidentiality obligations of this Section 7 shall survive the termination or expiration of this LOI for a period of two (2) years.
As a material inducement to Buyer's execution of this LOI, Seller represents, warrants, and agrees that during the period between execution of this LOI and Closing:
Subject to the satisfaction of all conditions, including completion of due diligence and receipt of SBA loan authorization, the parties intend to close the transaction (the "Closing") no later than [TARGET CLOSING DATE — typically 60–90 days from execution]. At Closing, Seller shall deliver all assets, accounts, credentials, and documentation necessary to transfer full operational control of the Business to Buyer.
Seller agrees to provide reasonable transition assistance for a period of [30 / 60 / 90] days following Closing, at no additional cost to Buyer, including introductions to key contacts, explanation of operational processes, and assistance with platform and account transfers. Extended consulting arrangements may be negotiated separately.
The parties intend to negotiate and execute a definitive Asset Purchase Agreement (or Stock Purchase Agreement, as applicable) and related transaction documents that will constitute the legally binding agreement between the parties. Neither party is obligated to proceed with the transaction unless and until a definitive agreement is fully executed by both parties.
This LOI shall be governed by and construed in accordance with the laws of the State of [STATE], without regard to its conflict of law provisions. Any dispute arising under or related to the binding provisions of this LOI shall be resolved by binding arbitration or in the state and federal courts of [COUNTY, STATE].
This LOI constitutes the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior discussions and agreements. This LOI may be executed in counterparts, including electronic signatures (e.g., DocuSign), each of which shall be deemed an original. This LOI may only be modified by a written instrument signed by both parties. If any provision of the binding portions of this LOI is found unenforceable, the remaining provisions shall continue in full force and effect.
The parties indicate their agreement to proceed in good faith toward the proposed transaction on the general terms set forth above by executing this Letter of Intent as of the date first written above.