Asset purchase LOI

Date: [DATE]
Buyer: [BUYER ENTITY NAME, A DELAWARE LLC TO BE FORMED] ("Buyer")
Seller: [SELLER LEGAL ENTITY NAME], a [STATE] [ENTITY TYPE] ("Seller")
Target: The business operated by Seller under the trade name [TARGET BUSINESS DBA] (the "Business")

This Letter of Intent ("LOI") sets forth the principal terms under which Buyer proposes to acquire substantially all of the operating assets of the Business from Seller (the "Transaction"). Except as expressly set forth in Section 11 below, this LOI is not legally binding on either party.

1. Transaction structure

Buyer will acquire from Seller substantially all of the assets used in the operation of the Business, including but not limited to: customer lists and contracts, inventory, equipment and fixed assets, intellectual property, books and records, and goodwill. Buyer will assume only those liabilities specifically identified in the definitive Asset Purchase Agreement ("APA"). Buyer will not assume any indebtedness, transaction expenses, taxes, or pre-closing obligations of Seller unless expressly identified.

2. Purchase price

The aggregate purchase price ("Purchase Price") will be [$0,000,000], subject to the working-capital adjustment in Section 3 below, and will be paid as follows at closing:

• Cash at closing: [$0,000,000] (financed in part through an SBA 7(a) loan)
• Buyer equity injection: [$0,000,000]
• Seller financing (if applicable): [$0,000,000] per Section 4

Purchase Price is on a cash-free, debt-free basis: Seller will retain all cash on the balance sheet at closing and will pay off all indebtedness for borrowed money prior to or at closing.

3. Working-capital peg

The Purchase Price assumes the Business is delivered with normalized working capital of [$000,000] (the "Peg"), defined as accounts receivable plus inventory minus accounts payable, computed on a trailing-twelve-month seasonal-trough basis. Working capital delivered above the Peg results in a dollar-for-dollar increase to the Purchase Price; working capital delivered below the Peg results in a dollar-for-dollar decrease. The methodology and computation will be set out in a schedule to the APA.

4. Seller financing (if applicable)

If applicable, Seller will accept a promissory note in the principal amount of [$000,000] ("Seller Note"), bearing interest at [%] per annum, with no payments of principal or interest for twenty-four (24) months from the closing date (full standby), and amortizing over the subsequent [months]. The Seller Note will be subordinated in all respects to Buyer's SBA 7(a) loan.

5. Earnest money

Within five (5) business days of LOI signing, Buyer will deposit [$00,000] into escrow with a mutually-agreed escrow agent ("Earnest Money"). The Earnest Money is refundable to Buyer if the Transaction does not close for any reason other than a material breach by Buyer.

6. Due diligence period

Buyer will have sixty (60) days from LOI signing (the "Diligence Period") to conduct due diligence, including financial (Quality of Earnings), legal, customer, employee, and operational reviews. Seller will provide reasonable access to records, personnel, and facilities, subject to confidentiality. Buyer may terminate this LOI for any reason during the Diligence Period and recover its Earnest Money.

7. Exclusivity

From the date of this LOI through the earlier of (a) execution of a definitive APA, (b) Buyer's written termination of this LOI, or (c) [90] days from LOI signing (the "Exclusivity Period"), Seller and its representatives will not solicit, encourage, or entertain offers, inquiries, or proposals from any other party regarding a sale of the Business or any material portion of its assets. Seller will promptly notify Buyer of any unsolicited inquiries.

8. Closing conditions

Closing will be conditioned on:

• Buyer's receipt of an SBA 7(a) loan commitment on terms reasonably acceptable to Buyer
• Completion of due diligence to Buyer's reasonable satisfaction
• Receipt of all required third-party consents (landlord, key customers, key vendors)
• No material adverse change in the Business
• Execution of definitive APA, employment or transition agreements with key personnel, and other ancillary agreements

9. Definitive agreements

The parties will negotiate in good faith to execute a definitive APA within thirty (30) days of LOI signing. The APA will contain customary representations, warranties, indemnification provisions, and covenants for a transaction of this size and type.

10. Confidentiality

Each party agrees to keep confidential the existence and terms of this LOI and all information exchanged in connection with the Transaction, except as required by law, lender, or professional advisors bound by duties of confidentiality. This Section 10 is binding on both parties.

11. Binding provisions

Sections 5 (Earnest Money), 7 (Exclusivity), 10 (Confidentiality), 12 (Expenses), and 14 (Governing Law) are legally binding on the parties upon signature. All other provisions are non-binding statements of intent and create no legal obligation until incorporated into a signed definitive agreement.

12. Expenses

Each party will bear its own legal, accounting, and advisory fees, whether or not the Transaction closes.

13. Public announcements

Neither party will make any public announcement regarding the Transaction without the prior written consent of the other party, except as required by law.

14. Governing law

This LOI is governed by the laws of the State of [STATE], without regard to conflict-of-laws principles.

Accepted and agreed:

BUYER: [BUYER ENTITY NAME]
By: ______________________________
Name: [NAME]
Title: [TITLE]
Date: ______________________________

SELLER: [SELLER LEGAL ENTITY]
By: ______________________________
Name: [NAME]
Title: [TITLE]
Date: ______________________________