Letter of Intent Template for Buying a Business

This non-binding letter of intent (this "Letter") sets out the terms on which [Buyer name(s)] and/or assigns ("Buyer") proposes to purchase the assets of [Legal name of the business] ("Seller").

Assets included

The purchase includes the following assets of Seller, free and clear of all liens and encumbrances:

• Furniture, fixtures and equipment
• Goodwill
• General intangibles, including the business name, phone numbers, website and customer lists

The purchase excludes cash, securities and bank accounts, and any asset not listed above.

Accounts receivable are excluded and remain with Seller.

Purchase price and payment

The purchase price is [Purchase price], payable as follows:

• At closing: [Paid at closing] in certified funds, from Buyer's funds and/or SBA financing. The purchase is contingent on Buyer obtaining that financing.

Buyer and Seller will agree on the allocation of the purchase price among the assets before closing.

Due diligence and exclusivity

For [Due diligence and exclusivity period (days)] days after this Letter is signed, Seller will give Buyer and its advisors reasonable access to the facilities, financial and accounting records, tax returns, material contracts, legal records, key employees, customers and suppliers of the business, so that Buyer can complete due diligence and obtain financing. The Purchase Agreement will be contingent on Buyer being satisfied with its due diligence.

During that period, as long as Buyer is working in good faith toward a Purchase Agreement, Seller will not solicit, negotiate or accept another offer for the business.

Conduct of the business

While this Letter is in effect, Seller will run the business in the ordinary course and will not take any action that would materially reduce the value of the business or its assets.

Closing

Closing will take place at a date and time agreed by Buyer, Seller and the other parties to the transaction, with a target closing date of [Target closing date].

Transition

Seller, or an agent of Seller, will remain available to the business for up to [Seller transition period (months)] months after closing and will make best efforts to transition customers, suppliers and employees to Buyer.

Non-compete

Seller will enter into a non-compete agreement on terms agreed before the Purchase Agreement is signed.

Expenses

Buyer and Seller will split the cost of preparing the Purchase Agreement. Otherwise, each will pay its own costs, including legal, accounting and other professional fees. Buyer is responsible for all costs of its financing. Seller is responsible for any broker fees it owes.

Confidentiality

Buyer and Seller will keep the terms of this Letter, and all information exchanged under it, confidential, except as shared with their advisors and lenders for the purpose of this transaction.

Termination

This Letter ends on the earliest of: the signing of the Purchase Agreement, the written agreement of Buyer and Seller, or the end of the due diligence period if no Purchase Agreement has been signed by then.

Non-binding

This Letter is non-binding. It reflects the parties' intentions only and does not create any obligation, except the exclusivity terms in the section titled Due diligence and exclusivity and the section titled Confidentiality, which are binding. No obligation to complete the transaction exists unless and until a Purchase Agreement is signed and delivered by both parties.

Governing law

This Letter is governed by the laws of the State of [State law that governs the letter].

Response

Buyer requests a response to this Letter within [Days for the seller to respond] business days of receipt. If these terms are acceptable, please sign and return a copy.