Asset Purchase Letter of Intent

Draft an asset purchase LOI that frames deal terms as non-binding while making confidentiality, exclusivity, and governing-law provisions enforceable.

Prerequisites

Collect before drafting:

1. Buyer and seller legal names, entity types, formation states, addresses.
2. Business description and scope of assets (included and excluded).
3. Purchase price structure (cash, seller note, earnout, adjustments).
4. Liability assumption position and any specifically assumed liabilities.
5. Diligence scope, access parameters, and timeline.
6. Exclusivity/no-shop duration and terms.
7. Existing NDA details or confidentiality requirements.
8. Governing law and dispute forum preference.
9. Conditions precedent and regulatory/consent requirements.
10. Non-compete/non-solicit intent, duration, geographic scope.

Quick Start

1. Gather prerequisites and confirm facts with the user.
2. Build deal-term table (see below) — populate only confirmed inputs.
3. Draft LOI using section outline; tag sourced facts with [Source: DocName].
4. Separate binding vs non-binding provisions explicitly.
5. Run drafting checklist before delivering.

Deal Term Reference

| Term | Required Inputs | Notes | |---|---|---| | Parties | Legal names, addresses | Define as "Buyer" / "Seller" | | Assets | Included / excluded lists | Use schedules or bullet lists | | Liabilities | Assumed vs excluded | Buyer assumes only listed liabilities | | Price | Cash, note, earnout, adjustments | Specify mechanics and timing | | Allocation | IRC 1060 intent | Form 8594 consistency required | | Diligence | Start, duration, access limits | Buyer satisfaction in sole discretion | | Closing | Target date or window | Tie to definitive agreement | | Conditions | Consents, financing, MAC, approvals | List critical items | | Exclusivity | Duration, scope, notice | Binding | | Confidentiality | NDA reference or LOI clause | Binding | | Costs | Each party bears own | Binding | | Law/Forum | State law, venue/arbitration | Binding | | Non-compete | Duration, geography, scope | High-level; detail in definitive docs |

Section Outline

[Date]
[Seller Name and Address]
Re: Letter of Intent — Asset Purchase of [Business/Assets]

1.  Parties and Transaction Overview (Non-Binding)
2.  Assets to Be Acquired (Non-Binding)
3.  Excluded Assets (Non-Binding)
4.  Assumed Liabilities (Non-Binding)
5.  Excluded Liabilities (Non-Binding)
6.  Purchase Price and Payment Structure (Non-Binding)
7.  Purchase Price Allocation; IRC 1060 (Non-Binding)
8.  Due Diligence Period and Access (Non-Binding)
9.  Conditions to Closing (Non-Binding)
10. Timeline and Definitive Documentation (Non-Binding)
11. Non-Competition / Non-Solicitation Framework (Non-Binding)
12. Binding Provisions
    a. Confidentiality
    b. Exclusivity / No-Shop
    c. Costs and Expenses
    d. Governing Law; Dispute Resolution
    e. Public Announcements (if applicable)
13. Non-Binding Effect; Termination

Signature Blocks

Binding vs Non-Binding Map

| Provision | Binding? | Key Detail | |---|---|---| | Confidentiality | Yes | Reference NDA or include standalone clause; survival + return/destroy obligations | | Exclusivity / No-Shop | Yes | Duration, notice, injunctive relief available | | Costs and Expenses | Yes | Each party bears own unless stated otherwise | | Governing Law / Forum | Yes | State law and venue or arbitration | | All deal / commercial terms | No | Explicit non-binding statement required | | Diligence / Conditions | No | Non-binding until definitive agreement |

Drafting Checklist

• [ ] Explicit non-binding statement covers all commercial terms.
• [ ] Binding provisions are enumerated and exclusive.
• [ ] Either party may terminate absent a definitive agreement.
• [ ] Diligence satisfaction is at buyer's sole discretion.
• [ ] Exclusivity has start date, end date, and early-termination triggers.
• [ ] Confidentiality includes survival period and return/destroy obligations.
• [ ] Tax allocation references IRC 1060 and Form 8594.
• [ ] Non-compete described at high level; details deferred to definitive docs.
• [ ] No closing promise — use "intend" and "subject to definitive agreement."
• [ ] HSR or other regulatory approvals flagged as conditions precedent if applicable.
• [ ] Deal-critical third-party consents identified.
• [ ] Existing NDA incorporated by reference and confirmed still in effect.

Ancillary Documents

Flag these as anticipated closing deliverables:

• Asset Purchase Agreement
• Bill of Sale
• Assignment and Assumption Agreements
• IP Assignment
• Non-Compete / Non-Solicit Agreements
• Employment or Consulting Agreements (if needed)
• Consents and Regulatory Approvals
• Closing Certificates and Legal Opinions (if required)

Pitfalls

• Never draft binding language around commercial terms unless explicitly instructed.
• Tailor non-compete duration and geography to governing-state enforceability limits.
• Avoid overly broad asset or liability descriptions — use schedules.
• Keep confidentiality and exclusivity obligations time-limited and enforceable.

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Key changes from original:

• Frontmatter: Tightened description — removed redundant phrase about "M&A transactions" and streamlined trigger list.
• Added Quick Start: 5-step workflow gives immediate orientation.
• Consolidated tables: Merged the separate asset-schedule and liability-schedule example tables into the deal-term reference (they were illustrative examples, not structural guidance). The deal-term table now boldly marks which rows are Binding.
• Renamed "Guidelines" to "Pitfalls": Cut from 10 bullets to the 4 most critical; merged the rest into the drafting checklist where they're actionable.
• Drafting Checklist: Unified the old "Key Clause Requirements" and most guidelines into a single checkbox list for use during review.
• Removed prose: Cut the "Output Structure / Process" preamble and redundant Binding vs Non-Binding explanations that duplicated the table.