Simple Letter of Intent Template

This letter sets out the main terms on which the Buyer proposes to buy certain assets of the Business from the Seller. In this letter, the "Assets" means the assets described in the section titled "The Proposed Asset Purchase," and the "Proposed Transaction" means the Buyer's purchase of the Assets from the Seller on the terms described in this letter.

The "Definitive Agreement" means the final, detailed asset purchase agreement that the parties may negotiate and sign to complete the Proposed Transaction, together with any related transfer documents.

This letter is a framework for negotiation. It shows the parties' current shared understanding and gives them a starting point for preparing the Definitive Agreement.

Apart from the specific terms listed as binding in the section titled "Binding and Non-Binding Terms," this letter is not a contract to buy or sell anything, and neither party is required to complete the Proposed Transaction.

The terms described in this letter are based on the information the Seller has given the Buyer so far. The Buyer may revise its proposal if due diligence or later information shows facts different from what the Buyer has been told.

If the Seller agrees with the terms of this letter, the Seller should sign and return a copy to the Buyer by [date]. If the Buyer does not receive a signed copy by then, this proposal will lapse automatically.

Before signing the Definitive Agreement, the Buyer intends to carry out a full review of the Business and the Assets. This review may cover financial, legal, tax, operational, commercial, environmental, employment, technical, and intellectual property matters, along with any other area the Buyer considers relevant.

The parties expect that the Seller will give the Buyer and its advisors reasonable access, during normal business hours and on reasonable notice, to the Seller's books, records, contracts, facilities, equipment, and key personnel related to the Business and the Assets.

The parties expect that the Seller will answer the Buyer's questions promptly, fully, and accurately, and will provide copies of requested documents through a secure data room or another method the Buyer approves.

The Buyer expects to complete its due diligence within [number] days after the Seller gives the Buyer access to the requested materials, while keeping within the deadline set out in the section titled "Timeline and Definitive Agreement."

The Buyer alone will decide whether the results of its due diligence are satisfactory. Its decision may take into account any factor it considers relevant.

If due diligence uncovers liabilities, defects, or other issues, the Buyer may propose changes to the price, payment terms, list of Assets, or other terms, or may decide not to go ahead with the Proposed Transaction.

No due diligence carried out by the Buyer will limit or reduce any statements, promises, or protections the Seller gives in the Definitive Agreement.

The Buyer proposes to buy, and the Seller proposes to sell, the following Assets used in or related to the Business: [list of asset categories, for example equipment, inventory, customer lists, contracts, intellectual property, domain names, permits, goodwill, and records].

The Assets will not include the following excluded assets, which will stay with the Seller: [list of excluded assets, for example cash, bank accounts, tax refunds, corporate records, and specified contracts].

The Buyer will not take on any debts, obligations, or liabilities of the Seller or the Business, whether they are known or unknown, except for the specific obligations listed in the Definitive Agreement that arise after the closing under contracts the Buyer has expressly agreed to take over: [list of assumed obligations, if any].

The Assets will be transferred to the Buyer free and clear of all liens, security interests, claims, charges, and other encumbrances.

The parties expect that the Seller will obtain any third-party consents needed to transfer to the Buyer the contracts, licenses, and permits included in the Assets.

The Buyer may, but is not required to, offer employment to some or all of the Seller's employees who work in the Business, on terms the Buyer decides. The Seller will remain responsible for all wages, benefits, severance, and other employee obligations arising up to the closing, and for any employees the Buyer does not hire.

The parties expect that for a period of [number] months after the closing, the Seller will provide reasonable transition help to support a smooth handover of the Business, including introductions to customers and suppliers and training of the Buyer's personnel, at no extra cost to the Buyer.

The parties expect that the Seller and its owners will agree in the Definitive Agreement not to compete with the Business, or solicit its customers or employees, for [number] years after the closing within [geographic area].

The total proposed purchase price for the Assets is [currency] [amount] (the "Purchase Price"), on a cash-free and debt-free basis.

The parties expect that the Purchase Price will be paid as follows: [currency] [amount] in cash at closing, and [currency] [amount] (the "Holdback Amount") retained by the Buyer or placed with a mutually agreed escrow agent for [number] months after closing.

The Holdback Amount will be available to cover any claims the Buyer may have under the Definitive Agreement, including claims for breaches of the Seller's statements and promises and for any liabilities that stay with the Seller. Any remaining Holdback Amount not subject to a pending claim will be released to the Seller at the end of the holdback period.

The Purchase Price assumes that the inventory and working capital transferred at closing will be at least [currency] [amount]. The Purchase Price will be adjusted after closing, up or down, to reflect any difference, using a method set out in the Definitive Agreement.

Any amounts needed to pay off liens or debts secured on the Assets will be paid from the Purchase Price at closing directly to the relevant creditors, so that the Assets are delivered free of encumbrances.

The Buyer will prepare the allocation of the Purchase Price among the Assets for tax and accounting purposes, and the Seller will review it in good faith and follow it in its own filings.

The Seller will be responsible for all taxes arising from the sale of the Assets and from operating the Business up to the closing. Any transfer, sales, stamp, or similar taxes on the transfer of the Assets will be paid by [the Seller / the parties equally].

All payments to the Seller will be made by bank transfer to an account the Seller designates in writing.

The parties expect that the Buyer's obligation to complete the Proposed Transaction will depend on the following conditions being met or waived by the Buyer, together with any additional conditions set out in the Definitive Agreement.

The Buyer must have completed its due diligence with results it finds satisfactory in its sole judgment.

The parties must have negotiated and signed a Definitive Agreement in a form satisfactory to the Buyer.

All required government, regulatory, and third-party approvals, consents, and notices for transferring the Assets must have been obtained or given, on terms acceptable to the Buyer.

There must have been no material adverse change in the Business, the Assets, or their value, operations, or prospects between the Effective Date and the closing.

The Buyer's [board of directors / management] must have approved the Proposed Transaction.

The Buyer must have obtained financing for the Proposed Transaction on terms acceptable to it, if the Buyer decides to use outside financing.

The Seller's statements and promises in the Definitive Agreement must be true and fulfilled at closing, and key employees identified by the Buyer, namely [names or roles], must have accepted employment with the Buyer, if the Buyer chooses to make such offers.

The parties intend to negotiate in good faith with the aim of signing the Definitive Agreement within 60 days after the Effective Date (the "Signing Deadline").

The Buyer's legal counsel will prepare the first draft of the Definitive Agreement and send it to the Seller within [number] days after the Buyer has completed enough due diligence to do so.

The parties expect that the Definitive Agreement will include the terms set out in this letter, along with customary statements and promises by the Seller about the Business and the Assets, protection of the Buyer against losses (indemnities), closing deliveries, and other terms usual for an asset purchase of this kind.

The parties are aiming for closing to take place on or before [target closing date], or on another date the parties agree in writing.

The parties will keep each other updated on progress and will hold regular calls or meetings, at least [frequency], to discuss open issues.

If the Definitive Agreement has not been signed by the Signing Deadline, this letter will end as described in the section titled "Ending This Letter," unless the parties agree in writing to extend the Signing Deadline.

This letter is a non-binding expression of the parties' current intentions, except for the terms listed as binding below.

The following sections are legally binding on both parties: "Binding and Non-Binding Terms," "Exclusivity Period," "Confidentiality," "Costs and Expenses," "Ending This Letter," and "Governing Law and Dispute Resolution" (the "Binding Terms").

All other sections, including "Purpose of This Letter," "Due Diligence," "The Proposed Asset Purchase," "Purchase Price and Payment Terms," "Conditions for Completing the Deal," and "Timeline and Definitive Agreement," are not binding and do not create any legal obligation on either party.

No binding agreement to buy or sell the Assets will exist unless and until the parties sign the Definitive Agreement. Words such as "will," "must," or "agree" used in non-binding sections describe intentions only and do not make those sections binding.

Except as limited by the Binding Terms, either party may stop negotiating at any time, for any reason or no reason, without any liability to the other party.

Neither party may claim that a binding agreement to complete the Proposed Transaction was formed by conduct, partial performance, oral statements, or the exchange of drafts.

The Binding Terms are the only enforceable obligations under this letter, and they will apply even if the Proposed Transaction does not go ahead.

From the Effective Date until the end of the Signing Deadline (the "Exclusivity Period"), the Seller will deal exclusively with the Buyer regarding any sale of the Business or the Assets.

During the Exclusivity Period, the Seller will not, and will make sure that its owners, directors, officers, employees, affiliates, brokers, and advisors do not, directly or indirectly: seek, encourage, or respond to any offer or inquiry from anyone other than the Buyer about buying all or a significant part of the Business or the Assets, or any ownership interest in the Seller; give information to anyone for that purpose; or negotiate or enter into any agreement or understanding about such a deal.

The Seller will immediately end any existing discussions with third parties about any deal covered by this section.

If the Seller receives any offer, inquiry, or approach covered by this section during the Exclusivity Period, the Seller will tell the Buyer in writing within [number] business days, including the main terms of the approach. The Seller does not have to disclose the identity of the third party if a prior confidentiality obligation prevents it.

During the Exclusivity Period, the Seller will run the Business in the ordinary way, keep the Assets in good condition, and not sell, transfer, license, or put any lien on any of the Assets outside the normal course of business without the Buyer's prior written consent.

The parties may extend the Exclusivity Period by written agreement, and any extension of the Signing Deadline agreed in writing will extend the Exclusivity Period automatically for the same length of time, unless the parties agree otherwise in writing.

If the Seller breaches this section, the Seller will reimburse the Buyer for all reasonable out-of-pocket costs the Buyer has incurred in connection with the Proposed Transaction, including legal, accounting, and advisory fees. This reimbursement is in addition to any other remedy available to the Buyer.

The Seller agrees that money damages may not be enough to remedy a breach of this section, and that the Buyer may seek a court order to stop or prevent a breach without having to post a bond or prove actual damages, to the extent the law allows.

"Confidential Information" means all non-public information, in any form, that one party (the "Disclosing Party") or its representatives give to the other party (the "Receiving Party") or its representatives in connection with the Proposed Transaction. This includes financial data, customer and supplier information, business plans, pricing, know-how, trade secrets, due diligence materials, and the existence and terms of this letter and the parties' negotiations.

The Receiving Party will use Confidential Information only to evaluate, negotiate, and complete the Proposed Transaction, and will keep it confidential using at least the same care it uses for its own confidential information, and never less than reasonable care.

The Receiving Party may share Confidential Information with its directors, officers, employees, affiliates, actual or potential financing sources, and professional advisors who need to know it for the Proposed Transaction, as long as they are told it is confidential and are bound by confidentiality duties at least as protective as this section. The Receiving Party is responsible for any breach by these people.

Confidential Information does not include information that: is or becomes public through no fault of the Receiving Party or its representatives; was lawfully known to the Receiving Party before disclosure; is lawfully received from a third party with no duty of confidentiality; or is developed independently without using the Disclosing Party's Confidential Information.

If the Receiving Party is required by law, regulation, or court order to disclose Confidential Information, it will, where legally allowed, give the Disclosing Party prompt written notice so that the Disclosing Party can seek protection, and it will disclose only what is legally required.

Neither party will make any public announcement or statement about the Proposed Transaction without the other party's prior written consent, except as required by law.

If the Proposed Transaction does not go ahead, each party will, at the other party's written request, promptly return or destroy the other party's Confidential Information. Each party may keep copies required by law or stored in routine electronic backups, which will remain subject to this section.

The obligations in this section will last for [number] years after this letter ends, and for trade secrets, for as long as they remain trade secrets under applicable law.

Each party will pay its own costs and expenses related to this letter, due diligence, and the negotiation, preparation, and completion of the Definitive Agreement and the Proposed Transaction, including fees of its lawyers, accountants, and other advisors.

The Seller alone will be responsible for any fees or commissions owed to any broker, finder, or investment banker that the Seller or its affiliates have hired or dealt with in connection with the Proposed Transaction.

The Buyer alone will be responsible for any fees or commissions owed to any broker, finder, or investment banker that the Buyer has hired in connection with the Proposed Transaction.

The Buyer will not owe the Seller any break-up fee, termination fee, or other payment if the Buyer decides not to go ahead with the Proposed Transaction for any reason.

Nothing in this section limits the Seller's duty to reimburse the Buyer's costs under the section titled "Exclusivity Period," or the allocation of taxes and other costs agreed in the Definitive Agreement.

This letter will end on the earliest of the following: the date the parties sign the Definitive Agreement; the date the parties agree in writing to end this letter; the date the Buyer gives the Seller written notice that it is ending negotiations; or the Signing Deadline, if the Definitive Agreement has not been signed by then and the parties have not agreed in writing to extend it.

The Buyer may end this letter at any time by written notice to the Seller, for any reason or no reason.

The Seller may end this letter before the Signing Deadline only if the Buyer materially breaches a Binding Term and does not fix the breach within [number] days after receiving written notice from the Seller describing it.

When this letter ends, the obligations under the section titled "Exclusivity Period" will also end, except for any accrued reimbursement obligations and any breaches that occurred before the end date.

The sections titled "Binding and Non-Binding Terms," "Confidentiality," "Costs and Expenses," "Ending This Letter," and "Governing Law and Dispute Resolution" will continue to apply after this letter ends.

Ending this letter does not release either party from liability for any breach of the Binding Terms that happened before it ended.

If the parties sign the Definitive Agreement, it will replace this letter in full, except that the confidentiality obligations in this letter will continue to apply unless the Definitive Agreement expressly replaces them.

This letter, and any dispute arising from or related to it, will be governed by the laws of [jurisdiction], without applying any conflict-of-law rules that would lead to the laws of another place.

If a dispute arises under this letter, senior representatives of the parties will first try in good faith to settle it through direct talks for [number] days after one party gives the other written notice of the dispute.

If the dispute is not settled within that time, either party may bring it exclusively before the courts located in [city / venue], and each party agrees to the jurisdiction of those courts.

Despite the previous clauses, either party may seek urgent court orders, including injunctions, in any court with proper authority to protect its rights under the sections titled "Exclusivity Period" or "Confidentiality."

All notices under this letter must be in writing and sent by hand delivery, recognized courier, or email to the addresses shown in the signature section, or to another address a party designates by notice. A notice takes effect when received, or on the next business day if received outside business hours.

The Binding Terms are the entire binding agreement between the parties about their subject matter and replace any earlier discussions on those subjects. This letter may be changed or waived only in a written document signed by both parties.

The Seller may not assign this letter without the Buyer's prior written consent. The Buyer may assign its rights under this letter to any of its affiliates, or to an entity it forms to complete the Proposed Transaction, by written notice to the Seller.

If any part of this letter is found invalid or unenforceable, the rest will remain in effect, and the invalid part will be applied to the maximum extent the law allows.

This letter may be signed in counterparts, including by electronic signature or by exchanging scanned signed copies, and all counterparts together will form one document.