Letter of Intent Asset Acquisition (US)

OLOpen Legal LibraryUpdated 22 Aug 2026

Letter of Intent for US Asset Acquisition (SME/Startup)

LETTER OF INTENT

(ASSET ACQUISITION — UNITED STATES, SME / STARTUP)

Note: How to use this template: (1) complete Exhibit A (Key Commercial Terms) — every yellow placeholder pulls from there; (2) choose one Option (A, B, C…) where Option blocks appear, and delete the others; (3) review every help box and delete it before sending the final clean letter to the Seller; (4) send on Buyer letterhead — the title block above can be removed if Buyer prefers a pure-letter look.

[buyer letterhead — optional]

[date of letter]

[seller legal name]

[seller mailing address]

Attention: [seller recipient name]

Re: Proposal to Purchase the Assets of the [description of the business] Business of [seller legal name]

Dear [seller recipient name]:

This letter (this "Letter") summarizes the principal terms of a proposal being considered by [buyer legal name] ("Buyer") regarding its possible acquisition of substantially all of the assets, and the assumption of certain specified liabilities, of the [description of the business] business (the "Business") of [seller legal name] ("Seller"). Buyer's possible acquisition of the Business is referred to as the "Transaction," and Buyer and Seller are referred to collectively as the "Parties" and individually as a "Party."

1. ACQUISITION OF ASSETS

1.1 Subject to the terms of this Letter and the satisfaction of the conditions described in Section 4, at the closing of the Transaction (the "Closing") Buyer (either directly or indirectly through one or more wholly owned subsidiaries) would acquire substantially all of the assets, and assume only certain specified liabilities, of the Business (the "Assets"), free and clear of all claims, liens, security interests, and other encumbrances. The specific Assets to be acquired and liabilities to be assumed will be identified in the Definitive Agreement (as defined in Section 3).

Note: An asset acquisition lets Buyer pick and choose which assets and liabilities to take on. Compared with buying the company itself (a stock or equity purchase), it gives Buyer more control over hidden liabilities — but the trade-off is that contracts, licenses, and permits often need to be re-assigned (sometimes with third-party consent), and asset transfer taxes can apply in some states. If you are considering a stock purchase or merger instead, this template is not the right starting point.

Note: Successor-liability flag: in most states the doctrine of successor liability is narrow, but several categories survive an asset sale even when the agreement says otherwise — sales and use tax (most states require a tax clearance certificate or bulk-sale notice), unpaid wages, unemployment insurance contributions, environmental obligations, and product-liability claims involving "mere continuation" of the Business. The Definitive Agreement should allocate these risks expressly.

2. PURCHASE PRICE

2.1 Headline price. The aggregate purchase price for the Assets would be [headline purchase price (usd)] (the "Purchase Price"), payable in cash and subject to adjustment as set out in Section 2.2. The Purchase Price would be paid as follows:

(a) [cash at closing amount] payable to Seller at the Closing; and

(b) [escrow holdback amount] deposited with a mutually agreed escrow agent, held for [escrow holdback period (months)] months following the Closing, to secure Seller's post-Closing obligations under the Definitive Agreement (including indemnification and the working-capital true-up).

Note: Commercial benchmark: SME asset deals typically hold back 7.5%–15% of the headline price in escrow for 12–24 months. Anything below 5% gives Buyer little protection if a hidden liability surfaces; anything above 20% is unusual outside high-risk industries. Earn-outs (deferred consideration tied to post-Closing performance) are not addressed in this template — if you are using one, add a separate clause stating the metric, measurement period, and cap.

2.2 Working capital adjustment. Buyer has calculated the Purchase Price based on information [contained in the information memorandum dated [information memorandum date] / currently known to Buyer] and on the assumption that working capital of the Business at Closing will be [target working capital (usd)]. The Purchase Price payable at Closing would be increased or decreased on a dollar-for-dollar basis to the extent that actual working capital at Closing differs from the target. The mechanics of the working-capital determination would be set out in the Definitive Agreement using one of the following approaches:

Note: Use either Option A or Option B.

Note: Use Option A if the Business has clean, GAAP-consistent financials and both Parties are comfortable with a standard GAAP-based formula. Use Option B if either Party wants tighter control over which line items are in or out of working capital — for example to exclude deferred revenue or include only specified inventory categories. Option B is more common in SME deals because it removes interpretation arguments later.

Option A — GAAP-based formula: Working capital at Closing and any adjustment to the Purchase Price will be calculated in accordance with United States generally accepted accounting principles ("US GAAP"), consistently applied with the historical practice of the Business. The principles governing the calculation will be set out in the Definitive Agreement.

Option B — Agreed schedule (recommended for SME): Working capital at Closing and any adjustment to the Purchase Price will be determined by reference to a closing adjustment schedule prepared in the format and using only those line items, and applying the accounting principles, agreed by Buyer and Seller and attached as a schedule to the Definitive Agreement.

2.3 Other assumptions. The Purchase Price has also been calculated on the basis of the following assumptions: [other pricing assumptions].

3. PROPOSED DEFINITIVE AGREEMENT

3.1 As soon as reasonably practicable after the execution of this Letter, the Parties will begin negotiation of a definitive asset purchase agreement (the "Definitive Agreement") relating to Buyer's acquisition of the Assets, to be drafted by Buyer's counsel. The Definitive Agreement would include (without limitation) the terms summarized in this Letter and such other representations, warranties, conditions, covenants, indemnities, and other terms that are customary for transactions of this kind and not inconsistent with this Letter. The Parties will also begin to negotiate ancillary documents to be drafted by Buyer's counsel, including (i) an escrow agreement, (ii) a bill of sale, (iii) an assignment and assumption agreement, and (iv) such other ancillary documents as the Parties reasonably consider necessary to consummate the Transaction.

Note: Because most of this Letter is non-binding (see Section 15), it is the Definitive Agreement — not this Letter — that creates legally enforceable acquisition obligations. The risk of a vaguely drafted LOI is illustrated by the line of cases starting with Texaco, Inc. v. Pennzoil Co., 729 S.W.2d 768 (Tex. App. 1987) (a $10.5 billion verdict against a third party that interfered with what a Texas jury found to be a binding deal — even though the parties had only signed a memorandum of agreement) and SIGA Technologies, Inc. v. PharmAthene, Inc., 67 A.3d 330 (Del. 2013) and 132 A.3d 1108 (Del. 2015) (a Delaware court awarded expectation damages because a binding agreement to negotiate in good faith was breached). Plain-English takeaway: how this Letter is drafted — and how the Parties behave during negotiation — really does matter, even when both sides assume "it's only an LOI."

4. CONDITIONS TO CLOSING

4.1 Buyer's obligation to close the Transaction would be subject to customary conditions, including:

(a) Buyer's satisfactory completion of legal, financial, tax, employment, IP, environmental, and operational due diligence on the Business;

(b) approval of the Transaction by the board of directors (or other governing body) [buyer approval body] of Buyer and [seller approval body] of Seller, and any required shareholder, member, or partner approvals;

(c) the Parties' execution and delivery of the Definitive Agreement and the ancillary documents contemplated by Section 3;

(d) the receipt of all material regulatory approvals, tax clearances, and third-party consents on terms reasonably satisfactory to Buyer, including in particular [specific material consents];

(e) each of [names of key employees] entering into employment or services arrangements with Buyer on terms reasonably acceptable to Buyer;

(f) Seller (and any of its affiliates that Buyer reasonably designates) entering into restrictive covenants, in a form reasonably acceptable to Buyer, agreeing for [restrictive covenant period (months)] months following Closing not to (i) compete with the Business in [restrictive covenant territory], (ii) solicit any employee of the Business or encourage any such employee to leave such employment, and (iii) interfere with the relationship of the Business with any of its customers or suppliers;

(g) there being no material adverse change in the business, results of operations, condition (financial or otherwise), or assets of the Business between the date of this Letter and the Closing;

(h) no person or governmental authority having commenced or threatened to commence any litigation, proceeding, or investigation, or enacted or proposed any legislation or order, that would prohibit or materially interfere with the proposed Transaction; and

(i) [other conditions to closing].

Note: Restrictive covenants in Section 4(f) are part of the deal price — Buyer is paying not just for assets but for goodwill that would evaporate if the Seller's principals re-opened the same business next door. Two points on sale-of-business non-competes: (a) most US states enforce sale-linked non-competes more readily than employment non-competes, but the restriction must still be reasonable in time, scope, and geography to protect the goodwill being purchased — 2 to 5 years is the standard SME range; (b) California is a special case. California Business and Professions Code Sections 16601 and 16602.5 permit non-competes in connection with the sale of the goodwill of a business or substantially all operating assets, even though Section 16600 (as amended by SB 699 and AB 1076 in 2024) voids non-competes in the employment context. To fit within Section 16601, tie the restriction expressly to the asset sale and the goodwill being transferred.

Note: FTC Non-Compete Rule status: the FTC's 2024 rule banning most employment non-competes was set aside nationwide by the U.S. District Court for the Northern District of Texas in Ryan LLC v. FTC (Aug. 20, 2024) and the FTC appealed. The rule itself preserved a sale-of-business exception. State non-compete law continues to govern in the meantime, so the Section 16601 sale-of-business analysis above remains the relevant test for an asset deal.

Note: HSR Act flag: under Section 7A of the Clayton Act (15 U.S.C. Section 18a), some asset acquisitions trigger pre-merger notification to the FTC and DOJ Antitrust Division and a mandatory 30-day waiting period before Closing. The size-of-transaction and size-of-person thresholds are revised by the FTC each January (the size-of-transaction threshold sits in the low-hundred-million-dollar range as of 2026 — verify the current figure on the FTC's HSR page once the headline price is fixed). A missed HSR filing carries civil penalties per day of non-compliance, so build the analysis into the conditions in Section 4 if either Party's deal value or asset base could trigger filing.

Note: Bulk sales note: most US states have repealed UCC Article 6 (bulk sales). California still has a modified bulk sale law (California Commercial Code Section 6101 et seq.) that requires advance public notice for certain asset sales by retailers, restaurants, and similar businesses. If the governing state is California (or any state that retained its bulk-sale statute), the Definitive Agreement should include a bulk-sale notice mechanic. Non-compliance can leave Buyer subject to claims by Seller's unpaid creditors.

5. DUE DILIGENCE AND ACCESS

5.1 Diligence scope. As soon as reasonably practicable after the execution of this Letter, Buyer (and its officers, employees, accountants, attorneys, and other advisers) will commence a detailed due diligence investigation of the Business. The investigation will include a complete review of the legal, financial, accounting, tax, environmental, intellectual property, employment, data privacy, and information-technology records and agreements of the Business, and any other matters that Buyer's counsel and other advisers reasonably consider relevant.

5.2 Seller cooperation. From and after the execution of this Letter, Seller will:

(a) provide Buyer's officers, employees, representatives, and advisers with reasonable access during normal business hours to the records, key employees, advisers, premises, and operations of the Business for the purpose of Buyer conducting its due diligence investigation;

(b) provide, or make available to, Buyer's officers, employees, representatives, and advisers such information relating to the Business as Buyer may reasonably request to evaluate and assess the Business and the Assets in connection with the Transaction; and

(c) respond to all due diligence inquiries raised by or on behalf of Buyer in a comprehensive, accurate, and timely manner.

5.3 Channel for inquiries. All requests for information or other inquiries made by or on behalf of Buyer in connection with its due diligence investigation will be made via [seller diligence contact name and email]. Without the prior written consent of Seller, neither Buyer nor anyone acting on its behalf will contact or communicate directly with any employee of Seller (other than [permitted direct-contact employees]), or any customer or supplier of the Business, regarding the proposed Transaction, or disclose to any of them the purpose of Buyer's due diligence investigation.

Note: The information Seller shares during due diligence is confidential and continues to be governed by the existing confidentiality agreement referenced in Section 12. If no NDA is in place, sign one now — relying on common-law confidentiality alone is risky.

6. EMPLOYMENT ARRANGEMENTS

6.1 Buyer would offer employment to substantially all of the employees of the Business effective as of the Closing, on terms substantially similar to their existing terms (taken as a whole). Seller will use reasonable efforts to assist Buyer in employing those individuals, including by terminating their employment with Seller effective immediately before the Closing. Buyer's offers of employment will be conditional on Closing and on the relevant individual satisfying Buyer's standard onboarding and background-check requirements.

Note: WARN Act flag: if Buyer does not offer employment to substantially all of the workforce, the federal Worker Adjustment and Retraining Notification Act (WARN Act, 29 U.S.C. Section 2101 et seq.) requires 60 days' advance written notice to affected employees at sites with 100+ employees in qualifying mass-layoff or plant-closing scenarios. Several state "mini-WARN" statutes (notably California, New York, Illinois, and New Jersey) apply at lower thresholds and longer notice periods. Allocate WARN responsibility expressly in the Definitive Agreement when a workforce reduction is on the table.

Note: ERISA flag: assuming any Seller employee benefit plan (401(k), health, severance) brings Buyer into ERISA fiduciary, reporting, and funding obligations. The cleaner default in an SME asset deal is for Buyer to enroll continuing employees in Buyer's own plans and for Seller to retain and wind down its plans separately. State that default expressly in the Definitive Agreement and only deviate where there is a specific commercial reason.

7. INTERIM COVENANTS OF SELLER

7.1 During the period from the signing of this Letter through the earlier of (a) the execution of the Definitive Agreement and (b) the termination of this Letter under Section 9, Seller will: (i) conduct the Business in the ordinary course in a manner consistent with past practice; (ii) maintain the Assets in good working condition (normal wear and tear excepted); (iii) preserve relationships with the Business's employees, customers, suppliers, and other counterparties; and (iv) not, without Buyer's prior written consent, sell, lease, license, or otherwise dispose of any material asset of the Business outside the ordinary course, or enter into, materially amend, or terminate any material contract of the Business.

8. EXCLUSIVITY

8.1 No-shop. In consideration of the time and expense that Buyer has incurred and will incur in connection with the proposed Transaction, Seller agrees that until the earliest of (i) the execution of the Definitive Agreement, (ii) the mutual written agreement of the Parties to terminate this Letter, and (iii) [exclusivity end date] (the "Exclusivity Period"), neither Seller nor any of its representatives, officers, employees, directors, agents, advisers, equityholders, subsidiaries, or affiliates (collectively, the "Seller Group") will, directly or indirectly: (a) initiate, solicit, entertain, negotiate, accept, or discuss any proposal or offer from any person other than Buyer and its affiliates to acquire all or any material portion of the Business or the Assets, whether by merger, purchase of equity, purchase of assets, tender offer, or otherwise (an "Acquisition Proposal"); (b) provide any non-public information to any third party in connection with an Acquisition Proposal; or (c) enter into any agreement, arrangement, or understanding requiring Seller to abandon, terminate, or fail to consummate the Transaction with Buyer.

8.2 Notice; existing discussions. Seller will immediately notify Buyer if any member of the Seller Group receives any indication of interest, request for information, or offer in respect of an Acquisition Proposal during the Exclusivity Period, and will communicate to Buyer in reasonable detail the terms of any such indication, request, or offer (including providing copies of any written communications). Immediately upon execution of this Letter, Seller will, and will cause the Seller Group to, terminate any and all existing discussions or negotiations with any person other than Buyer and its affiliates regarding any Acquisition Proposal. Seller represents that, as of the date of this Letter, no member of the Seller Group is party to or bound by any agreement with respect to an Acquisition Proposal other than under this Letter.

8.3 Break-fee / expense reimbursement.

Note: Use either Option A or Option B for Section 8.3.

Note: Use Option A if Buyer wants Seller to reimburse Buyer's out-of-pocket transaction expenses if the deal does not proceed for reasons attributable to Seller. Use Option B if the Parties prefer a clean exclusivity-only structure with each side bearing its own costs (more common in friendly SME deals where the relationship matters).

Option A — Expense reimbursement on Seller walk-away: If, within the Exclusivity Period, Seller does not execute the Definitive Agreement reflecting the material terms set forth in this Letter (or material terms substantially similar) for any reason other than (i) the mutual written agreement of the Parties to terminate this Letter or to materially change those terms or (ii) Buyer's unilateral refusal to execute the Definitive Agreement, then Seller will pay to Buyer an amount equal to the reasonable, documented out-of-pocket expenses (including the reasonable fees and expenses of legal counsel, accountants, and other advisers, whether incurred before or after the date of this Letter) incurred by Buyer in connection with the proposed Transaction, capped at [expense reimbursement cap (usd)]. Such amount will be payable in immediately available funds on the first business day after the end of the Exclusivity Period.

Option B — No expense reimbursement: Each Party will bear its own transaction expenses incurred in connection with the proposed Transaction, regardless of whether the Definitive Agreement is executed during the Exclusivity Period.

Note: Commercial benchmark: SME exclusivity periods of 30–60 days are standard; periods longer than 90 days are unusual unless the Buyer needs to arrange financing or run a regulated diligence stream. Expense-reimbursement caps in the SME range are typically capped at the lesser of actual documented expenses and a fixed dollar cap (often USD 100,000–500,000 depending on deal size). Reverse break-fees (Buyer pays Seller if Buyer walks) are uncommon in SME asset deals.

9. TERMINATION

9.1 Automatic termination. This Letter will automatically terminate and be of no further force or effect on the earliest of (a) the execution of the Definitive Agreement by Buyer and Seller, (b) the mutual written agreement of the Parties, and (c) [letter outside date] (the "Outside Date").

9.2 Buyer walk-away. Buyer may terminate negotiations relating to the proposed Transaction at any time, for any reason or for no reason, by giving written notice to Seller, and Buyer will not incur any liability to Seller in respect of such termination (other than any liability arising from a breach of a binding provision of this Letter prior to termination).

9.3 Survival. Notwithstanding Sections 9.1 and 9.2, Sections 8 (only Section 8.3 to the extent payment has accrued), 11, 12, 13, 14, 15, and 16 will survive any termination of this Letter, and termination will not affect any rights any Party has with respect to a breach of any binding provision of this Letter occurring before termination.

10. BID EXPIRATION

10.1 This offer will remain open for acceptance until [bid expiration time and date], unless accepted or rejected by Seller, or withdrawn by Buyer, before that time.

11. GOVERNING LAW

11.1 Choice of law.

Note: Use Option A, Option B, Option C, or Option D.

Note: Use Option A (Delaware) if Buyer or Seller is a Delaware entity or if the Parties want a well-developed body of M&A case law. Use Option B (New York) for deals with a strong East Coast or financial-industry connection. Use Option C (California) for deals where one Party insists on California law (note: California has special rules on non-competes and consumer privacy that may apply regardless of choice of law). Use Option D for any other state — fill in the chosen state and confirm with counsel that there is no compelling reason to choose Delaware or New York instead.

Option A — Delaware: This Letter shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to any choice or conflict-of-laws provision or rule that would cause the application of the laws of any jurisdiction other than the State of Delaware.

Option B — New York: This Letter shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to any choice or conflict-of-laws provision or rule that would cause the application of the laws of any jurisdiction other than the State of New York.

Option C — California: This Letter shall be governed by and construed in accordance with the internal laws of the State of California, without giving effect to any choice or conflict-of-laws provision or rule that would cause the application of the laws of any jurisdiction other than the State of California.

Option D — Other state: This Letter shall be governed by and construed in accordance with the internal laws of the State of [other governing state], without giving effect to any choice or conflict-of-laws provision or rule that would cause the application of the laws of any jurisdiction other than the State of [other governing state].

11.2 Forum and jury trial waiver. Each Party (a) submits to the exclusive jurisdiction of the state and federal courts located in [forum county and state] for any action or proceeding arising out of or relating to this Letter, and (b) WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.

Note: Jury-trial waivers are enforced in most US states (including Delaware and New York) but are unenforceable as a pre-dispute contract term in California (Grafton Partners v. Superior Court, 36 Cal.4th 944 (2005)) and Georgia (Bank South v. Howard, 264 Ga. 339 (1994)). If the governing state is California or Georgia, delete Section 11.2(b); use a judicial reference or arbitration mechanism instead if the Parties want to avoid a jury.

12. CONFIDENTIALITY

12.1 Existing NDA controls. This Letter, and the existence and contents of the discussions between the Parties relating to the proposed Transaction, are confidential to the Parties and their respective representatives and are subject to the confidentiality (or non-disclosure) agreement entered into between Buyer and Seller dated [existing nda date] (the "NDA"), which continues in full force and effect. If there is a conflict between the NDA and this Letter on a confidentiality matter, the NDA controls.

12.2 Public announcements. Neither Party will issue any press release or other public announcement regarding the existence of this Letter or the proposed Transaction without the prior written consent of the other Party, except as required by applicable law, regulation, or stock-exchange rule (in which case the disclosing Party will, to the extent legally permissible, give the other Party reasonable advance notice and opportunity to comment on the proposed disclosure).

Note: Public-company flag: if either Party is a public reporting company, signing this Letter and the negotiation itself can trigger securities-law disclosure obligations: (a) Regulation FD (17 CFR Section 243.100) governs selective disclosure of material non-public information; (b) Rule 10b-5 (17 CFR Section 240.10b-5) prohibits insider trading on the basis of pending-deal information; and (c) Schedule 13D filings under Section 13(d) of the Securities Exchange Act of 1934 may be required if Buyer crosses the 5 percent ownership threshold. If either Party is publicly traded, treat the existence of the negotiation as material non-public information from signing onward, restrict trading by deal-team members, and prepare a Form 8-K disclosure path for the date the Definitive Agreement is signed.

13. NO THIRD-PARTY BENEFICIARIES

13.1 Except as expressly set out in this Letter, nothing in this Letter is intended or shall be construed to confer on any person or entity other than the Parties and their respective successors and permitted assigns any rights or remedies under or by reason of this Letter. For the avoidance of doubt, no employee, customer, supplier, or other counterparty of the Business is a third-party beneficiary of this Letter.

14. EXPENSES

14.1 Except as expressly set out in Section 8.3, each Party will bear its own transaction expenses, including the fees and expenses of investment bankers, attorneys, accountants, and other advisers, incurred in connection with the proposed Transaction, regardless of whether the Transaction is consummated.

15. BINDING AND NON-BINDING EFFECT

15.1 Non-binding intent. This Letter reflects the present intentions of the Parties. For the avoidance of doubt, neither this Letter nor its acceptance by Seller is intended to give rise to, or shall be construed as creating, any legally binding or enforceable obligation on either Party with respect to the Transaction itself, except for the limited binding provisions identified in Section 15.2. No contract or agreement providing for any acquisition of the Business or the Assets shall be deemed to exist between Buyer and Seller (or any of their respective affiliates) unless and until a Definitive Agreement has been executed and delivered by Buyer and Seller.

15.2 Binding sections.

Note: Use either Option A or Option B for Section 15.2.

Note: Use Option A (recommended) if exclusivity, confidentiality, expense allocation, governing law, and termination are intended to be legally binding from signing — this is standard market practice for an LOI. Use Option B only if the Parties want this Letter to be entirely non-binding (sometimes used where the relationship is strong, the deal is small, or the LOI exists only to memorialize discussions for the boards).

Option A — Listed sections binding (recommended): Notwithstanding Section 15.1, the Parties intend that Section 8 (Exclusivity), Section 9 (Termination), Section 11 (Governing Law), Section 12 (Confidentiality), Section 13 (No Third-Party Beneficiaries), Section 14 (Expenses), this Section 15, and Section 16 (Counterparts; Miscellaneous) shall be binding obligations of the Parties from and after the date this Letter is countersigned by Seller.

Option B — Fully non-binding (no provision is legally binding): Notwithstanding the headings of any individual sections, no provision of this Letter is intended to create, and no provision shall be construed as creating, a legally binding or enforceable obligation on either Party. The exclusivity, confidentiality, and expense provisions of this Letter reflect intentions only; if the Parties wish to make any of these provisions binding, they will do so in a separately signed writing.

Note: Why this matters: as Texaco v. Pennzoil and SIGA v. PharmAthene illustrate, courts (including those of Delaware and Texas) will look at how the LOI is drafted and how the Parties behaved during negotiation when deciding whether obligations have actually arisen. A clear, explicit binding/non-binding split — together with conduct consistent with that split — is the best protection. Avoid sending follow-up emails that say things like "the deal is done" or "we have an agreement" until the Definitive Agreement is signed.

16. COUNTERPARTS; MISCELLANEOUS

16.1 Counterparts; electronic signatures. This Letter may be executed in counterparts, each of which will be deemed an original and all of which together will constitute one agreement. A signature delivered by email PDF, electronic signature platform (e.g., DocuSign), or other recognized electronic means will be valid and binding under the federal Electronic Signatures in Global and National Commerce Act (15 U.S.C. Section 7001) and the Uniform Electronic Transactions Act as adopted in the governing state.

16.2 Headings. Section headings are inserted for reference only and do not affect the interpretation of this Letter.

16.3 Entire understanding. This Letter, together with the NDA referenced in Section 12, contains the entire understanding of the Parties with respect to its subject matter and supersedes all prior letters of intent, term sheets, and other proposals between the Parties relating to the Transaction. This Letter may be amended only by a writing signed by both Parties.

16.4 Language. Negotiations relating to the proposed Transaction will be conducted in English and the Definitive Agreement will be prepared in English.

If you agree with the terms set out above and wish to proceed with the proposed Transaction, please sign this Letter in the space provided below and return an executed copy to the attention of [buyer recipient name] at [buyer recipient email].

Very truly yours,

BUYER

[buyer legal name]

Signature:

Printed Name: [buyer signatory printed name]

Title: [buyer signatory title]

Date: [buyer signature date]

Address: [buyer notice address]

Email: [buyer notice email]

Agreed to and accepted:

SELLER

[seller legal name]

Signature:

Printed Name: [seller signatory printed name]

Title: [seller signatory title]

Date: [seller signature date]

Address: [seller notice address]

Email: [seller notice email]

EXHIBIT A — KEY COMMERCIAL TERMS

Note: Complete this Exhibit before sending this Letter. In the event of a conflict between the body of this Letter and this Exhibit, this Exhibit prevails for the items listed below.

Date of Letter: [date of letter]

Buyer Legal Name: [buyer legal name]

Buyer Notice Address: [buyer notice address]

Buyer Notice Email: [buyer notice email]

Buyer Recipient Name (for Seller's reply): [buyer recipient name]

Buyer Recipient Email: [buyer recipient email]

Seller Legal Name: [seller legal name]

Seller Mailing Address: [seller mailing address]

Seller Notice Address (for binding notices): [seller notice address]

Seller Notice Email: [seller notice email]

Seller Recipient Name (salutation): [seller recipient name]

Description of the Business: [description of the business]

Headline Purchase Price (USD): [headline purchase price (usd)]

Cash at Closing Amount: [cash at closing amount]

Escrow Holdback Amount: [escrow holdback amount]

Escrow Holdback Period (months): [escrow holdback period (months)]

Target Working Capital (USD): [target working capital (usd)]

Information Memorandum Date (if any): [information memorandum date]

Other Pricing Assumptions: [other pricing assumptions]

Buyer Approval Body: [buyer approval body]

Seller Approval Body: [seller approval body]

Specific Material Consents: [specific material consents]

Names of Key Employees: [names of key employees]

Restrictive Covenant Period (months): [restrictive covenant period (months)]

Restrictive Covenant Territory: [restrictive covenant territory]

Other Conditions to Closing: [other conditions to closing]

Seller Diligence Contact Name and Email: [seller diligence contact name and email]

Permitted Direct-Contact Employees (if any): [permitted direct-contact employees]

Exclusivity End Date: [exclusivity end date]

Expense Reimbursement Cap (USD) — if Option A: [expense reimbursement cap (usd)]

Letter Outside Date: [letter outside date]

Bid Expiration Time and Date: [bid expiration time and date]

Other Governing State (if Option D): [other governing state]

Forum County and State: [forum county and state]

Existing NDA Date: [existing nda date]

Buyer Signatory Printed Name: [buyer signatory printed name]

Buyer Signatory Title: [buyer signatory title]

Buyer Signature Date: [buyer signature date]

Seller Signatory Printed Name: [seller signatory printed name]

Seller Signatory Title: [seller signatory title]

Seller Signature Date: [seller signature date]

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“I found GitLaw to be extremely useful and convenient in helping draft a contract. It has tracking, an easy to understand and familiar interface and has saved thousands of dollars in fees.”

Michael Hawkes

Letter of Intent Asset Acquisition (US)

California note

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