Letter of Intent Asset Acquisition (US)
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
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About this template
What is this template?
This is a non-binding letter of intent for an asset purchase that includes specific binding provisions for exclusivity and confidentiality. It contains detailed options for working capital adjustments (GAAP-based vs. agreed schedule) and expense reimbursement mechanics that are not typically found in simpler term sheets.
When should you use it?
Use this when a Buyer and Seller have agreed on headline commercial terms for a US asset sale but need to secure exclusivity while the Buyer performs due diligence. Use a Stock Purchase Agreement or Merger LOI instead if the transaction involves the sale of corporate equity rather than specific assets.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1.1 | ACQUISITION OF ASSETS | Specifies that the Buyer would acquire substantially all assets free of encumbrances while assuming only certain specified liabilities. |
| 2.1 | Headline price | Identifies the aggregate Purchase Price and sets an escrow holdback amount for a specific period of months. |
| 2.2 | Working capital adjustment | Provides for a dollar-for-dollar adjustment to the price if actual working capital at Closing differs from the stated target. |
| 4.1 | CONDITIONS TO CLOSING | Conditions the Buyer obligation on satisfactory due diligence, board approvals, and key employees entering new employment arrangements. |
| 8.1 | EXCLUSIVITY | Prohibits the Seller from soliciting or discussing any Acquisition Proposal with third parties until the Exclusivity End Date. |
| 15.2 | Binding sections | Designates specific sections including Exclusivity and Governing Law as legally binding obligations despite the letter's generally non-binding intent. |
Who it's for
- a US company proposing to acquire the assets of an SME or startup
- parties negotiating a deal requiring a formal exclusivity period and escrow holdback
- buyers seeking to conduct due diligence before signing a definitive asset purchase agreement
How long it runs and how it's signed
Law it's drafted under
California note
This version is drafted for California. US contract and employment rules vary by state, so it will not transfer cleanly elsewhere. Tell GitLaw where the parties are and it adjusts the draft.
Frequently asked questions
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