ASSET PURCHASE AND SALE TERM SHEET

Letter of Intent

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Date: [DATE]

Buyer: [BUYER LEGAL NAME]
Address: [BUYER ADDRESS]
Contact: [BUYER CONTACT INFORMATION]

Seller: [SELLER LEGAL NAME]
Address: [SELLER ADDRESS]
Contact: [SELLER CONTACT INFORMATION]

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EXECUTIVE SUMMARY

This Letter of Intent (“LOI”) sets forth the preliminary terms and conditions for the proposed acquisition by [Buyer] of certain assets from [Seller] (the “Transaction”). This LOI is intended to facilitate further negotiations and due diligence leading to a definitive Asset Purchase Agreement.

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I. TRANSACTION STRUCTURE

Transaction Type: Asset Purchase and Sale

Assets to be Acquired: [Specify assets – e.g., “All assets related to the [Business Line/Division], including but not limited to inventory, equipment, intellectual property, customer contracts, and goodwill”]

Excluded Assets: [Specify excluded assets – e.g., “Cash, accounts receivable as of Closing Date, certain real estate, and any assets specifically retained by Seller”]

Assumed Liabilities: [Specify – e.g., “Trade payables, accrued expenses, and customer obligations directly related to the Assets”]

Excluded Liabilities: [Specify – e.g., “All debt, tax liabilities, litigation matters, and environmental liabilities existing prior to Closing”]

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II. FINANCIAL TERMS

Purchase Price: $[AMOUNT] (the “Purchase Price”)

Payment Structure:

• Cash at Closing: $[AMOUNT]
• Seller Financing: $[AMOUNT] (if applicable)
• Earnout Consideration: $[AMOUNT] (if applicable)
• Escrow Amount: $[AMOUNT] (held for [TIME PERIOD])

Purchase Price Adjustments:

• Working Capital Adjustment: [Specify methodology]
• Inventory Adjustment: [Specify – e.g., “At cost, subject to physical count”]
• Other Adjustments: [Specify any other adjustments]

Earnout Terms (if applicable):

• Performance Metric: [Specify – e.g., “Based on EBITDA of acquired assets”]
• Measurement Period: [Specify time period]
• Maximum Earnout: $[AMOUNT]
• Payment Schedule: [Specify timing]

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III. DUE DILIGENCE

Due Diligence Period: [NUMBER] days from execution of this LOI

Information to be Provided:

• Financial statements for the past [NUMBER] years
• Tax returns and records
• Material contracts and agreements
• Intellectual property documentation
• Environmental reports and permits
• Employee and benefit plan information
• Litigation and regulatory matters
• Insurance policies and claims history

Management Presentations: Seller agrees to provide reasonable access to management for due diligence presentations and Q&A sessions.

Exclusivity Period: [NUMBER] days from execution of this LOI, during which Seller will not solicit or negotiate with other potential buyers.

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IV. CONDITIONS PRECEDENT

Buyer’s Conditions:

• Satisfactory completion of due diligence
• Execution of definitive Asset Purchase Agreement
• Receipt of all required regulatory approvals
• No material adverse change in the business or assets
• Delivery of audited financial statements (if required)
• Key employee retention agreements (if applicable)

Seller’s Conditions:

• Execution of definitive Asset Purchase Agreement
• Receipt of all required regulatory approvals
• Buyer’s financing commitments secured
• Corporate approvals from Buyer’s board of directors

Mutual Conditions:

• Expiration of applicable waiting periods under antitrust laws
• Receipt of third-party consents for material contracts
• Completion of environmental assessments (if required)

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V. REPRESENTATIONS AND WARRANTIES

Seller Representations: Standard representations regarding corporate authority, financial statements, material contracts, compliance with laws, environmental matters, intellectual property, and absence of material adverse changes.

Buyer Representations: Standard representations regarding corporate authority, financial capability, and ability to consummate the transaction.

Survival Period: [NUMBER] months for general representations, [NUMBER] years for tax and environmental matters.

Indemnification Cap: [PERCENTAGE]% of Purchase Price for general matters, uncapped for fundamental representations, tax, and environmental matters.

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VI. EMPLOYEE MATTERS

Employee Transition: Buyer will offer employment to [ALL/SUBSTANTIALLY ALL/SPECIFIED] employees associated with the acquired assets.

Benefit Plans: [Specify treatment of employee benefits, vacation accruals, and retirement plans]

Key Employee Retention: [Specify any retention bonuses or employment agreements for key personnel]

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VII. CLOSING CONDITIONS

Closing Date: On or before [DATE], subject to satisfaction of conditions precedent.

Closing Location: [SPECIFY LOCATION]

Closing Deliverables:

• Executed Asset Purchase Agreement
• Bills of sale and assignment agreements
• Intellectual property assignments
• Third-party consents and approvals
• Officer’s certificates
• Legal opinions (if required)
• Wire transfer instructions and closing funds

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VIII. POST-CLOSING MATTERS

Transition Services: Seller to provide transition services for [TIME PERIOD] at cost plus [PERCENTAGE]% markup.

Non-Compete Agreement: Seller agrees not to compete in [GEOGRAPHIC AREA] for [TIME PERIOD] in the business being sold.

Confidentiality: Mutual confidentiality provisions to survive termination of this LOI.

Employee Non-Solicitation: [TIME PERIOD] restriction on soliciting employees.

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IX. REGULATORY AND APPROVALS

Antitrust Filings: [Specify if HSR or other antitrust filings required]

Industry-Specific Approvals: [List any required regulatory approvals]

Third-Party Consents: Material contracts requiring consent for assignment.

Environmental Clearances: [Specify any required environmental approvals]

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X. FINANCING

Buyer’s Financing: Buyer represents that it has [CASH ON HAND/COMMITTED FINANCING/CONDITIONAL FINANCING] sufficient to complete the transaction.

Financing Conditions: [Specify any conditions related to Buyer’s financing]

Financing Contingency: [Specify if transaction is subject to financing contingency and terms]

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XI. DISPUTE RESOLUTION

Governing Law: This LOI shall be governed by the laws of [STATE/JURISDICTION].

Jurisdiction: Disputes shall be resolved in [SPECIFY COURTS/ARBITRATION].

Arbitration: [If applicable, specify arbitration rules and procedures]

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XII. GENERAL PROVISIONS

Binding Effect: This LOI is [BINDING/NON-BINDING] except for the provisions relating to confidentiality, exclusivity, expense reimbursement, and governing law.

Expenses: Each party shall bear its own expenses, except [SPECIFY ANY EXPENSE REIMBURSEMENT PROVISIONS].

Publicity: No public announcements without mutual written consent.

Termination: This LOI may be terminated by mutual consent or by either party upon [NOTICE PERIOD] written notice if definitive agreement is not executed by [DATE].

Amendments: This LOI may only be amended in writing signed by both parties.

Counterparts: This LOI may be executed in counterparts, including electronic signatures.

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XIII. NEXT STEPS AND TIMELINE

Definitive Agreement: Target execution of Asset Purchase Agreement by [DATE]

Due Diligence Completion: [DATE]

Regulatory Filings: To be submitted by [DATE]

Anticipated Closing: [DATE]

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SIGNATURE BLOCKS

BUYER:

[BUYER LEGAL NAME]

By: _________________________
Name: [NAME]
Title: [TITLE]
Date: _______________________

SELLER:

[SELLER LEGAL NAME]

By: _________________________
Name: [NAME]
Title: [TITLE]
Date: _______________________

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EXHIBITS:

• Exhibit A: Asset Schedule
• Exhibit B: Assumed Liabilities Schedule
• Exhibit C: Financial Statements
• Exhibit D: Material Contracts List
• Exhibit E: Due Diligence Checklist

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This Letter of Intent contains confidential and proprietary information. Distribution is restricted to authorized parties only.