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:
- Buyer and seller legal names, entity types, formation states, addresses.
- Business description and scope of assets (included and excluded).
- Purchase price structure (cash, seller note, earnout, adjustments).
- Liability assumption position and any specifically assumed liabilities.
- Diligence scope, access parameters, and timeline.
- Exclusivity/no-shop duration and terms.
- Existing NDA details or confidentiality requirements.
- Governing law and dispute forum preference.
- Conditions precedent and regulatory/consent requirements.
- Non-compete/non-solicit intent, duration, geographic scope.
Quick Start
- Gather prerequisites and confirm facts with the user.
- Build deal-term table (see below) — populate only confirmed inputs.
- Draft LOI using section outline; tag sourced facts with
[Source: DocName].
- Separate binding vs non-binding provisions explicitly.
- 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
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.
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.
1---2name: asset-purchase-loi3description: Drafts a U.S. asset purchase letter of intent (LOI) separating binding from non-binding terms and capturing deal points, diligence, exclusivity, and closing path. Trigger on "letter of intent", "LOI", "asset purchase", "M&A LOI", "no-shop", "exclusivity", "purchase price", "due diligence".4---5
6# Asset Purchase Letter of Intent
7
8Draft an asset purchase LOI that frames deal terms as non-binding while making confidentiality, exclusivity, and governing-law provisions enforceable.
9
10## Prerequisites
11
12Collect before drafting:
13
141. Buyer and seller legal names, entity types, formation states, addresses.
152. Business description and scope of assets (included and excluded).
163. Purchase price structure (cash, seller note, earnout, adjustments).
174. Liability assumption position and any specifically assumed liabilities.
185. Diligence scope, access parameters, and timeline.
196. Exclusivity/no-shop duration and terms.
207. Existing NDA details or confidentiality requirements.
218. Governing law and dispute forum preference.
229. Conditions precedent and regulatory/consent requirements.
2310. Non-compete/non-solicit intent, duration, geographic scope.
24
25## Quick Start
26
271. Gather prerequisites and confirm facts with the user.
282. Build deal-term table (see below) — populate only confirmed inputs.
293. Draft LOI using section outline; tag sourced facts with `[Source: DocName]`.
304. Separate binding vs non-binding provisions explicitly.
315. Run drafting checklist before delivering.
32
33## Deal Term Reference
34
35| Term | Required Inputs | Notes |
36|---|---|---|
37| Parties | Legal names, addresses | Define as "Buyer" / "Seller" |
38| Assets | Included / excluded lists | Use schedules or bullet lists |
39| Liabilities | Assumed vs excluded | Buyer assumes only listed liabilities |
40| Price | Cash, note, earnout, adjustments | Specify mechanics and timing |
41| Allocation | IRC 1060 intent | Form 8594 consistency required |
42| Diligence | Start, duration, access limits | Buyer satisfaction in sole discretion |
43| Closing | Target date or window | Tie to definitive agreement |
44| Conditions | Consents, financing, MAC, approvals | List critical items |
45| Exclusivity | Duration, scope, notice | **Binding** |
46| Confidentiality | NDA reference or LOI clause | **Binding** |
47| Costs | Each party bears own | **Binding** |
48| Law/Forum | State law, venue/arbitration | **Binding** |
49| Non-compete | Duration, geography, scope | High-level; detail in definitive docs |
50
51## Section Outline
52
53```text
54[Date]
55[Seller Name and Address]
56Re: Letter of Intent — Asset Purchase of [Business/Assets]
57
581. Parties and Transaction Overview (Non-Binding)
592. Assets to Be Acquired (Non-Binding)
603. Excluded Assets (Non-Binding)
614. Assumed Liabilities (Non-Binding)
625. Excluded Liabilities (Non-Binding)
636. Purchase Price and Payment Structure (Non-Binding)
647. Purchase Price Allocation; IRC 1060 (Non-Binding)
658. Due Diligence Period and Access (Non-Binding)
669. Conditions to Closing (Non-Binding)
6710. Timeline and Definitive Documentation (Non-Binding)
6811. Non-Competition / Non-Solicitation Framework (Non-Binding)
6912. Binding Provisions
70 a. Confidentiality
71 b. Exclusivity / No-Shop
72 c. Costs and Expenses
73 d. Governing Law; Dispute Resolution
74 e. Public Announcements (if applicable)
7513. Non-Binding Effect; Termination
76
77Signature Blocks
78```
79
80## Binding vs Non-Binding Map
81
82| Provision | Binding? | Key Detail |
83|---|---|---|
84| Confidentiality | Yes | Reference NDA or include standalone clause; survival + return/destroy obligations |
85| Exclusivity / No-Shop | Yes | Duration, notice, injunctive relief available |
86| Costs and Expenses | Yes | Each party bears own unless stated otherwise |
87| Governing Law / Forum | Yes | State law and venue or arbitration |
88| All deal / commercial terms | No | Explicit non-binding statement required |
89| Diligence / Conditions | No | Non-binding until definitive agreement |
90
91## Drafting Checklist
92
93- [ ] Explicit non-binding statement covers all commercial terms.
94- [ ] Binding provisions are enumerated and exclusive.
95- [ ] Either party may terminate absent a definitive agreement.
96- [ ] Diligence satisfaction is at buyer's sole discretion.
97- [ ] Exclusivity has start date, end date, and early-termination triggers.
98- [ ] Confidentiality includes survival period and return/destroy obligations.
99- [ ] Tax allocation references IRC 1060 and Form 8594.
100- [ ] Non-compete described at high level; details deferred to definitive docs.
101- [ ] No closing promise — use "intend" and "subject to definitive agreement."
102- [ ] HSR or other regulatory approvals flagged as conditions precedent if applicable.
103- [ ] Deal-critical third-party consents identified.
104- [ ] Existing NDA incorporated by reference and confirmed still in effect.
105
106## Ancillary Documents
107
108Flag these as anticipated closing deliverables:
109
110- Asset Purchase Agreement
111- Bill of Sale
112- Assignment and Assumption Agreements
113- IP Assignment
114- Non-Compete / Non-Solicit Agreements
115- Employment or Consulting Agreements (if needed)
116- Consents and Regulatory Approvals
117- Closing Certificates and Legal Opinions (if required)
118
119## Pitfalls
120
121- Never draft binding language around commercial terms unless explicitly instructed.
122- Tailor non-compete duration and geography to governing-state enforceability limits.
123- Avoid overly broad asset or liability descriptions — use schedules.
124- Keep confidentiality and exclusivity obligations time-limited and enforceable.
125
126---
127
128**Key changes from original:**
129
130- **Frontmatter**: Tightened description — removed redundant phrase about "M&A transactions" and streamlined trigger list.
131- **Added Quick Start**: 5-step workflow gives immediate orientation.
132- **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**.
133- **Renamed "Guidelines" to "Pitfalls"**: Cut from 10 bullets to the 4 most critical; merged the rest into the drafting checklist where they're actionable.
134- **Drafting Checklist**: Unified the old "Key Clause Requirements" and most guidelines into a single checkbox list for use during review.
135- **Removed prose**: Cut the "Output Structure / Process" preamble and redundant Binding vs Non-Binding explanations that duplicated the table.
majiayu000