A Letter of Intent (LOI) in the context of buying or selling a business is a formal document that outlines the preliminary understanding between the buyer and the seller before the finalization of the transaction. It serves as a framework for the negotiation process and sets the stage for the due diligence and final agreement. Here are the key points typically included in an LOI:

1. 1. Introduction and Purpose:
      • • Statement of intent to buy or sell the business.
        • Identification of the parties involved (buyer and seller).
   2. Transaction Overview:
      • • Description of the business being bought or sold.
        • Outline of the proposed transaction structure (asset purchase, stock purchase, etc.).
   3. Purchase Price and Terms:
      • • Proposed purchase price or formula for determining the price.
        • Payment terms (cash, financing, stock, earnouts, etc.).
        • Any deposit or escrow arrangements.
   4. Due Diligence:
      • • Outline of the due diligence process, including timelines.
        • Types of information to be reviewed (financial records, contracts, etc.).
   5. Confidentiality:
      • • Agreement to keep the negotiations and any shared information confidential.
   6. Exclusivity:
      • • Provision for exclusivity, preventing the seller from negotiating with other potential buyers for a specified period.
   7. Conditions Precedent:
      • • Key conditions that must be met before the transaction can proceed (e.g., financing, regulatory approvals, satisfactory due diligence).
   8. Closing Date:
      • • Proposed timeline for completing the transaction.
   9. Representations and Warranties:
      • • Basic representations and warranties from both parties regarding their authority to enter into the agreement and the accuracy of the provided information.
   10. Non-Binding Nature:
       • • Clarification that the LOI is generally non-binding, except for certain binding provisions (e.g., confidentiality, exclusivity).
   11. Termination:
       • • Conditions under which the LOI can be terminated by either party.
   12. Governing Law:
       • • Jurisdiction and governing law applicable to the LOI.
   13. Signatures:
       • • Signatures of the parties involved to acknowledge their agreement to the terms outlined in the LOI.

An LOI helps ensure that both parties are on the same page regarding the major aspects of the deal before committing significant time and resources to the transaction.