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LOIs are beneficial to both the buyer and seller. The fundamental goal of the LOI is to confirm that a 'meeting of the minds' has been reached prior to both parties making the large investments of time, energy, and expense required to execute a Definitive Purchase Agreement (DPA), aka Asset Purchase Agreement (APA).

An LOI is a nonbinding legal agreement that not only expresses interest, but typically details the initial terms for the contemplated transaction, timing for due diligence, any contingencies (financing, Board approval, etc.), and specifies the timing to execute a final definitive agreement and close the transaction.

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