Understand the offer.
Before you say yes.

1. The people & entities

Harbor Service Acquisitions, LLC (“Buyer”), represented by its managing member Jordan Lee, proposes to purchase the operating assets of Coastal Comfort HVAC, LLC (“Seller”), owned by Avery Morgan. Both businesses and both people are fictional.

Buyer would acquire directly. Any change to the purchasing entity or addition of investors would require Seller’s written agreement before definitive documents are signed. Jordan Lee is identified as Buyer’s representative, not as a personal guarantor.

2. Asset vs. equity sale

The proposed transaction is an asset purchase, not a purchase of Seller’s membership interests. Included assets would comprise operating equipment and vehicles, saleable inventory, eligible receivables, the trade name, website, customer relationships, and assignable operating contracts.

Seller would retain cash, its legal entity, and assets expressly excluded in the purchase agreement. Buyer would assume only the ordinary trade payables included in the working-capital calculation and specifically listed post-closing contract obligations. Seller would retain borrowing, pre-closing taxes, and other liabilities except those expressly assumed.

3. Price & cash at closing

The proposed base purchase price is $1,200,000, subject to the working-capital adjustment in section 6. It includes the specified operating assets and the agreed working capital; those items are not added to the price again.

Before adjustments, consideration would comprise $1,100,000 in cash at closing and a $100,000 seller note. Of the cash consideration, $50,000 would be deposited into escrow under section 15. This leaves $1,050,000 available to Seller at closing before Seller’s debt payoffs, fees, taxes, and other settlement deductions. No earnout or retained ownership is proposed.

4. Buyer funding & lender

Buyer proposes to fund the base purchase price with a $900,000 conventional bank acquisition loan, $200,000 of Buyer’s cash, and the $100,000 seller note. Buyer must separately budget and fund its fees and any additional operating cash.

Buyer has had an initial lender discussion only; no financing approval or commitment has been obtained. By day 15 after acceptance, Buyer would provide evidence of its equity funds and a written lender status update, with further updates on days 30 and 45. Closing is conditional on acceptable financing and satisfaction of the lender’s conditions.

5. Seller financing

The proposed $100,000 seller note would bear 6% annual interest and amortize through monthly payments over five years, beginning 30 days after closing, with no balloon payment or prepayment penalty.

Security, guarantees, payment restrictions, default remedies, and any subordination to the senior bank would be negotiated with counsel and require senior-lender acceptance before signing the purchase agreement. Seller has not agreed to an unlimited payment standstill.

6. Working-capital peg

The price assumes delivery of $120,000 in net operating working capital at closing. For this example, that means eligible trade receivables plus saleable inventory, less ordinary trade payables. Cash, borrowing, income taxes, and transaction expenses are excluded. The parties would agree a schedule and consistent accounting policies, including aging and obsolete-stock rules, before the purchase agreement is signed.

Price would increase or decrease dollar for dollar for the difference between closing working capital and this peg. A preliminary closing adjustment would be followed by Buyer’s statement within 60 days, Seller’s 30-day review, and referral of unresolved accounting items to an agreed independent accountant under a defined procedure.

7. Purchase price allocation

Buyer and Seller would agree an asset purchase price allocation before signing the definitive purchase agreement, with advice from their respective tax advisors. The allocation would address the applicable asset classes, including inventory, equipment, identifiable intangible assets, and goodwill.

The parties would use the agreed allocation consistently in required filings, including Form 8594 where applicable, subject to law and agreed changes for later purchase price adjustments. No tax savings or after-tax proceeds are promised by this LOI.

8. Due diligence & requests

Buyer proposes a 45-day diligence period beginning when both parties acknowledge in writing that the agreed core financial package is available. Core items are three years of financial statements and tax returns, year-to-date results, addback support, receivable and payable aging, and an equipment and inventory summary.

Further requests would cover customer and supplier contracts, revenue concentration, leases, employee arrangements, licenses, liens, litigation, insurance, and relevant technology and data-security obligations. Requests would be kept in one shared list with owners and target dates. Access remains subject to section 11.

9. Milestones & target close

Day 0 means acceptance of this LOI. The parties aim to make the core diligence package available by day 5, receive the first purchase agreement draft by day 30, finish the proposed diligence period by day 50, and close by day 60.

These are targets, not a promise to close. If the core package is delayed, the parties would reassess the schedule in writing. A diligence delay does not automatically extend exclusivity. Closing also depends on agreed definitive documents, financing, consents and the other conditions described here.

10. Exclusivity

For 60 days from acceptance, Seller and its authorized representatives will not solicit, negotiate, provide acquisition information for, or enter into another sale of the business with a competing purchaser. Seller will notify Buyer of an unsolicited acquisition approach without beginning negotiations.

Exclusivity ends earlier if Buyer gives written notice it is ending discussions. Seller may end exclusivity by written notice if Buyer misses the day-15 funding update or day-30 first-draft milestone. Any extension requires a writing signed by both parties; a pending request does not extend the period.

11. Confidentiality & access

The parties’ fictional September 1, 2026 mutual NDA continues according to its terms and controls confidentiality if this LOI conflicts with it. Buyer may share information only with permitted advisors and funding sources subject to the NDA’s protections.

Until closing or earlier written termination of negotiations, Buyer will not contact employees, customers, suppliers or the landlord about the proposed acquisition without Seller’s prior written approval. No public announcement may be made without both parties’ written approval, except where legally required and after permitted advance notice.

12. Lease & required consents

Closing would require the landlord’s written consent to assignment of the premises lease, or a replacement lease acceptable to Buyer and its lender. Seller would require a written release of Avery Morgan’s personal lease guarantee as a closing condition.

The parties would also identify other contracts, permits and licenses requiring consent or replacement. Buyer would pay its new lease costs; responsibility for any landlord assignment fee would be agreed before the purchase agreement is signed.

13. Non-compete & restrictions

Buyer proposes that Avery Morgan and Seller agree to a three-year restriction on owning or operating a competing HVAC service business in Charleston, Berkeley and Dorchester counties, together with separately defined customer and employee non-solicitation terms.

The parties’ counsel would review applicable law, legitimate business interests, scope, exceptions and enforceability before agreeing any restriction. No restrictive covenant becomes effective merely from acceptance of this nonbinding proposal.

14. People & handover

The price would include up to 80 hours of Avery Morgan’s transition assistance during the first 60 days after closing, scheduled by mutual agreement. Work beyond that scope would require a separate written paid arrangement.

Buyer would identify intended employee offers and its licensing and qualification plan during diligence. Seller would remain responsible for pre-closing payroll and benefits except as expressly agreed. Closing would depend on an acceptable plan for required operating licenses and key roles.

15. Escrow & purchase agreement

Of the cash consideration, $50,000 would be placed with an agreed independent escrow agent for 12 months to support specified claims under the purchase agreement. Undisputed funds would then be released; amounts tied to timely unresolved claims would remain held until resolution.

The purchase agreement would define representations, warranties, disclosure schedules, indemnity procedures, liability limits, exclusions, and claim periods. The escrow amount is not an agreed cap on Seller’s overall liability. No deposit or break fee is proposed in this example.

16. Costs & governing law

Each party will pay its own legal, accounting, diligence and advisory expenses whether or not the acquisition closes. Neither party owes a termination fee merely because negotiations end.

South Carolina law will govern the provisions identified as binding, with disputes brought in courts of competent jurisdiction in Charleston County. Expense and governing-law provisions survive the end of negotiations. Rights arising from a prior breach are preserved.

17. Binding terms & acceptance

Only sections 10 (Exclusivity), 11 (Confidentiality & Access), 16 (Costs & Governing Law), and this section 17 are intended to be legally binding upon acceptance. Sections 1–9 and 12–15 describe proposed transaction terms only. Neither party must buy or sell unless both sign and deliver a definitive purchase agreement.

Either party may end negotiations by written notice, subject to the binding provisions and their stated duration. A Seller decision to end talks does not by itself release Seller from section 10; the early-release rules there still apply. Confidentiality survives as provided in the NDA. Changes to the binding provisions require a signed writing.

This fictional offer is dated September 15, 2026 and would lapse unless accepted by September 22, 2026 at 5:00 p.m. Eastern. Authorized representatives would acknowledge it for Buyer and Seller, with Avery Morgan separately acknowledging any obligations expressly imposed personally. No signatures are requested or accepted on this educational page.