Indication of Interest (IOI)
A non-binding offer letter for a business that provides the sellers with a price range and structure to evaluate against other offers (if there are any).
Letter of Intent (LOI)
A more detailed offer letter that has exact price, terms, expectations about what assets are coming with the deal, expectations for the sellers post-close, etc. The LOI also includes an exclusivity provision to allow the buyer the exclusive right to buy the target company.
Stock/Asset Purchase Agreement
The final agreement that defines the purchase of the target company – whether the buyer is acquiring assets or stock. This agreement will provide all the elements of the LOI in more detail and will also include certain promises that both buyers and sellers are making at close (Representations & Warranties).
It is typical that the sellers stay around for some transition period lasting from months to years. The employee agreement defines the terms of that employment.
Sellers cannot compete against the buyers after the deal is done. The non-compete agreement spells out the exact restrictions, how long they last, and consequences if those restrictions are not adhered to.
Often times the buyer is buying a portion of the company and the owners will be equity holders & partners ongoing. In this case, the owners will be in the shareholder/operating agreement that determines how the new entity purchasing the target will be governed.