Letter of Intent ( Loi ) Procedures All Brokers

Beltway Business Brokerage, Inc. Standard Operating Procedures 2007-001 (SOP 2007_LOI_001) Effective Date January 16, 2007 Page 1 of 4

LETTER OF INTENT (“LOI”) PROCEDURES

In order to ensure that all LOI’s are handled properly and that we protect our clients, and our company, from potential loss and/or unnecessary civil liability please, follow this directive at all times. Any/all exceptions to this policy and these procedures must be approved through your manager. Managers needing additional guidance on possible exceptions should consult with the Corporate Office before making final decisions that are contrary to this directive. It should be noted that the handling of earnest money checks is one specific area of our business where we are exposed to significant liability and subject to close scrutiny.

DUTIES OF THE BUYER’S BROKER –Once it is determined that a prospective buyer desires to submit an offer on one of our listings, the buyer’s broker has the following responsibilities:

PRE-RATIFICATION  Complete a legible LOI, making sure you get the signature of the prospective buyer.  Collect a check from the buyer equal to 10% of the purchase price of the subject business as an earnest money deposit. It is incumbent upon the buyer’s broker to explain in detail our procedures as they relate to earnest money and the timing of earnest money deposits.   Make copies of the LOI and the check for distribution to the following: Prospective Buyer The Corporate file Manager’s File  Contact the seller’s broker in order for him/her to make arrangements to present the offer to his/her client.

POST-RATIFICATION  Advise the prospective buyer that the seller has ratified the LOI and make arrangements to deliver to him/her a copy of the ratified LOI. This can be done in person, by facsimile, or by regular mail. Make sure you reiterate our procedures as they relate to the buyer’s earnest money deposit advising him/her that the earnest check will be deposited at our earliest convenience  Make three copies of the ratified LOI to distribute to buyer, corporate and your Manager.  Complete and make one copy of the escrow money account report. Beltway Business Brokerage, Inc. Standard Operating Procedures 2007-001 (SOP 2007_LOI_001) Effective Date January 16, 2007 Page 2 of 4

 Submit the forms to your manager who will distribute appropriately by keeping the original the office file and providing one copy of each document to John Riley for the corporate file.  Make arrangements to meet with the Seller’s Broker to develop a closing contingency checklist. That checklist must be submitted via email or fax (301-937-1212) to the attention of Orlando Dorsey.  *** If the buyer request that his/her attorney hold the earnest money deposit; this must be done by certified check and a copy furnished to the buyers broker prior to the broker submitting the ratified LOI to corporate.

DUTIES OF THE SELLER’S BROKER

PRE-RATIFICATION  Receive notification from buyer’s broker that an offer has been received  Review the written offer with the buyer’s broker to ensure the offer meets the client’s requirements as it relates to timing, confidentiality, and, financial credibility (when applicable as per clients specific instructions)  Contact seller to make arrangement to present the offer  Present the offer

POST-RATIFICATION

Once it is certain that the seller has ratified an LOI and the seller’s broker has a signed original of the actual LOI the seller’s broker must do the following:

 Notify the buyer’s broker immediately and make arrangements to deliver the signed LOI as soon as possible.  Make three copies of the signed LOI. Retain one copy for your seller, one copy for your personal listing file and give the other copy to your Manager.  Make arrangements to meet with the Seller’s Broker to develop a closing contingency checklist. That checklist must be submitted via email or fax (301-937-1212) to the attention of Orlando Dorsey.

LOI that is NOT ACCEPTED/RATIFIED – NEGOTIATION PROCESS

 In the event an LOI is not accepted/ratified, the seller’s broker shall notify the buyer’s broker as soon as possible with the counter offer or rejection, so that the buyer can decide to make another offer, move on to another listing, or, quit. Beltway Business Brokerage, Inc. Standard Operating Procedures 2007-001 (SOP 2007_LOI_001) Effective Date January 16, 2007 Page 3 of 4

 This can be done on the same LOI form, by not signing on the signature line at the bottom, crossing out the listed offer price and writing above it the seller’s counter offer price with the sellers initials following.  If the buyer is ready to makes another offer on the same business or a different one, the same earnest money deposit check can be used. If the price of the business is different from the earnest money deposit, the adjusted amount will be returned at settlement or provided for deposit to Beltway, 10 days prior to settlement.  If the buyer request time to make the next offer, the buyer’s broker should return the un-deposited check to the buyer and obtain a new check in the appropriate amount and then resubmit following the aforementioned procedures.  If the buyer chooses to make another offer on a different business in our inventory the buyer’s broker shall make sure that all necessary measures are taken to close out the prior attempted transaction so that we can move forward with this client without multiple transactions being co-mingled.  A copy of the un-ratified LOI should be placed in the hard file for your manager, the corporate office and for your personal file.  In the event the unsuccessful prospective buyer decides to abandon their efforts with Beltway, it is the responsibility of the buyer’s broker to make sure their initial check is returned to them un-cashed. Beltway Business Brokerage, Inc. Standard Operating Procedures 2007-001 (SOP 2007_LOI_001) Effective Date January 16, 2007 Page 4 of 4

DUTIES OF THE MANAGER

PRE RATIFICATION  Maintain a file of all un-ratified LOI’s.  Hold all earnest money deposit checks on outstanding LOI’s

POST RATIFICATION  Maintain a file on all ratified LOI’s  Submit all paperwork to appropriate individuals within the firm o To John Riley: Ratified LOI, Original Earnest Money Check, and Escrow Money Record o To Master File the Corporate Administrative Assistant: LOI’s submitted (ratified and not-ratified)

Notice: Strict compliance to this directive is required of all individuals wishing to remain affiliated with Beltway Business Brokerage, Inc. Failure to comply with this directive is a serious matter and will be dealt with swiftly and decisively. The consequences for failing to comply can range from a warning letter to immediate separation from the company.