MOVING STRAIGHT TO APA, SANS LOI?
I'm looking at a business that I really like. The owners and I have built a great rapport, and this is a company I could see myself taking over and running well. This is a brokered deal, and the broker is insisting on a few things:
A) Instead of me issuing an LOI, he'd like go straight to a template APA that he has prepared. It's a fairly restrictive document that (in my opinion) binds the seller and I too closely together at this point in the process
B) Along with the APA, he'd like a 'good faith deposit' to be put into escrow. The APA outlines scenarios where I'd get my money back if the deal broke off, but also other scenarios where I wouldn't
Having read through the document, I don't think there's anyway I could seriously sign this. My questions are:
1) Has anyone come across something like this (e.g., move straight to APA, and one that is fairly restrictive)?
2) I'd like to think that my willingness to invest in attorneys and accountants is enough of a signal of good faith, so putting some money in escrow seems pretty silly to me. My understanding is that usually escrow, if it's used at all, is for the SELLER to put cash into an account for the BUYER to draw from in case something happens. Are there other cases when cash is put into escrow?
On the one hand, I really like the sellers and the business, so I'd be more willing to flex here than a typical deal. On the other hand, this APA is throwing up a ton of broker red flags for me, so part of me wants to walk away unless the broker lets us go through a standard LOI -> APA process. Thoughts?