Mr. ______

President

ABC Capital Corporation

Page 1

[To be prepared on Buyer’s Letterhead]

November ___, 20__

Mr. Seller

President

ABC Corporation

______

______, CO ______

RE:Letter of Intent for the Proposed Acquisition of Certain Assets of ABC Corporation

Dear Mr. Seller:

This letter of intent (the “Letter of Intent”) outlines the proposed terms and conditions under which Davis Aviation Incorporated, an Illinois corporation, or an affiliated company (“Davis”), would acquire certain assets described in paragraph 1 hereof (“Purchased Assets”) comprising the business being conducted under the trade name ______fromABC Corporation, a Colorado corporation (“ABC”).

1.Asset Purchase. The proposed transaction would be structured as a purchase of the assets of ABC operating the said business and not the shares of ABC. The assets to be transferred shall include:

a.Inventory

  1. Customer Lists
  2. Vendor Lists
  3. Telephone numbers, websites.
  4. Trade name, trademarks, service marks and the goodwill of the business.

Excluded from the purchase are: cash, checking accounts and accounts receivables.

Except for any liabilities expressly being assumed, the assets are to be sold free and clear of all claims, debts, liens or other liabilities with Davis receiving good and marketable title thereto.

  1. Purchase Price. Davis and ABC will negotiate in good faith to determine a purchase price and the payment terms thereof.

3.Due Diligence. Upon the execution and delivery of this Letter of Intent by the parties hereto, ABC shall afford Davisand its employees and representatives, reasonable opportunity and access during normal business hours to inspect, investigate and audit the assets, liabilities, contracts, operations and business of ABC for due diligence consideration of the proposed transaction.

  1. Asset Purchase Agreement. This Letter of Intent is predicated upon the execution and delivery of a definitive agreement for the proposed transaction. Davis will endeavor to deliver a draft agreement to ABC within ninety (90) days following the date of this Letter of Intent.
  2. Exclusive Dealing. Until expiration of this Letter of Intent, ABC shall not offer to sell or enter into negotiations to sell the Purchased Assets, and ABC shall refrain, and shall cause its officers, directors, employees and any investment banker, attorney, accountant or other agent retained by it or them to refrain, from initiating or soliciting any inquiries or making any proposals with respect to, or engaging in negotiations concerning, or providing any confidential information or data to or having any discussions with any person relating to, any acquisition, business combination or purchase of all or any significant portion of the assets or business operations, or any controlling equity interest in, ABC.
  3. Governing Law. This Letter of Intent shall be governed by Illinois law.

7.Termination. This Letter of Intent shall expire, and the undertakings set forth in Paragraphs 3 and 5 herein shall terminate on the earlier of (i)the date Davis and ABC enter into a definitive agreement for the proposed transaction, (ii)February 28, 2006, or (iii) in accordance with the provisions of the following two sentences. Subject to the provisions hereof, either ABC or Davis may terminate this Letter upon ten (10) days written notice ("notice period") to the other party, in the event such party believes that a irreconcilable impasse in the negotiations of the definitive agreement has occurred that can not be resolved. Upon receipt of such notice the parties will seek to resolve such differences and failing such resolution this Letter shall terminate upon expiration of the notice period. The provisions of Paragraphs 8 and 9 shall survive the termination of this Letter.

8.No Public Announcement. The parties agree not to make any public announcement with regard to the transaction contemplated by this Letter without the prior written consent of the other. Additionally, each of the parties shall bear its own costs and expenses related to the transaction contemplated by this Letter, including but not limited to fees and expenses of legal counsel and accountants.

9.Confidential Information. The parties agree that (except as may be required by law) they will not disclose or use and they will cause their officers, directors, employees, representatives, agents, and advisors not to discuss the proposed transaction with third parties and will not disclose or use, any Confidential Information (as hereinafter defined) with respect to either party furnished, or to be furnished by such parties in connection herewith at any time or in any manner and they will not use such information other than in connection with the proposed transaction. For the purposes of this paragraph, "Confidential Information" means this Letter of Intent and the fact that Davis is negotiating to acquire the Purchased Assets and any information provided to Davis by ABC with respect to the proposed transaction, including but not limited to information obtained in accordance with Paragraph 3 hereof. If the proposed transaction is not consummated, each party will promptly return all documents, contracts, records or properties to the proper owner thereof. The provisions of this paragraph will survive the termination of this Letter. Because damages to either party resulting from violation of the provisions of this paragraph would be considerable but difficult to ascertain, either party may enforce the provisions of this paragraph by means of an injunction in the appropriate court of competent jurisdiction in the State of Illinois and be entitled to any other rights or remedies available at law of equity to such party.

Except for the provisions contained in Paragraphs3, 5, 6, 7, 8 and 9 above, this Letter of Intent is not intended to be a complete statement of, or a binding agreement between Davis and ABC, or create any obligation or rights in either party to sell or purchase the Purchased Assets, it being agreed and understood that a binding commitment with respect to such transaction will only exist upon the execution and delivery of, and to the extent set forth in, a definitive agreement. The definitive agreement shall contain such terms and conditions, including, but not limited to representations, warranties, covenants and conditions precedent to closing, which may be agreed to by the parties.

Please sign and date this Letter of Intent in the spaces provided below to confirm our mutual understandings and your agreement to the binding provisions set forth in this Letter of Intent an return a signed copy to the attention of the undersigned.

DAVIS AVIATION INCORPORATED

By:

President

Acknowledged and Agreed to:

ABC CORPORATION

By:

______, President

{FILESANY-LETINT 14000132/}