Non-Binding Letter of Intent Stock Acquisition (14000575)

Non-Binding Letter of Intent Stock Acquisition (14000575)

Date, 201_

Mr. George Washington

Seller Corporation Address

RE:Letter of Intent for the Proposed Acquisition of 100% of the Outstanding Capital Stock of Seller Corporation

Dear Mr. Washington:

This letter of intent (the “Letter of Intent”) outlines the proposed terms and conditions under which Buyer Corporation, a State corporation, or an affiliated company (“___”), would acquire all of the outstanding shares of capital stock of Seller Corporation, a State corporation (“_____”).

  1. Transaction Structure. The proposed transaction would be structured as an acquisition of 100% of the issued and outstanding shares of capital stock of Selling Corporation(the “Shares”) from the shareholders of Selling Corporation(the “Shareholders”). In agreeing to the acquisition arrangement of this fashion, (i)there would be no material adverse tax consequences to Buying Corporation upon a merger of Seller Corporationwith Buyer Corporation, (ii)all of the assets, tangible or intangible, used in, or arising out of, the conduct of the business operations of Seller Corporation, are owned by Seller Corporation or otherwise held by Seller Corporationunder valid leases or licenses, (iii)Seller Corporation has no subsidiaries and (iv)there are no other securities convertible or exchangeable into shares of capital stock, nor any agreements of any kind relating to the issuance of any shares of capital stock or other securities of Seller Corporationunder the terms of any options, warrants or the like.
  2. Purchase Price. The proposed purchase price for the Shares (subject to the earnout) would be $______, payable as follows: (i)At the closing of the proposed transaction, $______would be paid in cash; and (ii)an aggregate $______would be available over a three-year period after the closing to the extent the business operations of Seller Corporation meets mutually agreeable annual performance thresholds.
  3. Due Diligence. Upon the execution and delivery of this Letter of Intent by the parties hereto, Seller Corporationshall afford Buyer Corporationand Bank A[define], and their respective employees and representatives, reasonable opportunity and access during normal business hours to inspect, investigate and audit the assets, liabilities, contracts, operations and business of Seller Corporation for due diligence consideration of the proposed transaction.
  4. Stock Purchase Agreement. This Letter of Intent is predicated upon the execution and delivery of a definitive agreement for the proposed transaction. Buyer Corporationwill endeavor to deliver a draft agreement to Seller Corporationwithin [_____(#) days] following the date of this Letter of Intent.
  5. Exclusive Dealing. The Shareholders shall not offer to sell or enter into negotiations to sell the Shares, and Seller Corporation 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, Seller Corporation. The Shareholders and Seller Corporationshall immediately cease and cause to be terminated any existing activities, discussions or negotiations with any persons conducted heretofore with respect to the foregoing.
  6. Governing Law. This Letter of Intent shall be governed by State 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 Buyer Corporationand the Shareholders enter into a definitive agreement for the proposed transaction, (ii)Date, 201_, or (iii) in accordance with the provisions of the following two sentences. Subject to the provisions hereof, either the Shareholders or Buyer Corporation may terminate this Letter upon ____ (#) 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 any information provided to the Buyer by the Shareholders or Seller Corporation 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 Buyer Corporationand the Shareholders or Seller Corporation or create any obligation or rights in either party to sell or purchase the outstanding shares of capital stock of Seller Corporation, 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.

The proposal herein shall expire at _:00 p.m. (State time), on Date , 201_. 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 and return a signed copy to the attention of the undersigned.

BUYER CORPORATION

By:

[Name, Title]

Acknowledged and Agreed to:

SELLER CORPORATION SHAREHOLDERS

By:_

George Washington, President[Name]

______

[Name]

______

[Name]

{FILESANY-LETINT 14000575/}