Subject: Letter of Intent for the Acquisition of COMPANY by ACQUIRER
Dear CEO NAME:
This letter confirms your and our mutual intent with respect to the potential transactions described herein between
ACQUIRER (“Buyer”, “us”, “our”) and
COMPANY (“Seller”, “you”, or “your”), including its shareholders. This document, in and of itself, does not represent an enforceable legal contract.
WHEREAS, Buyer is interested in acquiring all of the outstanding stock (“Shares”) of COMPANY / Seller, and will be performing certain due diligence with respect to Seller’s corporation; and
WHEREAS, Buyer and Seller intend to negotiate the substantive terms of such acquisition, including the terms of Buyer’s employment agreements with certain key employees and executives of Seller;
NOW, THEREFORE, the parties enter into this Letter of Intent as follows:
The principal terms of the proposed transaction would be substantially as follows:
- Real and Effective Acquisition. Subject to the successful due diligence, and the successful negotiation of a purchase price for the Shares, Buyer would acquire the Shares.
- Consideration. The aggregate purchase price for the Shares is to be negotiated between the parties in good faith, provided that the Purchase Agreement (as defined below) and employment agreements can be successfully negotiated concurrently with each other.
- Due Diligence Review. Promptly following the execution of this Letter of Intent, you will allow us to complete our examination of your financial, accounting and business records and the contracts and other legal documents and generally to complete due diligence. Any information obtained by us as a result thereof will be maintained by us in confidence subject to the terms of the Non-Disclosure Agreement executed by the parties and dated as of [DATE] (the “NDA”). The parties will cooperate to complete due diligence as expeditiously as possible.
- Definitive Purchase Agreement. All of the terms and conditions of the proposed transactions would be stated in the Purchase Agreement and employment agreements, to be negotiated in good faith concurrently with each other, and if agreed, executed by you and us. Neither party intends to be bound by any oral or written statements or correspondence concerning the Purchase Agreement or employment agreements arising during the course of negotiations, notwithstanding that the same may be expressed in terms signifying a partial, preliminary or interim agreement between the parties.
- Conduct in Ordinary Course. In addition to the conditions discussed herein and any others to be contained in a definitive written stock purchase agreement (the “Purchase Agreement”), consummation of the acquisition would be subject to having conducted your business in the ordinary course during the period between the date hereof and the date of closing and there having been no material adverse change in your business, financial condition or prospects. Seller shall not be liable in the event of any Buyer determination that Seller did not conduct its business in the ordinary course, or for any adverse changes Buyer may deem to have occurred.
- Contract of Employment. Simultaneously with the execution of the Purchase Agreement, we would offer employment to the following individuals currently employed by Seller and you hereby agree to accept such employment, subject to the negotiation of mutually acceptable employment agreements, it being understood that the term of such employment agreements will be for a period of not less than three (3) years.
You and we will pay our respective expenses incident to this Letter of Intent, the Purchase Agreement, the employment agreements and the transactions contemplated hereby and thereby, and NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY CAUSE WHATSOEVER ARISING UNDER THIS LETTER OF INTENT.
Neither you nor we will make any announcement of the proposed transaction contemplated by this Letter of Intent prior to the execution of the Purchase Agreement and employment agreements without the prior written approval of the other, which approval will not be unreasonably withheld or delayed. The foregoing shall not restrict in any respect your or our ability to communicate information concerning this Letter of Intent and the transactions contemplated hereby to your and our, and your and our respective affiliates’, officers, directors, employees and professional advisers, and, to the extent relevant, to third parties whose consent is required in connection with the transaction contemplated by this Letter of Intent.