/Docs/F/US/00/Agt/Acquire/Shares/MSPA/Annex/Letter_of_Intent/0.md
| Note | = | As per the original, the "Short Form" letter is at the foot of this file. |
| ANCILLARY DOCUMENT B | = | |
| Ti | = | |
| Doc.Ti | = | Letter of Intent |
| 0.1.sec | = | Dated: {EffectiveDate.YMD} |
| 0.2.sec | = | |
| 0.3.sec | = |
|
| 0.4.sec | = | Ladies and Gentlemen: |
| 0.5.sec | = | This letter will confirm that {Buyer.US.N,E,A} (“Buyer”) is interested in acquiring all the outstanding capital stock (the “Shares”) of {Company.US.N,E,A} (the “Company”) from you (“Sellers”), all the Company’s shareholders. In this letter, (a) the Company and its subsidiaries are called the “Acquired Companies,” and (b) Buyer’s possible acquisition of Shares (or other acquisition of the Company) is sometimes called the “Possible Acquisition.” |
| 0. | = | [G/Z/paras/s5] |
| NonBinding.Ti | = | Part One—Nonbinding Provisions |
| Intro.1.sec | = | The parties wish to commence negotiating a definitive written acquisition agreement providing for the Possible Acquisition (a “Definitive Agreement”). To facilitate the negotiation of a Definitive Agreement, the parties request that Buyer’s counsel prepare an initial draft. The execution of any Definitive Agreement would be subject to the satisfactory completion of Buyer’s ongoing investigation of the Acquired Companies’ business and would also be subject to approval by Buyer’s board of directors. |
| Intro.2.sec | = | Based upon the information currently known to Buyer, it is proposed that the Definitive Agreement would include the following terms: |
| Intro. | = | [G/Z/paras/s2] |
| Transaction.Ti | = | Basic Transaction |
| Transaction.sec | = | Sellers would sell all the Shares to Buyer at the price (the “Purchase Price”) set forth in Paragraph 2 at the closing of the Possible Transaction (the “Closing”), which is expected to be no later than {Closing.EffectiveDate.YMD}. |
| Transaction. | = | [G/Z/ol/Base] |
| Price.Ti | = | Purchase Price |
| Price.0.sec | = | The Purchase Price would be {Price.Total.Sum.$} (subject to adjustment as described below) and would be paid in the following manner: |
| Price.1.sec | = | at the Closing, Buyer would pay Sellers {Price.Close.Sum.$} in cash; |
| Price.2.sec | = | at the Closing, Buyer would deposit with a mutually acceptable escrow holder {Price.Escrow.Sum.$}, which would be held in escrow for a period of at least {Escrow.Release.Period.TimeSpan} in order to secure the performance of Sellers’ obligations under the Definitive Agreement; and |
| Price.3.sec | = | at the Closing, Buyer would execute and deliver to each Seller an unsecured nonnegotiable promissory note. The promissory notes to be delivered to Sellers by Buyer would have an aggregate principal amount of {Price.Note.Principal.$}, bear interest at the rate of {Price.Note.Interest.%} per annum, mature on the {Price.Note.Principal.MaturityYears.#}th anniversary of the Closing, and provide for {Price.Note.Principal.PaymentInstallments.#} equal {Price.Note.Principal.PaymentPeriod.cl} payments of principal along with {Price.Note.Interest.PaymentPeriod.cl} payments of accrued interest. |
| Price.00.sec | = | The Purchase Price assumes that the Acquired Companies have consolidated shareholders’ equity of at least {Company.Equity.Consolidated.Minimum.$} as of the Closing. The Purchase Price would be adjusted based on changes in the Acquired Companies’ consolidated shareholders’ equity as of the Closing on a dollar-for-dollar basis. |
| Price. | = | [G/Z/ol-a/s3] |
| Personnel.Ti | = | Employment and Noncompetition Agreements |
| Personnel.0.sec | = | At the Closing: |
| Personnel.1.0.sec | = | the Company would enter into employment agreements on the following terms: |
| Personnel.1.1.sec | = | {Employee.1.Name.Full}, as {Employee.1.Title}, at a salary of {Employee.1.Salary.$} for a period of {Employee.1.Employ.TimeSpan} |
| Personnel.1.2.sec | = | {Employee.2.Name.Full}, as {Employee.2.Title}, at a salary of {Employee.2.Salary.$} for a period of {Employee.2.Employ.TimeSpan} |
| Personnel.1.3.sec | = | {Employee.3.Name.Full}, as {Employee.3.Title}, at a salary of {Employee.3.Salary.$} for a period of {Employee.3.Employ.TimeSpan} |
| Personnel.1. | = | [G/Z/ol/s3] |
| /Personnel.1.sec | = | the Company and {Employee.Agt.Persons.cl} would enter into employment agreements for {Employee.Agt.TimeSpan} pursuant to which he/she would agree to continue to serve as the Company’s __________ and would be entitled to receive a salary of $__________ per year; and |
| Personnel.2.sec | = | each Seller would execute a {Noncompete.Years} noncompetition agreement in favor of Buyer. |
| Personnel. | = | [G/Z/ol-a/s2] |
| SPA.Ti | = | Other Terms |
| SPA.0.sec | = | Sellers would make comprehensive representations and warranties to Buyer and would provide comprehensive covenants, indemnities, and other protections for the benefit of Buyer. The consummation of the Possible Acquisition by Buyer would be subject to the satisfaction of various conditions required to be satisfied prior to Closing, which would include, but not be limited to, the following: |
| SPA.1.sec | = | Sellers will own 100% of the outstanding capital stock of the Company, and the Shares will be free and clear of all liens and encumbrances; |
| SPA.2.sec | = | There will have been no material adverse change in the business or financial condition of any Acquired Company; |
| SPA.3.sec | = | Buyer’s satisfactory environmental audit of all real properties owned or occupied by each Acquired Company; |
| SPA.4.sec | = | Between the date of the Definitive Agreement and the Closing, Sellers will cause the Acquired Companies to operate their business in the ordinary course and to refrain from any extraordinary transactions; |
| SPA.5.sec | = | The truth and accuracy of the representations and warranties of Sellers set forth in the Definitive Agreement; |
| SPA.6.sec | = | Sellers will have performed or complied in all material respects with all agreements required by the Definitive Agreement to be performed or complied with by them; and |
| SPA.7.sec | = | Such other conditions as are customary in transactions of this type. |
| SPA. | = | [G/Z/ol-a/s7] |
| Binding.Ti | = | Part Two—Binding Provisions |
| BindingIntro.sec | = | The parties, intending to be legally bound, agree to the following legally enforceable paragraphs of this letter. |
| Access.Ti | = | Access |
| Access.sec | = | Sellers will cause the Company to afford Buyer and its duly authorized representatives full and free access to each Acquired Company, its personnel, properties, contracts, books and records, and all other documents and data, subject to the Confidentiality Agreement referred to in Paragraph 8. |
| Access. | = | [G/Z/ol-a/s2] |
| Exclusive.Ti | = | Exclusive Dealing |
| Exclusive.sec | = | Sellers will not, and will cause the Acquired Companies not to, directly or indirectly, through any representative or otherwise, solicit or entertain offers from, negotiate with or in any manner encourage, discuss, accept, or consider any proposal of any other person relating to the acquisition of the Shares or the Acquired Companies, their assets or business, in whole or in part, whether directly or indirectly, through purchase, merger, consolidation, or otherwise (other than sales of inventory in the ordinary course); and |
| Exclusive.sec | = | Sellers will immediately notify Buyer regarding any contact between Sellers, any Acquired Company, or their respective representatives and any other person regarding any such offer or proposal or any related inquiry and if made in writing furnish a copy thereof. |
| Exclusive. | = | [G/Z/ol-a/s2] |
| Conduct.Ti | = | Conduct of Business |
| Conduct.sec | = | Sellers shall cause the Acquired Companies to operate in the ordinary course and to refrain from any transactions outside the ordinary course of business. |
| Conduct. | = | [G/Z/ol/Base] |
| Conf.Ti | = | Confidentiality |
| Conf.sec | = | Except as expressly modified by the Binding Provisions, the Confidentiality Agreement entered into by the Company and Buyer on {NDA.EffectiveDate.YMD} (the “Confidentiality Agreement”) shall remain in full force and effect. |
| Conf. | = | [G/Z/ol/Base] |
| HSR.Ti | = | Hart-Scott-Rodino |
| HSR.sec | = | Buyer and Sellers shall proceed, as promptly as is reasonably practical, to prepare and to file any notifications required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”). |
| HSR. | = | [G/Z/ol/Base] |
| Costs.Ti | = | Costs |
| Costs.sec | = | Buyer and each Seller will be responsible for and bear all of its respective costs and expenses (including any broker’s or finder’s fees and the expenses of their representatives) incurred at any time in connection with pursuing or consummating the Possible Acquisition. Notwithstanding the preceding sentence, Buyer will pay one-half and Sellers will pay one-half of the HSR Act filing fees. |
| Costs. | = | [G/Z/ol/Base] |
| Terminate.Ti | = | Termination |
| Terminate.sec | = | The Binding Provisions will automatically terminate upon the earliest of the following (the “Termination Date”): (i) {Closing.LatestDate.YMD}, (ii) execution of the Definitive Agreement by all parties, (iii) the mutual written agreement of Buyer and Sellers, or (iv) written notice of termination by Buyer, for any reason or no reason, with or without cause, at any time; provided, however, that the termination of the Binding Provisions will not affect the liability of a party for breach of any of the Binding Provisions prior to the termination. Upon termination of the Binding Provisions, the parties will have no further obligations under this letter, except Paragraph 13 will survive such termination. |
| Terminate. | = | [G/Z/ol/Base] |
| BindingEffect.Ti | = | Effect of Letter |
| BindingEffect.sec | = | The provisions of Paragraphs 1 through 4 of this letter are intended only as an expression of interest on behalf of Buyer, are not intended to be legally binding on any party or Acquired Company, and are expressly subject to the negotiation and execution of an appropriate Definitive Agreement. In addition, nothing in this letter should be construed as an offer or commitment on the part of Buyer to submit a definitive proposal. Except as expressly provided in Paragraphs 5 through 13 (or as expressly provided in any binding written agreement that the parties may enter into in the future), no past or future action, course of conduct, or failure to act relating to the Possible Acquisition, or relating to the negotiation of the terms of the Possible Acquisition or any Definitive Agreement, will give rise to or serve as a basis for any obligation or other liability on the part of the parties or any of the Acquired Companies. |
| BindingEffect. | = | [G/Z/ol/Base] |
| Misc.Ti | = | Miscellaneous |
| Misc.Entire.Ti | = | Entire Agreement |
| Misc.Entire.sec | = | The Binding Provisions supersede all prior agreements, whether written or oral, between the parties with respect to its subject matter and constitute a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. |
| Misc.Entire. | = | [G/Z/ol/Base] |
| Misc.Amend.Ti | = | Modification |
| Misc.Amend.sec | = | The letter may only be amended, supplemented, or otherwise modified by a writing executed by the parties. |
| Misc.Amend. | = | [G/Z/ol/Base] |
| Misc.Law.Ti | = | Governing Law |
| Misc.Law.sec | = | All matters relating to or arising out of a Possible Acquisition and the rights of the parties (sounding in contract, tort, or otherwise) will be governed by and construed and interpreted under the laws of {Law.State.the}, without regard to conflicts of laws principles that would require the application of any other law. |
| Misc.Law. | = | [G/Z/ol/Base] |
| Misc.Tribunal.Ti | = | Jurisdiction; Service of Process |
| Misc.Tribunal.sec | = | Any proceeding arising out of or relating to a Possible Acquisition shall be brought in the courts of {Tribunal.State.cl}, or, if it has or can acquire jurisdiction, in {Tribunal.USDC.cl}, and each of the parties irrevocably submits to the exclusive jurisdiction of each such court in any such proceeding, waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of such proceeding shall be heard and determined only in any such court, and agrees not to bring any proceeding arising out of or relating to a Possible Acquisition in any other court. Each party acknowledges and agrees that this Paragraph 13(d) constitutes a voluntary and bargained- for agreement between the parties. Process in any proceeding may be served on any party anywhere in the world. |
| Misc.Tribunal. | = | [G/Z/ol/Base] |
| Misc.Counterpart.Ti | = | Counterparts |
| Misc.Counterpart.sec | = | This letter may be executed in one or more counterparts, each of which will be deemed to be an original copy and all of which, when taken together, will be deemed to constitute one and the same document, and will be effective when counterparts have been signed by each of the parties and delivered to the other parties. A manual signature on this letter whose image shall have been transmitted electronically will constitute an original signature for all purposes. The delivery of copies of this letter, including executed signature pages, by electronic transmission will constitute effective delivery of this letter for all purposes. |
| Misc.Counterpart. | = | [G/Z/ol/Base] |
| Misc.xlist | = | |
| Misc. | = | [G/Z/ol/Base] |
| 00.1.sec | = | If you are in agreement with the foregoing, please sign and return one copy of this letter, which thereupon will constitute our understanding with respect to its subject matter and a binding agreement with respect to the Binding Provisions. |
| 00.2.sec | = | |
| 00.3.sec | = | Very truly yours, |
| = | ||
| 00.4.sec | = | {Buyer.US.Frame.Sign.Block} |
| 00.5.sec | = | |
| 00.6.sec | = | Agreed to as to the Binding Provisions on {EffectiveDate.YMD}. |
| = | ||
| 00.7.sec | = | SELLERS: |
| = | ||
| 00.8.sec | = | {Seller.Sign.Block} |
| = | ||
| 00. | = | [G/Z/paras/s8] |
| = | [G/Z/ol/Base] | |
| NonBinding.Sec | = | {NonBinding.Ti} {Intro.sec} |
| Binding.Sec | = | {Binding.Ti} {BindingIntro.sec} |
| xlist | = | |
| SHORT FORM LETTER OF INTENT | = | |
| [DATE] | = | |
| Seller [1] | = | |
| Seller [2] | = | |
| . . . | = | |
| Seller [8] | = | |
| Ladies and Gentlemen: | = | |
| This will set forth the preliminary intention of the parties as to general terms upon which __________ ("Buyer") would consider acquiring from you ("Sellers") all the outstanding capital stock of __________ ("Company"). | = | |
| 1. Upon the closing of the sale, Buyer would acquire all of the capital stock of Company from the shareholders of Company in exchange for an aggregate payment at closing of $_________ in cash, subject to adjustment, and promissory notes of Buyer in the aggregate principal amount of $__________. Each Seller would receive cash equal to $_________ per share owned, subject to adjustment, and a promissory note in the principal amount of $________ per share. Our willingness to consider this proposed transaction is conditioned on the willingness and eventual agreement of all shareholders of the Company to sell on terms acceptable to Buyer. | = | |
| 2. As promptly as practicable and in any event by _________, Buyer's counsel will prepare an initial draft of a definitive stock purchase agreement ("Purchase Agreement") and other related agreements for review by you and your counsel. The draft Purchase Agreement will provide for customary representations and warranties, covenants, conditions to closing, escrows, and indemnities. The parties will endeavor to negotiate and execute a final definitive Purchase Agreement on or before _________ , and to close the sale on or before _________ . The parties anticipate that prior to the execution of any definitive Purchase Agreement, Buyer will have the opportunity to conduct due diligence of the Company and you will have the opportunity to conduct due diligence of Buyer. | = | |
| 3. It is understood that before the parties would consider entering into a definitive Purchase Agreement, (a) Buyer shall have been satisfied with the results of its due diligence investigation of Company, and (b) Buyer shall have become satisfied that it is able to borrow $__ million of the cash portion of the purchase price on terms acceptable to Buyer. | = | |
| 4. It is agreed that each party shall bear its own legal, accounting, investment banking, and other expenses in connection with the negotiation, documentation, and closing of the acquisition, whether or not a closing occurs. Any expenses borne by Company would be deducted from the purchase price in the event of a closing. Each party represents that it has not engaged any broker or finder in connection with the acquisition. | = | |
| 5. The parties agree that this letter is merely an expression of intent and neither party is under any legal obligation to the other unless and until a definitive Purchase Agreement is executed, except for (a) the provisions of paragraph 4, this paragraph 5, and paragraph 6 and (b) the confidentiality agreement executed by Buyer with respect to the confidential information of Company. | = | |
| 6. It is agreed that any party may cease pursuit of the contemplated transaction at any time for any or no reason. No party is obligated to negotiate in good faith. | = | |
| If the foregoing is in accordance with your understanding, please execute and return the enclosed copy of this letter. | = | |
| Very truly yours, | = | |
| ________________________________ | = | |
| Buyer | = | |
| Agreed to as to Paragraphs 4, 5 and 6. | = | |
| _____________________________ | = | |
| Seller 1 | = | |
| . . . | = | |
| _____________________________ | = | |
| Seller 2 | = | |