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Negotiate the purchase of a US based business with this USA Letter of Intent to Purchase Assets of Business. - The letter of intent is not a legal contract and is not legally binding, except as it relates to the negotiations between the parties, such as confidentiality provisions. - In this template, the buyer intends to incorporate a new company which will purchase all of the assets and goodwill of the business from the seller. - The letter has a built-in expiry date, which will take effect if the parties fail to execute and deliver a formal Purchase & Sale Agreement within a specified number of days. - If the buyer is willing to proceed and the seller fails to go through with the transaction, the seller will pay the buyer's costs and a percentage of the purchase price as liquidated damages. This USA Letter of Intent to Purchase Assets of Business is provided in MS Word format, and is fully editable to fit your circumstances.
LETTER OF INTENT RE: PURCHASE OF ASSETS OF [NAME OF SELLER] Purchaser: Seller: [Purchaser] [Seller] [address] [address] [city, state, zip code] [city, state, zip code] ATTENTION: [contact person] ATTENTION: [contact person] [phone number] [phone number] [fax number] [fax number] PERSONAL & CONFIDENTIAL Dear Sirs: [Purchaser] (the “Purchaser”), a corporation incorporated under the laws of the State of _______________, is pleased to submit this letter of intent (the “Letter of Intent”) setting out the terms of the proposed acquisition of 100% of the assets of [Seller] (the “Company”) from the shareholders of the Company (the “Current Shareholders”), by a new corporate entity (“Newco”) to be formed by the Purchaser. The acquisition of the assets of the Company by Newco shall hereafter be referred to as the “Transaction” and the date of the completion of the Transaction shall be referred to as the “Closing Date”. Newco will pay a total consideration (the “Total Consideration”) composed of a cash purchase price for the assets of the Company of $___________ plus the assumption of $________ composed of certain liabilities, subject to the terms and conditions of this Letter of Intent. At the Closing Date, Newco will be owned by the Purchaser and [list other parties, if any, besides Purchaser who will have ownership in Newco] (the “Future Owners”). The terms and conditions of the Transaction are set out below. PART I - THE TRANSACTION 1. PURCHASE AGREEMENT The parties to this Letter of Intent will endeavor to finalize and execute a definitive asset purchase agreement (the “Definitive Purchase Agreement”) defining the Transaction which shall include the terms below and such other provisions as may be mutually agreed upon, prior to the Expiration Date (as hereinafter defined). 2. ASSETS PURCHASED The Transaction shall include the purchase of all of the assets of the Company, including but not limited to: (a) All right, title and exclusive interest in and to any and all patents, trademarks, trade names, technical processes, know-how or other intellectual property developed by, related to or associated with the business of the Company, whether registered or not; -2- (b) All tangible and intangible property related to or associated with the business of the Company including customer lists, books, records, goodwill and other intangible assets; (c) All contracts for purchases from suppliers or deliveries to customers of the Company; and (d) Any other assets of any nature whatsoever that are related to, associated with or used in connection with the business of the Company and its goodwill. 3. TOTAL CONSIDERATION The Total Consideration shall be payable to the Shareholders as follows: (i) A cash amount of $_____________ to be paid on the Closing Date, subject to adjustments as described below (the “Cash Purchase Price”); (ii) The assumption of $_____________ composed of certain liabilities as listed on the Closing balance sheet (the “Assumed Liabilities”); (iii) The issuance of common shares in Newco representing % of the fully diluted stock of Newco as at the Closing Date. 4. PURCHASE PRICE ADJUSTMENTS (a) The Cash Purchase Price shall be adjusted as of the Closing Date by [set out any adjustments to be made to the Cash Purchase Price]. (b) Subsequent to the Closing Date, the Purchase Price shall be adjusted by [set out any adjustments to be made to the purchase price post-closing]. (c) The Purchase Price shall be reduced by an amount equal to any account receivable of the Company that is not collected by Newco within 180 days after the Closing Date. In such cases the receivable shall be returned to the Current Shareholders for their collection. If any of such receivables were collected by Newco after the 180-day period, the amounts of any such recoveries shall be paid to the Company. (d) The Purchase Price shall be reduced by an amount equal to the value of any inventory acquired by Newco as at the Closing Date which is written off within one (1) year of the Closing Date. Any such write down shall be determined by an accounting firm, acceptable to the Current Shareholders, to the Purchaser and to its lenders, according to generally accepted accounting principles (“GAAP”). 5. ENVIRONMENTAL ISSUES The Company shall provide the Purchaser with full disclosure of all environmental issues, studies, remediation activities and monitoring of the Company’s land, buildings, plant, facilities, and operations of which the Company has knowledge. The Company shall also cooperate with any environmental audits required as a condition precedent to the Transaction, and the parties shall concur on the scope and extent of such audits, the entity that shall perform any such audits and the splitting of samples taken in the course of such audits. The parties shall keep strictly confidential all information regarding the results of any environmental audits. For a period of years after the Closing Date, any environmental liability cost incurred by Newco in respect of the assets or their use for the period prior to the Closing Date shall -3- be the obligation of the Current Shareholders, who shall reimburse Newco for any such costs Newco incurs. 6. REPRESENTATIONS AND WARRANTIES The Definitive Purchase Agreement shall contain representations and warranties typical in a transaction of this size and nature. Any cost incurred by Newco within years of the Closing Date as a result of a breach in the representations and warranties shall cause a reduction of an equal amount in the Purchase Price. 7. CONDITIONS PRECEDENT The Definitive Purchase Agreement shall provide for the following conditions precedent to closing: (a) Governmental Approvals: All required governmental approvals, licenses, and permits necessary for the closing of the Transaction and for the operations of Newco in the manner that the Company operated prior to the Transaction shall have been attained. (b) Material Adverse Change: There shall have been no material adverse change in the business, assets, operations, financial status or prospects of the Company from their current state as of the date of this Letter of Intent, and the Company shall immediately notify t
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