USA Letter of Intent to Purchase Assets of Business by Megadox


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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]


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


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).


The Transaction shall include the purchase of all of the assets of the Company, including but not limited

(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;

(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.


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.


(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”).


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

be the obligation of the Current Shareholders, who shall reimburse Newco for any such costs Newco


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.


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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