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Letters of Intent


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									CHAPTER 2

Letters of Intent
Sherry L. Countryman

§ 2.1       Introduction .......................................................................... 2–1

§ 2.2       Pros and Cons of Letters of Intent...................................... 2–1

§ 2.3       Contents of a Letter of Intent.............................................. 2–2

§ 2.4       Specific Drafting Issues........................................................ 2–4
            § 2.4.1         Parties’ Intent to Be Bound ................................... 2–4
            § 2.4.2         The Implied Duty to Negotiate in Good Faith ...... 2–5
            § 2.4.3         Including a No-Shop Provision ............................. 2–6

EXHIBIT 2A—Form of Letter of Intent for Stock Acquisition
by Merger ............................................................................................ 2–7

EXHIBIT 2B—Form of Letter of Intent for Purchase
of Privately Held Company ............................................................. 2–11

EXHIBIT 2C—Short Form Letter of Intent
for Commercial Lease ...................................................................... 2–15

2nd Edition 2010                                                                                     2–i

2–ii                                     2nd Edition 2010

Letters of Intent*
Sherry L. Countryman

                                   Scope Note
           This chapter first addresses the advantages and disadvan-
           tages of utilizing a letter of intent as a precursor to drafting a
           definitive contract. The elements of a letter of intent are then
           set forth. Finally, whether and what portions of the letter of in-
           tent should be binding, the implied duty to negotiate in good
           faith, and “no shop” provisions are also discussed.

§ 2.1          INTRODUCTION
Often the parties to a proposed transaction will reach a point at which they wish
to reflect their discussions in writing. These preliminary writings are often referred
to as a “memorandum of understanding,” “memorandum of agreement,” “term
sheet,” or “letter of intent” and are referred to in this chapter as “letters of intent.”

Depending on the parties’ respective intentions, relative negotiating power, the
status and timing of the transaction, and the terms of the particular letter of in-
tent, there are disadvantages and advantages to signing a letter of intent as com-
pared to proceeding directly with the negotiation and preparation of definitive
documents. In addition, there are several mistakes for buyers and sellers to avoid
in preparing letters of intent.

As noted above, there are advantages and disadvantages with respect to letters of

For example, in the context of the sale of a business, a letter of intent may give
the buyer the opportunity to have the seller agree to a “no shop” provision,
which provides in general that the seller will not solicit or negotiate other offers

    Updated for the 2010 Edition by MCLE.

2nd Edition 2010                                                                    2–1

to sell the business for a specified period or for so long as the seller and buyer
are still negotiating. This in effect takes the business off the market while the
buyer performs due diligence, negotiates the definitive agreements, and, if appli-
cable, lines up financing.

In addition, having a letter of intent may make it easier for a buyer to begin to
line up any required financing. From the seller’s perspective, a letter of intent
offers an opportunity to force the buyer to commit to the material terms of the
deal—in particular the purchase price to be paid—before the seller takes the
business off the market or discloses sensitive information.

In general, letters of intent may be useful as tools to cause both parties to focus
on and define the overall structure of the transaction, and the terms already
agreed upon. This may help to avoid a situation in which the buyer and the seller
proceed without a letter of intent, each expending significant amounts of time
and money performing due diligence, preparing first drafts of definitive agree-
ments, etc., before they realize that they are unable to agree upon a fundamental
term, such as price.

Finally, if a Hart-Scott-Rodino filing is required, the parties will be able to make
their filings and trigger the waiting period upon signing a letter of intent, rather
than waiting for the completion of definitive agreements.

Among the disadvantages of letters of intent, one of the most widely cited is that
preparing and negotiating a letter of intent (which can take as much time as the
parties will allow) distracts the parties and delays the transaction, and accord-
ingly the parties would be better off proceeding directly to definitive agreements.

        Practice Note
        Signing a letter of intent may trigger disclosure obligations if either
        party is a publicly-traded entity.

Even if a buyer and seller intend to draft a nonbinding document as merely an
expression of their intent to move forward and the known terms, the letter of
intent should adequately reflect the outline of the transaction between them and
should contain certain essential terms, including the following:

        • a description of the subject matter of the transaction (stock or
          assets), a description of the liabilities being assumed (or those not
          being assumed), and the structure of the transaction;

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LETTERS OF INTENT                                                               § 2.3

     • the purchase price, particularly the terms of any securities being
       issued in the transaction as well as any deferred payment terms,
       escrow terms, or the terms of any “earn out” provisions;

     • a basic description of the other terms of the agreement, including
       representations and warranties and covenants, focusing on any
       special or unique provisions discussed by the parties, particularly
       any such provisions which impact upon the calculation of the pur-
       chase price;

     • the extent of indemnification provisions, if any;

     • the conditions to the transactions, including any required approv-
       als or consents of a board of directors, shareholders, governments,
       or third parties, or financing condition, if any, and any other mate-
       rial conditions to the transaction;

     • the mutual confidentiality provisions (to the extent a confidential-
       ity agreement does not already exist);

     • the mutual indemnification provisions for any claims of a business
       broker or investment banker retained by the indemnifying party;

     • an express statement to the effect that the parties do not (or do) in-
       tend to be bound by the terms of the letter of intent (as described
       in greater detail in § 2.4.1, below).

In addition, the parties may add provisions relating to the interim period between
the letter of intent and the completion of definitive agreements, including:

     • a “no-shop” provision binding the seller (as discussed in greater
       detail in § 2.4.3, below);

     • an obligation on the seller’s part to cooperate in the buyer’s due
       diligence investigation, and, if applicable, a detailed description
       of any unusual due diligence procedures, such as restricting ac-
       cess to particularly sensitive information until the parties have
       progressed further with the transaction; and

     • an expense reimbursement provision in case the parties do not
       reach a definitive agreement for certain specified reasons (for ex-
       ample, because the buyer learns of some previously undisclosed
       material liabilities of the seller).

2nd Edition 2010                                                                 2–3

The following sections highlight key issues to consider when drafting and nego-
tiating a letter of intent.

§ 2.4.1      Parties’ Intent to Be Bound
In negotiating a letter of intent, often one of the more sensitive issues between a
buyer and seller is whether and what portions of the letter of intent should be
binding on the parties and what portions should be nonbinding or otherwise sub-
ject to change. For example, the seller may want the buyer to commit to a speci-
fied purchase price before the seller will agree to either disclose sensitive infor-
mation or take the business off the market by agreeing to a no-shop provision.
On the other hand, the buyer will probably be unwilling to commit to a purchase
price or other specific terms until the buyer has completed due diligence and, if
applicable, lined up financing. There is no right or wrong answer here—it is
generally determined by the parties’ relative sophistication and bargaining posi-
tion. However, there are two rules to remember to avoid disputes later on.

First, the general rule as to the binding nature of a letter of intent is based on
whether or not the parties intended to be bound. See McCarthy v. Tobin, 429
Mass. 84, 87 (1999) (noting that “[t]he controlling fact is the intention of the
parties” while finding that an offer to purchase real estate constituted a binding
contract); Targus Group Int’l v. Sherman, 76 Mass. App. Ct. 421, 433–34 (2010)
(use of present tense in settlement “agreement in principle,” together with so-
phistication of parties, signed approval of content and form, endorsement of me-
diator, and absence of references to unfinished terms or future mediation, all
indicated an intention to be bound); Hunneman Real Estate Corp. v. The Nor-
wood Realty, Inc., 54 Mass. App. Ct. 416, 421 (2000) (finding intent to be bound
where parties “twice expressly stated [so] in prominent parts of a letter of in-
tent”). Other factors bearing upon present intent to be bound include “the subse-
quent conduct and interpretation of the parties themselves.” Hunneman Real
Estate Corp. v. The Norwood Realty, Inc., 54 Mass. App. Ct. at 423, n.11 (inter-
nal quotation omitted). Once intent is established, the analysis “turns to whether
the inchoate or unresolved aspects of the parties’ agreement are ‘essential’ or
‘material.’” Hunneman Real Estate Corp. v. The Norwood Realty, Inc., 54 Mass.
App. Ct. at 421. As long as there is a present intention to be bound, “[i]t is not
required that all terms of the agreement be precisely specified, and the presence
of undefined or unspecified terms will not necessarily preclude the formation of
a binding contract.” Situation Mgmt. Sys., Inc. v. Malouf, Inc., 430 Mass. 875,
878 (2000); see Targus Group Int’l v. Sherman, 76 Mass. App. Ct. at 431–32
(finding that need for determination of final payment date, and which business

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LETTERS OF INTENT                                                                § 2.4

lines were covered by noncompete covenants, did not render settlement “agree-
ment in principle” critically indefinite).

Conversely, a letter of intent may not be binding when one or more of the parties
have manifested an intention not to be bound until the completion of definitive
agreements. See 20 Atlantic Ave. Corp. v. Allied Waste Indus., Inc., 482 F. Supp.
2d 60, 74–77 (D. Mass. 2007) (express language that matter would not be com-
plete until the execution of a final, written agreement, coupled with continued
negotiation of material terms long after signing of letter of intent, supported
holding that parties did not intend to be bound by letter of intent). Accordingly,
if the parties have an understanding as to the binding nature of their letter of
intent, it should be expressed clearly in the letter of intent. See paragraph 10 of
the letter of intent included as Exhibit 2A.

Second, even if the letter of intent already provides that neither party is to be
obligated to proceed with a transaction, certain provisions are intended to be bind-
ing and should be expressed as such in the letter of intent. These types of provi-
sions include no-shop, expense reimbursement, and confidentiality provisions.

§ 2.4.2       The Implied Duty to Negotiate in Good Faith
Courts may impose upon the parties an implied duty to negotiate in good faith,
based on the terms of the letter of intent or the negotiations relating to the letter
of intent. See Anthony’s Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 471–72
(1991) (implied covenant to negotiate in good faith requires “that neither party
shall do anything that will have the effect of destroying or injuring the right of
the other party to receive the fruits of the contract . . .”) (citations omitted). Sim-
ple breach of a contract will not usually be interpreted to violate this duty. Tar-
gus Group Int’l v. Sherman, 76 Mass. App. Ct. at 435. Rather, a breach of the
implied covenant involves “‘bad faith’ conduct ‘implicating a dishonest purpose,
consciousness of wrong, or ill will in the nature of the fraud.’” Targus Group
Int’l v. Sherman, 76 Mass. App. Ct. at 435 (quoting Equip. & Sys. for Indus., Inc.
v. Northmeadows Constr. Co., 59 Mass. App. Ct. 931, 932–33 (2003)). Accord-
ingly, a claim for breach of the implied covenant of good faith and fair dealing
will not stand in the absence of an underlying finding of an enforceable letter of
intent. Compare Hunneman Real Estate Corp. v. The Norwood Realty, Inc., 54
Mass. App. Ct. at 425 (allowing breach of implied covenant of good faith claim
to proceed in light of finding that letter of intent enforceable), with 20 Atlantic
Ave. Corp. v. Allied Waste Indus., Inc., 482 F. Supp. 2d at 77 (dismissing implied
covenant of good faith claim because letter of intent found unenforceable).
In light of the case law on the implied duty to negotiate in good faith, consider
adding a provision to the letter of intent to the effect that no such duty is to be

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§ 2.4.3       Including a No-Shop Provision
As noted above, buyers will often ask sellers to take their business off the market
for a specified period of time. See, e.g., 20 Atlantic Ave. Corp. v. Allied Waste
Indus., Inc., 482 F. Supp. 2d at 69 (considering letter of intent containing no-
shop/no-negotiation provision of ninety days).

From the buyer’s perspective, this is to avoid a situation where the buyer pro-
ceeds with due diligence, retains lawyers and accountants to assist with the
transaction, and perhaps pays commitment fees to financing sources, only to find
that the seller has accepted an offer from another party. In addition, the buyer
wishes to avoid a situation where the seller is playing one prospective purchaser
off against the other—in effect creating an auction of the business.

From the seller’s perspective, if a no-shop provision is agreed to, the no-shop
period should be kept as short as possible. This will generally permit the seller to
keep pressure on the buyer to complete the transaction on a timely basis. In addi-
tion, if the parties are still negotiating the business terms of the transaction at a
time when the no-shop provision is about to expire, this may permit the seller to
pressure the buyer to concede open business points by threatening to put the
business back on the market once the no-shop provision expires. See 20 Atlantic
Ave. Corp. v. Allied Waste Indus., Inc., 482 F. Supp. 2d at 69, 74 (letter of in-
tent’s limitation of no-shop/no-negotiation period to ninety days evidenced “a
recognition that further negotiations among the parties may be unsuccessful and
that there may come a time when the parties enter into negotiations with oth-
ers”). Of course, this threat only works if the buyer believes there are other pro-
spective purchasers out there.

In circumstances where the seller is a publicly-held company, or a private com-
pany with too many stockholders to make it practical for the seller to obtain the
approval of its stockholders prior to agreeing to a no-shop provision, the deci-
sion by the seller’s board of directors to agree to a no-shop provision is subject
to the directors’ fiduciary duties under state law. Under these circumstances the
seller may argue that it is unable to agree to a no-shop provision or that any no-
shop provision must be limited in scope and contain broad “fiduciary outs.” In
these circumstances the buyer must be knowledgeable about the relevant rules
imposed on directors by the seller’s state of incorporation in order to be able to
negotiate the broadest possible no-shop provision that will be enforceable under
the relevant state law.

For an example of a no-shop provision in a letter of intent to purchase a privately
held company, see part 3 of Exhibit 2B.

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EXHIBIT 2A—Form of Letter of Intent for Stock
Acquisition by Merger

                     [NAME AND ADDRESS OF BUYER]

                                                  _____ __________, 20__



Ladies and Gentlemen:

     This letter sets forth our mutual intent of _________, a _________ corpora-
tion (the “Company”), concerning the acquisition by _________, a _________
corporation (the “Buyer”), of all of the outstanding capital stock of the Company.

1.   Form of Acquisition. The Buyer will acquire all of the outstanding capital
     stock of the Company by affecting a merger of the Company with a newly-
     formed subsidiary of the Buyer, with the Buyer as the surviving entity (the

2.   Merger Consideration. As a result of the Merger, the stockholders of the
     Company will be entitled to receive as merger consideration $__________
     (the “Merger Consideration”). The Merger Consideration will be paid by
     delivery at closing of $__________ in cash (the “Cash Portion”) and leg-
     ended shares of the Buyer’s Common Stock having a market value of
     $__________ (the “Shares”). [The value of the Shares will be based on the
     average of the closing price of the Buyer’s Common Stock over the thirty
     trading days preceding the date of [this letter].]

(b) The Merger Consideration will be reduced by the amount by which current
    liabilities and indebtedness for borrowed money (including any accrued in-
    terest) outstanding at closing, exceeds $__________, with such reduction to
    be applied first to the Cash Portion of the Merger consideration. The Merger
    Consideration will be increased or decreased to reflect any changes in cash
    plus receivables less current trade payables from the amounts shown on the
    __________, 20__ balance sheet of the Company. Any such increase or de-
    crease shall be applied first to the Cash Portion of the Merger Consideration
    as provided above.

3.   Registration Rights. At the Closing the Buyer will enter into a registration
     rights agreement with respect to the Shares, in a mutually satisfactory form.

2nd Edition 2010                                                              2–7

      This agreement will provide for the prompt post-closing registration of the
      Shares on Form S-3 and will include mutually acceptable holdback provisions.

4.    Conditions. The obligations of the parties hereto to effect the transactions
      contemplated by this letter are subject to a number of conditions, including
      without limitation the following:

       • satisfactory completion of the Buyer’s due diligence investigation;

       • approval by the Board of Directors of the Buyer and the Company
         and their stockholders (to the extent required);

       • completion of definitive documentation on terms satisfactory to
         the parties hereto (the “Transaction Documents”), which will in-
         clude representations and warranties and indemnities customary
         for negotiated corporate acquisitions and non-competition cove-
         nants from [certain stockholders of the Company];

       • completion of any necessary government regulatory requirements;

       • obtaining any consents required from third parties.

5.    Exclusive Dealing. Each of the parties hereto will cooperate in good faith
      and proceed expeditiously in the preparation of the documents and the tak-
      ing of other actions necessary to consummate the transactions contemplated
      hereby. The Company agrees not to offer to sell any assets to any other per-
      son or entity (except for dispositions of inventory and other assets in the or-
      dinary course of business) and not to negotiate or accept any agreement for
      the sale (whether by merger, stock purchase or otherwise) of any interest in
      the Company or assets relating to the Company to any third party (except
      for dispositions of inventory and other assets in the ordinary course of busi-
      ness) until sixty (60) days after this letter is accepted by the Company and
      returned to the Buyer as provided below.

6.    Non-Disclosure; Publicity. Each party agrees that it will not without the
      prior written consent of the other party hereto disclose publicly or to any
      third party the terms and conditions of this letter or the subsequent negotia-
      tions between the parties, except to the extent required by law. Any press re-
      lease to be issued by either party regarding the subject matter of this letter
      shall be subject to the prior consent of the other party hereto, not to be un-
      reasonably withheld or delayed.

7.    Access to Information. Immediately following acceptance of this letter, the
      Company shall provide the Buyer and its representatives access to the books,

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     records, management, financial statements and properties of the Company
     to enable the Buyer to complete its due diligence investigation.

8.   Expenses. Each party will pay its own expenses and costs incidental to the
     completion of the transactions contemplated by this letter agreement, in-
     cluding legal and accounting fees.

9.   Brokerage. Each of the parties hereto agrees to indemnify each of the other
     parties hereto against any claim for brokerage fees owed to any broker em-
     ployed by the indemnifying party in connection with the transactions con-
     templated by this letter.

10. Non-Binding Agreement. This letter agreement is intended to provide the
    basis for the preparation of the Transaction Documents. Except for the
    agreements and obligations contained in Sections 5 through 9 hereof, this
    letter represents only the parties’ current good faith intention to negotiate
    and enter into definitive Transaction Documents. It is not, and is not in-
    tended to be, a binding agreement between the parties (except as to the Sec-
    tions specified as binding above), and neither party shall have any liability
    to the other party if such party fails to execute definitive Transaction Docu-
    ments for any reason (other than liabilities arising under the Sections speci-
    fied as binding above).

11. General. This letter agreement shall be governed by, and construed in ac-
    cordance with, the laws of the Commonwealth of Massachusetts. This letter
    may not be amended, terminated, waived or rescinded except pursuant to a
    written agreement duly executed by the parties hereto. This letter may be
    signed in counterparts, each of which shall constitute one and the same in-

12. Acceptance. This letter may be accepted by each of you by having an au-
    thorized representative sign a copy of this letter below and returning the
    original signature to me before _____ __________, 20__ and this letter will
    terminate if not accepted by you by the close of business on that date.

2nd Edition 2010                                                              2–9

    We are delighted to have the opportunity to work with you.

                                           Very truly yours,


                                           By: ____________________

Accepted and Agreed:


By: ____________________

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EXHIBIT 2B—Form of Letter of Intent for Purchase
of Privately Held Company
Submitted by Edwin L. Miller, Jr., Esq.

This form of letter of intent assumes that a single buyer is buying all of the stock
of a privately held company owned by multiple stockholders, and that target
management is in charge of the sale process. There is (minimal) language deal-
ing with confidentiality; consideration should be given to having the parties sign
a separate confidentiality agreement. Consideration should also be given to add-
ing provisions dealing with employment agreements, earn-out payments, and
governing law.

                                [Buyer Letterhead]


[Address of Target]

Ladies and Gentlemen:

    [Xyz, Inc.] (“Buyer”) is pleased to submit this proposal to acquire all of the
outstanding capital stock and other equity interests, in [Target] (“Company”).

    1. Acquisition. Subject to the terms and conditions of the Definitive Agree-
ment (as defined below), Buyer is prepared to acquire all of the capital stock and
other equity interests of Company for the following consideration aggregating

    (i) $_________ in cash, of which approximately $_________ will be used
    to repay Company’s bank indebtedness in full;

    (ii) $_________ in shares of a new series of preferred stock of Buyer. The
    shares will be additional shares of a new series of preferred stock to be
    placed with investors to fund a portion of the acquisition price, and such
    shares will be valued at the price paid by such investors; and

    (iii) interest-bearing non-convertible promissory notes in the principal
    amount of $_________; such notes will be subordinated to Buyer’s existing

 Reprinted from Buying and Selling a Privately Owned Business in Massachusetts
(MCLE, Inc. 2005).

2nd Edition 2010                                                              2–11

    or future debt to banks or other financial institutions, and are expected to
    have a term of __ years and bear interest at the rate of __ percent.

     The transaction is expected to be structured as a reverse triangular merger,
but the transaction may be re-structured as an asset acquisition if more tax favor-
able to Buyer.

     The transaction will be structured so as to qualify as a private placement
under applicable securities laws. Buyer desires to minimize the number of Com-
pany stockholders who will hold its stock and notes. The consideration will be
allocated in such a way so as to repay in full Company’s current and any future
bridge loans, as well as conform to the liquidation preferences of Company’s
current capital structure, or as the stockholders of Company may otherwise
agree. It is also understood that all equity interests in Company, such as options
and warrants, will be cancelled in the transaction. Attached is a capitalization
table showing how such consideration (and the components thereof) would be
allocated among the bridge note holders and the different classes of stock and
stockholders of Company.

     Buyer expects that certain employees of Company who are identified by
Buyer as key employees will commit to become employees of Buyer, will com-
mit to remain with Buyer for an acceptable initial period of employment, and
will sign mutually acceptable employment and non-competition agreements.

    The Definitive Agreement will provide for customary representations and
warranties, covenants, and conditions to closing, including receipt of necessary
consents and regulatory approvals, and that there has been no material adverse
change in the business. We understand that the business will be run in the ordi-
nary course until the closing and that no dividends or other distributions will be
made in that period. The Definitive Agreement will also provide for negotiated
mutually agreeable indemnification and escrow provisions to be provided by all
Company stockholders to Buyer.

     Buyer will work with Company to ensure that its continuing due diligence
effort causes minimal disruption to Company’s ongoing business operations.
Buyer desires to negotiate and sign the Definitive Agreement, and to close the
acquisition, as soon as reasonably possible. It is understood that Buyer must
complete its preferred stock financing before it is able to close.

     2. Due Diligence; Access. Company and Buyer shall each provide the other
and its prospective investors with access to its books and records and shall cause
its directors, officers, employees, accountants, and other agents and representa-
tives to cooperate with them in connection with the due diligence process.

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     3. No-Shop. Because of the significant effort and expense that must be
undertaken by Buyer in connection with the acquisition, Buyer must have
Company’s assurance that it will move forward exclusively with Buyer until
[date]. To put it more formally, until 5:00 p.m. (Eastern time) on [date],
Company shall not, and none of the undersigned Company securityholders shall,
directly or indirectly (including through agents), enter into any agreement,
solicit or entertain offers from, discuss or negotiate with or in any manner
consider any proposal of any other person or entity relating to the acquisition, by
any means, of Company or any assets of Company outside the ordinary course
of business. If Company or any such securityholders shall receive any such
communication, offer or proposal, such communication, offer or proposal shall
be unqualifiedly refused, and Company or such securityholder shall notify Buyer
of the receipt of such communication, offer or proposal.

      4. Disclosure. Except as and to the extent required by law, without the prior
written consent of the other party, neither Company nor any Company stock-
holder, on the one hand, nor Buyer, on the other, nor their respective officers,
affiliates, or representatives, shall disclose the existence of discussions regarding
a possible transaction between the parties or any of the terms, conditions or
other aspects of the transaction proposed in this letter, except to shareholders,
directors, officers, employees, legal and financial advisors, and potential inves-
tors who have a need to know.

     5. Costs. Buyer shall be responsible for and bear all of its own costs and
expenses incurred in connection with the proposed transaction. The stockholders
of Company shall be responsible for and bear all of their own and, in the event a
closing occurs, Company’s costs and expenses (including any attorney fees and
any brokers’ or finders’ or investment banking fees) incurred in connection with
the proposed transaction.

     6. Definitive Agreement; Binding Effect. Buyer and Company intend
promptly to begin negotiating a written definitive agreement relating to the ac-
quisition (the “Definitive Agreement”). This letter is not intended to, and shall
not create or constitute, any legally binding or enforceable obligation between
Buyer, on the one hand, and Company and its stockholders, on the other hand, to
consummate the transaction, and no party hereto shall have any liability to the
other party with respect to any provision hereof. Notwithstanding the foregoing,
paragraphs numbered [2 through 6] are intended to create legally binding obliga-
tions until the Definitive Agreement, if successfully negotiated, is executed and
delivered by all parties. If the Definitive Agreement is not executed and deliv-
ered for any reason, no party to this letter shall have any liability to any other
party hereto based upon, arising from or relating to the provisions hereof other
than those set forth in paragraphs numbered [2 through 6]. This letter shall ex-
pire at 5:00 p.m. (Eastern time) on [date] (except that such expiration shall not

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relieve any party of liability for any breach of the binding obligations set forth

    This letter shall be governed by and construed in accordance with the laws
of Delaware.

     If you are in agreement with the foregoing, kindly so indicate by signing
and returning to the undersigned the enclosed duplicate copy of this letter. This
letter of intent shall expire and be of no force or effect unless a copy hereof duly
executed by Company and each securityholder named below shall have been
received by Buyer prior to 5:00 p.m. (Eastern time) on [date].

                                              Very truly yours,

                                              Buyer, Inc.

                                              By: ____________________

Acknowledged and agreed as
of [date]


By: ____________________


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EXHIBIT 2C—Short Form Letter of Intent
for Commercial Lease
Submitted by James W. Hackett, Esq.
Timothy M. Smith, Esq.

                                                 __________, 20__

XYX, Inc.
123 First Avenue
Boston, MA 00123

Ladies and Gentlemen:

This letter outlines the terms of the proposed Lease between the undersigned as
Landlord and you as Tenant for the leasing of __________ rentable square feet
on the _____ floor at 321 Fifth Avenue, Boston, Massachusetts.

LOCATION:              321 Fifth Avenue
                       Boston, Massachusetts

SPACE:                 Approximately rentable square feet on the _____ floor

ORIGINAL TERM: Five (5) years

OCCUPANCY:             __________, 20__

RENTAL RATE:           Year 1:

                       Year 2:

                       Year 3:

                       Year 4:

                       Year 5:


                       The Landlord will abate the annual fixed rent for one (1)

    Reprinted from Commercial Lease Forms (MCLE, Inc. 2003).

2nd Edition 2010                                                           2–15


                   Tenant will have an option to extend the term of the lease
                   for five (5) years at the then-current market rent by writ-
                   ten notice to Landlord at least one (1) year prior to expira-
                   tion of the Original Term.


                   Tenant will pay its proportionate share of all increases in
                   real estate taxes and operating expenses over a base of


                   Landlord will provide improvements to the premises util-
                   izing building-standard materials to building-standard


                   Tenant will be responsible for the cost of tenant electricity,
                   which is estimated to be $__________ per rentable square

                   This letter of intent does not constitute a binding com-
                   mitment on either party and the obligations of each party
                   hereunder shall be subject to negotiation and delivery of a
                   mutually agreed-upon lease.




Date: __________

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