Acquisition Letter of Intent

[Letterhead of the Purchaser]

[DATE]

Personal and Confidential

[Name(s) of Shareholders]
[Board of Directors]
[Name and Address of Shareholders/Company]
________________________________
________________________________
Attention: ________________________

Re: ____________________________________________

Ladies and Gentlemen:

This letter confirms our understanding of the mutual present intentions of [name of acquiring corporation] (the "Purchaser") and _________________ ([collectively], the "Seller") with respect to the principal terms and conditions under which the Purchaser will acquire [all of the outstanding capital stock of the Company] [the Company's __________ business] [the Company's __________ Division] [the stock of the Subsidiary of the Company] [all of the assets of the Company] [and the Purchaser will assume certain liabilities of the Company]. Such transaction is hereinafter referred to as the "Acquisition."

The parties hereto acknowledge that this letter does not contain all matters upon which an agreement must be reached in order for the Acquisition to be consummated. Further, among other conditions specified herein or otherwise agreed to by the parties, the obligations of the parties hereto to consummate the Acquisition are subject to the negotiation and execution of the Purchase Agreement referred to in paragraph 3 below. Accordingly, this letter is intended solely as a basis for further discussion and is not intended to be and does not constitute a legally binding agreement; provided, however, that the provisions set forth in paragraphs 6, 7, 9, 10, 11 and 12 below and this paragraph shall be binding upon the parties hereto and, only with respect to paragraphs 9 and 12, shall survive the termination hereof.

1. [Purchase of Stock. At the closing (the "Closing"), subject to the satisfaction of all conditions precedent contained in the Purchase Agreement, the Purchaser will purchase from the Seller, and the Seller will sell to the Purchaser, all of the outstanding capital stock of the Company, free and clear of any liens, charges, restrictions or encumbrances thereon (collectively, the "Shares"). The Purchaser may assign some or all of its rights hereunder prior to the Closing to one or more of its subsidiaries. After further review, at the Purchaser's election, the Acquisition may be modified so that the Purchaser acquires the Shares through a merger between the Purchaser or one of its subsidiaries and the Company (the "Merger").]

[Purchase of Assets. At the closing (the "Closing"), subject to the satisfaction of all conditions precedent contained in the Purchase Agreement, the Purchaser will purchase from the Seller, and the Seller will sell to the Purchaser, free and clear of any liens, charges, restrictions or encumbrances thereon, all of [the following assets] [the assets, properties and rights of the Company constituting the Company's [_______________ business (the "Business")] [__________________ division (the "Division")]or used therein, including the following:] (collectively, the "Assets").]

[insert list of specified Assets]

[The Assets shall not include the assets, properties and rights of the Company listed on Schedule I hereto.]

[The Purchaser shall [not] assume [any] [the following] liabilities of the Company[:][.]]

[Insert list of specified liabilities]

2. Purchase Price. The purchase price for the [Shares] [Assets] will be [insert detailed description, including the amount of cash per Share or for all Shares or all the Assets; the form of any noncash consideration (such as promissory notes, stock of the Purchaser, etc.); the purchase price adjustment mechanism; treatment of outstanding stock options; any earnout mechanism; and any holdback mechanism].

3. Definitive Agreement. The Purchaser and the Seller hereby agree to use reasonable diligence to commence good faith negotiations in order to execute and deliver a definitive [asset purchase] [stock purchase or merger agreement] relating to the Acquisition (the "Purchase Agreement") acceptable to parties hereto on or prior to _____ __, 20___. All terms and conditions concerning the Acquisition shall be stated in the Purchase Agreement, including without limitation, representations, warranties, covenants and indemnities that are usual and customary in a transaction of this nature as such may be mutually agreed upon between the parties. Subject to the satisfaction of all conditions precedent contained in the Purchase Agreement, the Closing will take place no later than _________ __, 20___ or as soon thereafter as possible, subject to the approvals of regulatory authorities. The Purchaser's obligation to execute, deliver and perform the Purchase Agreement is conditioned upon approval by the Purchaser's Board of Directors. [All shareholders of the Company will execute and deliver the Purchase Agreement, will agree to vote their shares in the Company in favor of the Acquisition and will use their best efforts to cause the Acquisition to be completed.]

4. Representations and Warranties. The Agreement will contain representations and warranties customary to transactions of this type, including without limitation, representations and warranties by [the Seller and] the Company as to (a) the accuracy and completeness of the [Company's] [Division's] financial statements for the past three years (including the year ended [DATE]); (b) disclosure of all the [Company's] [Division's] contracts, commitments and liabilities, direct or contingent; (c)  the physical condition, suitability, ownership and absence of liens, claims and other adverse interests with respect to the [Company's assets] [Assets]; [(d) Seller's ownership of the Shares;] (e) absence of liabilities with respect to the [Company] [Division], other than as set forth in a balance sheet dated [DATE]; (f) the absence of a material adverse change in the condition (financial or otherwise), business, properties, assets or prospects of the [Company] [Division]; (g) absence of pending or threatened material litigation, investigations or other matters affecting the Acquisition; (h) the [Company's] [Division's] compliance with laws and regulations applicable to its business and obtaining all licenses and permits required for its business; and (i) the due incorporation, organization, valid existence, good standing and capitalization of the Company.

5. Conditions to Consummation of the Acquisition. The respective obligations of the parties with respect to the Acquisition shall be subject to satisfaction of conditions customary to transactions of this type, including without limitation, (a) receipt and approval by the Purchaser of the Company's [DATE] year end audited financial; (a) execution of the Purchase Agreement by...