LOI
The Letter of Intent (the “LOI”) sets forth certain understandings and agreements between the Buyer and Seller. The LOI is usually in the form of a Stock Purchase Agreement. The LOI will sets out the key terms of the acquisition of the Shares by the Buyer. The parties agree to negotiate and enter into a comprehensive Share Purchase Agreement (the “Agreement”) usually within ten business days of the date of the LOI or as soon as practicable thereafter. I have listed an example of the information that is usually outlined in an LOI:
1. Terms.
Subject to certain sections of the LOI the Buyer agrees to purchase from the Seller and that Seller agrees to sell to the Buyer the Shares for an aggregate purchase price of $750,000 US dollars (the “Stock Purchase”).
2. Representations, Warranties and Agreements
2.1 Seller represent, warrant and agree that:
(a) The Seller currently owns 9,500,000 shares of Company common stock fully paid and nonassessable.
(b) The Seller is an authorized representative of approximately 100 shareholders who own 1,800,000 shares of Company common stock. The Seller is authorized to represent these shareholders, and possesses stock powers, executed by each of these stock holders.
(c) At closing, Company will provide the Buyer an executed Board Resolution from the Company approving the transactions contemplated herein
(d) The Company shall operate its business, if any, prior to the closing of the Stock Purchase in the normal and ordinary course consistent with past practices. Upon closing of the transactions contemplated herein, all directors and officers will resign as such and appoint successors to be named prior to closing; and
(e) There are no outstanding subscriptions, rights, options, warrants, convertible securities or other agreements or commitments obligating the Company, to sell, convey or issue any additional common shares or any securities convertible into common shares.
2.2 The Agreement will contain customary representations, warranties, indemnifications, acknowledgements and agreements, in addition to those contained in this LOI.
2.3 Subject to any provisions in the Agreement to the contrary, the representations, warranties and covenants of the parties will be a condition on which the parties will have relied on in entering into the Agreement.
3. Conditions Precedent. The closing of the Agreement shall be conditional on the following:
(a) a satisfactory completion by Buyer of a due diligence review of the affairs and business of the Company, such review to be concluded no later than ten business days from the execution of this LOI by all parties;
(b) execution of this letter by the Seller, and the Agreement, and properly transfer of all of the shares of Common Stock of the Company to the Buyer;
(c) a legal opinion from counsel to the Company opining as to the transactions contemplated hereby as well as confirming that the shares of Common Stock transferred hereby represent a majority of the outstanding securities of the Company and pursuant to the Company’s Articles of Incorporation and Bylaws such interest shall constitute authority to take action without necessity of a meeting of the shareholders of the Company;
(d) a Board resolution approving the transaction, written consent of the majority shareholder, execution of the definitive share purchase agreements, appointment of new Board of Directors, resignation of current officers and directors and the filing of Form 8K announcing change in control;
(e) there being no order, ruling, judgment or decree in effect, including any regulatory agency, which would enjoin or prohibit the Stock Purchase;
(f) the Company shall have no liabilities;
(g) the Company shall have no outstanding unresolved SEC issues;
(h) the Company will have filed its 10K for 2006 with the SEC;
(i) the Company’s current operating business shall be sold to the Officers and Directors;
(j) undated resignation of as Director and resignation as Officer; appointment of new officer;
(k) Seller shall have transferred the shares of common stock referenced in Section 2.1(b) into Buyers and others as designated by Buyer and have the authority to transfer such shares to the Buyer as contemplated herein; and
(l) The Company having no disagreements with its independent auditors or legal counsel.
4. Closing and Standstill
4.1 The parties will use their reasonable best efforts to complete the Stock Purchase by the transferring of the Shares no later than March 1, 2007 from the execution hereof or as soon as reasonably practicable thereafter. At closing, the parties will deliver such documentation as may be reasonably requested by the other party’s counsel to effect the transactions contemplated herein.
4.2 Until the completion of the Agreement occurs, or until termination of this LOI in accordance with the terms hereof, or until otherwise mutually agreed to by the parties in writing the parties agree as follows:
(a) Seller hereby agrees to take all necessary steps to ensure that the Company does not sell its material assets either directly or indirectly, and that the Company shall not incur any liabilities.
(b) Each party shall keep confidential any information obtained in connection with the transactions contemplated herein, unless such information has been rightfully obtained from a third party or is generally available to the public. In the event that public disclosure is required to be made by any regulation or law, or by any regulatory filing in connection with the transactions contemplated herein, such disclosure shall be agreed by all parties, including, without limitation, approval as to form and content.
(c) Seller and Company shall provide Buyer and its representatives with access to financial and other information relating to the Company as may be reasonably necessary in order for Buyer to make informed decisions as to the viability of the business arrangements contemplated herein.
(d) Seller and Company agree not to contact, undertake negotiations with or provide any information in connection with the transactions contemplated herein to any third party for any purpose including pursuing another transaction or series of transactions similar to the ones contemplated herein, until this letter agreement is terminated in accordance with the terms hereof, and subject to the terms of any successor Agreement.
5. Termination
Seller and Buyer agree that the LOI will be automatically terminated if the closing has not occurred before or on the closing date of February 28, 2007 and will be of no further affect on the parties thereafter unless the parties to this Agreement, agree in writing to extend the closing date beyond February 28, 2007.
6. No Third Party Rights; Assignment.
Nothing in this LOI will create or be deemed to create any third party beneficiary rights in any person or entity not a party to this LOI except as provided below. No assignment of this Agreement or of any rights or obligations hereunder may be made by either Seller, or Buyer (by operation of law or otherwise) without the prior written consent of the other parties hereto and any attempted assignment without the required consents will be void.
7. Escrow.
In connection with this Agreement the parties have appointed the escrow agent, Dewey, Cheatum & Howe. (the “Escrow Agent”). The Escrow Agent is holding Fifty Thousand ($50,000) Dollars from the Buyer as a deposit (the “Deposit”) for the transactions contemplated herein. The Deposit shall be fully refundable if, on or prior to June 28, 2007 the Buyer decides, for whatever reason whatsoever not to pursue the transactions contemplated herein. In such event the Buyer shall notify the Escrow Agent in writing and the Escrow Agent will immediately return the funds as instructed. The Escrow Agent shall return the Deposit to the Buyer regardless of any dispute or written instrument from the Seller. Escrow Agent is specifically indemnified and held harmless hereby for its actions or inactions in following these instructions. In the event of a dispute involving the escrow instructions or the consideration to be delivered in escrow, the escrow agent is authorized to implead consideration received in the courts located in Miami Dade County, Florida upon ten days written notice, and be relieved of any further escrow duties thereupon. Any and all costs of attorney’s fees and legal actions of escrow agent for any dispute resolution or impleader action shall be paid in equal shares by the parties to this agreement.
“Company”
By:________________Accepted this_____day of February, 2007.
“Seller”
__________________Accepted this______day of February, 2007.
“Buyer”
____________________Accepted this________day of February, 2007.










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