Legal Precontract Agreement

LEGAL PRECONTRACT AGREEMENT

This Legal Precontract Agreement (the "Agreement") is entered into as of Effective Date: by and between: Party A Name: , Entity Type: Individual Corporation LLC Other, and Party B Name: , Entity Type: Individual Corporation LLC Other.

RECITALS

WHEREAS, Party A and Party B have had preliminary discussions concerning the potential transaction described as: (the "Proposed Transaction"); and

WHEREAS, the parties intend to negotiate in good faith toward a definitive written agreement memorializing the terms and conditions of the Proposed Transaction, subject to the terms and conditions set forth in this Agreement; and

WHEREAS, the parties wish to set forth certain binding and non-binding provisions to allocate risks, protect confidential information, and establish the process for negotiation and exclusivity prior to execution of a Final Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below:

"Confidential Information" means all non-public, proprietary or confidential information disclosed by one party to the other, whether oral, written or electronic, including without limitation business plans, financial information, technical data, customer lists and terms of the Proposed Transaction, except information that (a) is or becomes publicly available other than through breach of this Agreement, (b) is independently developed by the receiving party without use of the disclosing party's Confidential Information, or (c) is rightfully obtained from a third party not under an obligation of confidentiality.

"Final Agreement" means a definitive written agreement executed by authorized representatives of both parties that fully documents the terms and conditions of the Proposed Transaction.

2. PURPOSE

The parties agree to negotiate exclusively and in good faith with the objective of executing a Final Agreement on substantially the terms set forth in this Agreement and such additional terms as the parties may agree.

3. BINDING AND NON-BINDING PROVISIONS

Except as expressly provided in this Section 3, the parties acknowledge and agree that this Agreement is intended to record certain agreed terms but does not itself constitute a Final Agreement. The parties further agree that Sections 4 (Exclusivity), 5 (Confidentiality), 7 (Deposit/Consideration), 12 (Notices), 13 (Governing Law) and this Section 3 are binding obligations enforceable at law. All other provisions are illustrative of the parties' current understanding and are non-binding until a Final Agreement is executed.

4. EXCLUSIVITY

For a period of days following the Effective Date, neither party shall solicit, negotiate, or enter into any agreement with any third party with respect to a transaction that is the same as or similar to the Proposed Transaction without the prior written consent of the other party. Breach of this Section shall entitle the non-breaching party to injunctive relief and damages.

5. CONFIDENTIALITY

Each party shall keep Confidential Information strictly confidential and shall not disclose such information to any third party except to its employees, advisors, legal counsel, accountants or financing sources on a need-to-know basis and who are bound by confidentiality obligations at least as protective as those set forth herein. Each party shall use Confidential Information solely for the purpose of evaluating or consummating the Proposed Transaction. The obligations of confidentiality shall survive termination of this Agreement for a period of five (5) years.

6. CONDITIONS PRECEDENT

The parties' obligation to execute a Final Agreement is subject to the satisfaction (or mutual waiver) of customary conditions precedent, including without limitation: (a) completion of satisfactory due diligence by each party; (b) receipt of any required third-party consents; (c) corporate approvals and authorizations; and (d) agreement on final economic and legal terms.

7. DEPOSIT / CONSIDERATION

If a deposit is to be provided in connection with the Proposed Transaction, the amount shall be . The deposit shall be Refundable Non-Refundable. Any deposit shall be held in trust by and applied as set forth in the Final Agreement.

8. REPRESENTATIONS AND WARRANTIES

Each party represents and warrants to the other that: (a) it has the full corporate or legal power, authority and capacity to enter into and perform its obligations under this Agreement; (b) execution and delivery of this Agreement and performance hereunder have been duly authorized; and (c) this Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms.

9. COVENANTS

During the exclusivity period, each party covenants to negotiate in good faith, to provide access to information reasonably requested for due diligence, and to use commercially reasonable efforts to obtain required approvals. Neither party shall make public announcements regarding the Proposed Transaction without the prior written consent of the other party, except as required by law.

10. TERMINATION

This Agreement shall terminate upon the earliest of: (a) execution of the Final Agreement; (b) mutual written agreement of the parties to terminate; (c) expiration of the exclusivity period specified in Section 4; or (d) thirty (30) days' written notice by either party following material breach by the other party if such breach remains uncured at the expiration of such notice period. Termination shall not relieve any party of liability for breaches occurring prior to termination.

11. FEES AND EXPENSES

Except as otherwise expressly agreed in writing, each party shall bear its own costs and expenses incurred in negotiating and performing this Agreement, including legal and financial advisory fees. Any fee-shifting or break-up fees shall be set forth in the Final Agreement and are not intended to arise under this Agreement unless expressly provided herein.

12. NOTICES

All notices required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by certified mail, return receipt requested, or sent by nationally recognized overnight courier, addressed as follows:

13. GOVERNING LAW; JURISDICTION

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to its conflict of laws principles. The parties submit to the exclusive jurisdiction of the courts located in that state for resolution of disputes arising under this Agreement.

14. ENTIRE AGREEMENT; SEVERABILITY

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether written or oral. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect and the invalid provision shall be replaced by a valid provision that most closely reflects the parties' intent.

15. AMENDMENTS; WAIVER

No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by authorized representatives of both parties. No failure or delay by any party in exercising any right shall operate as a waiver of that right.

16. COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures delivered by electronic means shall be binding.

ADDITIONAL PROVISIONS

Sign Now