Precontract Legal Document

PRECONTRACT AGREEMENT

This Precontract Agreement (the Agreement) is made as of Effective Date: by and between Party A: and Party B: (each a Party and collectively the Parties). Each Party represents that it has full power and authority to enter into this Agreement and to perform its obligations hereunder.

RECITALS

WHEREAS, Party A and Party B wish to record certain material terms and conditions governing their proposed transaction and to set a framework for negotiating and preparing definitive agreements memorializing such transaction; and

WHEREAS, the Parties desire to establish the scope, preliminary commercial terms and certain interim obligations while definitive documentation is prepared and executed; and

WHEREAS, the Parties acknowledge that certain obligations set forth in this Agreement are intended to be legally binding and others are intended to be non-binding as expressly stated below.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, capitalized terms used herein shall have the following meanings:

"Definitive Agreement" means the final written agreement or agreements executed by the Parties that fully set forth the terms and conditions of the proposed transaction contemplated by this Agreement.

"Confidential Information" means any non-public information disclosed by one Party to the other Party in connection with the negotiation or performance of this Agreement, whether disclosed orally, in writing, or electronically.

2. PURPOSE AND KEY TERMS

The Parties agree to negotiate in good faith toward execution of a Definitive Agreement for the following principal terms:

3. STATUS OF OBLIGATIONS; BINDING EFFECT

The Parties agree that except as otherwise expressly provided in this Section 3 and Section 4 (Confidentiality) and Section 7 (Expenses), this Agreement is intended only as a statement of mutual intentions and is not intended to create, and shall not be construed to create, any legally binding obligation to consummate the proposed transaction or to obligate either Party to enter into any Definitive Agreement.

The Parties further agree that the following provisions are intended to be legally binding obligations: Confidentiality (Section 4), Exclusivity and Good Faith Negotiation obligations (Section 5) if selected below, Governing Law (Section 12), and this Section 3. The Parties shall indicate their intent by selecting the applicable box:

  The Parties intend that Exclusivity and Good Faith Negotiation obligations in Section 5 are legally binding.
  The Parties intend that this Agreement is fully non-binding except for Confidentiality and Expenses.

4. CONFIDENTIALITY

Each Party shall hold Confidential Information in strict confidence and shall not disclose such Confidential Information to any third party except (a) to its employees, professionals or advisors who have a need to know and who are bound by confidentiality obligations no less restrictive than those contained herein, or (b) as required by applicable law subject to prior notice to the disclosing Party where permissible. Each Party shall use Confidential Information solely for the purpose of evaluating and negotiating the proposed transaction.

Confidentiality obligations shall survive termination of this Agreement for a period of following the date of disclosure. Notwithstanding the foregoing, information that is or becomes public through no fault of the receiving Party, or that is independently developed by the receiving Party without use of the other Party's Confidential Information, shall not be deemed Confidential Information.

5. EXCLUSIVITY AND NEGOTIATION

For the period beginning on the Effective Date and continuing for a period of (the Exclusivity Period), neither Party shall solicit, negotiate, or enter into any agreement with any third party with respect to the subject matter of the proposed transaction, unless the Parties both agree in writing. If the Parties have selected the binding exclusivity option in Section 3, this exclusivity obligation is a binding covenant enforceable at law or in equity.

6. CONDITIONS PRECEDENT

Any obligation of either Party to proceed with the Definitive Agreement shall be subject to the satisfaction or waiver of customary conditions precedent, including but not limited to: completion of satisfactory due diligence, negotiation and execution of mutually acceptable Definitive Agreements, receipt of required third-party consents, and compliance with applicable law. The Parties acknowledge that the Parties' respective board or other corporate approvals may be required.

7. EXPENSES

Each Party shall bear its own expenses incurred in connection with the negotiation of this Agreement and the Definitive Agreement, including legal and accounting fees, unless otherwise agreed in writing. The Parties may agree in a separate writing to allocate specific fees or to reimburse one another for out-of-pocket costs.

8. REPRESENTATIONS AND WARRANTIES

Each Party represents and warrants to the other that: (a) it is duly organized and in good standing under the laws of its jurisdiction of organization; (b) it has the corporate power and authority to enter into this Agreement; and (c) the execution and performance of this Agreement do not and will not violate any law or contractual obligation binding on it. Each Party further represents that, to its knowledge, there are no pending or threatened actions that would have a material adverse effect on its ability to perform hereunder.

9. TERMINATION

This Agreement shall terminate upon the earlier of (a) execution of a Definitive Agreement by the Parties, (b) written mutual agreement of the Parties to terminate, or (c) the expiration of the Exclusivity Period. Sections that by their nature survive termination, including Confidentiality, Expenses and Governing Law, shall survive such termination as specified herein.

10. NOTICES

All notices, demands or communications required or permitted hereunder shall be in writing and shall be delivered to the Parties at the addresses set forth below by hand, nationally recognized overnight courier, or certified mail (return receipt requested). Notices shall be deemed given upon receipt.

11. AMENDMENT; WAIVER

This Agreement may be amended, modified or supplemented only by a written instrument signed by both Parties. No failure or delay by either Party in exercising any right hereunder will operate as a waiver of such right, nor will any single or partial exercise of any right preclude any other or further exercise of that right.

12. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction selected by the Parties below, without regard to conflict of law principles.

13. ENTIRE AGREEMENT; SEVERABILITY

This Agreement constitutes the entire understanding between the Parties with respect to the subject matter hereof and supersedes all prior discussions and agreements. If any provision of this Agreement is held to be illegal, invalid or unenforceable under applicable law, such provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable.

14. COUNTERPARTS

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

15. MISCELLANEOUS

Each Party agrees to cooperate reasonably and in good faith to take such further actions and execute such further documents as may be necessary to carry out the intent of this Agreement. No Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party, except to an affiliate or in connection with a merger or sale of substantially all of such Party's assets.

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