Letter of Intent

  Letter of Intent

ABC Corporation Corporation

Office Park New York, New York

Attention: __________/President

Gentlemen:

This letter of intent sets forth the basic terms and conditions under which Acquisition, Inc. ( the "Purchaser" ) will enter into a definitive merger agreement ( the "Merger Agreement" ) with ABC corporation ( the "Company" )for the merger of the Purchaser with and into the Company ( the "Merger" ). It is anticipated that the consummation of the Merger will occur on or before ________ 2000__, or on such other date to which the parties may agree.

Purchase Price

Pursuant to the Merger Agreement, upon consummation of the Merger, the selling stockholders of the Company will receive in exchange for each share of the Company's common stock and preferred stock ( the "stock" ) outstanding as of the date of this letter :

_______ Dollars ( $ _______ ) in cash; and

One share of preferred stock ( "Preferred Stock" ) of the surviving corporation of the Merger with a liquidation preference in the amount of __________ Dollars (__________) and containing the terms set forth on Exhibit A hereto.

Conditions to closing

The consummation of the Merger shall be subject to the satisfaction of the following conditions:

(a) the parties shall have received all required approvals and consents from govermental authorities and agencies and third parties;

(b) the Purchaser and the Company shall have executed on or prior to _________, 2000 a definitive Merger Agreement containing mutually acceptable provisions relating to among other things, representations, warranties, conditions and indemnification:

(c) the truth and accuracy of all representations and warranties and the satisfaction of all conditions;

(d) the consummation of the Merger on or prior to _________, 2000;

(e) Purchaser and certain members of management of the Company designated by Purchaser having entered into mutually satisfactory employment contracts simultaneously with the execution of the Merger Agreement ;

(f) since ________, 2000, (date of last audited balance sheet ) the business of the Company and its subsidiary shall have been conducted in the ordinary courses, and there shall have been no material adverse change in the business, prospects, operations, earnings, assets or financial condition of the Company and its subsidiaries ; ( and )

(g) Purchaser shall have obtained financing in an amount and upon terms satisfactory to it to consummate the Merger; ( and )

(h) there shall have been no dividend, redemption or similar distribution, or any stock split, re-capitalization or stock issuance of any kind, by the Company since _______, 2000, ( date of last audited balance sheet ) other than regularly scheduled dividends on the preferred stock.

General

After executing this letter and until ________, 2000, the Company agrees, and shall use its best efforts to cause its officers, directors, employees, agents and stockholders, not to solicit or encourage, directly or indirectly, in any manner any discussion with, or furnish or cause to be furnished any information to, any person other than Purchaser in connection with, the sales of the Stock of the Company or the capital stock of its subsidiaries, all or substantially all of the assets of the Company or its subsidiaries or any portion or all of its business or that of its subsidiaries, or any business combination or merger of the Company or its subsidiaries with any other party.   You will promptly inform Purchaser of any inquiries or proposals with respect to the foregoing. ( In the event that the agreements in this paragraph are violated by the Company or its officers, directors, employees, agents or stockholders, and Purchaser does not consummate the Merger, then, in addition to other remedies available to Purchaser, Purchaser shall be entitled to receive from the Company all out-of-pocket expenses (including reasonable attorney's fees and expenses relating to the financing), which Purchaser has incurred.

Neither of the parties to this letter shall disclose to the public or to any third party the existence of this letter or the proposed sale described herein other than with the express prior written consent of the other party, except as may be required by law.

From and after the date hereof, upon reasonable prior notice and during normal business hours, the Company will grant to each of Purchaser and its agents, employees and designees full and complete access to the books and records and personnel of the Company and its subsidiaries. Except as may be required by law court order, all information so obtained, not otherwise already public, will be held in confidence.

( Except as provided herein, ) each party will be responsible for its own expenses in connection with all matters relating to the transaction herein proposed.   If this proposed transaction shall not be consummated for any reason other than a violation of the agreement not to solicit other offers or negotiate with other purchasers, neither party will be responsible for any of the other's expenses.

Each party will indemnify, defend and hold harmless the other against the claims of any brokers of finders claiming by, through or under the indemnifying party.

Except for matters relating to ( i) the confidentiality of this proposal and the business operations of the Company or its subsidiary, ( ii ) the agreement not to negotiate with others for otherwise pursue the sale of the Company or its subsidiary, and (iii) the agreement that each party will bear its own expenses in connection herewith, this letter does not create a binding, legal obligation on any party but merely represents the present intentions of the parties.

In the event that for any reason the definitive Merger Agreement is not executed by _________, 2000 any party may discontinue negotiations and terminate this letter without liability to any other party.

Your signature below shall indicate your agreement with the foregoing letter of intent. We look forward to working with you on this transaction.

Very truly yours,

Acquisition, Inc.

By :__________

Title: Vice President

Agreed to and Accepted

this _____ day of_______, 2000

ABC Corporation

By : ________

Title:___________