GENETIC VECTORS, INC.
0000 X.X. 00XX XXXXXX, XXXXX 000
XXXXX, XXXXXXX 00000
October 1, 1999
DNA Sciences, Inc.
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Gentlemen:
This letter confirms the intent of Genetic Vectors, Inc. (the
"BUYER") to acquire all of the outstanding capital stock (the "DNA SCIENCES
SHARES") of DNA Sciences, Inc., a ______________ corporation ("DNA SCIENCES"),
from the shareholders of DNA Sciences (each a "SHAREHOLDER" and collectively the
"SHAREHOLDERS").
1. THE ACQUISITION. The transaction will be structured as a merger
(the "MERGER") of DNA Sciences with and into the Buyer, so that the Shareholders
can receive tax-free treatment for the consideration received for their DNA
Sciences Shares, if permitted by the Internal Revenue Code of 1986, as amended.
The parties will use their best efforts to account for this merger using the
"pooling of interests" method of accounting.
2. PURCHASE PRICE. In exchange for the DNA Sciences Shares, the
Shareholders will receive 450,000 shares of common stock, par value $0.001 per
share (the "BUYER'S COMMON STOCK"), of the Buyer.
3. BOARD OF DIRECTORS. The Agreement (as defined herein) will
provide that the Shareholders of DNA Sciences shall have the right to nominate
one (1) member to the Buyer's Board of Directors.
4. CLOSING. The Merger will be consummated at a closing (the
"CLOSING") to be held at the offices of Xxxxx's attorneys, on a date which shall
be on or before November 30, 1999.
5. EMPLOYMENT AGREEMENTS. The Agreement will provide that the Buyer
will enter into an employment agreement with Xxxxxxx Xxxxxx, Xxxx Xxxxxxxxx and
Xxxxxx Xxxxxxx. The terms of each of these agreements will be satisfactory to
the parties thereto.
DNA Sciences, Inc.
October 1, 1999
Page 2
6. DUE DILIGENCE INSPECTION. After the signing of this letter, each party may
make examinations and inspections of each others financial condition,
properties, legal matters, business and affairs. Each party will cause their
attorneys, accountants and other advisors and agents to cooperate with the other
in its investigation and to make their files and work papers available.
Consummation of the purchase will be subject to each party obtaining
satisfactory results in its due diligence investigation; PROVIDED, HOWEVER, that
(a) each party will submit to the other party a request for documents within
five (5) days of the execution date of this letter; (b) each party will respond
to the request for documents within ten (10) days after receipt of such request;
and (c) each party will complete its review of such documents within ten (10)
days of receipt of such documents. Thereafter, each party will have five (5)
days to provide the other party with written notice of its desire not to proceed
because the results of the investigation were not satisfactory.
7. NO-SHOP. From the date of this letter until December 31, 1999,
neither DNA Sciences nor its shareholders, officers, directors, employees or
other agents will, directly or indirectly, take any action to solicit, initiate
or encourage any acquisition of substantially all of the assets or any of the
stock of DNA Sciences or any transaction similar to the transaction outlined
herein, nor will they entertain any unsolicited proposals or approaches in this
regard.
8. COSTS. Each party agrees to pay, without right of reimbursement
from the other party and regardless of whether or not the transaction is
consummated, the costs incurred by it in connection with this transaction,
including legal fees and other costs incidental to the negotiation of the terms
of the transaction and the preparation of related documentation. Each party will
indemnify and hold the other harmless from any loss, liability or expense
(including, without limitation, legal fees) resulting from the indemnifying
party's breach of this Section 8.
9. PRESS RELEASES. Prior to the Closing, neither party will make any
press release, statement to employees or other disclosure of this letter or the
transaction contemplated hereby without the prior written consent of the other
party, except as required by law.
10. NON-BINDING LETTER OF INTENT. Except for Sections 6, 7, 8 and 9
hereof, this letter is an expression of interest only and is not intended to be
a binding letter of intent, and the general principles set forth in this letter
shall not constitute an agreement to consummate the transaction described
herein. Upon the satisfactory completion of the due diligence investigation by
each of the parties hereto as described in Section 6 hereof which confirms each
party's intent to consummate the transaction for the purchase price described in
Section 2 hereof, the parties will proceed to use their best efforts to
negotiate the definitive terms of this transaction and enter into a formal and
binding agreement (the "AGREEMENT") which sets forth such representations,
warranties, covenants, indemnifications and other provisions as are acceptable
DNA Sciences, Inc.
October 1, 1999
Page 3
to the parties in their sole discretion. This letter of intent is not an
agreement to enter into any definitive agreement.
11. COUNTERPARTS. This letter may be signed in counterparts, each of which will
be considered an original and all of which will constitute the same document.
If this letter accurately reflects your understanding, please indicate
your agreement by signing both enclosed copies of this letter and returning one
executed copy to me by October 5, 1999.
Sincerely yours,
GENETIC VECTORS, INC.
By:__________________________________
Name: Xxxx X. XxXxxx, Xx.
Title: President
ACCEPTED AND AGREED THIS _____
DAY OF OCTOBER, 1999:
DNA SCIENCES, INC.
By:_____________________________
Name:___________________________
Title:____________________________
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[Shareholders]
