--000000000000ea22d205ac9f7ccf Content-Type: text/plain; charset="UTF-8" Content-Transfer-Encoding: quoted-printable Thanks, Tim and Timothy, we have received your email and have our attorneys doing a review. We will ask to save some of the finer legal points for the SPA when we have a real, binding document. I don't expect movement on purchase price but we are escalating to see if there is any room (again, the indication so far is that if keeping a stock deal there is no room, but I am escalating further). Best, Lucas On Mon, Aug 10, 2020 at 12:19 PM Tim Thomas wrote: > Hello Lucas, > > Thank you for sending us the letter of intent. We appreciate you having > accommodated us on the structure of the purchase, as a share purchase > transaction. We have the following comments and suggestions with respect > to the LOI: > > -in terms of representations and warranties, we will want the SPA to set > out an express disclosure by us and an express waiver by you as to the > existence of potentially adverse consequences to the business due to the > pandemic, given that no one is in a position to anticipate whether the > effects of this might be positive or negative in terms of future business > prospects; > > -we aren=E2=80=99t clear as to the wording near the end of the penultimat= e > paragraph of Section 2 as to materiality qualifiers being disregarded for > the purposes of determining whether or not a breach has occurred. Our > counsel has advised that this is the sole purpose of a materiality > qualifier such that the proposed wording would render the materiality > aspect of a representation or warranty without effect. Kindly consider > removing this wording; > > -As to the requirement of tail insurance, [we ask that this be removed, a= s > we have confirmed that the applicable liability insurance is an > =E2=80=9Coccurrence-based policy=E2=80=9D such that we are covered for cl= aims made > post-closing for claims relating to occurrences that arose during the > pre-closing period.] *NOTE: to be confirmed* > > -with respect to the proposed purchase price and the working capital > level, we ask that the purchase price be set at US$6,000,000 but that we > guarantee a working capital balance of no less than =C3=87A$500,000 (comp= rised > of cash on hand of no less than CA$200,000 and A/R), with an adjustment > clause should the working capital balance be established as greater or le= ss > than such amount pursuant to a post-closing working capital calculation > submitted by our accountant; > > -please set the annual salary of Timothy Thomas II at $175,000 with an > annual bonus of $75,000; > > -we would prefer to have the LOI and SPA governed by the laws of the > Province of Quebec, however if the laws of Delaware are to apply, please > consider having any disputes governed by binding arbitration, with hearin= gs > to be convened in the District of Manhattan, NY; > > -please add wording to the effect that the purchaser must advise the > seller=E2=80=99s i