LETTER OF INTENT
THIS
LETTER OF INTENT is made and entered into this 22nd day of February 2006, by
and
among Amera Link, a Nevada corporation (“AL”), 518 Media, Inc. a California
corporation (“518”), and based on the following:
Premises
A. AL
is a
publicly held company which has 25,000,000 authorized common stock 7,000,000
of
which are issued and outstanding.
B. AL
has no
assets or liabilities and is current in its reporting obligations.
C. 518
is a
recently formed California corporation which intends to acquire and/or currently
owns or has rights to the property set for on the attached Exhibit
A.
D. The
parties wish to combine in order to afford 518 access to the public capital
markets and provide eventual liquidity to 518 shareholders.
Agreement
Based
upon the foregoing premises, which are incorporated herein by this reference,
the parties enter into this Letter of Intent on the following principal terms
and conditions:
1. Acquisition.
Subject
to the terms set forth below, AL would acquire all of the issued and outstanding
shares of 518 to combine their business activities with AL being the parent
and
518 being a wholly owned subsidiary of AL. In connection with such
reorganization, the shareholders of 518 would receive 5,300,000 restricted
common shares of AL, pro rata.
2. Principal
Conditions Precedent to Completion of this Transaction.
Completion of the transactions contemplated by this Letter of Intent is subject
to the following conditions precedent:
(a) the
negotiation of a definitive agreement(s) as set forth in paragraph 6
below;
(b) the
approval, to the extent required by governing law, of the merger by the
shareholders of AL and/or 518;
(c) the
delivery by 518 of audited financial statements meeting the requirements of
Regulation SB of the Securities Act and GAAP, that the shareholders of 518
have
retained all of the net income generated to date by the assets of 518.
(d) the
re-organization of AL, before taking into account item (e), so that at closing
there are 8,534,000 shares outstanding and no options or other share rights
outstanding. Included in this reorganization would be a sixty-to-one forward
split of the existing 26,000 shares of unlegended common stock.
1
(e) the
completion of a private placement offering at $0.40 per share, minimum of
$400,000 dollars and a maximum of $600,000 with the following terms:
(i)
$0.40
per share.
(ii)
restricted common stock.
(iii)
50%
warrant coverage, two year, $0.80 per share exercise price.
(iv)
piggyback registration rights.
(v)
Principle fundraising completed by Liberty and Associates.
(vi)
Commissions may be payable. (f) the
board
of directors of AL and 518 shall be reconstituted to include Xxxxx Xxxxx, Xxxxx
Xxxxx, Xxxxx XxXxxxx, Xxxxxx Xxxxxx, and a nominee of AL
(g) AL
and
518 enter into employment agreements with Xxxxx Xxxxx; Xxxxx Xxxxx; Xxxxx
XxXxxxx and Xxxxxx Xxxxxx acceptable to AL.
3. Post
Closing Covenants.
AL
shall take the following action immediately after or in conjunction with the
closing of the transactions contemplated hereby: (a) change the name of the
corporation to 518 Media or otherwise as requested by 518 (b) file within 4
days
of closing the required reports with the Securities Exchange Commission. (c)
application for symbol and pink sheet listing.
4. Term. This
Letter of Intent shall remain effective until April 30, 2006.
5. Mutual
Access to Information and Confidentiality.
Each
party will give to the other, and to its employees, counsel, accountants,
potential financing sources and other representatives, access to all properties,
books, contracts, documents and records with respect to their affairs as a
party
may reasonably request in connection with matters relating to the transaction.
Each party will ensure that all confidential information that such party or
any
of their respective officers, directors, employees, counsel, accountants,
potential financing sources or other representatives may now possess or may
hereafter obtain relating to the other party or any constituent entity of 518
shall not be published, disclosed or made accessible by any of such persons
to
any other person at any time or used by any of such persons for any purpose
other than in connection with the structuring and negotiation of the
transaction.
6. Negotiation
of Definitive Agreement.
Upon
the acceptance of this letter of intent by the parties, the parties agree
promptly to proceed to negotiate in good faith a definitive agreement, and
other
documents contemplated hereby (collectively the “Definitive Agreements”), which
will reflect more specifically the understandings outlined in this Letter of
Intent as well as other matters, issues, terms and/or conditions not contained
herein. The Definitive Agreement will contain and provide among other items
the
following:
2
(a) such
terms, conditions, covenants, representations, warranties, indemnifications
and
other provisions as each of the parties believes are necessary or appropriate
to
safeguard the respective interests of the parties; and
(b) that
the
obligations of the parties to consummate the merger shall be subject to a number
of conditions, including (i) approval of the Definitive Agreement by the board
of directors of the parties; (ii) to the extent required, approval by the
shareholders of AL and/or 518; (iii) receipt of any required approvals from
governmental and regulatory agencies on terms acceptable to the parties, (iv)
receipt of all other necessary consents; and (iv) no material adverse change
having occurred with respect to the financial condition, business operations
or
prospects of 518 or AL.
7. Actions
by 518.
In
consideration of the expenditure of time and effort by AL in the due diligence
investigation of 518 and the negotiation of definitive agreements respecting
the
transaction contemplated hereby, from and after the date of this Letter of
Intent and until the earlier of either the closing of the transaction
contemplated hereby in accordance with such agreements or the termination of
the
negotiation of definitive agreements or the failure to execute such definitive
agreements by April 30, 2006, 518 or the discovery of the inability of the
AL
party to perform hereunder in any material way or the mutual agreement of the
parties to terminate this Letter of Intent, shall not, directly or
indirectly:
(a) enter
into any transaction with any party other than AL relative to the sale, lease,
or other transfer of its business and assets;
(b) solicit
or encourage submission of inquiries, proposals, or offers from any other party
relative to the sale, lease, or other transfer of its business and
assets;
(c) provide
further information to any party other than AL relating to any possible sale,
lease, or other transfer of its business and assets; or
(d) disclose
to any third-party, other than 518’s attorneys or other professional advisors on
a confidential basis, the 518’s willingness to sell, lease, or otherwise
transfer its business or assets or discuss the existence or substance of this
Letter of Intent with any such third-party.
If
at any
time during the period described above, 518 receives an offer or proposal
relating to the possible purchase, lease, or other acquisition of its business
or assets, or any part thereof, it will immediately notify AL of said offer
or
proposal, the identity of the party making the offer or proposal, and the
specific terms of such offer or proposal.
8. Costs.
Each of
the parties will pay its own costs and expenses associated with the negotiation,
preparation, execution, and delivery of the definitive agreements and the
consummation of the transaction.
3
9.
No
Binding Agreement Regarding the Transaction.
This
letter of intent constitutes only a statement of the current intentions of
the
parties and does not constitute a binding obligation, except to the extent
expressly provided in this Agreement. No contract or agreement of any nature,
express or implied, providing for or relating to the transaction shall be deemed
to exist unless and until a Definitive Agreement(s) has been executed.
Notwithstanding the foregoing, paragraphs 4, 5, 7, and 8 of this letter of
intent are agreed by the parties to be fully binding on the parties hereto.
Neither this paragraph 10 nor any other provision of this letter of intent
may
be waived or amended except by written consent of all parties, which consent
shall specifically refer to this paragraph (or such other provision) and
explicitly state such waiver or amendment. Each of the parties represent that
this letter of intent does not violate, breach, conflict with or otherwise
contravene the provisions of any existing agreement, commitment or debt
instrument of such party.
10. Governing
Law.
This
letter of intent is solely for the benefit of 518 and AL. The provisions of
this
letter of intent shall be governed by, and shall be interpreted under, the
laws
of the state of California, without giving effect to such state’s choice of law
provisions.
11. General.
The
foregoing sets forth the principal terms of the proposed transaction. The
completion of the transaction will be subject to a number of customary
conditions, including the satisfactory completion of legal due diligence, the
negotiation and execution of mutually agreeable definitive agreements, securing
any requisite third-party consents, and the absence of any litigation or other
governmental proceeding which could result in a material adverse effect on
either of the parties or which seeks to enjoin the consummation of the
transaction. However, by signing this agreement, we all agree to use our
respective best efforts to proceed as quickly as possible with the negotiation,
preparation, execution, and delivery of definitive agreements and the
consummation of the transaction, recognizing that the complexities of the
transaction will require time for the necessary business, legal, and accounting
review.
12. Advance.
Upon
execution of the letter of intent, 518 will advance $20,000 to AL to help defer
the cost of completing the transaction. If the transaction is consummated 518
will get credit for the $20,000 against the delivery of assets set forth in
paragraph 2(c). If the transaction is not consummated then AL will deliver
425,000 shares of AL restricted common stock with piggy-back registration rights
to 518 as repayment of the advance and distribute such shares according to
518
instructions.
DATED
as
of the date first above written.
|
Amera
Link
|
518
Media, Inc.
|
||
|
By:
|
/s/
Xxxxxx Xxxxxxxx
|
By:
|
/s/
Xxxxx Xxxxx
|
|
Xxxxxx
Xxxxxxxx, President
|
Xxxxx
Xxxxx, President
|
||
4
|
Exhibit
A - 518 Media Inc. Proforma -
|
||||||||||
|
CONFIDENTIAL
as of 1-24-06
|
|
|||||||||
|
Jan
24, '06
|
Dec
31, '05
|
|||||||||
|
ASSETS
|
||||||||||
|
Current
Assets
|
||||||||||
|
3,674.06
|
1,991.82
|
|||||||||
|
100.03
|
100.03
|
|||||||||
|
Cash
|
3,774.09
|
2,091.85
|
||||||||
|
Accounts
Receivable
|
||||||||||
|
Accounts
Receivable
|
2,600.00
|
0.00
|
||||||||
|
Total
Accounts Receivable
|
2,600.00
|
0.00
|
||||||||
|
Total
Current Assets
|
6,374.09
|
2,091.85
|
||||||||
|
Other
Assets
|
||||||||||
|
Sasquatch
D Gang Member Rights
|
10,379.00
|
|||||||||
|
Wild
Blue Yonder Digi Beta Mast
|
1,867.67
|
|||||||||
|
XXXXX
XXXXX 0 xxx xxxxx
|
7,063.67
|
7,063.67
|
||||||||
|
XXXXXXXXXXXX
0 xxx xxxxx
|
9,129.17
|
9,129.17
|
||||||||
|
LESSONS
OF DARKNESS 1 print
|
6,070.61
|
6,070.61
|
||||||||
|
NOSFERATU
3 PRINTS
|
10,580.69
|
10,580.69
|
||||||||
|
WHEEL
OF TIME - 1 Digi Beta
|
1,025.66
|
1,025.66
|
||||||||
|
WILD
BLUE YONDER 5 prints
|
7,458.74
|
7,458.74
|
||||||||
|
WILD
BLUE YONDER RIGHTS
|
80,000.00
|
80,000.00
|
||||||||
|
Options
for Software/Electronic Game/Dalles Dox
|
0.00
|
0.00
|
||||||||
|
Total
Other Assets
|
133,575.21
|
121,328.54
|
||||||||
|
TOTAL
ASSETS
|
139,949.30
|
123,420.39
|
||||||||
