BINDING LETTER OF INTENT
BINDING
LETTER OF INTENT
September
12, 2007
Xxxx
XxXxxxxxxx
0000
00xx
Xxxxxx Xxxxx
St.
Petersburg, FL 33702 USA
Dear
Xx.
XxXxxxxxxx:
The
purpose of this binding letter of intent (“LOI”) is to set forth certain
understandings and binding agreements between Xxxx XxXxxxxxxx. (“RM”), an
individual living in the State of Florida and 247MGI, Inc. (“247MGI”) a company
incorporated under the laws of the State of Florida, with respect to certain
terms and conditions, set forth below.
The
following numbered paragraphs reflect our understanding of the matters described
in them, but are not to constitute a complete statement of RM or 247MGI with
respect to the matters described therein.
PURCHASE
On
the
terms, and subject to the conditions, of a Technology Assignment and Transfer
Agreement (“Agreement”) to be negotiated and entered into by RM and
247MGI.
The
following terms shall be incorporated into a more formal Agreement.
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1.
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XX
agrees to assign and transfer to NEWCO a company controlled by Sovereign
Research, LLC a wholly owned subsidiary of 247MGI, Inc a publicly
traded
company all rights and interest in Avalon Java based Peer 2 Peer
streaming
application and the Avalon Java based P2P video conferencing
application.
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2.
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000XXX
agrees to issue RM Thirty Five percent (35%) of the issued and outstanding
shares of NEWCO on the day of signing the Agreement, further more
247MGI
shall issue to RM 2,843,537 shares of the issued and outstanding
common
stock. The shares shall bear a restrictive legend when
issued.
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3.
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RM
shall be entitled to a seat on the Board of 247MGI as long as RM
remains
with NEWCO.
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4.
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247MGI
and RM agree to issue Xxxxxx Xxxxxx Five percent (5%) of the issued
and
outstanding shares of NEWCO on the day the Agreement is
signed.
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5.
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247MGI
shall raise $1.5 million in seed capital for NEWCO over the next
18
months. 247MGI may sell shares of its common stock or a portion
of its 60% ownership of NEWCO to raise the
capital.
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6.
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247MGI
and RM agree to share the revenue generated by the Avalon Streaming
Applications and all other technologies. The Streaming and video
technology transferred by RM to NEWCO 80/20, 247MGI shall receive
80% of
the net revenue and RM shall receive 20% of the net
revenue. The net revenue shall be determined the by net revenue
number reported in Quarterly and Annual financial reports of 247MGI
as
filed with the Securities and Exchange Commission as it relates to
NEWCO
only not 247MGI as a whole.
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7.
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XX
Xxxxx serve as Chief Technology Officer of NEWCO and shall serve
on the
Board of Directors during which time RM shall receive a salary of
$75,000
per year and other benefits as defined in an Employment Agreement
to be
executed on the day of signing the Agreement, the Employment Agreement
shall be for a term of no less then two years. The Employment
Agreement shall contain performance and options and incentives to
be
defined within the Employment
Agreement.
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8.
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RM
shall be able to distribute his 35% ownership in NEWCO to other
individuals he feels may add value in the development of the
software.
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9.
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247MGI
may sell shares of NEWCO to help raise funds needed for development
or
marketing of the software. RM shall be protected from any
dilution which may take place during 247MGI’s and NEWCO’s efforts to raise
the initial $1.5 million dollars. All shareholders shall share
in equal dilution for any funds raised after the initial seed capital
of
$1.5 million.
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10.
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247MGI
and RM agree to have equal representation on the Board of Directors
of
NEWCO, with all Board Resolutions decided by majority
vote.
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11.
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247MGI
shall deliver to RM a draft of the Agreement no later then the 14th
of
September. 247MGI and XX agree to use there best efforts to
work towards a final agreement as quickly as
possible.
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12.
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247MGI
shall found $50,000 at signing of the Agreement and $50,000 a week
over
the following 4 weeks for a total of $250,000. Any funds
distributed to NEWCO prior to the signing of the Agreement shall
be
deducted from the amount due at signing of the Agreement. If
for some reason the Agreement is not executed by RM then the amount
loaned
shall become a demand Note owed by RM to 247MGI. If the
Agreement is not executed by 247MGI then the money shall be deemed
a Note
owed by RM.
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13.
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000XXX
agrees to fund RM $25,000 within 10 business days from the date the
LOI is
executed.
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14.
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The
Agreement shall be signed no later the 45 days after the signing
of this
LOI. If the Agreement is not signed then this LOI shall
terminate immediately unless both parties agree in writing to extend
the
signing of the Agreement.
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15.
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247MGI
and RM agree that as long as NEWCO is a private entity the technology
may
not be sold, transferred, assigned, granted, or moved in any way
from
control of NEWCO without the consent of both 247MGI and
RM
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16.
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247MGI
and RM agree that any and all patents, copyrights, intellectually
property
and all source code shall belong to
NEWCO.
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2 OTHER
PROVISIONS.
The
Purchase Agreement will contain customary representations, warranties,
covenants, and other agreements, on behalf of 247MGI and its stockholders and
the Closing will be subject to usual conditions, including:
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A.
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Submission
of necessary consents or approvals of shareholders, governmental
bodies,
lenders, lessors, or other required third
parties;
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B.
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Delivery
of legal opinions, closing certificates, and other customary
documentation.
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C.
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An
absence of material change or event (exclusive of a competing offer)
that
would make proceeding with execution and approval of the Stock Purchase
Agreement or Closing illegal, invalid, or contrary to the fiduciary
duties
of the Board of Directors of
247MGI.
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3.
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COSTS. RM
and 247MGI shall each be solely responsible for and shall bear
all of
their respective expenses, including, without limitation, legal,
accounting, and other advice, incurred in connection with the Purchase
Agreement and the transactions contemplated
thereby.
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4.
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PUBLIC
DISCLOSURE. Neither RM nor 247MGI shall
make any public release of information regarding the matters contemplated
herein except (i) that a joint press release in agreed form shall
be
issued by RM and 247MGI as promptly as is practicable after the
execution
of this LOI, (ii) that RM and 247MGI may each continue such communications
with employees, customers, suppliers, franchisees, lenders, lessors,
shareholders, and others as may be required, necessary or appropriate
and
not inconsistent with the best interests of the other party, for
the
prompt consummation of the transactions contemplated by this LOI,
or (iii)
as required by law.
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5.
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CONFIDENTIALITY. 247MGI
agrees that (except as may be required by law) it will not disclose
or use
and it will cause its officers, directors, employees, representatives,
agents, and advisors not to disclose or use, any Confidential Information
(as hereinafter defined) with respect to RM, furnished, or to be
furnished
by RM to 247MGI in connection herewith at any time or in any manner
and
will not use such information other than in connection with its
evaluation
of the Acquisition. For the purpose of this paragraph,
“Confidential Information” means any information identified as such in
writing to 247MGI by XX. If the proposed Agreement is not
consummated, 247MGI shall promptly return all documents, contracts,
records, or properties to RM. The provisions of this paragraph
shall survive the termination of this
LOI.
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XX
agrees
to treat all information concerning 247MGI furnished, or to be furnished,
by or
on behalf of 247MGI in accordance with the provisions of the paragraph
(collectively, the “Confidential Information”), and to take, or abstain from
taking, other actions set forth herein. The information will be used
solely for the purpose of evaluating the proposed transaction, and will be
kept
confidential by RM and its officers, directors, employees, representatives,
agents, and advisors; provided that (i) any of such information may be disclosed
to RM’s officers, directors, employees, representatives, agents, and advisors
who need to know such information for the purpose of evaluating the Acquisition,
and provided they agree to be bound by the terms of this confidentiality
clause,
(ii) any disclosure of such information may be made to which 247MGI consents
in
writing and (iii) such information may be disclosed if required by subpoena
provided that prior to disclosure, pursuant to said subpoena, RM has given
247MGI notice of such subpoena and an opportunity to quash same. If
the Acquisition is not consummated or 247MGI decides not to proceed with
the
Acquisition, RM will return to 247MGI all material containing or reflecting
the
information and will not retain any copies, extracts, or other reproductions
thereof.
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6.
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CHOICE
OF LAW. This Letter of Intent shall be
construed under the laws of the State of Florida , and shall inure
to the
benefit of, and be binding upon, the respective successors and
assigns of
the parties to this Letter of Intent. The parties agree that
any action brought by any party against another party in connection
with
any rights or obligations arising out of this Letter of Intent
shall be
instituted properly in a federal or state court of competent jurisdiction
with venue in the appropriate state court in and for Broward County,
Florida, or the United States District Court for the Southern District
of
Florida. A party to this Letter of Intent named in any action
brought in connection with this Letter of Intent in any court outside
of
the above named designated county or district shall have the right
to have
the venue of said action changed to the above designated county
or
district or, if necessary, have the case dismissed, requiring the
other
party to refile such action in an appropriate court in the above
designated county or federal
district
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7.
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DISPUTES. The
prevailing party in any dispute pursuant to this LOI and the Purchase
Agreement shall be entitled to reasonable attorneys’ fees and
costs.
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Please
sign and date this LOI of Intent in the spaces provided below to confirm our
normal understandings and binding agreement as set forth in this Letter of
Intent and return a signed copy to the undersigned.
By:
/s/Xxxxxxx X. Xxxxx
Name: Xxxxxxx
X. Xxxxx
Title: President/CEO
Date:
September 12, 2007
ACCEPTED:
XXXX
XXXXXXXXXX
By:
/s/Xxxx XxXxxxxxxx
Name:
Xxxx XxXxxxxxxx
Date:
October 12, 2007
AMENDMENT
NO. 1 TO LETTER OF INTENT
AMENDMENT
NO. 1 TO BINDING LETTER OF INTENT
(“Agreement”) dated as of October 10, 2007, by and
between 247MGI, INC., a Florida corporation (“247MGI”), and
Xxxx XxXxxxxxxx, an Individual residing in Florida
(“RM”)
W
I T N E S S E T H:
Whereas,
the parties are all of the parties to a Binding Letter of Intent dated September
10, 2007 (the “Original Agreement”); and
Whereas,
the parties desire to amend the Original Agreement upon the terms and conditions
set forth herein
Now,
Therefore, in consideration of the foregoing premises and the covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Item
11
of the Original Agreement is hereby deleted in its entirety and the following
shall be inserted in its place and stead:
Item
11 247MGI and RM agree to use their best efforts to work towards a final
agreement as quickly as possible.
2. Item
12
of the Original Agreement is hereby deleted in its entirety.
3. Item
13
of the Original Agreement is hereby deleted in its entirety and the following
shall be inserted in its place and stead:
Item
13 247MGI agrees to the first round of funding to Xeco within 3 days of
date of LOI and ongoing funding continuing on an as-needed basis per weekly
review by 24/7 and RM once the Amendment has been executed and Xeco has been
established. Sovereign LLC on October 9, 2007 filed with the State of
Florida to form Xeco, Inc., once the corporate papers have been received
a tax
ID number will be obtained and a bank account will be opened with joint
signatory powers of Xxxxxxx Xxxxx and Xxxx XxXxxxxxxx. 247MGI shall
begin funding Xeco to allow for RM to receive a salary, begin paying vendors,
programmers and to secure office space. It is understood that 247MGI
will need a working demo to showcase in order to raise the $1.5 million needed
to complete the final project, in the meantime 247MGI will use its best efforts
to raise capital to allow Xeco, Inc. to continue in the development of the
technology.
4. Item
14 of the Original Agreement is hereby deleted in its entirety.
5. Distributed
funds over $500.00USD require 2 signatures from established officers of the
company. In the event a second officer is unavailable, a PO will be submitted
for review to an authorized representative of 247MGI and returned
within 24 hours via email or fax. Authorizations will be keep on file at
Xeco
and 247MGI. Miscellaneous items from xxxxx cash cannot exceed a total
of 499.99 per week (Sunday to Saturday) without approval by 2 officers. In
the
event that the discretion fund is tapped into, all receipts of 25.00 or more
will be scanned and emailed on a weekly (Friday) basis along with a current
copy
of Quickbooks SMB Edition and expense report (Standard Form) to a representative
of 247MGI for consolidation and review. Books will be reviewed and balanced
on a
monthly basis internally by a representative designated by RM and externally
be
a representative designated by 247MGI.
6. It
is further understood that the transaction between 247MGI and RM is no longer
contingent upon 247MGI successfully purchasing PurFusion Group of Companies,
Inc. from Xxxxxx Xxxxxx. It is also understood that should Xxxxxx
Xxxxxx chose not to work with 247MGI or vice versa that this shall not void
the
agreement between 247MGI and RM.
7. Except
as modified hereby, the Original Agreement shall remain in full force and
effect.
Signature
page follows
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to the
Binding Letter of Intent to be duly executed as of the date and year first
above
written.
247MGI,
Inc., a Florida corporation
By:
/s/Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
President
Xxxx
XxXxxxxxxx, a Florida Resident
By:
/s/Xxxx XxXxxxxxxx
Name:
Xxxx XxXxxxxxxx
