EXHIBIT 99.1
May 2, 2003
PowerSki International
000-X Xxxxx Xxxxxxx
Xxx Xxxxxxxx, XX 00000
LETTER OF INTENT
Gentlemen:
The following will summarize the principal terms of a merger agreement
("Merger Agreement") to be entered into between Nova Communications Ltd
("Nova"), a Nevada corporation, and PowerSki International ("PSI"), a California
corporation, as follows:
1. PSI and Xxxx intend to enter into the Merger Agreement pursuant to
which, among other things, PSI will be merged into Nova with Nova being the
surviving corporation.
2. Prior the execution of the Merger Agreement, Nova will use its best
effort to obtain financing for PSI from private investors in an aggregate amount
and on terms and conditions to be agreed upon between Nova and PSI.
3. The closing of the Merger Agreement ("Closing") will be a date not
later than one hundred eighty (180) days after the Merger Agreement is signed,
which will be the Closing Date.
4. The terms of the proposed merger will be further negotiated and
memorialized in the definitive Merger Agreement, which will contain the usual
and customary representations and warranties, specific obligations of the
parties pending the Closing and conditions precedent to Closing.
5. The representatives of Nova and PSI, respectively, are to be
permitted to make a full and complete investigation of the business, properties,
customers, financial statements and books and records of Nova and PSI,
respectively, for a period of one hundred eighty (180) days from the signing of
this Letter of Intent.
6. During the period from the date of this Letter of Intent to Closing,
PSI will operate in the ordinary course of business and PSI will use its best
efforts to preserve its business and its relationship with its employees,
customers, distributors and suppliers.
7. Xxxx and PSI each agree to bear their own expenses incurred in
connection with the proposed Merger Agreement, including fees of their
respective attorneys, accountants and other advisors.
8. Xxxx and PSI have signed a confidentiality agreement of even date
herewith, which agreement is attached and incorporated herein by this reference,
as paragraph 8.
9. Without the prior approval of the other party to this letter, no
party will hereafter make any announcement of the transactions contemplated
hereby, until and unless the Merger Agreement is executed by both parties.
10. Xxxx believes that Xxxxxx X. Xxxxxxxxxx'x and other key employees'
( to be determined) continued availability and participation in the continuing
business activities is a great importance. Therefore, Xxxxx will enter into
consulting/employment agreements with them for a period of at least five (5)
years (at least with respect to Xx. Xxxxxxxxxx) at compensation amounts to be
negotiated with, an included in, the Merger Agreement.
This Letter of Intent is accepted by the parties as a statement of
mutual intention at this time to conduct further negotiations along the lines
indicated above, and it is understood that the proposed purchase of assets is
subject to the negotiation of the Merger Agreement, and review and approval
thereof by the respective legal counsel and boards of directors of the parties.
It is understood that except for the provisions of paragraphs 7, 8 and 9 (which
are binding on PSI and Xxxx), neither Xxxx nor PSI will be bound to the other by
this Letter of Intent for damages, expenses, failure to finally agree upon the
definitive Merger Agreement, or in any other way.
If the foregoing correctly sets forth our general understanding, kindly
so indicate by signing and returning the enclosed copy of this Letter of Intent.
Very truly yours,
Nova Communications Ltd.
By: /s/ XXXXXXX XXXX
President
AGREED AND ACCEPTED AS OF THE DATE OF THIS LETTER:
PowerSki International
By: /s/ XXXXXX X. XXXXXXXXXX
President
