Exhibit 10(ii)
LETTER OF INTENT
March 20,2000
Santa Fe Acquisitions, Inc.
0000 Xxxxxxxxx, Xxxx
Xxxxxxxxxx Xxxxxx, XX 00000
SUBJECT, Letter of Intent for SoundWorks International, Inc. to acquire Santa
Fe Acquisitions, Inc. after Santa Fe has concluded its purchase of
the assets of Sunset Productions, Inc, (Asset Purchase Agreement
Attached)
Gentlemen:
The purpose of this letter is to confirm the intention of the parties to proceed
with negotiation of definitive agreements for the acquisition of Santa Fe
Acquisitions, Inc., a Delaware corporation ("Santa Fe"), by our SoundWorks USA,
Inc. subsidiary-
We understand that Santa Fe has entered into an agreement to acquire all of the
assets of Sunset Productions, Inc. for approximately $348,000. In order to
complete that acquisition, Santa Fe is to raise $500,000 in a private placement
with the balance of the amount raised in excess of the purchase price to be used
for expenses of the private placement offering and for working capital,
The definitive agreement between you and us is expected to provide that promptly
after Santa Fe has concluded its offering and purchase of the assets of Sunset,
SoundWorks will acquire Santa Fe via a merger Of Santa Fe into its operating
subsidiary, SoundWorks U.S.A., Inc. SoundWorks U.S.A., Inc. will be the
surviving company in the merger, and in the merger all of the outstanding
capital stock of Santa Fe wi11 be changed into 1,000,000 shares of our common
stock (representing 2.3% of our common stock immediately following the merger)
and 1,000,000 warrants to purchase our common stock at $0.50 per share. The
number of shares and warrants and the exercise price for the warrants are based
on the assumption. that the offering price for our share: will be $0.50 per
share. If the offering price is greater or less than that amount, an appropriate
adjustment will be made in the number of shares and warrants that your
stockholders will receive in the merger.
We are currently preparing an SB-2 registration statement to be filed with the
Securities and Exchange Commission which will provide for the registration of
3,000,000 shares at $0.50 per share (or the market value of shares at the time
of the offering) or $1,500,000. The offering will also include 3,000,000
warrants at $0.50 per share (or the market value of shares at the time of the
offering) or an additional $1,500,000 if the warrants are exercised. The
distribution of our shares to shareholders of Santa Fe in the merger described
above will be included in the shares we are registering in that registration
statement.
This Letter of Intent is non-binding-, the parties will be, bound only by the
definitive agreement, which will contain, in addition to the terms described in
this Letter, representations, warranties, covenants and conditions customary in,
and appropriate to, this type of transaction,
If this letter correctly sets forth the intentions of the parties, please
confirm that fact by signing and returning to us the enclosed copy of this
letter.
SOUNDWORKS INTERNATIONAL, INC.
________________________________________
By: Xxxxxx X. Xxxxxx, President
Confirmed:
________________________________________
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