Exhibit 10.4

 

 [illum_america.jpg]

 

2060 NW Boca Raton Blvd, Suite 6

Boca Raton, Fl. 33431

 

 

January 11, 2017

 

 

 

Board of Directors

Grom Holdings, Inc.

2060 NW Boca Raton Blvd., #6

Boca Raton, FL 33431

 

Re: Plan of Share Exchange Between Illumination America, Inc. and Grom Holdings,
Inc.

 

Dear Mr. Marks:

 

This letter is intended to express the general terms of the Plan of Share
Exchange to be formalized between Illumination America, Inc., a publicly-held
Florida corporation ("IAI") and Grom Holdings, Inc., a privately-held Delaware
corporation ("Grom"). The objective of our discussions has been the execution
and consummation, as soon as feasible, of formal Agreements between the parties
hereto (the "Exchange Agreements") which, among other things, would provide for
the various matters set forth below.

 

1.          Plan of Share Exchange and Reorganization of the Companies. The
parties hereto · share joint control, as well as various members of management
and offices. This has created various potential conflicts of interests. The
board of directors of IAI and Grom have completed an initial evaluation of the
business plan, financial statements and other relevant corporate documents of
the other, and have concluded that a Share Exchange of Grom into IAI whereby IAI
would issue shares of its common stock based upon on an internal valuation of
both parties in Illumination stock in exchange for 100% of the then outstanding
shares of Grom (at the rate of 4.17 shares of Illumination stock valued at $1.00
per share for each share of Grom stock) would be in the best interest of both
companies. It is the intent of the parties hereto that the proposed Share
Exchange of Grom into IAI be effected as a tax-free reverse Share Exchange
pursuant to Section 368 of the Internal Revenue Code.

 

2.           Capitalization.

 

(a)          IAI Capitalization. IAI's total authorized capital consists of
100,000,000 shares of Common Stock, par value $0.001 per share and 25,000,000
shares of Preferred Stock, par value $0.001 per share. As of the date hereof
there are 10,214,744 Common Shares issued and outstanding and no shares
Preferred Stock issued or outstanding. Immediately prior to the Effective Date
(as defined herein below), there will be no more than 11,000,000 shares of IAI's
Common Stock issued and outstanding.

 

 

 

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(b)           Grom Capitalization. Grom's total authorized capital consists of
100,000,000 Common Shares, par value $0.001 per share and 10,000,000 Preferred
Shares, par value $0.001 per share. As of the date of this letter there are
24,202,744 common shares of Grom issued and outstanding. Immediately prior to
the Effective Date (as defined herein below), there will be no more than
25,000,000 shares of Grom’s Common Stock issued and outstanding.

 

3.          Transaction Process.

 

(a)          Following execution hereof, the parties hereto shall:

 

(i)        cause to be prepared the Exchange Agreements. Once the Exchange
Agreements have been approved by the Board of Directors, the Board of Directors
of Grom shall call a special meeting of its shareholders to approve the
transactions proposed herein;

 

(ii)        management of Grom shall retain an SEC qualified independent
accountant to undertake an audit of its financial records pursuant to US GAAP;

 

(iii)       IAI shall prepare, file and take all action necessary to have its
registration statement on Form S-4 filed with the US Securities and Exchange
Commission and obtain effectiveness thereof.

 

(iv)       IAI shall form a new wholly owned subsidiary and assign all of its
current LED business operations to this entity so that IAI shall become a
holding company for both the new subsidiary and Grom. (vi)   have its
shareholders approve amendments to the IAI Articles of Incorporation increasing
the authorized capital to 200,000,000 common shares, par value $0.0001 per
share, and changing the name of IAI to "Grom Holdings Inc."

 

(b)          Officers and Directors. Prior to the Effective Date, the Board of
Directors of IAI shall accept the resignation of Ismael Llera as President of
IAI (while remaining President of the new wholly owned subsidiary) and William
Andrews as Chief Operating Officer and Vice President of Sales, Marketing and
Design (while assuming these positions in the new wholly owned subsidiary) and
appoint Sander Schwartz as President, Darren Marks as Chief Executive Officer
and Melvin Leiner as Executive Vice President, Secretary, Treasurer and Chief
Financial Officer.

 

(c)         take all action necessary to timely file all notices and
applications with FINRA to cause a new trading symbol to be issued.

 

4.                 Conditions to Closing. The Closing of this proposed
transaction shall take place on a mutually agreeable time and place once the
following matters are successfully resolved or completed, as applicable:

 

(a)         The Exchange Agreements are approved by the lawfully required number
of Grom shareholders and executed by the parties hereto;

 

(b)         The audit of Grom financial statements has been completed; and

 

(c)         IAI's registration statement on Form S-4 has been deemed effective
by the SEC.

 

5.                 Effective Date. The Effective date of the Exchange shall be
the date upon which all of the conditions contained in Section 4 have been
satisfied.

 

 

 

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6.                  Costs.  Each party hereto shall be responsible for payment
of their own legal, accounting and any other out-of-pocket expenses reasonably
incurred in connection with this transaction, whether or not this transaction is
consummated.

 

Except for the Paragraphs 6, hereof, this letter is not intended as a contract
or to create any enforceable rights or obligations whatsoever on the part of
either party. No obligations on the part of either party with respect to the
matters covered hereby (other than as set forth in Paragraphs 6 hereof) shall
exist unless and until a written agreement, satisfactory in form and substance
to both parties, has been approved by their respective boards of directors and
shareholders and executed by officers specifically authorized to do so.

 

If the foregoing accurately reflects your understanding of the terms and
conditions of our agreement please so indicate by signing below as designated.

 

Yours truly,

 

ILLUMINATION AMERICA, INC.

 

 

/s/ Ismael Llera                              

Ismael Llera, President

 

APPROVED AND ACCEPTED THIS 11th day of January. 2017.

 

GROM HOLDINGS, INC.

 

 

/s/ Darren Marks                                           

Darren Marks, Chief Executive Officer

 

 

 

 

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