loi_rm.htm


    
      

    


     

    


    BINDING
      LETTER OF INTENT

    


    September
      12, 2007

    


    Ross
      McCullough

    6601
      22nd
      Street North

    St.
      Petersburg, FL 33702 USA

    


    


    Dear
      Mr.
      McCullough:

    


    The
      purpose of this binding letter of intent (“LOI”) is to set forth certain
      understandings and binding agreements between Ross McCullough. (“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.

    


    
      	
              1.  

            	
              RM
                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.

            


    

    


    
      	
              2.  

            	
              247MGI
                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.

            


    

    


    
      	
              3.  

            	
              RM
                shall be entitled to a seat on the Board of 247MGI as long as RM
                remains
                with NEWCO.

            


    

    


    
      	
              4.  

            	
              247MGI
                and RM agree to issue Norman Farrar Five percent (5%) of the issued
                and
                outstanding shares of NEWCO on the day the Agreement is
                signed.

            


    

    


    
      	
              5.  

            	
              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.

            


    

    


    
      	
              6.  

            	
              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.

            


    

    


    
      	
              7.  

            	
              RM
                Shall 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.

            


    

    


    
      	
              8.  

            	
              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.

            


    

    


    
      	
              9.  

            	
              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.

            


    

    


    
      	
              10.  

            	
              247MGI
                and RM agree to have equal representation on the Board of Directors
                of
                NEWCO, with all Board Resolutions decided by majority
                vote.

            


    

    


    
      	
              11.  

            	
              247MGI
                shall deliver to RM a draft of the Agreement no later then the 14th
                of
                September.  247MGI and RM agree to use there best efforts to
                work towards a final agreement as quickly as
                possible.

            


    

    


    
      	
              12.  

            	
              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.

            


    

    


    
      	
              13.  

            	
              247MGI
                agrees to fund RM $25,000 within 10 business days from the date the
                LOI is
                executed.

            


    

    


    
      	
              14.  

            	
              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.

            


    

    


    
      	
              15.  

            	
              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

            


    

    


    
      	
              16.  

            	
              247MGI
                and RM agree that any and all patents, copyrights, intellectually
                property
                and all source code shall belong to
                NEWCO.

            


    

    


    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:

    


    
      	
              A.  

            	
              Submission
                of necessary consents or approvals of shareholders, governmental
                bodies,
                lenders, lessors, or other required third
                parties;

            


    

    
      	
              B.  

            	
              Delivery
                of legal opinions, closing certificates, and other customary
                documentation.

            


    

    
      	
              C.  

            	
              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.

            


    

    
       

      
        	
                3.

              	
                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.

              


      

      


      
        	
                4.

              	
                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.

              


      

      


      
        	
                5.

              	
                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 RM.  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.

              


      

      


      RM
        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.

      


      
        	
                6.

              	
                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

              


      

       

      


      
        	
                7.

              	
                DISPUTES. The
                  prevailing party in any dispute pursuant to this LOI and the Purchase
                  Agreement shall be entitled to reasonable attorneys’ fees and
                  costs.

              


      

       

    

    
      
                 

        
        

      

      
        
        

      

      
        
        

      

    


    


    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.

    


    


    247MGI,
      Inc.

    


    


    


    By:
      /s/Matthew P. Dwyer

    Name:   Matthew
      P. Dwyer

    Title:     President/CEO

    


    


    Date:
      September 12, 2007

    


    


    


    ACCEPTED:

    ROSS
      MCCULLOUGH

    


    


    


    By:
      /s/Ross McCullough

    Name:
      Ross McCullough

    


    


    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
        Ross McCullough, 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 Matthew Dwyer and Ross McCullough.  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 petty 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 Norman Farrar.  It is also understood that should Norman
        Farrar 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/Matthew P. Dwyer

        Name:
          Matthew P. Dwyer

        Title:
          President

         

         

        Ross
          McCullough, a Florida Resident

        


        


        By:
          /s/Ross McCullough

        Name:
          Ross McCullough