SUMMARY OF TERMS OF PROPOSED MERGER BETWEEN MY CATALOGS ONLINE, INC. AND BRIGHT MOUNTAIN HOLDINGS, INC.

●  Bright Mountain Holdings, Inc., a Florida corporation

    ("Bright Mountain")

 

●  My Catalogs Online, Inc., a Nevada corporation

 

●  Catalogs Merger Sub, Inc., a Nevada corporation to be formed as a wholly-owned subsidiary of

     Catalogs ("Merger Sub"- to be named, e.g., My Bright Mountain, Inc.)

Catalogs will acquire all the shares of capital stock and all other rights to acquire capital stock of Bright Mountain pursuant to a merger of Bright Mountain with and into the Merger Sub, with Merger Sub, Inc. surviving as a wholly-owned subsidiary of Catalogs (the "Merger"). In the Merger-Sub, shares of common stock of Bright Mountain will be exchanged for shares of common stock of Catalogs. In conjunction with the Merger. Catalogs will change its name to Bright Mountain Holdings, Inc. and request a new trading symbol agreeable to all parties.

Immediately prior to the closing of the Definitive Agreement, Catalogs will cause a 10-for-1 reverse split of its common stock resulting in a pre-exchange total of Catalogs shares outstanding of 1,386,280, (subject to verification by transfer agent).

 

At closing, Catalogs will issue authorized but unissued new common shares totaling approximately 26,339,320 common shares to Bright Mountain shareholders or such an amount that represents  5% of the total issued and outstanding shares of the post closing shares outstanding of Bright Mountain Holdings, Inc. (f/k/a Catalogs). After issuing these shares and upon completion of the Merger, there will be a total of 27,725,600 shares issued and outstanding. The Catalogs shares will be exchanged with Bright Mountain shareholders on a prorate basis based on Bright Mountain's shareholder ownership interests immediately prior to closing of the Definitive Agreement, (the closing ratio is approximately 1.85 Catalogs shares for each existing Bright Mountain share).

 

Finally, the post-Merger company will issue an additional 200,000 shares of its authorized common capital stock, including 150,000 to Jerrold Burden and 50,000 to Ron Teblum, in full and final payment of any and all outstanding shareholder debt 011 the Catalogs books immediately prior to closing, (see Conditions to Closing). These shares are in addition to the existing 27,725,600 shares existing in Catalogs at the time of the merger.

All shares to be issued, will be issued, free and clear of any and all claims, liens, encumbrances and/or adverse interests of any kind. It is expected that the Merger would constitute a tax-free reorganization for U.S. Federal income tax purposes.

The shares of Catalogs capital stock to be issued as Merger consideration are expected to be exempt from registration pursuant to Rule 506 of Regulation D under the Securities Act of 1933, as amended.

 

Catalogs shall cause to be filed an information statement under Section 14c of the Securities Exchange Act of 1934, as amended, (the "Information Statement"), which will provide the required disclosure for shareholder approval by Catalog's shareholders of the Name Change and the Reverse Stock Split.

 

Following the closing of the Definitive Agreement, Ronald Teblum and Dan O'Meara will resign all Board and Officer positions with Catalogs and Jerrold Burden will elect a replacement Board of Directors of Bright Mountain Holdings, Inc. (f/k/a Catalogs) that will consist of Kip Speyer, Greg Stepic, Todd Speyer and Todd Davenport. Upon appointment of the new Bright Mountain Board of Directors, Jerrold Burden shall resign all positions with the Company including as a member of the Board and as an officer.

The Definitive Agreement will contain representations, warranties, pre-closing covenants, closing conditions and other provisions customary for a transaction of this nature, including, but not limited to:

a) hold harmless agreements from all Catalog shareholders holding 5% or more of the pre-closing outstanding shares;

b) Representations that no options or other contracts are in effect with respect to Catalogs commons shares that have not been

previously disclosed; and

c) Representations that there are no liabilities of any kind, fixed or contingent, except as provided for in this LOI.

Execution of the Definitive Agreement will be conditional upon: (a) the satisfactory completion of legal and accounting due diligence by Bright Mountain and Catalogs; and (b) the approval of the Definitive Agreement and the Share Exchange by the Boards of Directors of both Bright Mountain and Catalogs

 

 

By:  /s/ W. Kip Speyer

By:  /s/ Ronald Teblum

Name: W. Kip Speyer

Name:  Ronald Teblum

Title: President and CEO

Title: CEO

Date: October 18, 2012

Date: October 18, 2012