Exhibit 2.1
LETTER OF INTENT
December 28, 2005
Ladies and Gentlemen:
This binding Letter of Intent ("LOI") sets forth the basic terms and
conditions under which Execute Sports, Inc., a Nevada state corporation
("Buyer") will enter into a definitive agreement (the "Definitive Agreement")
with ▇▇▇▇▇ ▇▇▇▇▇, an individual residing in California and ▇▇▇▇ ▇▇▇▇▇▇, an
individual residing in California, which shall be collectively referred to
hereinafter as the "Sellers" or individually as "Seller". The Buyer and the
Sellers shall be collectively referred to as the "Parties."
WHEREAS, Sellers own shares of Pacific Sports Group, Inc., (hereinafter referred
to as the "Shares"), a California state corporation (the "Acquired Company"),
which constitute 100% of the issued and outstanding shares of the Acquired
Company;
WHEREAS, Sellers desire to sell, and ▇▇▇▇▇ desires to purchase, all of the
Shares that they own of the Acquired Company (hereinafter referred to as the
"Transaction").
NOW, THEREFORE, in consideration of the foregoing, the Parties hereby agree as
follows:
It is anticipated that the consummation of the Transaction will occur on or
about January 31, 2005, or on such other date to which the parties may agree
("Closing"). This binding LOI is subject to the terms and conditions outlined
herein, including, but not limited to the satisfactory completion of due
diligence by both parties and the preparation, execution and performance of the
Definitive Agreement containing such terms, conditions, covenants,
representations and warranties as are reasonable and customary in similar
transactions.
Based on the information currently known, it is proposed that the
Definitive Agreement include terms and conditions to be negotiated based on the
following:
1. TRANSACTION CONSIDERATION AND TERMS
At Closing Seller shall:
(i) Receive consideration of Four Million, Seven Hundred and Fourteen
Thousand Two Hundred and Eighty Five (4,714,285) shares of the
Buyer's common stock ("Stock") (in addition to the $150,000 in cash
to be issued under paragraph 2 below) which shall carry all the same
rights and provisions of Buyer's currently issued common stock. The
Stock shall be issued pursuant to Rule 144 and not be entitled to
any registration rights;
(ii) Retain the right to appoint one member to the Buyer's Board of
Directors.
(iii) Comply with ▇▇▇▇▇'s request for all requisite due diligence
documentation.
At Closing Buyer shall:
(i) Receive one-hundred percent (100%) of the total outstanding shares
of Seller's (and/or its subsidiaries and affiliates) common shares,
no par value; Buyer is entitled to receive ALL assets and shall
assume ALL liabilities of Seller. Buyer shall accommodate Seller's
reasonable requests concerning the structure of the Transaction to
allow Seller and its members to minimize their tax burden from the
Transaction.
2. ADDITIONAL CONSIDERATION
At the execution of an LOI by and between the Buyer and Seller on December
13, 2005 (the "Original LOI"), ▇▇▇▇▇ has issued to Seller One Hundred and Fifty
Thousand ($150,000.00), ("BINDER PAYMENT").
3. ACCESS
During the period from the date this letter is signed by both parties
until the date on which either Party provides the other Party with written
notice that negotiations toward a Definitive Agreement are terminated, Seller
and Buyer will afford each other full and free access to Seller and Buyer, their
personnel, properties, contracts, books and records, and all other documents and
data during reasonable business hours upon at least 24 hours prior notice;
provided, however, neither Seller nor Buyer shall contact one another's
employees, customers or vendors without Seller's express prior written consent.
4. MUTUAL CONFIDENTIALITY AND NON-SOLICITATION
The Parties have entered into a Confidentiality Agreement which shall
remain in effect after the execution and delivery of this Letter of Intent.
▇▇▇▇▇ agrees not to solicit employees of Seller at any time during ▇▇▇▇▇'s
review and for a period of 24 months thereafter.
5. DISCLOSURE
Except as to the extent required by law, without the prior written consent
of the other Party, no Party will, and each will direct its representatives not
to make, directly or indirectly any public comment, statement or communication
with respect a possible transaction between the Parties.
6. COSTS
Buyer and Seller will each be responsible for and bear all of their own
costs and expenses incurred at any time in connection with pursuing or
consummating the contemplated Transaction.
7. COMPLETION OF TRANSACTION
Each Party will act in good faith to finalize negotiations of the terms of
the Transaction; complete its diligence review; execute a Definitive Agreement
containing such terms, conditions, covenants, representations and warranties as
are reasonable and customary in similar transactions; and close the Transaction.
8. GOVERNING LAW
This letter of intent will be governed by and construed under the laws of
the State of California.
9. TERMINATION AND BREAK-UP FEE
This LOI may be terminated upon written notice by either Party to the
other Party unilaterally, for any reason or no reason, with or without
reasonable cause, at any time; however, if Seller terminates with or without
reasonable cause it shall transfer the Binder Payment to Buyer, or as Buyer may
direct. If Buyer terminates with or without reasonable cause, Seller shall
transfer the Binder Stock to Buyer, or as Buyer may direct. The termination of
this LOI will not affect the liability of a Party for breach of any of
provisions contained herein prior to the termination. Upon such a termination of
the Parties will have no further obligations hereunder, except as stated in
Paragraphs 3, 4, 6, 8 and 9 herein, which will survive any such termination.
10. COUNTERPARTS
This letter may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this letter and all of which, when
taken together, will be deemed to constitute one and the same.
If you desire to proceed in accordance with this LOI, please sign and
return one copy of this letter.
Very truly yours,
Execute Sports, Inc.
By: ______________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive Officer
Pacific Sports Group, Inc.
By: ______________________________
▇▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
By: ______________________________
▇▇▇▇ ▇▇▇▇▇▇, Vice President and Treasurer