Exhibit 10.1
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October 18, 2005
Premier BPO, Inc.
The Crusman Building,
55 N. First Street, Suite 300
Clarksville, Tennessee 37040
Attention: Mark Briggs, Chairman and Chief Executive Officer
Re: Letter of Intent ("Letter of Intent") for the exchange of "restricted"
shares of Jump'n Jax, Inc., a Utah Corporation, ("Jump'n Jax") for all of the
issued and outstanding shares of common and preferred stock of Premier BPO,
Inc., a Delaware Corporation, ("Premier") by the formation and merger of a
wholly-owned Delaware subsidiary of Jump'n Jax ("Subsidiary") with and into
Premier (the "Merger"), with Premier being the surviving corporation and the
stockholders of Premier being issued shares of common stock of Jump'n Jax under
the Merger.
Dear Mr. Briggs:
This letter will confirm the following general terms upon which the Boards of
Directors of Jump'n Jax, Subsidiary, and Premier will adopt an Agreement and
Plan of Merger (the "Merger Agreement" or "Plan of Merger") and whereby
Jump'n Jax will exchange shares of its $0.001 par value voting common stock
for all of the issued and outstanding shares of common and preferred stock of
Premier on the Merger of Subsidiary with and into Premier and whereby Premier
will become a wholly-owned subsidiary of Jump'n Jax, on the closing of the
Agreement (the "Closing").
We propose that a definitive agreement, which will set forth in detail our
intent upon the following general terms and conditions, be negotiated,
approved by the respective Boards of Directors, and executed:
A. The Exchange.
(i) Jump'n Jax shall issue approximately 11,588,891 shares or approximately 90%
of its issued and outstanding post-split, post- Plan-of-Merger $0.001 par-value
common voting stock in exchange for all of the issued and outstanding common and
preferred stock of Premier;
(ii) At Closing, Monarch Bay Capital Group, LLC ("Monarch Bay"), Tryant, LLC
("Tryant") and its designees, any finders, and the existing stockholders of
Jump'n Jax, shall own approximately 1,287,654 shares or approximately 10% of the
issued and outstanding post-split, post-Plan-of-Merger $0.001 par-value common
voting stock of Jump'n Jax; Steve Moulton, Lane Clissold, Monarch Bay and Tryant
will receive warrants to purchase an aggregate of 210,000 shares of Jump'n Jax
common stock at an exercise price of $1.20 per share. Doherty & Company, LLC
("Doherty") will receive a warrant to purchase 289,722 shares of Jump'n Jax
common stock at an exercise price of $0.80 per share.
(iii)The pre-Closing officers, directors, and the holders of 5% or more of the
Premier common stock shall have executed and delivered to Jump'n Jax a Leak-Out
Agreement to the effect that they will not sell or otherwise dispose of any
equity securities of Jump'n Jax for a period of one year (the "Leak-Out Period")
following the Closing except in accordance with the Leak-Out Agreement, which
would allow for the sale of no more than 1/12th of the registered securities
owned by them per month.
(iv) Upon Closing, Jump'n Jax and Premier shall cooperate to cause to establish
a DBA of "Premier BPO, Inc.";
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(v) Upon Closing, Premier shall have paid to Tryant, an amount totaling
$450,000 in consideration of their payment and personal indemnification of
Jump'n Jax and Premier of any and all past liabilities of any type or nature
whatsoever of Jump'n Jax existing at Closing, which will include the expenses of
Jump'n Jax related to the Plan of Merger, as set forth in Exhibit A, and the
compromise and settlement of any amounts due and owing for advances of Tryant or
otherwise that were incurred prior to Closing by Jump'n Jax and/or the other
expenses set forth in Exhibit A attached hereto and incorporated herein by
reference.
(vi) Upon execution of this Letter of Intent, the $25,000 previously deposited
into the Richardson & Patel, LLP Trust Account, pursuant to the Letter of Intent
dated October 3, 2005 by and between Premier BPO, Inc., Sheffield
Pharmaceuticals, Inc., Monarch Bay Capital, LLC and Tryant, LLC shall be treated
as a refundable deposit in consideration for a fourteen-day due- diligence
period, during which fourteen-day due-diligence period the $25,000.00 shall be
returned upon notification, less any fees incurred by Richardson & Patel, LLP in
conjunction with the preparation of the Plan of Merger and related
documentation, not to exceed $15,000. At the expiration of the fourteen-day due-
diligence period, the $25,000 deposit will become non-refundable.
(vii) The Merger is intended to be a tax-free reorganization under the Internal
Revenue Code.
(viii)Conditions Subsequent:
(a) The closing is subject to the simultaneous closing of the planned minimum of
$3,000,000 equity raise.
(b) The Company is compliant with all SEC filing requirements, all federal and
state tax filing requirements and has complied with applicable provisions of
Sarbanes-Oxley.
B. Definitive Agreement.
The definitive agreement shall include, contain, or provide:
(i) Representations and Warranties. The principal executive officer of each of
the parties shall certify the customary and usual representations and warranties
"to the best of his personal knowledge and information."
(ii) Opinions of Counsel. Favorable opinions of counsel for the corporate
parties with respect to good standing, authorization and execution will be
delivered at Closing.
(iii) Financial and Other Information.
(a) The examination and inspection of the books and records of each of the
parties prior to Closing; the delivery no later than at Closing of customary
schedules listing each party's material contracts; real and personal properties;
pending, threatened and contemplated legal proceedings; employees; assets and
liabilities, including contingencies and commitments; and other information
reasonably requested;
(b) Prior to the Closing, Premier will provide audited financial statements
consisting of a balance sheet as of September 30, 2004 and a related statement
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of income for the period ended September 30, 2004 which fairly present the
financial condition of Premier as of their respective dates and for the periods
involved, and such statements shall be prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied, on Closing, for
such period or periods as shall be set forth in the definitive agreement that
satisfy Form 8-K requirements for merger transactions. For any quarter period
since the year-end statements, Premier will submit un-audited financial
statements, consisting of a balance sheet and related statement of income
prepared in accordance with the requirements under Form 8-K and the rules and
regulations promulgated there under. Additionally, Premier will provide a pro
forma balance sheet for inclusion in the Form 8-K that will be filed within four
business days of the Closing.
(c) Prior to or in conjunction with the Closing, Jump'n Jax will have enough
authorized stock to issue to Premier stockholders in connection with paragraph
A(i) above.
(d) As part of the Plan, Jump'n Jax will exchange Premier's options totaling
approximately 2,248,733 options, which are incentives for employees, consultants
and management.
(e) Prior to the Closing, Jump'n Jax will provide or make available an audited
balance sheet as of December 31, 2004, audited income statements for the two
years ended December 31, 2004 which fairly present the financial condition of
Jump'n Jax as of their respective dates and for the periods involved, and such
statements shall be prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied. For any quarter period since the
year-end statements, Jump'n Jax will provide or make available un- audited
financial statements, consisting of a balance sheet and related statement of
income prepared in accordance with the requirements under Form 8-K and the rules
and regulations promulgated there under.
(f) The financial statements of Jump'n Jax shall reflect no liabilities and no
assets at Closing or satisfactory evidence of payment of all liabilities shall
be provided by a person other than an officer or representative of Jump'n Jax.
(iv) Conduct of Business of Jump'n Jax and Premier Pending Closing. Until
consummation or termination of the Plan of Merger, Jump'n Jax and Premier will
conduct business only in the ordinary course and none of the assets of Jump'n
Jax or Premier shall be sold or disposed of except within the ordinary course of
business without the written consent of the other party.
(v) Other.
(a) Jump'n Jax and Premier shall have received all permits, authorizations,
regulatory approvals and third party consents necessary for the Closing of the
Plan of Merger, and all applicable legal requirements shall have been satisfied.
(b) The definitive agreement shall be executed as soon as practicable, and
Jump'n Jax shall instruct its legal counsel to immediately prepare all necessary
documentation upon the execution of this Letter of Intent.
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(c) The Boards of Directors of Jump'n Jax and Premier and the requisite majority
of the stockholders of Premier required under the laws of the state of
incorporation shall have approved the definitive agreement.
(d) Piggyback registration rights shall be granted to Tryant, Monarch Bay and
their designees (including up to 100,000 shares owned by Moulton and Clissold)
and to any finders for twelve months on any "unregistered" and "restricted"
shares held following completion of the Plan of Merger, subject to the right of
any underwriters to reduce the number of shares to be included in any
registration statement.
(e) The pre-Closing officers, directors and the holders of 5% or more of the
Jump'n Jax common stock and Monarch Bay, Tryant and Doherty shall execute a
Leak-Out Agreement to the effect that they will not sell or otherwise dispose of
any equity securities of Jump'n Jax for a period of one year (the "Leak-Out
Period") following the Closing except in accordance with the Leak-Out Agreement,
which would allow for the sale of no more than 1/12th of the registered
securities owned by them per month.
(f) All notices or other information deemed required or necessary to be given to
any of the parties shall be given at the following addresses.
Jump'n Jax, Inc.
3270 South 1100 West
South Salt Lake, UT 84119
Monarch Bay Capital Group, LLC
3 Inspiration Point
Laguna Niguel, CA 92677
Tryant, LLC
1608 W. 2225 S.
Woods Cross, UT 84087
Ryan Hong, Esq.
Richardson & Patel, LLP
10900 Wilshire Blvd., Suite 500
Los Angeles, California 90024
Premier BPO, Inc.
The Crusman Building,
55 N. First Street, Suite 300
Clarksville, Tennessee 37040
(h) Any finder's fee or similar payment with respect to the Plan of Merger
(other than the warrants provided for in A(ii)) shall be paid by the party or
parties agreeing to such fee or payment.
(i) The definitive agreement shall contain customary and usual indemnification
and hold-harmless provisions.
(j) The transactions which are contemplated herein, to the extent permitted,
shall be governed by and construed in accordance with the laws of the State of
the Utah.
(k) Each party and its agents, attorneys and representatives shall have full and
free access to the properties, books and records of the other party (the
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confidentiality of which the investigating party agrees to retain) for purposes
of conducting investigations of the other party.
(l) The substance of any public announcement with respect to the exchange, other
than notices required by law, shall be approved in advance by all parties or
their duly authorized representatives.
(m) In the event of the abandonment of this Letter of Intent prior to the
execution of the Plan of Merger, except as provided in paragraph A (vi), each
party shall bear and pay its own costs and expenses and shall indemnify and hold
the other parties harmless there from. Following execution and delivery of the
Plan of Merger, it will control the rights of the parties in this respect.
Except as provided in paragraphs A (vi), D and E, this Letter of Intent merely
evidences the intention of the parties hereto and is not intended to be legally
binding. The proposed Merger contemplated herein may be terminated by any of the
parties at any time prior to the execution of the definitive agreement, which
shall be controlling thereafter, and each of the parties agrees to hold the
others harmless for any attorney's fees, accountant's fees, expenses or other
damages which may be incurred by failure to consummate the Merger, except as
provided in paragraph A (vi).
C. Counterparts.
This Letter of Intent may be executed in any number of counterparts and each
such counterpart shall be deemed to be an original instrument, but all of such
counterparts together shall constitute but one agreement.
D. Confidentiality.
By its execution hereof, Jump'n Jax acknowledges to and agrees with Premier that
in the exercise of the several rights granted to it pursuant to this Letter of
Intent, Jump'n Jax, and/or its agents and affiliates, may become familiar with
or aware of certain Confidential Information (as such term is hereinafter
defined) disclosed by Premier or one or more of its officers, directors,
employees, stockholders, partners, agents or representatives (each of such
relationships being defined herein as an "Affiliate"). Accordingly, Jump'n Jax
hereby agrees that any and all Confidential Information disclosed or furnished
to it or to any of its Affiliates, by Premier or any of its Affiliates, is and
shall remain proprietary to Premier. Neither Jump'n Jax, nor any Affiliate of
Jump'n Jax, shall have any rights to distribute or divulge any of such
Confidential Information to any third party without Premier's prior consent, or
to use any of such Confidential Information in any way detrimental to Premier or
any of its Affiliates, or in any way which would otherwise destroy, injure or
impair any of Premier or its Affiliates' rights in or in respect of any such
Confidential Information including, without limitation, by using any of such
Confidential Information to solicit away from Premier, any of its employees,
contractors, customers, or vendors or other business relationships, or to
establish or assist any person or entity that is or will be, directly or
indirectly, in competition with Premier. For purposes of this Agreement, the
term "Confidential Information" shall mean any and all proprietary information
belonging to Premier, whether tangible or intangible, written or oral,
including, without limitation, any intellectual property rights, books and
records, computer software and files, lists of (or proprietary information
concerning) its customers, suppliers, vendors and other business relationships,
and any other item which may properly be classified as a protected trade secret.
Jump'n Jax expressly agrees and understands that its agreement to abide by the
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provisions of this Section D constitutes a material part of the consideration
inducing Premier to enter into this Letter of Intent and consider the
transactions contemplated herein, and that any violation of such provisions
could create immediate and irreparable harm to Premier. In the event of any
breach of this Section D, the parties hereby agree that, in addition to whatever
other remedies may be available to Premier, it shall be entitled to seek
injunctive and other equitable relief, and Jump'n Jax hereby waives any bonding
or other requirement as a precursor thereto.
E. Termination. The proposal set forth herein shall expire if this LOI has not
been executed by Premier and delivered to us on or before 5:00 p.m. PDT on
October 19, 2005 or if the Closing has not occurred by November 30, 2005.
[signature page follows]
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If the foregoing correctly sets forth the substance of the understandings of
the parties, please execute this Letter of Intent in duplicate. Please send a
copy of an executed letter of intent via facsimile to Ryan Hong, Esquire,
(310) 208-1154. Please retain one copy for your records and return one to
Ryan Hong, Esq. at Richardson & Patel, LLP, 10900 Wilshire Blvd, Suite 500,
Los Angeles, California 90024, telephone: (310) 208-1182. In addition,
please send via wire transfer the deposit of $25,000.00 to the Richardson &
Patel, LLP. Trust Account.
Very truly yours,
/s/ Jeff Jenson
_______________________________
Jeff D. Jenson, Managing Director
Tryant, LLC.
/s/ Lane Clissold
_______________________________
Lane Clissold, President
Jump'n Jax, Inc.
/s/ David Walters
_______________________________
David Walters, President
Monarch Bay Capital, LLC
Accepted this 18th day of October, 2005.
Premier BPO, Inc.
/s/ Mark Briggs
_________________________________________
Mark Briggs, Chairman and Chief Executive Officer
Premier BPO, Inc.
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EXHIBIT "A"
Except as otherwise agreed the following expenses will be included and paid by
Tryant in conjunction with the Plan Merger, assuming receipt by the Richardson &
Patel Trust Account of the $25,000 deposit and the receipt by Tryant of the
balance of $425,000 from Premier upon Closing:
* Legal work to be completed by Ryan Hong, Esq., Richardson & Patel, LLP.
- Plan of Merger.
* Execution of Closing documents by officers and directors of Jump'n Jax
and Premier.
- Jump'n Jax officers and directors will offer resignations.
- Close of escrow on funds and transfer of shares.
* Post-Plan-of-Merger filings are made, with the following agencies.
- Cooperate to create a DBA "Premier, Inc.".
- Certificate of Designation - define rights, title, and
preferences for classes of stock or warrants that are authorized
(pre-Plan of Merger task).
- National Quotation Bureau ("NQB") - new CUSIP number.
- National Association of Securities Dealers ("NASD")
- request new symbol
- submit top three choices.
The following expenses will be included and paid by Premier, in conjunction
with the Plan of Merger;
* Form 8-K reflecting consolidated, combined financials statements of
Premier and Jump'n Jax within four business days of transaction;
* Prepare and disseminate the Information Statement regarding the
name change;
* S-3 or SB-2 Registration statement preparation and filing;
* Order and issue new certificates;
* Premier audited Financial Statements; and
* Pro forma combined balance sheet taking into consideration the Plan of
Merger.
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