EXHIBIT 10.1
AGREEMENT
CONCERNING THE EXCHANGE OF SECURITIES
BY AND AMONG
TORPEDO SPORTS USA, INC.
TORPEDO NEWCO, INC.
AND
iNTERACTIVE GAMES, INC. AND
THE SECURITY HOLDERS OF INTERACTIVE GAMES, INC.
INDEX
Page
----
ARTICLE I - THE MERGER; EXCHANGE OF SECURITIES AND CASH CONSIDERATION.......2
1.1 - The Merger.....................................................2
1.2 - Issuance of Securities.........................................2
1.3 - Issuance of Warrants...........................................2
1.4 - Exemption from Registration....................................2
1.5 - Cash Consideration..............................................2
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF Interactive..................3
2.1 - Organization...................................................3
2.2 - Capital........................................................3
2.3 - Subsidiaries...................................................3
2.4 - Directors and Officers.........................................3
2.5 - Financial Statements...........................................3
2.6 - Absence of Changes.............................................3
2.7 - Absence of Undisclosed Liabilities.............................3
2.8 - Tax Returns....................................................4
2.9 - Investigation of Financial Condition...........................4
2.10 - Proprietary Rights.............................................4
2.11 - Compliance with Laws...........................................4
2.12 - Litigation.....................................................4
2.13 - Authority......................................................4
2.14 - Ability to Carry Out Obligations...............................4
2.15 - Full Disclosure................................................4
2.16 - Assets.........................................................5
2.17 - Material Contracts.............................................5
2.18 - Indemnification................................................5
2.19 - Criminal or Civil Acts.........................................5
2.20 - Restricted Securities..........................................5
2.21 - Bulletin Board Trading Status..................................5
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF TORPEDO AND
MERGER SUBSIDIARY..............................................5
3.1 - Organization...................................................5
3.2 - Capital........................................................6
3.21 - Stock and Warrants to be Issued.................................6
3.3 - Subsidiaries...................................................6
3.4 - Directors and Officers.........................................6
3.5 - Financial Statements...........................................6
3.6 - Absence of Changes.............................................6
3.7 - Absence of Undisclosed Liabilities.............................6
3.8 - Tax Returns....................................................7
i
INDEX
(Continued)
Page
----
3.9 - Investigation of Financial Condition...........................7
3.10 - Proprietary Rights.............................................7
3.11 - Compliance with Laws...........................................7
3.12 - Litigation.....................................................7
3.13 - Authority......................................................7
3.14 - Ability to Carry Out Obligations...............................7
3.15 - Full Disclosure................................................7
3.16 - Disposal of Assets and Liabilities; Escrow Agreement...........8
3.17 - Material Contracts.............................................9
3.18 - Indemnification................................................9
3.19 - Criminal or Civil Acts.........................................9
3.20 - Bulletin Board Trading Status..................................9
3.21 - Additional Representations and Warranties of
Merger Subsidiary..............................................9
ARTICLE IV - COVENANTS PRIOR TO THE CLOSING DATE ..........................10
4.1 - Investigative Rights..........................................10
4.2 - Conduct of Business...........................................10
ARTICLE V - CONDITIONS PRECEDENT TO Interactive'S PERFORMANCE.............11
5.1 - Conditions....................................................11
5.2 - Accuracy of Representations...................................11
5.3 - Performance...................................................11
5.4 - Absence of Litigation.........................................11
5.5 - Officer's Certificate.........................................11
5.6 - Corporate Action..............................................11
5.7 - Proprietary Rights and Material Contracts.....................11
ARTICLE VI - CONDITIONS PRECEDENT TO TORPEDO'S AND MERGER
SUBSIDIARY'S PERFORMANCE .....................................12
6.1 - Conditions....................................................12
6.2 - Accuracy of Representations...................................12
6.3 - Performance...................................................12
6.4 - Absence of Litigation.........................................12
6.5 - Officer's Certificate.........................................12
6.6 - Directors of Torpedo..........................................12
6.7 - Officers of Torpedo and Merger Subsidiary.....................12
6.8 - Corporate Action..............................................12
6.9 - Divestiture of Assets and Current Operations..................12
ii
INDEX
(Continued)
Page
----
ARTICLE VII - CLOSING...................................................... 13
7.1 - Closing...................................................... 13
ARTICLE VIII - COVENANTS SUBSEQUENT TO THE CLOSING DATE......................13
8.1 - Registration and Listing......................................13
ARTICLE IX - MISCELLANEOUS...................................................13
9.1 - Captions and Headings.........................................13
9.2 - No Oral Change................................................14
9.3 - Non-Waiver....................................................14
9.4 - Time of Essence...............................................14
9.5 - Entire Agreement..............................................14
9.6 - Choice of Law.................................................14
9.7 - Counterparts..................................................14
9.8 - Notices.......................................................14
9.9 - Binding Effect................................................14
9.10 - Mutual Cooperation.............................................15
9.11 - Finders........................................................15
9.12 - Public Announcements...........................................15
9.13 - Expenses.......................................................15
9.14 - Survival of Representations and Warranties.....................15
9.15 - Exhibits.......................................................15
Signatures.................................................16
iii
INDEX
(Continued)
EXHIBITS
..........
Allocation of Securities...................................Exhibit 1.2
Performance Shares.......................................Exhibit 1.2.1
Form of Warrant............................................Exhibit 1.3
Subscription Agreement.....................................Exhibit 1.4
Cash Consideration.........................................Exhibit 1.5
Financial Statements of Interactive........................Exhibit 2.5
Outstanding Derivative Securities of Torpedo ..............Exhibit 3.2
Subsidiaries of Torpedo....................................Exhibit 3.3
Financial Statements of Torpedo............................Exhibit 3.5
Tax Returns of Torpedo.....................................Exhibit 3.8
Proprietary Rights of Torpedo.............................Exhibit 3.10
Proprietary Rights and Material
Contracts of Interactive .................................Exhibit 5.8
Directors of Torpedo ......................................Exhibit 6.6
Officers of Torpedo .......................................Exhibit 6.7
iv
AGREEMENT
AGREEMENT made this day of , 2004, by and between TORPEDO SPORTS USA,
Inc., a Nevada corporation ("Torpedo"), Torpedo Newco, Inc., a Florida
Corporation ("Merger Subsidiary"), INTERACTIVE GAMES Inc., a Florida corporation
("Interactive"), and the security holders of Interactive (the "Interactive
Security Holders") who are listed on Exhibit 1.2 hereto and have executed
Subscription Agreements in the form attached in Exhibit 1.4, hereto.
WHEREAS, the Boards of Directors of Torpedo and Merger Subsidiary have
approved the merger of the Interactive with and into Merger Subsidiary (the
"MERGER") upon the terms and subject to the conditions set forth herein; and
WHEREAS, pursuant to the Merger, Torpedo desires to acquire all of the
issued and outstanding common stock of Interactive from the Interactive Security
Holders in exchange for newly issued unregistered shares of common stock of
Torpedo in a transaction to be considered a tax-free reorganization within the
meaning of Section 368(a)(1)(A) and (a)(2)(D) of the Internal Revenue Code of
1986, as amended; and
WHEREAS, Interactive desires to assist Torpedo in acquiring all of the
issued and outstanding common stock of Interactive from the Interactive Security
Holders pursuant to the terms of this Agreement; and
WHEREAS, all of the Interactive Security Holders, by execution of
Exhibit 1.4 hereto, agree to exchange all 5,000,000 shares of Interactive $.001
par value common stock for 20,000,000 shares of Torpedo $0.001 par value common
stock, or such other number of shares of Torepdo common stock necessary to
insure the Interactive Security Holders hold 51% of the outstanding common stock
of Torpedo, on a fully diluted basis, on the Closing Date, and certain potential
additional shares, if certain agreed upon criteria are met, in order to allow
the Interactive Security Holders to hold 54% of the outstanding common stock at
the time of the closing; and
WHEREAS, Interactive agrees to pay to Torpedo, as agreed to by the
parties in Exhibit 1.5 hereto, cash in the amount of $250,000 upon the
completion of the financing to be undertaken by Torpedo after the closing, the
proceeds of which are to be utilized for payment of certain outstanding Torpedo
liabilities on the dates and in the amounts determined at the sole discretion of
the current Torpedo management:
NOW, THEREFORE, in consideration of the mutual promises, covenants and
representations contained herein, THE PARTIES HERETO AGREE AS FOLLOWS:
1
ARTICLE I
THE MERGER; EXCHANGE OF SECURITIES AND CASH CONSIDERATION
1.1. THE MERGER. Subject to the terms and conditions of this Agreement,
at the Closing Date (as defined in Section 7.1 hereof), the Merger Subsidiary
will be merged with and into Interactive whereupon the separate corporate
existence of the Merger Subsidiary will cease, and Interactive will continue as
the surviving corporation (the "SURVIVING CORPORATION"). From and after the
Closing Date, the Surviving Corporation will possess all the rights, privileges,
powers, and franchises and be subject to all the restrictions, disabilities, and
duties of Interactive and Merger Subsidiary, as prescribed under Florida
Corporation Law.
1.2 ISSUANCE OF SECURITIES. Subject to the terms and conditions of this
Agreement, Torpedo agrees to issue and exchange the greater of 20,000,000 fully
paid and nonassessable unregistered shares of Torpedo's $.001 par value common
stock, or that number of shares necessary to ensure the Interactive Security
Holders hold 51% of the outstanding common stock of Torpedo, on a fully diluted
basis, on the Closing Date, including, any stock options or warrants outstanding
on the Closing Date (the "Torpedo Shares") for all 5,000,000 issued and
outstanding shares of the $.001 par value common stock of Interactive (the
"Interactive Shares") held by the Interactive Security Holders. All Torpedo
common stock will be issued directly to the Interactive Security Holders on the
Closing Date, pursuant to the schedule set forth in Exhibit 1.2.
In addition, Torpedo agrees to issue pro rata up to an additional
3,450,799 shares to the Interactive Security Holders based upon certain
performance criteria of the Surviving Corporation as set forth in exhibit 1.2.1
hereto.
1.3 WARRANT EXERCISE PRICE. All warrants which are set forth on Exhibit
1.3 shall have their exercise prices reduced for the duration of their term by
an amount equal to 40% of the price set forth on such Exhibit.
1.4 EXEMPTION FROM REGISTRATION. The parties hereto intend that all
Torpedo common stock to be issued to the Interactive Security Holders shall be
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Act"), pursuant to Section 4(2) of the Act and the rules and
regulations promulgated thereunder. In furtherance thereof, each of the
Interactive Security Holders will execute and deliver to Torpedo on the Closing
Date a copy of the Subscription Agreement set forth in Exhibit 1.4 hereto.
1.5 CASH CONSIDERATION. Interactive agrees to pay to Torpedo, as agreed
to by the parties in Exhibit 1.5 hereto, cash in the amount of $250,000 upon the
completion of the financing to be undertaken by Torpedo after the closing, the
proceeds of which are to be utilized for payment of certain outstanding Torpedo
liabilities on the dates and in the amounts determined at the sole discretion of
the current Torpedo management.
2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF INTERACTIVE
Interactive hereby represents and warrants to Torpedo and Merger
Subsidiary that:
2.1 ORGANIZATION. Interactive is a corporation duly organized, validly
existing and in good standing under the laws of Florida, has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the states where its business requires qualification.
2.2 CAPITAL. The authorized capital stock of Interactive consists of
100,000,000 authorized shares of $.001 par value common stock, 5,000,000 of
which are outstanding, and no shares of preferred stock authorized or issued.
All of the outstanding common stock of Interactive is duly and validly issued,
fully paid and nonassessable. There are no outstanding subscriptions, options,
rights, warrants, debentures, instruments, convertible securities or other
agreements or commitments obligating Interactive to issue or to transfer from
treasury any additional shares of its capital stock of any class, except for
250,000 shares of common stock to be issued to BestBet Media, Inc. pursuant to a
certain agreement dated March , 2004 between Interactive and BestBet Media, Inc.
2.3 SUBSIDIARIES. Interactive does not have any subsidiaries or own any
interest in any other enterprise.
2.4 DIRECTORS AND OFFICERS. The names and titles of the directors and
officers of Interactive as of the date of this Agreement are as follows: Xxxxxxx
Xxxxxxxx, President and Director; Xxxx Xxxxxxxxx, Chief Financial Officer; and
Xxxx Xxxxx, Director of Casino Operations.
2.5 FINANCIAL STATEMENTS. Exhibit 2.5 hereto consists of the audited
financial statements of Interactive for the fiscal years ended December 31, 2003
and 2002 (the "Interactive Financial Statements"). The Interactive Financial
Statements have been prepared in accordance with generally accepted accounting
principles and practices consistently followed by Interactive throughout the
period indicated, and fairly present the financial position of Interactive as of
the date of the balance sheets included in the Interactive Financial Statements
and the results of operations for the period indicated.
2.6 ABSENCE OF CHANGES. Since December 31, 2003 there has not been any
material change in the financial condition or operations of Interactive, except
as contemplated by this Agreement.
2.7 ABSENCE OF UNDISCLOSED LIABILITIES. As of December 31, 2003
Interactive did not have any material debt, liability or obligation of any
nature, whether accrued, absolute, contingent or otherwise, and whether due or
to become due, that is not reflected in the Interactive Financial Statements.
2.8 TAX RETURNS. Interactive has filed all federal, state, franchise
and local tax returns required by law and has paid all taxes, assessments and
3
penalties due and payable. The provisions for taxes, if any, reflected in
Exhibit 2.5 are adequate for the periods indicated. There are no present
disputes as to taxes of any nature payable by Interactive.
2.9 INVESTIGATION OF FINANCIAL CONDITION. Without in any manner
reducing or otherwise mitigating the representations contained herein, Torpedo,
its legal counsel and accountants shall have the opportunity to meet with
Interactive's accountants and attorneys to discuss the financial condition of
Interactive. Interactive shall make available to Torpedo all books and records
of Interactive.
2.10 PROPRIETARY RIGHTS. Interactive owns all necessary trademarks,
service marks, trade names, copyrights, patents and proprietary information and
other rights as set forth in Exhibit 5.8.
2.11 COMPLIANCE WITH LAWS. Interactive has complied with, and is not in
violation of, applicable federal, state or local statutes, laws and regulations,
including federal and state securities and gaming laws.
2.12 LITIGATION. Interactive is not a defendant in any suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation which is pending or, to the best knowledge of Interactive,
threatened against or affecting Interactive or its business, assets or financial
condition. Interactive is not in default with respect to any order, writ,
injunction or decree of any federal, state, local or foreign court, department,
agency or instrumentality applicable to it. Interactive is not engaged in any
material litigation to recover monies due to it.
2.13 AUTHORITY. The Board of Directors of Interactive has authorized
the execution of this Agreement and the consummation of the transactions
contemplated herein, and Interactive has full power and authority to execute,
deliver and perform this Agreement, and this Agreement is a legal, valid and
binding obligation of Interactive and is enforceable in accordance with its
terms and conditions. By execution of Exhibit 1.3, all of the Interactive
Security Holders have agreed to and have approved the terms of this Agreement.
2.14 ABILITY TO CARRY OUT OBLIGATIONS. The execution and delivery of
this Agreement by Interactive and the performance by Interactive of its
obligations hereunder in the time and manner contemplated will not cause,
constitute or conflict with or result in (a) any breach or violation of any of
the provisions of or constitute a default under any license, indenture,
mortgage, instrument, article of incorporation, bylaw, or other agreement or
instrument to which Interactive is a party, or by which it may be bound, nor
will any consents or authorizations of any party other than those hereto be
required, (b) an event that would permit any party to any agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation of Interactive, or (c) an event that would result in the
creation or imposition of any lien, charge or encumbrance on any asset of
Interactive.
2.15 FULL DISCLOSURE. None of the representations and warranties made
by Interactive herein or in any exhibit, certificate or memorandum furnished or
to be furnished by Interactive, or on its behalf, contains or will contain any
untrue statement of material fact or omit any material fact the omission of
which would be misleading.
4
2.16 ASSETS. Interactive's assets are fully included in Exhibit 2.5 and
are not subject to any claims or encumbrances except as indicated in Exhibit 2.5
2.17 MATERIAL CONTRACTS. Interactive does not have any material
contracts, except and to the extent set forth in Exhibit 5.8.
2.18 INDEMNIFICATION. Interactive agrees to indemnify, defend and hold
Torpedo harmless against and in respect of any and all claims, demands, losses,
costs, expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorney fees, that it shall incur
or suffer, which arise out of, or result from (i) any breach by Interactive in
performing any of its covenants or agreements under this Agreement or in any
schedule, certificate, exhibit or other instrument furnished or to be furnished
by Interactive under this Agreement or (ii) any untrue statement made by
Interactive in this Agreement.
2.19 CRIMINAL OR CIVIL ACTS. For the period of five years prior to the
execution of this Agreement, no executive officer, director or principal
stockholder of Interactive has been convicted of a felony crime, filed for
personal bankruptcy, been the subject of a Commission or NASD judgment or
decree, or is currently the subject to any investigation in connection with a
felony crime or Commission or NASD proceeding.
2.20 RESTRICTED SECURITIES. Interactive and the Interactive Security
Holders, by execution of this Agreement and of Exhibit 1.3, acknowledge that all
of the Torpedo Shares issued by Torpedo are restricted securities and none of
such securities may be sold or publicly traded except in accordance with the
provisions of the Act.
2.21 BULLETIN BOARD TRADING STATUS. Interactive agrees that following
the Closing Date, it shall use its best efforts to maintain compliance with all
requirements for, and the Torpedo common stock shall continue to be, trading
freely on the Over the Counter Bulletin Board system such that the common stock
of Torpedo may continue to be so traded without interruption following the
Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TORPEDO AND MERGER SUBSIDIARY
Torpedo and Merger Subsidiary represent and warrant to Interactive and
the Interactive Security Holders that:
3.1 ORGANIZATION. Torpedo and Merger Subsidiary are each a corporation
duly organized, validly existing and in good standing under the laws of Nevada,
has all necessary corporate powers to carry on its business, and is duly
qualified to do business and is in good standing in each of the states where its
business requires qualification.
5
3.2 CAPITAL. The authorized capital stock of Torpedo on the Closing
Date will consist of 50,000,000 shares of $.001 par value common stock, of which
20,000,000 shares of common stock will be issued and outstanding on the Closing
Date; and 5,000,000 shares of $.001 par value preferred stock, of which -0-
shares will be issued and outstanding on the Closing Date. All of Torpedo's
outstanding securities are duly and validly issued, fully paid and
nonassessable. Except as set forth in Exhibit 3.2 hereto, there are no
outstanding subscriptions, options, rights, warrants, debentures, instruments,
convertible securities or other agreements or commitments obligating Torpedo to
issue or to transfer from treasury any additional shares of its capital stock of
any class except shares issuable under this Agreement. The authorized capital
stock of Merger Subsidiary consists of shares of $ par value common stock, of
which no shares of common stock were issued and outstanding on the closing date.
3.21 STOCK AND WARRANTS TO BE ISSUED. Torpedo will issue shares of its
common stock at Closing such that the Interactive Security Holders shall own
shares of common stock representing no less than 51% of the total outstanding
common stock of Torpedo, on a fully diluted basis, on the Closing Date. In
addition, Torpedo agrees to issue up to an additional 3,450,799 shares to the
Interactive Security Holders based upon certain performance criteria of the
Surviving Corporation as set forth in exhibit 1.2.1 hereto. Torpedo further
agrees to issue up to 250,000 shares of its common stock to BestBet Media, Inc.
following the Closing Date as agreed to by Interactive in that certain agreement
between Interactive and BestBet Media, Inc. dated March , 2004. Pursuant to that
agreement, Torpedo will offer BestBet Media, Inc. piggy-back registration rights
on the shares to be issued.
3.3 SUBSIDIARIES. Torpedo does not have any subsidiaries or own any
interest in any other enterprise except as disclosed in Exhibit 3.3 hereto.
3.4 DIRECTORS AND OFFICERS. The names and titles of the directors and
officers of Torpedo and Merger Subsidiary are: Xxxxx Xxxx, Chief Executive
Officer and Director; Xxxxx X. Xxxxxxxxx, Chief Financial Officer; and Xxxxxx X.
Xxxxx, Secretary.
3.5 FINANCIAL STATEMENTS. Exhibit 3.5 hereto consists of the Torpedo
audited financial statements for the years ended July 31, 2003 and 2002 and the
unaudited financial statements of Torpedo for the nine months ended April 30,
2004 (the "Torpedo Financial Statements"). The Torpedo Financial Statements have
been prepared in accordance with generally accepted accounting principles and
practices consistently followed by Torpedo throughout the period indicated, and
fairly present the financial position of Torpedo as of the date of the balance
sheets included in the Torpedo Financial Statements and the results of
operations for the period indicated.
3.6 ABSENCE OF CHANGES. Since July 31, 2004, there has not been any
material change in the financial condition or operations of Torpedo, except as
contemplated by this Agreement.
3.7 ABSENCE OF UNDISCLOSED LIABILITIES. As of April 30, 2004, Torpedo
did not have any material debt, liability or obligation of any nature, whether
accrued, absolute, contingent or otherwise, and whether due or to become due,
that is not reflected in the Torpedo Financial Statements.
6
3.8 TAX RETURNS. Within the times and in the manner prescribed by law,
Torpedo has filed all federal, state, franchise and local tax returns required
by law and has paid all taxes, assessments, and penalties due and payable,
except as disclosed in Exhibit 3.8 hereto.
3.9 INVESTIGATION OF FINANCIAL CONDITION. Without in any manner
reducing or otherwise mitigating the representations contained herein,
Interactive, its legal counsel and accountants shall have the opportunity to
meet with Torpedo's accountants and attorneys to discuss the financial condition
of Torpedo. Torpedo shall make available to Interactive all books and records of
Torpedo.
3.10 PROPRIETARY RIGHTS. Torpedo does not have any patents, trademarks,
service marks, trade names or copyrights except as disclosed in Exhibit 3.10
hereto.
3.11 COMPLIANCE WITH LAWS. Torpedo has complied with, and is not in
violation of, applicable federal, state or local statutes, laws or regulations
including federal and state securities laws.
3.12 LITIGATION. Torpedo is not a defendant in any suit, action,
arbitration, or legal, administrative or other proceeding, or governmental
investigation which is pending or, to the best knowledge of Torpedo, threatened
against or affecting Torpedo or its business, assets or financial condition.
Torpedo is not in default with respect to any order, writ, injunction or decree
of any federal, state, local or foreign court, department, agency or
instrumentality applicable to it. Torpedo is not engaged in any material
litigation to recover monies due to it.
3.13 AUTHORITY. The Board of Directors of Torpedo has authorized the
execution of this Agreement and the transactions contemplated herein, and
Torpedo has full power and authority to execute, deliver and perform this
Agreement, and this Agreement is the legal, valid and binding obligation of
Torpedo, and is enforceable in accordance with its terms and conditions.
3.14 ABILITY TO CARRY OUT OBLIGATIONS. The execution and delivery of
this Agreement by Torpedo and the performance by Torpedo of its obligations
hereunder will not cause, constitute or conflict with or result in (a) any
breach or violation of any of the provisions of or constitute a default under
any license, indenture, mortgage, instrument, article of incorporation, bylaw or
other agreement or instrument to which Torpedo is a party, or by which it may be
bound, nor will any consents or authorization of any party other than those
hereto be required, (b) an event that would permit any party to any agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation of Torpedo, or (c) an event that would result in the creation
or imposition of any lien, charge or encumbrance on any asset of Torpedo.
3.15 FULL DISCLOSURE. None of the representations and warranties made
by Torpedo herein, or in any exhibit, certificate or memorandum furnished or to
be furnished by Torpedo or on its behalf, contains or will contain any untrue
statement of material fact or omit any material fact the omission of which would
be misleading.
7
3.16 DISPOSAL OF ASSETS AND LIABILITIES; ESCROW AGREEMENT.
(a) Torpedo represents and warrants to Interactive and the Interactive
Security Holders that as of a date which is three months after the Closing Date,
all of Torpedo's assets and liabilities shall have been transferred, sold, or
otherwise disposed of so that as of such date, Torpedo shall have no assets or
liabilities, as such terms are defined by U.S. generally accepted accounting
principles consistently applied. In order to secure the performance of the
foregoing representation and warranty by Torpedo hereby agrees to transfer at
Closing to the Law Offices of Xxxxxx X. Xxxxxx, P.A., as Escrow Agent (the
"Escrow Agent"), certificates representing 500,000 of their restricted shares of
common stock of Torpedo (the "Escrow Shares"), which Escrow Shares will be
promptly transferred and disbursed pro rata by the Escrow Agent to the
Interactive Security Holders, in the event that Torpedo shall have assets or
liabilities as of a date which is three months after the Closing Date, which
condition would be contrary to the terms of their representation and warranty.
Torpedo shall deliver a certificate or certificates representing the Escrow
Shares, endorsed in blank, with stock powers attached, to the Escrow Agent to
enable him to hold the Escrow Shares and deliver good title to the Escrow Shares
to the Interactive Security Holders if required by the terms of the escrow. In
addition, Torpedo shall continue to make the representation and warranty first
set forth above to the Interactive and the Security Holders of Interactive
despite any disbursement to them of the Escrow Shares, such that Interactive and
the Interactive Security Holders shall have legally enforceable rights against
Torpedo in the event that Torpedo has assets or liabilities on or after the date
which is three months from the Closing Date.
(b) The escrow arrangement set forth above shall continue until the
Escrow Shares are disbursed to the Interactive Security Holders because of a
breach of the representation and warranty set forth above or they are returned
to the Torpedo because the conditions set forth in the representation and
warranty have been satisfied, or unless it is earlier terminated by all of the
parties. The Escrow Agent shall not be compensated for his services rendered
pursuant to this Section 3.16.
(c) The Escrow Agent shall not be responsible for the identity,
authority or rights of any person, firm or corporation executing or delivering
or purporting to execute or deliver this Agreement or any document deposited
hereunder or any endorsement thereon or assignment thereof.
(d) The Escrow Agent may rely upon any instrument or writing believed
by it to be genuine and sufficient and properly presented and shall not be
liable or responsible for any action taken or omitted in reliance thereon.
(e) The Escrow Agent shall not be liable or responsible for any act it
may do or omit to do in the exercise of reasonable care. In the event any
property held by the Escrow Agent hereunder shall be attached, garnished or
levied upon or fall under any order of any court or the delivery thereof shall
be made or entered by any court affecting the share deposits or any part thereof
or any acts of the Escrow Agent, the Escrow Agent is hereby authorized in its
exclusive discretion to obey and comply with all such writs, orders, judgments
or decrees so entered or issued, whether with or without jurisdiction, and if
8
the Escrow Agent obeys and complies with any such writ, order, judgment or
decree, it shall not be liable to any of the parties hereto, their successors,
heirs or personal representatives or to any other person, firm or business
entity by reason of such compliance notwithstanding such writ, order, judgment
or decree be subsequently reversed, modified, annulled, set aside or vacated.
(f) The parties hereto jointly and severally agree to indemnify and
hold the Escrow Agent harmless from any and all costs, expenses, claims, losses,
liabilities and damages (including reasonable attorneys' fees) that may arise
out of or in connection with the Escrow Agent's acting as escrow agent hereunder
except where the Escrow Agent has been guilty of gross negligence or willful
misconduct.
(g) The Escrow Agent may resign for any reason, upon 30 days' written
notice to the parties. Upon expiration of such 30-day notice period, the Escrow
Agent may deliver the share deposits to any successor escrow agent appointed
jointly by the parties, or if no successor escrow agent has been so appointed,
to any court of competent jurisdiction in the United States. Upon either such
delivery, the Escrow Agent shall be released from any and all liability under
this Escrow Agreement. A termination under this paragraph shall in no way
discharge the provisions hereof affecting reimbursement of expenses and
indemnity.
3.17 MATERIAL CONTRACTS. Torpedo has no material contracts.
3.18 INDEMNIFICATION. Torpedo agrees to indemnify, defend and hold
Interactive harmless against and in respect of any and all claims, demands,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties, and reasonable attorney fees, that
it shall incur or suffer, which arise out of, or result from (i) any breach by
Torpedo in performing any of its covenants or agreements in this Agreement or in
any schedule, certificate, exhibit or other instrument furnished or to be
furnished by Torpedo under this Agreement, or (ii) any untrue statement made by
Torpedo in this Agreement.
3.19 CRIMINAL OR CIVIL ACTS. For a period of five years prior to the
execution of this Agreement, no executive officer, director or principal
stockholder of Torpedo has been convicted of a felony crime, filed for personal
bankruptcy, been the subject of a Commission or NASD judgment or decree, or is
currently the subject to an investigation in connection with any felony crime or
Commission or NASD proceeding.
3.20 BULLETIN BOARD TRADING STATUS. Torpedo shall be in compliance with
all requirements for, and its common stock shall be, trading freely on the Over
the Counter Bulletin Board system on the date immediately prior to the Closing,
such that the common stock of Torpedo may continue to be so traded without
interruption following the Closing.
3.21 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF MERGER SUBSIDIARY.
Merger Subsidiary represents and warrants to Interactive that: (i) The Board of
Directors of Merger Subsidiary has authorized the execution of this Agreement
and the transactions contemplated herein, and Merger Subsidiary has full power
and authority to execute, deliver and perform this Agreement, and this Agreement
is the legal, valid and binding obligation of Merger Subsidiary, and is
enforceable in accordance with its terms and conditions; (ii) Merger Subsidiary
9
does not have any debt, liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due; (iii)
Merger Subsidiary is not a defendant in any suit, action, arbitration, or legal,
administrative or other proceeding, or governmental investigation which is
pending or, to the best knowledge of Merger Subsidiary, threatened against or
affecting Merger Subsidiary or it business, assets or financial condition; (iv)
Merger Subsidiary has no material contracts; (v) None of the representations and
warranties made by Merger Subsidiary herein, or in any exhibit, certificate of
memorandum furnished or to be furnished by Merger Subsidiary or on its behalf,
contains or will contain any untrue statement of material fact or omit any fact
the omission of which would be misleading; and (vi) Merger Subsidiary has not
made a misstatement of material fact to Interactive in connection with its
financial condition or results or operations, or the transactions contemplated
herein, or failed to state a material fact to Interactive in connection with its
financial condition or results of operations, or the transactions contemplated
herein, the statement or omission of which, under the circumstances, would be
misleading.
ARTICLE IV
COVENANTS PRIOR TO THE CLOSING DATE
4.1 INVESTIGATIVE RIGHTS. Prior to the Closing Date, each party shall
provide to the other party, and such other party's counsel, accountants,
auditors and other authorized representatives, full access during normal
business hours and upon reasonable advance written notice to all of each party's
properties, books, contracts, commitments and records for the purpose of
examining the same. Each party shall furnish the other party with all
information concerning each party's affairs as the other party may reasonably
request.
4.2 CONDUCT OF BUSINESS. Prior to the Closing Date, each party shall
conduct its business in the normal course and shall not sell, pledge or assign
any assets without the prior written approval of the other party, except in the
normal course of business. Neither party shall amend its Articles of
Incorporation or Bylaws (except as may be described in this Agreement), declare
dividends, redeem or sell stock or other securities, incur additional or
newly-funded liabilities, acquire or dispose of fixed assets, change employment
terms, enter into any material or long-term contract, guarantee obligations of
any third party, settle or discharge any balance sheet receivable for less than
its stated amount, pay more on any liability than its stated amount, or enter
into any other transaction other than in the normal course of business. Neither
party shall enter into negotiations with any third party or complete any
transaction with a third party involving the sale of any of its assets or the
exchange of any of its common stock.
10
ARTICLE V
CONDITIONS PRECEDENT TO TORPEDO AND MERGER SUBSIDIARY'S PERFORMANCE
5.1 CONDITIONS. Interactive's obligations hereunder shall be subject to
the satisfaction at or before the Closing of all the conditions set forth in
this Article VI. Interactive may waive any or all of these conditions in whole
or in part without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by Interactive of any other condition of or
any of Interactive's rights or remedies, at law or in equity, if Torpedo shall
be in default of any of its representations, warranties or covenants under this
Agreement.
5.2 ACCURACY OF REPRESENTATIONS. Except as otherwise permitted by this
Agreement, all representations and warranties by Interactive in this Agreement
or in any written statement that shall be delivered to Torpedo by Interactive
under this Agreement shall be true and accurate on and as of the Closing Date as
though made at that time.
5.3 PERFORMANCE. Interactive shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it on or before the Closing Date.
5.4 ABSENCE OF LITIGATION. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Interactive on or before the Closing Date.
5.5 OFFICER'S CERTIFICATE. Interactive shall have delivered to Torpedo
a certificate dated the Closing Date signed by the Chief Executive Officer of
Interactive certifying that each of the conditions specified in this Article has
been fulfilled and that all of the representations set forth in Article II are
true and correct as of the Closing Date.
5.6 CORPORATE ACTION. Interactive shall have obtained the approval of
the Interactive Security Holders for the transaction contemplated by this
Agreement.
5.7 PROPRIETARY RIGHTS AND MATERIAL CONTRACTS. Interactive owns all
necessary trademarks, service marks, trade names, copyrights, patents and
proprietary information and other rights necessary to conduct its business and
has executed material contracts as set forth in Exhibit 5.8 including, but not
limited to: license and distribution agreements with Xx XxXxxxx for the
Interactive Games "Million Dollar Madness Class III Slot Machine"; and license
and/or distribution agreements with BestBet Media, Spin Inc. and other
third-party manufacturers and distributors in which the company has the right to
market, sublicense and distribute gaming products under the Interactive Games
brand.
11
ARTICLE VI
CONDITIONS PRECEDENT TO INTERACTIVE'S PERFORMANCE
6.1 CONDITIONS. Torpedo's and Merger Subsidiary's obligations hereunder
shall be subject to the satisfaction at or before the Closing of all the
conditions set forth in this Article V. Torpedo or Merger Subsidiary may waive
any or all of these conditions in whole or in part without prior notice;
provided, however, that no such waiver of a condition shall constitute a waiver
by Torpedo or Merger Subsidiary of any other condition of or any of Torpedo's or
Merger Subsidiary's other rights or remedies, at law or in equity, if
Interactive shall be in default of any of its representations, warranties or
covenants under this Agreement.
6.2 ACCURACY OF REPRESENTATIONS. Except as otherwise permitted by this
Agreement, all representations and warranties by Torpedo in this Agreement or in
any written statement that shall be delivered to Interactive by Torpedo under
this Agreement shall be true and accurate on and as of the Closing Date as
though made at that time.
6.3 PERFORMANCE. Torpedo shall have performed, satisfied and complied
with all covenants, agreements and conditions required by this Agreement to be
performed or complied with by it on or before the Closing Date.
6.4 ABSENCE OF LITIGATION. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Torpedo on or before the Closing Date.
6.5 OFFICER'S CERTIFICATE. Torpedo shall have delivered to Interactive
a certificate dated the Closing Date signed by the Chief Executive Officer of
Torpedo certifying that each of the conditions specified in this Article has
been fulfilled and that all of the representations set forth in Article III are
true and correct as of the Closing Date.
6.6 DIRECTORS OF TORPEDO. On the Closing Date, the Board of Directors
of Torpedo shall elect the directors listed in Exhibit 6.6 hereto to Torpedo's
Board of Directors.
6.7 OFFICERS OF TORPEDO AND MERGER SUBSIDIARY. On the Closing Date, the
newly constituted Board of Directors of Torpedo shall elect such officers of
Torpedo and Surviving Corporation as listed on Exhibit 6.7 hereto.
6.8 CORPORATE ACTION. On or before the Closing Date, Torpedo will take
the corporate action described in Section 1.2, above.
6.9 DIVESTITURE OF ASSETS AND CURRENT OPERATIONS. As set forth in
Section 5.16 hereto, on or before six months following the Closing Date, Torpedo
shall have divested all of its pre-Merger assets and operations by the transfer,
sale, or other disposition of such assets and operations.
12
ARTICLE VII
Closing
7.1 CLOSING. The Closing of this Agreement shall be held at the offices
of , at any mutually agreeable time and date (the "Closing Date") prior to
_____________________, 2004, unless extended by mutual agreement. At the
Closing:
(a) Interactive shall deliver to Torpedo copies of Exhibit 1.3 executed by
all of the Interactive Security Holders together with certificates
representing all outstanding Interactive securities duly endorsed to
Torpedo;
(b) Torpedo shall deliver to the Interactive Security Holders the greater
of 20,000,000 shares of Torpedo's common stock, or that number of
shares necessary to ensure the Interactive Security Holders hold 51% of
the outstanding common stock of Torpedo, on a fully diluted basis, on
the Closing Date, including any stock options or warrants outstanding
on the Closing Date for which the Interactive Shares have been
exchanged, pursuant to the computations set forth in Exhibit 1.2
hereto;
(c) Torpedo shall deliver (i) the officer's certificate described in
Section 6.5 and (ii) a signed consent and/or minutes of its directors
approving this Agreement and each matter to be approved under this
Agreement;
(d) Interactive shall deliver (i) the officer's certificate described in
Section 5.5 and (ii) a signed consent and/or minutes of its
shareholders and directors approving this Agreement and each matter to
be approved under this Agreement.
ARTICLE VIII
COVENANTS SUBSEQUENT TO THE CLOSING DATE
8.1 REGISTRATION AND LISTING. Following the Closing Date,
Torpedo shall:
(a) Continue Torpedo's common stock listing on the OTC Bulletin Board;
(b) Maintain a continuous listing of Torpedo's common stock on the
Electronic Bulletin Board or "Pink Sheets";
ARTICLE IX
MISCELLANEOUS
9.1 CAPTIONS AND HEADINGS. The article and paragraph headings
throughout this Agreement are for convenience and reference only and shall not
define, limit or add to the meaning of any provision of this Agreement.
13
9.2 NO ORAL CHANGE. This Agreement and any provision hereof may not be
waived, changed, modified or discharged orally, but only by an agreement in
writing signed by the party against whom enforcement of any such waiver, change,
modification or discharge is sought.
9.3 NON-WAIVER. The failure of any party to insist in any one or more
cases upon the performance of any of the provisions, covenants or conditions of
this Agreement or to exercise any option herein contained shall not be construed
as a waiver or relinquishment for the future of any such provisions, covenants
or conditions. No waiver by any party of one breach by another party shall be
construed as a waiver with respect to any other subsequent breach.
9.4 TIME OF ESSENCE. Time is of the essence of this Agreement and of
each and every provision hereof.
9.5 ENTIRE AGREEMENT. This Agreement contains the entire Agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings.
9.6 CHOICE OF LAW. This Agreement and its application shall be governed
by the laws of the state of Florida.
9.7 COUNTERPARTS. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.8 NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
TORPEDO OR MERGER SUBSIDIARY:
Torpedo Sports USA, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxx, Chief Executive Officer
INTERACTIVE:
Interactive Gaming, Inc.
0000 XxXxxxxx Xxxx - X00
Xx. Xxxxxxxxxx, Xxxxxxx 00000 Attn: Xxxxxxx Xxxxxxxx,
President
9.9 BINDING EFFECT. This Agreement shall inure to and be binding upon
the heirs, executors, personal representatives, successors and assigns of each
of the parties to this Agreement.
14
9.10 MUTUAL COOPERATION. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein.
9.11 FINDERS. There are no finders in connection with this transaction.
9.12 PUBLIC ANNOUNCEMENTS. None of the parties hereto will make any
public announcement with respect to the transactions contemplated herein without
the prior written consent of the other parties, which consent will not be
unreasonably withheld or delayed; PROVIDED, HOWEVER, that any of the parties
hereto may at any time make any announcements that are required by applicable
Law so long as the party so required to make an announcement promptly upon
learning of such requirement notifies the other parties of such requirement and
discusses with the other parties in good faith the exact proposed wording of any
such announcement.
9.13 EXPENSES. Each party will bear their own expenses incurred in
connection with this Agreement.
9.14 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the parties set forth in this Agreement
or in any instrument, certificate, opinion or other writing providing for in it,
shall survive the Closing.
9.15 EXHIBITS. As of the execution hereof, the parties have provided
each other with the Exhibits described herein. Any material changes to the
Exhibits shall be immediately disclosed to the other party.
(SIGNATURE PAGE FOLLOWS)
15
In witness whereof, the parties have executed this Agreement on the
date indicated above.
TORPEDO SPORTS USA, Inc.
By: /s/ Xxxxx Xxxx
-----------------------------------
Xxxxx Xxxx, Chief Executive Officer
TORPEDO NEWCO, INC.
By: /s/ Xxxxx Xxxx
-----------------------------------
Xxxxx Xxxx, Chief Executive Officer
INTERACTIVE GAMES, INC.
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Xxxxxxx Xxxxxxxx, President
16
EXHIBIT 1.2
SCHEDULE OF INTERACTIVE COMMON STOCKHOLDERS
AND
ALLOCATION OF TORPEDO COMMON SHARES AND WARRANTS
------------------- --------------------- ------------------------ ---------------------
Name of Interactive Number of Interactive Number of Torpedo Common Number of Torpedo
Stockholder Shares Exchanged Shares to be Issued Warrants to be Issued
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
------------------- --------------------- ------------------------ ---------------------
Totals 5,000,000
------------------- --------------------- ------------------------ ---------------------
EXHIBIT 1.2.1
PERFORMANCE SHARES
EXHIBIT 1.3
Warrant/Option Number of Exercise Weighted Average
Shares Price
------------------------- ---------------- ------------- ----------------
Stock Options 827,000 $ 0.26 $ 215,020
Stock Options 1,700,000 $ 0.20 $ 340,000
Warrant 1,050,000 $ 0.20 $ 210,000
Warrant 300,000 $ 0.15 $ 45,000
Warrant 1,750,000 $ 0.10 $ 175,000
Warrant 300,000 $ 0.05 $ 15,000
---------------- ----------------
5,927,000 $ 1,000,020
================ ================
WEIGHTED AVERAGE EXERCISE PRICE $ 0.17
FORM OF WARRANT
The securities represented hereby have not been registered under the Securities
Act of 1933, as amended, or any state securities laws and neither the securities
nor any interest therein may be offered, sold, transferred, pledged or otherwise
disposed of except pursuant to an effective registration statement under such
Act and such laws or an exemption from registration under such Act and such laws
which, in the opinion of counsel for the holder, which counsel and opinion are
reasonably satisfactory to counsel for this corporation, is available.
THESE ARE SPECULATIVE SECURITIES
--------------------------
WARRANT CERTIFICATE
Date: No. of Warrants: [Insert #]
---------------------
This certifies that, for value received and subject to the terms and
conditions set forth herein, [Insert Name] (the "Warrant Holder") is the
registered holder of [Insert #] warrants to purchase the common stock of Torpedo
Sports USA, Inc. (the "Company"), a Nevada corporation.
1. EXERCISE. The warrants evidenced hereby ("Warrants"), as they may be
adjusted from time to time, may be exercised at a price of $0.01 per share (the
"Exercise Price") to acquire one share of the common stock of Torpedo Sports
USA, Inc. par value of $0.001 (the "Common Stock"). The Warrants may be
exercised in whole or in part at any time during the period (the "Warrant
Exercise Period") commencing on their issuance and ending at 5:00 P.M. Eastern
Time on a date which is three years after the Closing Date under the Agreement
(as hereafter defined), unless extended by a majority vote of the Company's
Board of Directors for such length of time as they, in their sole discretion,
deem reasonable and necessary, provided however, the number of shares eligible
for exercise at any time may only equal that number of previously issued options
or warrants of the Company, as set forth in Exhibit 1.3 to that certain
Agreement Concerning the Exchange of Securities by and among Torpedo Sports USA,
Inc., Torpedo Newco, Inc. and Interactive Games, Inc and the Security Holders of
Interactive Games, Inc. dated October , 2004, (the "Agreement") that are
exercised during the term of this warrant.
Each Warrant shall be deemed to have been exercised immediately prior
to the close of business on the date (each, an "Exercise Date") of the surrender
for exercise of the Warrant Certificate. The Exercise Form attached hereto shall
be executed by the Warrant Holder thereof or his attorney duly authorized in
writing and shall be delivered together with payment to the Company at its
corporate offices located at 000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxx
Xxxxx, Xxxxxxx 33401(the "Corporate Office"), or at any such other office or
agency as the Company may designate, in cash or by official bank or certified
check, of an amount equal to the aggregate Exercise Price, in lawful money of
the United States of America.
Unless Warrant Shares may not be issued as provided herein, the person
entitled to receive the number of Warrant Shares deliverable on exercise shall
be treated for all purposes as the holder of such Warrant Shares as of the close
of business on the Exercise Date. The Company shall not be obligated to issue
any fractional share interest in Warrant Shares issuable or deliverable on the
exercise of any Warrant or scrip or cash therefor and such fractional shares
shall be of no value whatsoever.
The Warrants shall not entitle the holder thereof to any of the rights
of shareholders or to any dividend declared on the Common Stock unless such
holder or holders shall have exercised the Warrants prior to the record date
fixed by the Board of Directors for the determination of holders of Common Stock
entitled to such dividends or other rights.
The shares of Common Stock acquirable upon exercise hereof are referred
to herein as "Warrant Shares." If, at the time of any exercise of a Warrant, the
Warrant Shares shall not be registered under the Securities Act of Securities,
as amended (the "Securities Act"), the Company may require, as a condition of
allowing such exercise, that the holder or transferee of such Warrant, furnish
to the Company an opinion of counsel or recognized standing in securities law,
to the effect that such exercise may be made without registration under the
Securities Act, provided that subject to receipt of the aforementioned opinion,
the exercise of the Warrant shall at all times be within the control of such
holder or transferee, as the case may be, and, if required by the Company, by
written representation that the Warrant Shares are being purchased for
investment and not for distribution; acknowledging that such shares have not
been registered under the Securities Act; and agreeing that such shares may not
be sold or transferred unless there is an effective Registration Statement for
them under the Securities Act, or in the opinion of counsel to the Company such
sale or transfer is not in violation of the Securities Act.
2. TERM OF WARRANT. This Warrant may be exercised at any time and from
time to time in whole or in part commencing on the date hereof and terminating
at 5:00 P.M. Eastern Time on [Insert Date].
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES PURCHASABLE. The
Exercise Price and the number of shares of Common Stock purchasable pursuant to
the Warrant shall be subject to adjustment from time to time as hereinafter set
forth in this Section 3; provided, however, that no adjustment shall be made
unless by reason of the happening of any one or more of the events hereinafter
specified, the Exercise Price then in effect shall be changed by one percent or
more, but any adjustment that would otherwise be required to be made but for
this provision shall be carried forward and shall be made at the time of and
together with any subsequent adjustment which, together with any adjustment or
adjustments so carried forward, amounts to one percent or more.
(a) Adjustment of Exercise Price in the Event of Stock Dividends, Stock
Splits and Reverse Stock Splits. In case the Company shall at any time issue
Common Stock or securities convertible into Common Stock by way of dividend or
other distribution on any stock of the Company or effect a stock split or
reverse stock split of the outstanding shares of Common Stock, the Exercise
Price then in effect shall be proportionately decreased in the case of such
issuance (on the day following the date fixed for determining shareholders
entitled to receive such dividend or other distribution) or decreased in the
case of such stock split or increased in the case of such reverse stock split
(on the date that such stock split or reverse stock split shall become
effective), by multiplying the Exercise Price in effect immediately prior to the
stock dividend, stock split or reverse stock split by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately prior
to such stock dividend, stock split or reverse stock split, and the denominator
of which is the number of shares of Common Stock outstanding immediately after
such stock dividend, stock split or reverse stock split.
(b) Right to Reduce Exercise Price. The Company shall have the right to
reduce the Exercise Price at any time and from time to time that such appears in
the Company's best interests to do so.
(c) Subdivision or Combinations. In case the Company shall at any time
change as a whole, by subdivision or combination in any manner or by the making
of a stock dividend, the number of outstanding shares of Common Stock into a
different number of shares, with or without par value, (i) the number of shares
of Common Stock which immediately prior to such change the Warrant Holders shall
have been entitled to purchase pursuant to this Agreement shall be increased or
decreased, as the case may be, in direct proportion to the increase or decrease,
respectively, in the number of shares outstanding immediately prior to such
change, and (ii) the Exercise Price in effect immediately prior to such change
shall be increased or decreased, as the case may be, in inverse proportion to
such increase or decrease in the number of such shares outstanding immediately
prior to such change.
(d) Reorganization; Assets Sales; Etc. In case of any capital
reorganization or any reclassification of the capital stock of the Company or in
case of a non-surviving combination or a disposition of the assets of the
Company other than in the ordinary course of the Company's business, the Warrant
Holders shall thereafter be entitled to purchase (and it shall be a condition to
the consummation of any such reorganization, reclassification, non-surviving
combination or disposition that appropriate provision shall be made so that such
Warrant Holder shall thereafter be entitled to purchase) the kind and amount of
shares of stock and other securities and property receivable in such transaction
by a holder of the number of shares of Common Stock of the Company into which
this Agreement entitled the holder to purchase immediately prior to such capital
reorganization, reclassification of capital stock, non-surviving combination or
disposition; and in any such case appropriate adjustments shall be made in the
application of the provisions of this Section 8 with respect to rights and
interests thereafter or the holder to the end that the provisions of this
Section 8 shall thereafter be applicable, as near as reasonably may be, in
relation to any shares or other property thereafter purchasable upon the
exercise of a Warrant.
(e) Terminology of "Common Stock". Whenever reference is made in this
Section 3 to the issue or sale of shares of Common Stock, or simply shares, such
term shall mean any stock of any class of the Company other than preferred stock
with a fixed limit on dividends and a fixed amount payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company.
The Warrant Shares shall, however, be shares of Common Stock of the Company,
with a par value of $0.01, as constituted at the date hereof.
(f) Adjustment Statement. Whenever the Exercise Price is adjusted as
herein provided, the Company shall forthwith deliver to each Warrant Holder a
statement signed by the President of the Company and by its Treasurer or
Secretary stating the adjusted Exercise Price and number of shares for which
such Warrant is exercisable, determined as specified herein. The statement shall
show in detail the facts requiring such adjustment, including a statement of the
consideration received by the Company for any additional stock issued.
(g) Disputes. If there is any dispute as to the computation of the
Exercise Price or the number of shares of Common Stock required to be issued
upon the exercise of the Warrants, the Company will retain an independent and
nationally recognized accounting firm to conduct an audit of the computations
pursuant to the terms hereof involved in such dispute, including the financial
statements or other information upon which such computations were based. The
determination of such nationally recognized accounting firm shall, in the
absence of manifest error, be binding. If there shall be a dispute as to the
selection of such nationally recognized accounting firm, such firm shall be
appointed by the American Institute of Certified Public Accountants ("AICPA") if
willing, otherwise the American Arbitration Association ("AAA"). If the Exercise
Price or number of shares of Common Stock as determined by such accounting firm
is one percent or more higher or lower than the calculations thereof computed by
the Company, the expenses of such accounting firm and, if any, of AICPA and AAA,
shall be borne completely by the Company. In all other cases, they shall be
borne by the complaining Warrant Holders, as applicable.
(h) Corporate Action. Before taking any action which would cause an
adjustment reducing the Exercise Price below the then par value of the Warrant
Shares, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and non-assessable shares of Common Stock at the adjusted
Exercise Price.
4. REGISTRATION OF TRANSFER.
(a) The Warrant may, subject to provisions of Federal and State
Securities Laws, be transferred in whole or in part. Warrants to be exchanged
shall be surrendered to the Company at its Corporate Office. The Company shall
execute, issue and deliver in exchange therefor the Warrants that the holder
making the transfer shall be entitled to receive.
(b) The Company shall keep transfer books at its Corporate Office which
shall register Warrants and the transfer thereof. On due presentment for
registration of transfer of any certificate at the Corporate Office, the Company
shall execute, issue and deliver to the transferee or transferees a new Warrant
Certificate or Warrants representing an equal aggregate number of securities.
All such Warrants shall be duly endorsed or be accompanied by a written
instrument or instruments of transfer in form reasonably satisfactory to the
Company. The established transfer fee for any registration of transfer of
certificates shall be paid by the Warrant Holder or the person presenting the
certificate for transfer.
(c) Prior to due presentment for registration or transfer thereof, the
Company may treat the registered Warrant Holder of any Warrant as the absolute
owner thereof (notwithstanding any notations of ownership or writing thereon
made by anyone) for all purposes, and the parties hereto shall not be affected
by any notice to the contrary.
5. ISSUANCE OF COMMON STOCK UPON EXERCISE. The Company, at its own
expense, shall cause to be issued, within ten (10) business days after exercise
of this Warrant, a certificate or certificates in the name requested by the
Warrant Holder of the number of shares of Common Stock to which the Warrant
Holder is entitled upon such exercise. All Warrant Shares or other securities
delivered upon the exercise of this Warrant shall be validly issued, fully paid
and non-assessable.
Irrespective of the date of issuance and delivery of any Warrant
Shares, each person in whose name any such certificate is to be issued will for
all purposes be deemed to have become the holder of record of the Common Stock
acquired on the date on which a duly executed notice of exercise of this Warrant
and payment for the number of shares exercised are received by the Company.
6. LOSS OR MUTILATION. On receipt by the Company of evidence
satisfactory as to the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new certificate representing an equal number of Warrants. In the
case of loss, theft or destruction of any certificate, the individual requesting
reissuance of a new certificate shall be required to indemnify the Company and
also to post an open-penalty insurance or indemnity bond. If a certificate is
mutilated, such certificate shall be surrendered and canceled by the Company
prior to delivery of a new certificate. Applicants for a new certificate shall
also comply with such other regulations and pay such other reasonable charges as
the Company may prescribe.
7. REPRESENTATIONS AND WARRANTIES OF WARRANT HOLDER. Warrant Holder
hereby represents and warrants to Company as follows:
(a) Sophistication. Warrant Holder has (i) a preexisting personal or
business relationship with Company or one or more of its officers, directors, or
control persons; or (ii) by reason of Holder's business or financial experience,
or by reason of the business or financial experience or of Warrant Holder's
financial advisor who is unaffiliated with and who is not compensated, directly
or indirectly, by Company or any affiliate or selling agent of Company, Warrant
Holder is capable of evaluating the risks and merits of this investment and of
protecting Warrant Holder's own interests in connection with this investment.
(b) Accredited Investor. Warrant Holder is an "accredited investor" as
such term is defined under Regulation D of the Securities Act of 1933 as amended
(the "Securities Act").
(c) Investment Intent. Warrant Holder is purchasing the Warrant Shares
solely for his own account for investment. The entire legal and beneficial
interest of the Warrants is being purchased, and will be held, for Warrant
Holder's account only, and neither in whole or in part for any other person.
(d) Information Concerning Company. Warrant Holder is aware of the
business affairs and financial condition of Company and has acquired sufficient
information about Company to make an informed and knowledgeable decision to
purchase the Warrants and the Warrant Shares.
(e) Economic Risk. Warrant Holder realizes that the purchase of the
Warrants and the Warrant Shares will be a highly speculative investment and
involves a high degree of risk. Warrant Holder is able, without impairing his
financial condition, to hold the Warrants and/or the Warrant Shares for an
indefinite period of time and to suffer a complete loss of Warrant Holder's
investment.
8. No Right as Stockholder. The Warrant Holder is not, by virtue of his
ownership of this Warrant, entitled to any rights whatsoever as a stockholder of
the Company.
9. ASSIGNMENT. If not included in an effective registration statement,
this Warrant may not be assigned without providing the Company an opinion
satisfactory to its counsel that an exemption from registration for the transfer
exists.
10. WARRANT AGENT. The Company shall act as the Initial Warrant Agent
in connection with the issuance, registration, transfer and exchange of
certificates and the exercise of the Warrants. The Warrant Holder agrees that
the Company may, without the consent or prior approval of the Warrant Holders,
appoint a successor Warrant Agent, provided such successor Warrant Agent is a
registered transfer agent under Section 17A(c) of the Securities Exchange Act of
1934. Notice of the appointment of a successor Warrant Agent shall be promptly
given by the Company to all registered Warrant Holders.
11. NOTICES. All notices, demands, elections, opinions or requests
(however characterized or described) required or authorized hereunder shall be
deemed given sufficiently if in writing and sent by registered or certified
mail, return receipt requested and postage prepaid, or by confirmed telex,
telegram, facsimile transmission or cable to, in the case of the Company:
Xxxxx X. Xxxxxxxxx, President
Torpedo Sports USA, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
(000) 000-0000
(000) 000-0000 Facsimile
and if to the Warrant Holder at the address of such holder as set forth on the
books maintained by or on behalf of the Company.
12. BINDING AGREEMENT. This Warrant shall be binding upon and inure to
the benefit of the Company and the Warrant Holders. Nothing in this Warrant is
intended or shall be construed to confer upon any other person any right, remedy
or claim or to impose on any other person any duty, liability or obligation.
13. FURTHER INSTRUMENTS. The parties shall execute and deliver any and
all such other instruments and take any and all other actions as may be
reasonably necessary to carry out the intention of this Warrant.
14. SEVERABILITY. If any provision of this Warrant shall be held,
declared or pronounced void, voidable, invalid, unenforceable, or inoperative
for any reason by any court of competent jurisdiction, government authority or
otherwise, such holding, declaration or pronouncement shall not affect adversely
any other provision of this Warrant, which shall otherwise remain in full force
and effect and be enforced in accordance with its terms, and the effect of such
holding, declaration or pronouncement shall be limited to the territory or
jurisdiction in which made.
15. WAIVER. No delay or failure on the part of any party in the
exercise of any right or remedy arising from a breach of this Agreement shall
operate as a waiver of any subsequent right or remedy arising from a subsequent
breach of this Warrant.
16. GENERAL PROVISIONS. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF FLORIDA. This Warrant
may not be modified or amended or any term or provision hereof waived or
discharged except in writing by the party against which such amendment,
modification, waiver or discharge is sought to be enforced; except that, this
agreement may be amended in connection with the appointment of a successor
Warrant Agent without the consent or prior notice to the Warrant Holders,
provided no such amendment adversely effects the interests of the Warrant
Holders and the Company obtains an opinion of independent legal counsel to that
effect. The headings of this Warrant are for convenience and reference only and
shall not limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be signed on its behalf by its President affixed this day of , 2004.
TORPEDO SPORTS USA, INC.
By __________________________________
Xxxxx X. Xxxxxxxxx, President
EXERCISE FORM
(Complete to Exercise Warrant)
Dated _______________, ______
The undersigned hereby irrevocably elects to exercise the Warrant
represented by this Warrant Certificate to the extent of purchasing
______________ shares of Common Stock of Torpedo Sports USA, Inc. and hereby
makes payment of the Exercise Price per share.
--------------------------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name____________________________________________________________________________
(please type or print in block letters)
Address ________________________________________________________________________
Signature ______________________________________________________________________
Tax ID # _________________________________ Telephone #______________
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - -
ASSIGNMENT FORM
(Complete to Assign Warrant)
FOR VALUE RECEIVED, __________________________, hereby sells, assigns
and transfers unto
Name ___________________________________________________________________________
(Please type or print in block letters)
Address ________________________________________________________________________
the right to purchase shares of the Common Stock of __________________________
represented by this Warrant Certificate to the extent of _____________ shares of
the Common Stock of __________________________ as to which such right is
exercisable and does hereby irrevocably constitute and appoint
______________________________________ attorney, to transfer the same on the
books of the Company with full power of substitution in the premises.
-------------------------------------
Signature
Dated: ___________________, _______
Notice: the signature of this
assignment must correspond with the
name as it appears upon the face of
this Warrant Certificate in every
particular, without alteration or
enlargement or any change whatever.
EXHIBIT 1.4
SUBSCRIPTION AGREEMENT
In connection with my exchange of $ par value common stock of
Interactive Games, Inc. ("Interactive"), for the $.001 par value common stock of
Torpedo Sports USA, Inc. ("Torpedo"), I acknowledge the matters set forth below
and promise that the statements made herein are true. I understand that Torpedo
is relying on my truthfulness in issuing its securities to me.
I hereby represent and warrant to Torpedo that I have the full power
and authority to execute, deliver and perform this Agreement and to consummate
the transactions contemplated hereby. This Agreement is a legal, valid and
binding obligation of mine, enforceable against me in accordance with its terms.
I own the securities in Interactive that I am exchanging for securities of
Torpedo free and clear of all pledges, liens, encumbrances, security interests,
equities, claims, options, preemptive rights, rights of first refusal, or any
other limitation on my ability to vote such securities or to transfer such
securities to Torpedo. I have full right, title and interest in and to the
Interactive securities that I am exchanging.
I understand that Torpedo's common stock (the "Securities) are being
issued to me in a private transaction in exchange for my securities in
Interactive and in reliance upon the exemption provided in section 4(2) of the
Securities Act of 1933, as amended (the "Act") for non-public offerings and
pursuant to the Agreement Concerning the Exchange of Securities between Torpedo
and Interactive ("Agreement"). I understand that the Securities are "restricted"
under applicable securities laws and may not be sold by me except in a
registered offering (which may not ever occur) or in a private transaction like
this one. I know this is an illiquid investment and that therefore I may be
required to hold the Securities for an indefinite period of time, but under no
circumstances less than one year from the date of its issuance.
I am acquiring the Securities solely for my own account, for long-term
investment purposes only and not with a view to sale or other distribution. I
agree not to dispose of any Securities unless and until counsel for Torpedo
shall have determined that the intended disposition is permissible and does not
violate the Act, any applicable state securities laws or rules and regulations
promulgated thereunder.
All information, financial and otherwise, or documentation pertaining
to all aspects of my acquisition of the Securities and the activities and
financial information of Torpedo has been made available to me and my
representatives, if any, and I have had ample opportunity to meet with and ask
questions of senior officers of Torpedo, and I have received satisfactory
answers to any questions I asked.
In acquiring the Securities, I have reviewed the Agreement and have
made such independent investigations of Torpedo as I deemed appropriate. I am an
experienced investor, have made speculative investments in the past and am
capable of analyzing the merits of an investment in the Securities.
I understand that the Securities are highly speculative, involves a
great degree of risk and should only be acquired by individuals who can afford
to lose their entire investment. Nevertheless, I consider this a suitable
investment for me because I have adequate financial resources and income to
maintain my current standard of living even after my acquisition of the
Securities. I know that Torpedo is a "shell" company with no significant assets
or liabilities, its financial affairs can fluctuate dramatically from time to
time, and that although I could lose my entire investment, I am acquiring the
Securities because I believe the potential rewards are commensurate with the
risk. Even if the Securities became worthless, I could still maintain my
standard of living without significant hardship on me or my family.
By signing this Agreement, I also accept and agree to abide by the
terms and conditions of the Agreement as if I had executed the Agreement itself.
Dated as of this __________ day of _____________________ , 2004.
----------------------------------------
Signature
----------------------------------------
Name, Please Print
----------------------------------------
Residence Address
----------------------------------------
City, State and Zip Code
----------------------------------------
Area Code and Telephone Number
----------------------------------------
Social Security Number
----------------------------------------
Number of Interactive shares exchanged
EXHIBIT 1.5
AGREEMENT
AGREEMENT, made this ____ day of _____________, 2004, by and between
the security holders of Interactive Games, Inc. (the "Interactive Security
Holders"), a Florida corporation ("Interactive"), and Xxxxx Xxxx ("Xxxx"), the
Chief Executive Officer and a shareholder of Torpedo Sports USA, Inc., a Nevada
corporation ("Torpedo").
WHEREAS, the Boards of Directors of Torpedo and Torpedo Newco, Inc., a
Florida corporation ("Merger Subsidiary"), have approved the merger of Merger
Subsidiary with and into Interactive (the "Merger"), upon the terms and
conditions set forth in an Agreement, of even date herewith, between and among
Torpedo, Merger Subsidiary, Interactive and the Interactive Security Holders
(the "Merger Agreement"); and
WHEREAS, pursuant to the Merger, Torpedo desires to acquire all of the
issued and outstanding common stock of Interactive from the Interactive Security
Holders in exchange for newly issued unregistered shares of common stock of
Torpedo in a transaction structured to be a tax-free reorganization within the
meaning of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code
of 1986, as amended; and
WHEREAS, Interactive desires to assist Torpedo in acquiring all of the
issued and outstanding common stock of Interactive from the Interactive Security
Holders pursuant to the terms of the Merger Agreement; and
WHEREAS, each of the Interactive Security Holders have agreed to
exchange all of their shares of Interactive's Common Stock for 20,000,000 shares
of Torpedo Common Stock, or such other number of shares of Torpedo Common Stock
as may be necessary to insure that the Interactive Security Holders own 51% of
the outstanding shares of Torpedo Common Stock, on a fully diluted basis on the
Closing Date; and
WHEREAS, Torpedo has certain liabilities on its books that its current
management wishes to dispose of as a condition precedent of Torpedo's obligation
to cause Merger Subsidiary to consummate the Merger with Interactive; and
WHEREAS, Torpedo and Interactive have agreed that Torpedo shall deposit
in escrow 500,000 shares of its common stock which shall be transferred and
disbursed pro rata to the Interactive Security Holders in the event that Torpedo
does not pay-off or otherwise dispose of all of its assets and liabilities by a
date which is 90 days after the Closing Date; and
WHEREAS, the parties have engaged in discussions but are not able to
agree upon a means of discharging the Torpedo liabilities prior to the closing
of the Merger, but they are willing to address the payment of $250,000 of such
liabilities through some type of a debt or equity financing to be consummated
after the closing; and
WHEREAS, the Interactive Security Holders are willing to agree to cause
Torpedo, after the closing of the Merger, to use its best efforts to raise funds
within 90 days of the Closing Date in an amount sufficient to dispose of the
Torpedo liabilities; and
WHEREAS, capitalized terms used and not otherwise defined herein that
are defined in the Merger Agreement shall have the meanings given such terms in
the Merger Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
representations contained herein, the parties hereto agree as follows:
Article I
Best Efforts Obligation By Torpedo To Raise Funds
The Interactive Security Holders hereby agree, jointly and severally,
to cause Torpedo to use its best efforts for a period of 90 days after the
Closing Date, to raise sufficient funds to pay-off or otherwise dispose of up to
$250,000 of Torpedo's liabilities, as the term "liabilities" is defined by U.S.
generally accepted accounting principles. It is hereby agreed that all
liabilities of Torpedo shall be paid on the dates and in the amounts determined
in the sole discretion of the Torpedo management as it was constituted prior to
the Closing Date.
Article II
Explore Fund Raising Alternatives
In furtherance of the agreement set forth in Article I, the Interactive
Security Holders hereby agree to cause Torpedo to explore issuing common stock,
preferred stock, debt securities, convertible preferred stock or convertible
debt securities, or other equity instruments to investors in a transaction not
involving a public offering. Alternatively, the Interactive Security Holders
shall cause Torpedo to explore a self underwritten issuance of common stock
pursuant to Rule 415 under the Securities Act of 1933, as amended. In either
case, the Interactive Security Holders shall cause Torpedo to keep the former
management of Torpedo advised on their progress in raising the necessary funds
no later than every four weeks.
Article III
Direction Given By Torpedo's Former Management
In the event that Torpedo is successful in raising any funds in the
private market or in a public offering, Torpedo shall notify Xxxx within 10 days
thereof, and Xxxx, together with the other former management of Torpedo, shall
instruct the directors and officers of Torpedo on the payment dates and the
payment amount of the Torpedo liabilities. Thereafter, the Interactive Security
Holders agree to cause Torpedo to pay such liabilities as directed.
Article IV
Miscellaneous
This Agreement shall be governed by and construed in accordance with
the laws of the State of Florida.
This Agreement and its application shall be governed by the laws of the
State of Florida, including its conflict of laws principles.
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
This Agreement shall insure to and be binding upon the heirs,
executors, personal representatives, successors and assigns of each of the
parties to this Agreement.
The parties hereto shall cooperate with each other to achieve the
purpose of this Agreement and shall execute such other and further documents and
take such other and further actions as may be necessary or convenient to effect
the transactions contemplated herein.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first set forth above.
INTERACTIVE SECURITY HOLDERS:
------------------------------ ---------------------------
------------------------------ ---------------------------
------------------------------ ---------------------------
------------------------------ ---------------------------
------------------------------ ---------------------------
XXXXX XXXX:
---------------------------------
EXHIBIT 2.5
FINANCIAL STATEMENTS OF INTERACTIVE
EXHIBIT 3.2
OUTSTANDING DERIVATIVE SECURITIES OF TORPEDO
NUMBER OF EXERCISE
WARRANT/OPTION SHARES PRICE WEIGHTED AVERAGE
---------------------- --------------- ---------- ----------------
Stock Options 827,000 $ 0.26 $ 215,020
Stock Options 1,700,000 $ 0.20 $ 340,000
Warrant 1,050,000 $ 0.20 $ 210,000
Warrant 300,000 $ 0.15 $ 45,000
Warrant 1,750,000 $ 0.10 $ 175,000
Warrant 300,000 $ 0.05 $ 15,000
---------------- ----------------
5,927,000 $ 1,000,020
================ ================
WEIGHTED AVERAGE EXERCISE PRICE $ 0.17
EXHIBIT 3.3
SUBSIDIARIES OF TORPEDO
Torpedo Sports, Inc. (a Canadian corporation)
Torpedo Newco, Inc.
Exhibit 3.5
Financial Statements of Torpedo
Reference xxx.xxx.xxx for Torpedo's financial statements.
EXHIBIT 3.8
TAX RETURNS OF TORPEDO
Federal tax returns for the years ended December 31, 2002 and 2003 have not been
filed.
EXHIBIT 3.10
PROPRIETARY RIGHTS OF TORPEDO
Intellectual property rights to Torpedo trademarks.
EXHIBIT 5.8
PROPRIETARY RIGHTS AND MATERIAL CONTRACTS OF INTERACTIVE
Agreement between BestBet Media, Inc and Interactive Games, Inc
EXHIBIT 6.6
DIRECTORS OF TORPEDO
Xxxxx Xxxx
EXHIBIT 6.7
OFFICERS OF TORPEDO AND SURVIVING CORPORATION
OFFICERS OF TORPEDO
Xxxxx Xxxx, Chairman and CEO
Xxxxx X. Xxxxxxxxx, President and CFO
Xxxxxx X. Xxxxx, Secretary
OFFICERS OF SURVIVING CORPORATION
Xxxxxxx Xxxxxxxx, President
Xxxx Xxxxxxxxx, Chief Financial Officer
Xxxx Xxxxx, Director of Casino Operations
