October 12, 2001
EXHIBIT 99.1
Michael J. Coker, President and CEO
International Global Positioning, Inc.
3200 North Central Avenue, Suite 1990
Phoenix, Arizona 85012
Re: Preliminary Agreement for Merger
Dear Mr. Coker:
This letter evidences the Preliminary Agreement between HOT PRODUCTS,
INC.COM, an Arizona corporation ("HPIC"), and INTERNATIONAL GLOBAL POSITIONING,
INC., a Nevada corporation ("IGP") for a proposed transaction (the
"Transaction") by which IGP will be merged into HPIC. This Preliminary Agreement
is subject to the satisfaction of several contingencies, including the execution
by both parties of definitive agreements and the satisfactions of conditions set
forth in those definitive agreements. The terms of the Transaction are set forth
below.
1. Merger. IGP and HPIC will merge, with HPIC being the surviving
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corporation (the "Surviving Corporation"). The Surviving Corporation will remain
a reporting company under the Securities Exchange Act of 1934, as amended.
2. Name Change. As a part of the Transaction, the name of the
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Surviving Corporation changed to INTERNATIONAL GLOBAL POSITIONING, INC. HPIC and
IGP acknowledge that this will require assignment of a new CUSIP # and trading
symbol for HPIC.
3. Board of Directors. The Surviving Corporation will have a new
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board of directors which board will be comprised of three members designated by
IGP, two members designated by HPIC, and two outside members approved by both
HPIC and IGP.
4. Reverse Stock Split. HPIC will effectuate a one-for-five reverse
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split of its currently issued and outstanding shares, resulting in 2,043,125
shares being issued and outstanding. This reverse split will also reduce
outstanding HPIC warrants to 99,048 at a conversion price of $5.00/share.
5. New Warrants. The Surviving Corporation will authorize up to
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420,000 warrants convertible into one share at $1.50/share, which warrants shall
be issued to certain holders of warrants of IGP in cancellation of such
outstanding IGP warrants.
PAGE 2. AGREEMENT
6. Shares to IGP Shareholders. As a part of the Transaction, current
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holders of IGP shares will have their shares converted into 16,846,112
restricted shares of the Surviving Corporation.
7. Shares to HPIC Management. As a part of the Transaction, the
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Surviving Corporation will issue 1,110,763 restricted shares to the current
management of HPIC in exchange for the cancellation of all existing management
and employee agreements, as well as vested warrants, options and stock rights
not yet exercised or converted. Current management will resign in exchange for
such compensation.
8. New Employment Agreements. The Surviving Corporation will execute
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new employment contracts with its management.
9. Due Diligence. The period from the execution of this Preliminary
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Agreement until 75 days thereafter shall be referred to as the "Due Diligence
Period." During the Due diligence Period, each of HPIC and IGP and its
attorneys, accountants and agents, shall have the opportunity to conduct a due
diligence investigation of the other party. This shall include, without
limitation, the inspection by each party of the assets, books and records, and
all material documents of the other party. HPIC and IGP shall each deliver to
the other such copies of the books and records relating to that party's business
as may be reasonably requested by the other party. HPIC and IGP shall each fully
cooperate with the other in the due diligence inspection.
10. IGP Audit. IGP will complete an audit of its financial
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statements, satisfactory to HPIC, within 60 days from the date of this
Preliminary Agreement.
11. Necessary Action. IGP and HPIC will each take such action as may
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be required to effectuate the Transaction.
12. Closing. The closing of the purchase transaction will occur on
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the date specified for closing in the definitive Agreement and Plan of Merger
("Closing"), but no later than November 30, 2001. The Closing is subject to the
following conditions: (a) execution of a mutually acceptable Agreement and Plan
of Merger; and (b) completion, to each party's reasonable satisfaction, of its
due diligence investigation of the other party; and (c) approval by the
Shareholders of each party.
13. Agreement and Plan of Merger. HPIC and IGP will use their best
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good faith efforts to negotiate and execute a mutually acceptable definitive
Agreement and Plan of Merger within 30 days from the date this Preliminary
Agreement is executed by the parties. The Agreement and Plan of Merger will
include, among other items, standard and adequate representations and
warranties, conditions to Closing and indemnification provisions which are
customary in a transaction of this type.
PAGE 3. AGREEMENT
14. No Solicitation of Competing Offers. For a period of 60 days from
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the execution of this of this Preliminary Agreement, neither party will solicit
or negotiate with any other individual or entity for a merger or sale of its
assets.
15. Notice. All notices provided for by this Preliminary Agreement
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shall be in writing and shall be deemed received by the intended recipient: (a)
the business day that such notice is sent by telecopy or facsimile (if a number
telecopier number is listed below) to the intended recipient provided that such
notice is also sent by United States Mail, as certified mail, return receipt
requested and postage paid thereon; (b) the third business day after the date
placed in United States Mail, as certified mail, return receipt requested and
postage paid thereon; (c) the first business day after such notice is sent by
express mail or other overnight mail service. All notices shall be delivered to
the addresses indicated below, unless the party giving any such notice has been
notified in writing of a change of such address:
To HPIC: James L. Copland
Hot Products Inc.com
7625 East Redfield Road
Phoenix, Arizona 85260
Telecopier No. (480) 607-6801
To IGP: Michael J. Coker
International Global Positioning, Inc.
3200 North Central Avenue, Suite 1990
Phoenix, Arizona 85012
Telecopier No. (602) 285-0974
16. Governing Law. This Preliminary Agreement, and all documents
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prepared and signed pursuant to this Preliminary Agreement, shall be governed
and construed by the laws of the State of Arizona.
17. Expenses. Each party shall be solely responsible for and bear its
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own expenses, including but not limited to accounting, appraisal and legal
expenses, incurred at any time in connection with this Preliminary Agreement and
the transactions contemplated herein.
18. Term. Once this Preliminary Agreement is accepted, it shall remain
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in effect until the earlier of (i) execution of the Agreement and Plan of
Merger; or (ii) the failure of a condition to, or other term of, this
Preliminary Agreement.
PAGE 4. AGREEMENT
When countersigned by IGP, this letter will provide a basis to proceed with
the negotiations and Closing of this Transaction. Neither party shall be
obligated to effect the Transaction sell or purchase the Assets until such time
as the parties have entered into a formal Agreement and Plan of Merger. Please
indicate your acceptance of the terms of this Preliminary Agreement by signing
and returning the enclosed counterpart of this Preliminary Agreement to me.
Very truly yours,
HOT PRODUCTS INC.com
By: /s/ James L. Copland
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James L. Copland, President
And Chief Operating Officer
Accepted this 10th day of
October, 2001
INTERNATIONAL GLOBAL POSITIONING, INC.
/s/ Michael J. Coker, President
By: -----------------------------------
Michael J. Coker, President