AMENDED AND RESTATED AGREEMENT
and
PLAN OF REORGANIZATION
This AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANI ZATION,
effective the 22nd day of March, 1997 (the "Effective Date"), by and between
Messrs. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇. ▇▇▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇. ▇▇▇▇▇▇") (each, a
"Shareholder" and collectively, the "Shareholders"), and FORTUNE FINANCIAL
SYSTEMS, INC., a Delaware corporation ("FFS"),
WITNESSETH:
WHEREAS each of the Shareholders owns the number of shares of common
stock of Professional Marketing, Inc. (the "Company") set forth opposite his
name in Schedule 1 to this Agreement, which collectively constitute more than
80% of the issued and outstanding shares of the Company (collectively, the
"Company Shares"); and
WHEREAS FFS holds at least one million (1,00,000) shares of common
voting stock of FFS, which shares will constitute approximately five and
one-half percent (5.5%) of the issued and outstanding voting shares of FFS after
consummation of the transaction described herein; and
WHEREAS FFS wishes to acquire, and the Shareholders wish to transfer to
FFS, all of the issued and outstanding Company Shares in exchange for One
Million (1,000,000) shares of common voting stock of FFS (the "FFS Shares") in a
transaction intended to qualify as a reorganization within the meaning of
Internal Revenue Code Section 368(a)(1)(B), as amended;
NOW, THEREFORE, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
The following terms, as used herein, have the following meanings:
"Closing" means the consummation of the transactions contemplated
herein, as described herein. The Closing shall be deemed to have occurred March
22, 1997.
"Material Adverse Effect" means a material adverse effect on the
business (including the continued conduct or the operation thereof in
substantially the manner currently conducted), assets, liabilities, financial
condition or results of operations.
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 1
"Party" means each of FFS and each of the Shareholders.
ARTICLE 2
TRANSFER AND ASSIGNMENT OF SHARES
2.1 Statement of Intent. Effective March 22, 1997, the Parties entered
into that certain agreement between and among them (the "March 22 Agreement"),
pursuant to which the Shareholders agreed to transfer and assign to FFS all of
the Company Shares, and FFS agreed to transfer and assign to the Shareholders
all of the FFS Shares. It is the intention of the Parties, under the terms of
this Agreement, to amend and re-state the general agreements set forth in the
March 22 Agreement and consummate the transaction described therein, effective
March 22, 1997. To the extent that any of the terms of this Agreement are
inconsistent with the terms of the March 22 Agreement, the terms of this
Agreement shall govern.
2.2 Assignment and Transfer of Company Shares. Subject to the terms of
this Agree ment, the Shareholders agree to transfer and assign the Company
Shares to FFS. The Shareholders shall deliver to FFS a certificate or
certificates evidencing the Company Shares owned by the Shareholders, in a form
ready for transfer and duly endorsed to FFS. From time to time, FFS and each of
the Shareholders shall execute and deliver such other documents and instruments,
and take such other actions, as the other Parties may reasonably request, in
order more fully to vest in each of the Parties and perfect its title to all
right, title and interest in and to the Company Shares, in the case of FFS and
the FFS Shares, in the case of each of the Shareholders.
2.3 Assignment and Transfer of FFS Shares. Subject to the following
conditions and in accordance with the following schedule, FFS agrees to transfer
and assign to the Shareholders, One Million Thousand (1,000,000) FFS Shares in
the aggregate, which shall be duly assigned and transferred to the Shareholders
as follows:
(a) As of the Effective Date, FFS shall (i) deliver to the Shareholders
two stock certificates, each such certificate representing Two Hundred Fifty
Thousand (250,000) shares of FFS's common stock and issued in the name of each
of the Shareholders, respectively (which shares, together with other shares to
be transferred and delivered to other shareholders contemporaneously with such
delivery to the Shareholders, constitute more than fifty percent of the FFS
Shares to be transferred and delivered by FFS in connection with the
reorganization contemplated in this Agreement); and (ii) deliver to a mutually
acceptable escrow agent two additional stock certificates, each representing Two
Hundred Fifty Thousand (250,000) shares of FFS's common stock ("Escrow Shares"),
for the benefit of the Shareholders.
(b) On the first day on which the Company achieves aggregate gross
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 2
sales during any consecutive fifteen months during the period beginning March
22, 1997 to and including December 31, 1998, equal to or more than Fifteen
Million Dollars ($15,000,000), then FFS shall cause the escrow agent to deliver
to each of the Shareholders one stock certificate, representing Two Hundred
Fifty Thousand (250,000) shares of FFS's common stock and issued in the name of
such Shareholder. If aggregate gross sales during any such fifteen-month period
do not equal or exceed Fifteen Million Dollars, then FFS shall cause the escrow
agent to instruct the transfer agent for FFS to (i) deliver to each of the
Shareholders a stock certificate representing a number of FFS Shares bearing the
same proportion to 250,000 that the highest gross sales of the Company during
any such fifteen-month period bears to Fifteen Million Dollars, and (ii) return
the balance of the Escrow Shares to FFS.
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 3
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
As a material inducement to FFS to enter into this Agreement and to
consummate the transactions contemplated hereby, each of the Shareholders,
severally, represents and warrants to FFS as follows:
3.1 Ownership of the Company Shares. He is the true and lawful owner of
his Company Shares, has good title to and is the beneficial and record owner of
his Company Shares, and has the absolute right to assign and transfer his
Company Shares to FFS. His Company Shares will be conveyed to FFS free and clear
of all Liens, claims, restrictions, covenants, conditions, pledges, options,
encumbrances and rights of any Persons, other than pursuant to restrictions
under applicable federal and state securities laws. He has not entered into any
other agreement to sell or otherwise transfer his Company Shares, or entered
into any agreement limiting the ability to vote or transfer his Company Shares.
All of the Company Shares are duly authorized, validly issued, fully paid and
non-assessable. There are no outstanding options, warrants, agreements, rights,
conversion privileges or other agreements of any kind to acquire any share of
capital stock in the Company, nor any outstanding rights or privileges to
acquire any such interest. No share of capital stock of the Company has been
registered under the Securities Act of 1933, as amended, nor under the
securities laws of any state in which they were or may be offered for sale. The
Company Shares constitute one hundred percent (100%) of the issued and
outstanding capital stock of the Company.
3.2 Organization of the Company. The Company (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State in
which it was incorporated, (ii) has all requisite corporate power and authority
to own all of its properties and assets and to carry on its business as it is
now being conducted, (iii) is duly qualified to do business and is in good
standing, and is duly licensed, authorized or qualified to transact business in
each jurisdiction in which the ownership or lease of real property or the
conduct of its business requires it to be so qualified, except where the failure
to be so qualified or to be in good standing or to be duly licensed, authorized
or qualified to transact business, would not, individually or in the aggregate,
have a Material Adverse Effect on the Company, and (iv) has all federal, state
and local government licenses, permits, approvals and other authorizations
necessary to own its properties and assets and carry on its business as it is
now being conducted, except where the failure to have such governmental
licenses, permits, approvals or other authorizations would not, individually or
in the aggregate, have a Material Adverse Effect on the Company.
3.3 Authority and Approval. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action on
the part of Shareholders. This Agreement is a legal, valid and binding
obligation of the Shareholders, enforceable against each of the Shareholders in
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 4
accordance with its terms, except to the extent limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws or decisions
relating to or affecting creditors' rights generally, by equitable limitations
on its enforceability, and by other laws or decisions of general application
relating to general principles of equity.
3.4 No Conflict. The execution, delivery and performance of this
Agreement by the Shareholders do not, and the consummation by the Shareholders
of the transactions contemplated hereby and thereby will not, violate any
provision of the Company's Articles of Incorporation or By-laws.
3.5 Brokers. The Shareholders have not employed any investment banker,
broker or finder in connection with the transactions contemplated hereby who
might be entitled to a fee or other remuneration from the Shareholders, the
Company or FFS. FFS acknowledges a claim by Dalmar, Inc. and agrees to indemnify
the Company for all amounts in excess of Twenty-five Thousand Dollars in
connection with the settlement or resolution of such claim.
3.6 Litigation. To the Shareholders' best knowledge, except as set
forth in Exhibit 3.6, there is no litigation, investigation or proceeding of or
before any arbitrator, court, agency or governmental authority pending or
threatened by or against the Company or affecting the Company Shares.
3.7 Compliance with Laws. To the best knowledge of the Shareholders,
the Company is in compliance with all laws, rules, regulations, orders, writs,
injunctions and decrees to which it or any of its assets are subject, except
where the failure would not have a Material Adverse Effect on the Company.
3.8 No Undisclosed Liability. To the best knowledge of the
Shareholders, there is no liability or obligation of any kind, whether accrued,
absolute, fixed or contingent, of the Company that is not disclosed, reflected
or reserved against in the Company's financial statements.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF FFS
As a material inducement to the Shareholders to enter into this
Agreement and to consummate the transactions contemplated hereby, FFS represents
and warrants to the Shareholders as follows:
4.1 Ownership of the FFS Shares. FFS is the true and lawful owner of
the FFS Shares, has good title to and is the beneficial and record owner of the
FFS Shares, and has the absolute right to assign and transfer the FFS Shares to
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 5
the Shareholders. The FFS Shares are owned by FFS and will be conveyed to The
Shareholders free and clear of all Liens, claims, restrictions (except as
required under Rule 144 of the Securities and Exchange Commission), covenants,
conditions, pledges, options, encumbrances and rights of any Persons, other than
pursuant to restrictions under applicable federal and state securities laws. The
FFS Shares are common voting stock of FFS, eligible to vote in the election of
corporate directors of FFS. The FFS Shares constitute approximately five and
one-half percent (5.5%) of the issued and outstanding capital stock of FFS. FFS
has not entered into any other agreement to sell or otherwise transfer the FFS
Shares, nor has FFS entered into any agreement limiting the ability to vote or
transfer the FFS Shares. All FFS Shares transferred pursuant to this Agreement
are duly authorized, validly issued, fully paid and non-assessable, and are not
subject to dilution except in the same proportion as all other shares of FFS, in
connection with new issues for public distribution or for the purpose of
facilitating an acquisition or merger.
4.2 Organization of FFS. FFS (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State in which it
was incorporated, (ii) has all requisite corporate power and authority to own
all of its properties and assets and to carry on its business as it is now being
conducted, (iii) is duly qualified to do business and is in good standing, and
is duly licensed, authorized or qualified to transact business in each
jurisdiction in which the ownership or lease of real property or the conduct of
its business requires it to be so qualified, except where the failure to be so
qualified or to be in good standing or to be duly licensed, authorized or
qualified to transact business, would not, individually or in the aggregate,
have a Material Adverse Effect on FFS, and (iv) has all federal, state and local
government licenses, permits, approvals and other authorizations necessary to
own its properties and assets and carry on its business as it is now being
conducted, except where the failure to have such governmental licenses, permits,
approvals or other authorizations would not, individually or in the aggregate,
have a Material Adverse Effect on FFS.
4.3 Authority and Approval. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action on
the part of FFS. This Agreement is a legal, valid and binding obligation of FFS,
enforceable against FFS in accordance with its terms, except to the extent
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws or decisions relating to or affecting creditors' rights generally,
by equitable limitations on its enforceability, and by other laws or decisions
of general application relating to general principles of equity.
4.4 No Conflict. The execution, delivery and performance of this
Agreement by FFS do not, and the consummation by FFS of the transactions
contemplated hereby and thereby will not, violate any provision of FFS's
Articles of Incorporation or By-laws.
4.5 Brokers. FFS has not employed any investment banker, broker or
finder in connection with the transactions contemplated hereby who might be
Professional Marketing, Inc.
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and Plan of Reorganization
page 6
entitled to a fee or other remuneration from the Shareholder, the Company or The
Shareholders.
4.6 Disclosure. No representation or warranty of FFS contained in this
Agreement and no statement contained in any certificate, list, schedule, exhibit
or other instruments furnished or to be furnished to the Shareholders pursuant
hereto, or in any connection with the transaction contemplated hereby, contains
or will contain any untrue statement of a material fact, or omits or will omit
to state any material fact which is necessary in order to make the statements
contained herein not misleading.
4.7 Litigation. To FFS's best knowledge, there is no litigation,
investigation or proceeding of or before any arbitrator, court, agency or
governmental authority pending or threatened by or against FFS or affecting the
FFS Shares.
4.8 Compliance with Laws. To the best knowledge of FFS, FFS is in
compliance with all laws, rules, regulations, orders, writs, injunctions and
decrees to which it or any of its assets are subject, except where the failure
would not have a Material Adverse Effect on FFS.
4.9 No Undisclosed Liability. To the best knowledge of FFS, there is no
liability or obligation of any kind, whether accrued, absolute, fixed or
contingent, of FFS that is not disclosed, reflected or reserved against in the
FFS financial statements.
ARTICLE 5
COVENANTS OF FFS AND SHAREHOLDERS
5.1 Mutual Cooperation. Following the execution of this Agreement, FFS
and Shareholders agree:
(a) If any event should occur, either within or without the knowledge
or control of FFS or Shareholders, which would prevent fulfillment of the
conditions to the obligations of any Party hereto, to use his or their
commercially reasonable efforts to cure the same as expeditiously as possible;
and
(b) To cooperate fully with each other in preparing, filing,
prosecuting and taking any other actions which are or may be reasonable and
necessary to obtain the consent of any governmental instrumentality or any third
party, to accomplish the transactions contemplated by this Agreement.
5.2 Additional Covenants of FFS. FFS agrees that upon execution of this
Agreement, it shall assume primary liability for the following obligations of
the Company: long-term indebtedness in the amount of $50,000, (ii) the
Professional Marketing, Inc.
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and Plan of Reorganization
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obligation of the Company under that certain lease agreement relating to the
lease of the Company's premises at 261 South 1350 East, Lehi, Utah, and (iii)
the acquisition of a predictive dialer for use by the Company upon mutually
agreeable terms.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDERS
The obligations of the Parties to consummate the transactions
contemplated by this Agreement are subject to the satisfaction on or prior to
the Effective Date of all of the following conditions, any of which may be
waived by the Shareholders.
6.1 Filings; Consents; Waiting Periods. All registrations, filings,
applications, notices, transfers, consents, approvals, orders, qualifications,
waivers and other actions of any kind required of any Persons in connection with
the consummation of the transactions contemplated in this Agreement have been
filed, made or obtained and all applicable waiting periods shall have expired or
been terminated.
6.2 Deliveries by FFS. FFS shall have made delivery to the Shareholders
of the documents and items specified in Section 8.3.
6.3 Representations and Warranties of FFS. All representations and
warranties made by FFS in this Agreement shall be true and correct on and as of
the Effective Date, as if made by FFS on and as of that date.
6.4 Performance of Obligations of FFS. FFS shall have performed and
complied with the covenants, agreements, obligations and conditions required by
this Agreement to be performed or complied with by FFS at or prior to the
Effective Date.
6.5 Absence of Action Restraining or Affecting Transaction. No action
or proceeding by any Person or court shall have been instituted or threatened to
restrain or prohibit the consummation of the transactions contemplated by this
Agreement.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF FFS
The obligations of FFS to consummate the transactions contemplated by
this Agreement are subject to the satisfaction on or prior to the Effective Date
of all of the following conditions, any of which may be waived by FFS:
7.1 Filings; Consents; Waiting Periods. All registrations, filings,
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 8
applications, notices, transfers, consents, approvals, orders, qualifications,
waivers and other actions of any kind required of any Persons in connection with
the consummation of the transactions contemplated in this Agreement have been
filed, made or obtained and all applicable waiting periods shall have expired or
been terminated.
7.2 Deliveries by the Shareholders. The Shareholders shall have made
delivery to FFS of the documents and items specified in Section 8.2.
7.3 Representations and Warranties of the Shareholders. All
representations and warranties made by the Shareholders in this Agreement shall
be true and correct on and as of the Effective Date, as if made by the
Shareholders on and as of that date.
7.4 Performance of Obligations of the Shareholders. The Shareholders
shall have performed and complied with all the covenants, agreements,
obligations and conditions required by this Agreement to be performed or
complied with by the Shareholders at or prior to the Effective Date.
7.5 Absence of Action Restraining or Affecting Transaction. No action
or proceeding by any Person or court shall have been instituted or threatened to
restrain or prohibit the consummation of the transactions contemplated by this
Agreement.
ARTICLE 8
TERMINATION
8.1 Events of Termination. Notwithstanding any provision to the
contrary herein, this Agreement may be terminated at any time on or prior to the
Effective Date:
(a) By mutual written consent of the Shareholders and FFS;
(b) By either the Shareholders or FFS in the event any federal or
state agency having jurisdiction over the approval of the transactions
contemplated hereby disapproves of any part of such transactions.
ARTICLE 9
MANAGEMENT OF THE COMPANY
9.1 Management. FFS will appoint either ▇▇. ▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇ to
the Board of Directors of FFS, upon assurance of appropriate corporate
indemnities, insurance and protection for directors. ▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 9
will retain their existing positions as officers of the Company, and shall have
full authority to continue to operate the Company under the supervision of the
Board of Directors and in accordance with the Articles of Incorporation and the
By-laws of the Company. FFS agrees to appoint a three-person Board of Directors
for the Company, consisting of two Directors nominated by the Shareholders, and
one person nominated by FFS. In accordance with an employment agreement to be
executed between the Company and each of ▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇
and ▇▇. ▇▇▇▇▇▇ will be entitled to retain their existing positions as officers
of the Company for a period of at least five years, and they shall not be
removed from their positions for any reason other than for gross malfeasance.
They shall have full authority to continue to operate the Company under the
supervision of the Board of Directors, and in accordance with the Articles of
Incorporation and the By-laws, of the Company and this Agreement. The
headquarters of the Company shall remain in Utah. FFS agrees to permit the
Company to budget at least 3% of its annual gross revenues for the purpose of
financing capital improvements and expansion, based on an annual budget to be
approved by the Board of Directors of the Company from time to time.
9.2 Financial Management. FFS agrees that it will permit the Company to
operate autonomously so long as the Board of Directors of the Company meets its
obligation to exercise good business judgment and to fulfill its obligations to
shareholders as set forth in the By-laws of the Company. FFS agrees not to adopt
a dividend policy for the Company inconsistent with the provisions of this
Agreement.
9.3 Compensation Policy. The Company shall enter into employment
agreements with ▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇, and other key employees, providing
for compensation consistent with the provisions of Exhibit 9.3.
9.4 Actions Requiring Unanimous Consent. Notwithstanding any other
requirement set forth herein or the Articles of Incorporation of the Company,
the Parties expressly agree that a unanimous vote of all of the directors of the
Company who form a quorum of Directors convened to discuss such issues, after
due notice, shall be obtained before any of the following actions shall be taken
by the Company: (a) the appointment of any new or replacement Directors of the
Company; (b) the issuance of any shares, or of any warrants or debentures,
options or rights in or to shares of the common or other capital stock of the
Company; (c) any pledge, mortgage, sale, lease or other transfer, except in
normal course of business or as part of a complete dissolution or winding up, or
any material portion of its business; (d) any merger, consolidation or
amalgamation with or into another company or corporation; (e) any change to, or
the conduct of any business outside, the general business of the Company; (f)
the incurring of any indebtedness to any third person or entity for borrowed
funds or for the deferred purchase price of purchased goods, or any other
indebtedness of any kind, except as otherwise permitted herein; (g) the
extension of credit to any one debtor in an amount exceeding US$250,000 or its
equivalent in another currency; (h) the agreement of the Company to waive or not
enforce any rights it may have under any agreements, or in respect of
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 10
transactions to which it may be a party; (i) the adoption of any dividend policy
calling for the payment of dividends greater than the amounts required to meet
the objectives of this Agreement, or any departure from the dividend policies
set forth herein or in any of the Articles of Incorporation; provided, however,
that the Board of Directors of the Company may establish the initial dividend
policy consistent with the terms of this Agreement; or (j) any change in the
outside auditors of the Company.
9.5 Competition; Corporate Opportunity. ▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇
agree they will provide adequate time, good faith and best efforts in managing
the operations of the Company in accordance with a business plan to be adopted
by the Company (as amended from time to time, the "Company Business Plan"), and
consistent with the overall business plan of FFS (the "FFS Business Plan") (the
Company Business Plan and the FFS Business Plans being referred to collectively
as the "Business Plans"). With respect to any business or investment opportunity
falling within the scope of the Business Plans, ▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ agree
to present such opportunity to the board of directors of the Company or of FFS,
as the case may be. Such investment or business opportunity shall be undertaken
by the Company or by FFS only upon approval of a majority of the disinterested
directors. If FFS or the Company elect not to undertake such opportunity, then
▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ shall be free to undertake any such investment upon
the following terms: ▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ agree to provide to the Company
and to FFS a right to invest in such proposed business venture with ▇▇. ▇▇▇▇▇▇▇
and ▇▇. ▇▇▇▇▇▇, on a basis to be determined by the circumstance of such proposed
venture but in no case less favorable to the Company or to FFS, as the case may
be, than the opportunity available to ▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇. Such notice
shall be written and shall set forth sufficient information, and shall allow a
reasonable time under the circumstances, to permit adequate deliberation. FFS
shall have a right, at any time before, or up to sixty days after, the date of
such investment, to invest in up to a 50% participation in any such opportunity
by contributing up to 50% of the overall capital investment, in the same or
equivalent type of cash, goods or services and upon the same terms and
conditions of the participation by ▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇. In any such case,
whether or not FFS elects to participate in such business opportunity, (i) ▇▇.
▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ shall not, without the approval of FFS, utilize
employees, assets (including lists of prospective customers, good will and
intellectual property) of the Company or its affiliates, and (ii) the proposed
venture shall be conducted in a manner that does not devalue FFS or its
affiliates or deprive them of business opportunities within their scope.
ARTICLE 10
MISCELLANEOUS
10.1 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the Parties and delivered to the other Party.
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 11
10.2 Governing Law; Arbitration. This Agreement shall be governed by
and construed in accordance with the laws of the State of Utah without reference
to the choice of law principles thereof. Any controversy or claim arising out of
or in connection with this Agreement shall be finally settled in accordance with
the Commercial Arbitration Rules and supplementary procedures for commercial
arbitrations of the American Arbitration Association (the "AAA") then in force,
by submitting such dispute for binding arbitration before a jointly-designated
arbitrator. If the Parties are unable to agree on a single arbitrator, then such
binding arbitration shall be conducted before a panel of three arbitrators that
shall be chosen as follows: each Party shall designate one arbitrator and such
arbitrators shall designate a third arbitrator. This arbitration provision shall
be deemed to be self-executing, and in the event that either Party fails to
appear at any properly noticed arbitration proceeding award may be entered
against such Party notwithstanding such failure to appear. Any award granted by
such arbitral panel shall be self-executing, to the greatest extent permitted by
applicable law, and in any case shall be eligible for entry of judgment and for
enforcement by a court of appropriate and competent jurisdiction. The location
or site of such arbitration proceeding shall be (i) Salt Lake City, Utah, or
(ii) another location mutually accept able to the Parties, or (iii) if for any
reason it is or becomes impossible or impracticable for the Parties to conduct
arbitration proceedings in Salt Lake City, Utah and the Parties are unable to
agree on another location, then at a location determined by the American
Arbitration Association. Nothing in this Section shall be construed or deemed to
prevent either party from seeking injunctive relief pursuant to the terms hereof
in a court of appropriate jurisdiction.
10.3 Expenses. Except as set forth in this Agreement, FFS and the
Shareholders shall be responsible for their own legal and other costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby.
10.4 Notices. All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and (i) delivered personally, (ii) sent by
certified mail, postage prepaid, (iii) sent by overnight courier or (iv) sent by
facsimile transmission, to the appropriate address as set forth below. Notices
to the Shareholders shall be addressed to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Professional Marketing, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address and to the attention of such other person as
Shareholders or the Company may designate by notice to FFS. Notices to FFS shall
be addressed to:
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 12
Fortune Financial System, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address and to the attention of such other person as FFS may
designate by notice to Shareholders.
Any notice hereunder shall be deemed to have been served or given as of
(a) the date such notice is personally delivered, (b) three business days after
it is mailed certified U.S. mail, First Class postage prepaid, (c) one business
day after it is sent for overnight delivery by Federal Express or similar
next-day courier, or (d) the same day as it is sent by facsimile transmission
with confirmation of receipt.
10.5 Successors and Assigns. The rights and obligations of any Party to
this Agreement shall not be assignable by such Party without the prior written
consent of all other Parties. Notwithstanding the previous sentence, this
Agreement may be assigned by FFS to any Affiliate of FFS without the
Shareholders's prior written consent; provided, however, no such assignment
shall have the effect of releasing or reducing the obligations of FFS pursuant
to this Agreement, FFS Related Documents, or any other instruments, agreements
or covenants provided in or contemplated by this Agreement. This Agreement shall
inure to the benefit and shall be binding upon the respective successors and
permitted assigns of the Parties, including without limitation upon the Company
as the successor to FFS following its merger into the Company after the Closing
date. Nothing herein expressed or implied is intended to confer upon any person,
other than to the Parties or their respective heirs, personal representatives,
successors or permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
10.6 Headings. The headings contained in this Agreement are solely for
convenience of reference and shall not affect its interpretation.
10.7 Severability of Provisions. In the event that any of the
provisions contained herein would be held to be invalid, prohibited or
unenforceable in any jurisdiction for any reason because of the scope, duration
or area of its applicability or for other reasons, unless narrowed by
construction, such provision shall for purposes of such jurisdiction only, be
construed as if such invalid, prohibited or unenforceable provision had been
more narrowly drawn so as not to be invalid, prohibited or unenforceable (or if
such language cannot be drawn narrowly enough, the court making any such
determination shall have the power to modify, to the extent necessary to make
such provision or provisions enforceable in such jurisdiction, such scope,
duration or area or all of them, and such provision shall then be applicable in
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 13
such modified form). If, notwithstanding the foregoing, any such provision would
be held to be invalid, prohibited or unenforceable in any jurisdiction for any
reason, such provision, as to such jurisdiction only, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability, without
invalidating the remaining provisions. No narrowed construction,
court-modification or invalidation of any provision shall affect the
construction, validity or enforceability of such provision in any other
jurisdiction. Subject to the foregoing, in case any one or more of the
provisions contained in this Agreement or any other documents executed in
connection herewith should be invalid, illegal or unenforceable in any respect,
the validity, legality and unenforceability of the remaining provisions
contained herein and therein shall not be affected in any way thereby.
10.8 Gender. Whenever in this Agreement any masculine, feminine or
neuter pronoun is used, such pronouns shall also include the other genders
whenever required by the context.
10.9 Further Assurances. The Shareholders and FFS shall each execute
and deliver instruments and take such other actions as may be reasonably
required in order to carry out the intent of this Agreement.
10.10 Public Announcement. Neither FFS, Shareholders nor the Company
shall make any announcement or issue any press release relating to this
Agreement or the transactions contemplated hereby without the consent of the
other Parties.
10.11 Amendment; Waiver. This Agreement may be amended, modified,
superseded or canceled, and any of its terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
executed by FFS and the Shareholders or, in the case of a waiver, by the Party
waiving compliance. The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same. No waiver by any Party of any
condition, or of the breach of any provision, term, covenant, representation or
warranty contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be construed as a further or
continuing waiver of any such condition or of the breach of any other provision,
term, covenant, representation or warranty of this Agreement.
10.12 Litigation. In the event litigation or arbitration is instituted
between or among any of the Parties with respect to all or any part of this
Agreement, the prevailing Party therein shall be entitled to recover, in
addition to all other relief obtained, its costs, expenses and fees, including
reasonable attorneys' fees incurred in such litigation.
IN WITNESS WHEREOF, this Amended and Restated Agreement and Plan of
Reorganization has been signed by or on behalf of the Parties as of the day and
year first above written.
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 14
Shareholders
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
Fortune Financial Systems, Inc.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
President
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 15
Schedule 1
Name: No. of Company Shares: Percentage of Issued and
Outstanding share of the
Company:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ _____________________ ______________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ _____________________ ______________________
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 16
Exhibit 3.6
Claims and Litigation
1. DALMAR ENTERPRISES, INC. v. FORTUNE 21, PROFESSIONAL MARKETING,
INC., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Civil No. 970903709CVD,
Third District Court.
2. Home Business Technology. The Company processed approximately $2
million in sales of products and services sold by Home Business
Technology, a company affiliated with ▇▇. ▇▇ ▇▇▇▇▇▇▇ ("HBT"). HBT has
come under investigation by the Iowa Attorney General's office. The
Company has received no notice that any of its activities in connection
with such sales are under investigation.
3. Joint inquiry from Utah Attorney General and the Federal Trade
Commission regarding complaint by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 17
Exhibit 9.3
Employment Compensation Policy. For so long as ▇▇. ▇▇▇▇▇▇▇ or ▇▇.
▇▇▇▇▇▇ remains employed by the Company,
1. Each of them remaining so employed shall be entitled to
receive compensation from the Company, as follows: Monthly
salary of $12,500, payable at the beginning of each calendar
month, plus an amount equal to 1.5% of gross sales for such
month, as determined within five days after the end of such
month; provided that the total of such compensation shall not,
unless otherwise approved by the Board of Directors of the
Company, exceed $400,000 each, in any fiscal year.
2. At least forty percent (40%) of net pre-tax profits shall be
available to the Company to provide bonus compensation to
employees of the Company, at least fifty percent of which
shall be designated for each of them remaining so employed.
Professional Marketing, Inc.
Amended and Restated Agreement
and Plan of Reorganization
page 18