Exhibit 10.1 Agreement and Plan of Merger between Preferred Financial Resources,
Inc. and Investors Preferred Opportunities, Inc. dated August 15, 2003
--------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated this 15th day of August, 2003, is
entered into by and between PREFERRED FINANCIAL RESOURCES, INC. Colorado
Corporation (hereinafter referred to as "PFR" and "surviving corporation"), and
INVESTOR'S PREFERRED ASSETS, INC. , a Nevada corporation, hereinafter "IPO"),
hereinafter all referred to collectively as the "Constituent entities;"
WHEREAS, the Board of Directors and managers, respectively, of each of the
constituent entities deems it advisable for the general welfare and advantage of
the respective constituent entities and their respective stockholders and
members that the constituent entities merge into a single corporation pursuant
to this agreement, and the constituent entities respectively desire to so merge
pursuant to this agreement and pursuant to the applicable provisions of Title 7
of Colorado Statutes, Sections 0-000-000, et.seq., and Nevada Revised Statutes
92A.100, et. seq. This agreement supersedes all former agreements by and between
the parties.
NOW, THEREFORE, in consideration of the promises and the mutual covenants,
representations and warranties herein contained, and other good and valuable
consideration, the receipt, adequacy, and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Terms of Merger: The terms and conditions of such merger (the "Merger")
the mode of carrying the same into effect, the manner and basis of converting r
exchanging the shares of issued stock of each of the constituent entities, and
the manner of dealing with any issued stock of the constituent entities no to be
so converted or exchanged, are and shall be as set forth herein.
2. Surviving Corporation:: On the Effective Date (as hereinafter defined),
the separate existence of INVESTOR'S PREFERRED OPPORTUNITIES ("IPO") shall
cease, and IPO shall be merged into PREFERRED FINANCIAL RESOURCES, INC. ("PFR").
PFR shall continue its corporate existence and shall be the surviving entity.
3. Articles of Merger: Articles of Merger in substantially the form
attached hereto as Exhibit A (the "Articles of Merger") shall be approved by the
holders of at least 2/3 of the common stock of PFR, and a majority of the
shareholders of IPO. The Articles of Merger shall be filed with the Colorado
Department of State and the Nevada Secretary of State.
4. Articles of Incorporation: The Articles of Incorporation of PFR, in
effect as of the Effective Date, shall be the Articles of Incorporation of the
surviving entity.
5. By-Laws: The By-Laws of PFR, in effect as of the Effective Date, shall
be the By-Laws of the surviving entity until thereafter amended.
6. Officers and Directors: The Officers and Directors of PFR as of the
effective date shall be the officers and directors of the surviving entity until
their respective successors are duly elected and qualified.
7. Conversion of Members' interests: The manner and basis of converting or
exchanging the issued stock of each of PFR to the members of each LLC shall be
as follows:
A. On the Effective Date, the shareholders of IPO shall be deemed to
have surrendered the same to PFR, and such shareholders shall thereupon be
entitled to receive in exchange therefor a certificate representing 1 share
of PFR common stock for every common share held in IPO, upon tender of a
certificate representing the IPO shares to the Exchange Agent in accordance
with the letter of transmittal sent to each shareholder by the Exchange
Agent and the terms of the offer of exchange set forth in the Registration
Statement to be filed by PFR with the Securities and Exchange Commission on
Form S-4.
B. The exchange of shares contemplated hereby is intended not to give
rise to any taxable income to either PFR or SHAREHOLDERS, and the parties
hereby adopt this Agreement as a "plan of reorganization" within the
meaning of ss.368(a)(1)(B) of the Internal Revenue Code and the United
States Treasury Regulations interpreting it. The parties agree to take all
necessary steps to assure that no taxable income results from this
transaction, and no party shall take any action which would cause the
transaction to fail to qualify as such a reorganization.
C. No fractional shares of PFR common stock shall be issued, but, in
lieu thereof, each holder of shares of IPO who would otherwise be entitled
to receive a fraction of a share of PFR (after aggregating all fractional
shares of PFR common stock to be received by such shareholder) shall be
entitled to receive from PFR a whole share of PFR common stock.
8. Exchange Procedures.
A. American Stock Registrar & Transfer Co. is hereby appointed to act
as the Exchange Agent with respect to the exchange of stock provided
hereby, and PFR shall provide American with the requisite corporate
resolutions to issue the stock to be issued in connection with the exchange
prior to the effective date.
B. As soon as is practical after the effective date, the Exchange
Agent shall mail to each holder of record of a certificate or certificates
representing shares of PFR; 1) a letter of transmittal (which shall state
that delivery shall be effected, and risk of loss and title to the
certificate shall pass, only upon the delivery of the certificate to the
Exchange Agent), and 2) instructions for use in effecting the tender of the
certificate to the Exchange Agent, and subject the requirements and
restrictions of any other agreement entered into between PFR and any holder
of IPO common stock on or before the effective date, the holder of such
certificate shall be entitled to receive in exchange therefor the number of
shares of PFR common stock provided by the terms of this Agreement, and the
certificate surrendered shall be cancelled. Until surrendered as
contemplated by this section, the holder of each such certificate shall be
deemed only to have the right to receive upon such surrender the number of
such shares of PFR common stock as provided by this Agreement and the
provisions of Colorado law.
2
C. In the event any certificates evidencing shares of ACTON stock
shall have be lost, stolen, or destroyed, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed, the Exchange Agent shall issue
in exchange for such lost, stolen or destroyed certificates, upon the
making of a declaration of lost certificate, provided, however, that PFR
may require, in its discretion, as a condition precedent to the issuance
thereof, that the shareholder post a bond in such sum as is necessary to
indemnify against any claim that may be made against PFR or the Exchange
Agent with respect to the certificates alleged to have been lost; stolen;
or destroyed.
9. Dissenting Members: If the plan of merger contemplated hereby is
effected, shareholders of IPO dissenting from the offer of exchange, provided
they comply with the provisions of Title 7 of Colorado Statutes, Sections
0-000-000, et. seq., shall be paid the fair value of their interests. If any
such dissenting shareholder shall effectively withdraw or lose (through failure
to perfect or otherwise) the right to dissent, then, on the effective date, such
holder's shares shall be automatically converted into and represent only the
right to receive the shares of PFR common stock to which such dissenting
shareholder is entitled to under this Agreement. If any dissenting shareholder
is entitled to a cash payment, such payment shall be made by IPO.
The method of determining such "fair value" shall be as follows:
A. The "book value" of IPO shall be calculated by subtracting the
liabilities of each entity from its respective assets as of the effective
date of the proposed merger;
B. Said book value shall be divided by the number of common shares
outstanding in IPO; and
C. The resulting figure, multiplied by actual number of shares held by
the dissenting shareholder, shall constitute "fair value."
10. Accounting Matters: Upon the Effective Date:
A) All of the assets and liabilities of IPO shall be taken up on the
books of PFR at the amount at which they shall at that time be carried on
the books of IPO, subject to such adjustments, if any, as may be necessary
to conform to PFR's accounting procedures, and
B) All of the rights, privileges, immunities, powers, purposes, and
franchises of IPO, and all property; real, personal and mixed, and all
debts due to IPO on whichever account shall be vested in PFR, and all
property rights, privileges, immunities, powers, purposes and franchises,
and all and every other interest shall be thereafter as effectually the
property of PFR as they were of IPO, respectively, and all of the debts,
liabilities, obligations and duties of IPO shall thenceforth attach to PFR
and may be enforced against it to the same extent as if such debts,
liabilities, obligations, and duties had been incurred or contracted by
PFR.
2
11. Effective Date: The merger provided for by this Agreement, shall be
come effective (the "Effective Date") on that date set forth in PFR's
Registration Statement on Form S-4, once that Registration Statement shall have
been declared effective by the Securities and Exchange Commission, and the
separate existence of IPO, except insofar as continued by statute, shall cease
on the date as of which the Articles of Merger, duly advised, approved, signed,
acknowledged, and sealed by the constituent entities, have been filed for record
with the Colorado Department of State and the Nevada Secretary of State.
IN WITNESS WHEREOF, IPO and PFR, the entities who are parties to the
Merger, have caused this Agreement to be signed in their respective corporate
names and on behalf by their respective Presidents and Secretaries for each
corporation, as of the date first above written.
PREFERRED RESOURCES, INC.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxx Xxxxxxx
--------------------------- ----------------------------
Xxxxxx Xxxxx, Xxxxx Xxxxxxx,
Secretary President
INVESTORS PREFERRED OPPORTUNITIES, INC.
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxx
--------------------------- ----------------------------
Xxxxx Xxxxxxx, Secretary Xxxxxx Xxxxx, President
