AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is dated
December 12, 1997, and is by and between Protokopos Corporation, a Delaware
corporation (the "Company") and Rockport Group of Texas, Inc., a Nevada
corporation ("Rockport").
R E C I T A L S
WHEREAS, the shareholders of Rockport ("Shareholders") own the shares
of capital stock of Rockport as set forth in Schedule 1 attached hereto,
constituting all of the issued and outstanding stock of Rockport (the "Rockport
Shares");
WHEREAS, the Company is a public company, required to file reports
under Section 13 of the Securities Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇");
WHEREAS, the Company desires to acquire all of the Rockport Shares, and
the Shareholders desire to exchange all of the Rockport Shares for shares of
voting common stock of the Company, in a transaction that qualifies under
Section 368(a) (1)(B) of the Internal Revenue Code of 1986, as amended (the
"Code").
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in reliance upon the representations and warranties
hereinafter set forth, the parties agree as follows:
I. EXCHANGE OF THE SHARES AND CONSIDERATION
1.01. Shares Being Exchanged. Effective at the closing
of this Agreement (the "Closing"), and subject to the terms and
conditions of this Agreement the Shareholders shall assign,
transfer and deliver to the Company all of the Rockport Shares
which they own.
1.02. Consideration. Subject to the terms and conditions of this
Agreement, and in consideration of the assignment and delivery of Rockport
Shares to the Company, the Company shall at Closing issue to the Shareholders a
number of shares of voting common stock of the Company, $.001 par value per
share (the "Company Shares"), equal to the number of shares set forth opposite
the Shareholder's name on Schedule 1 attached hereto, and shall issue a total of
2,940,928 Company Shares. An additional 735,232 shares shall be reserved for the
acquisition of Managed Health Care, Inc.
1.03. Closing. The Closing of the transaction
contemplated by this Agreement (the "Closing") shall take place at
the offices of Hand & Hand on or before December 17, 1997.
1.04. Deliveries. Within 5 days of the execution and
delivery of this Agreement, the parties are delivering the
following documents:
1.04(a). The items and documents set forth in Sections
1.01 and 1.02.
1.04(b). The Company Shares described in Section 1.02
1.04(c). The Company shall deliver the resignations of
all of its current officers and directors, and a board
resolution electing ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and ▇▇▇▇▇
▇. ▇▇▇▇▇▇ to the Board of Directors of the Company.
1.05. Filings. Following the Closing, the Company shall
file the following documents:
1.05(a). A Current Report on Form 8-K with the U.S.
Securities and Exchange Commission, reporting the
transactions set forth in this Agreement, any change of
auditors, or other events required to be reported in such
report.
1.05(b). A Form 3 report of beneficial ownership with the U.S.
Securities and Exchange Commission with respect to each director,
executive officer or greater than 10% holder of Company Shares, signed
by such director, executive officer or shareholder, as the case may be.
1.05(c). A Schedule 13D with the U.S. Securities and Exchange
Commission for each person who is required to file such form as a
result of obtaining greater than 5% beneficial ownership of the
Company's Common Stock as a result of the transactions contemplated by
this Agreement.
1.05(d). A Certificate of Amendment to the Certificate of
Incorporation of the Company with the Delaware Secretary of State
changing the name of the Company to "Rockport Group of Texas, Inc." or
a similar name.
II. REPRESENTATIONS AND WARRANTIES OF ROCKPORT
Rockport represents and warrants to the Company as follows, as of the
date of this Agreement and as of the Closing:
2.01. Organization.
2.01(a). Rockport is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada;
Rockport has the corporate power and authority to carry on its business
as presently conducted; and Rockport is qualified to do business in all
jurisdictions where the failure to be so qualified would have a
material adverse effect on its business.
2.02. Capitalization.
2.02(a). The authorized capital stock and the issued
and outstanding shares of Rockport is as set forth on Exhibit
2
2.02(a). All of the issued and outstanding shares of
Rockport are duly authorized, validly issued, fully paid and
nonassessable.
2.02(b). Except as set forth in Exhibit 2.02(b) there
are no outstanding options, warrants, or rights to purchase
any securities of Rockport.
2.03. Subsidiaries and Investments. Rockport does not own
any capital stock or have any interest in any corporation, part-
nership or other form of business organization, except as de-
scribed in Exhibit 2.03 hereto.
2.04. Financial Statements. The unaudited financial statements of
Rockport as of and for the period inception (July 1997) to December 12, 1997,
including the unaudited balance sheets as of December 12, 1997 and the related
unaudited statement of operations for the periods then ended (the "Financial
Statements") present fairly the financial position and results of operations of
Rockport, on a consistent basis. The financial records of Rockport are of such a
character and quality that an unqualified (except as to going concern) audit of
the Rockport Financial Statements may be performed within 75 days of the
Closing.
2.05. No Undisclosed Liabilities. Other than as described in Exhibit
2.05 attached hereto, Rockport is not subject to any material liability or
obligation of any nature, whether absolute, accrued, contingent, or otherwise
and whether due or to become due, which is not reflected or reserved against in
the Financial Statements, except those incurred in the normal course of
business.
2.06. Absence of Material Changes. Since December 12, 1997,
except as described in any Exhibit attached hereto or as required
or permitted under this Agreement, there has not been:
2.06(a). any material adverse change in the condition
(financial or otherwise) of the properties, assets, liabilities or
business of Rockport, except changes in the ordinary course of business
which, individually and in the aggregate, have not been materially
adverse;
2.06(b). any redemption, purchase or other acquisition of any
shares of the capital stock of Rockport, or any issuance of any shares
of capital stock or the granting, issuance or exercise of any rights,
warrants, options or commitments by Rockport relating to their
authorized or issued capital stock; or
2.06(c). any change or amendment to the Articles of
Incorporation of Rockport.
2.07. Litigation. Except as set forth in Exhibit 2.07 at-
tached hereto, there is no litigation, proceeding or investigation
pending or threatened against Rockport affecting any of its
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properties or assets against any officer, director, or stockholder of Rockport
that might result, either in any case or in the aggregate, in any material
adverse change in the business, operations, affairs or condition of Rockport or
its properties or assets, or that might call into question the validity of this
Agreement, or any action taken or to be taken pursuant hereto.
2.08. Title To Assets. Rockport has good and marketable title to all of
its assets and properties now carried on its books including those reflected in
the balance sheets contained in the Financial Statements, free and clear of all
liens, claims, charges, security interests or other encumbrances, except as
described in Exhibit 2.08 attached hereto or any other Exhibit.
2.09. Transactions with Affiliates, Directors and Shareholders. Except
as set forth in Exhibit 2.09 attached hereto, there are and have been no
contracts, agreements, arrangements or other transactions between Rockport, and
any officer, director, or stockholder of Rockport, or any corporation or other
entity controlled by the Shareholders, a member of the Shareholders' families,
or any affiliate of the Shareholders.
2.10. No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach of any term or provision of, or constitute a default under,
the Articles of Incorporation or Bylaws of Rockport, or any agreement, contract
or instrument to which Rockport is a party or by which it or any of its assets
are bound.
2.11. Disclosure. To the actual knowledge of Rockport, neither this
Agreement, the Financial Statements nor any other agreement, document,
certificate or written or oral statement furnished to the Company by or on
behalf of Rockport in connection with the transactions contemplated hereby,
contains any untrue statement of a material fact or when taken as a whole omits
to state a material fact necessary in order to make the statements contained
herein or therein not misleading.
2.12. Authority. Rockport has full power and authority to enter into
this Agreement and to carry out the transactions contemplated herein. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, have been duly authorized and approved by the
Board of Directors of Rockport and no other corporate proceedings on the part of
Rockport are necessary to authorize this Agreement and the transactions
contemplated hereby.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Rockport as follows, as
of the date of this Agreement and as of the Closing:
3.01. Organization.
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3.01(a). The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware;
has the corporate power and authority to carry on its business as
presently conducted; and is qualified to do business in all
jurisdictions where the failure to be so qualified would have a
material adverse effect on the business of the Company.
3.01(b). The copies of the Certificate of Incorporation, of
the Company, as certified by the Secretary of State of Delaware, and
the Bylaws of the Company are complete and correct copies of the
Certificate of Incorporation and the Bylaws of the Company as amended
and in effect on the date hereof. All minutes of meetings and actions
in writing without a meeting of the Board of Directors and shareholders
of the Company are contained in the minute book of the Company and no
minutes or actions in writing without a meeting have been included in
such minute book since such delivery to Rockport that have not also
been delivered to Rockport.
3.02. Capitalization of the Company. The authorized capital stock of
the Company consists of 20,000,000 shares of Common Stock, par value $.001 per
share, of which 1,273,800 shares are outstanding, and 1,000,000 shares of
preferred stock, none of which is outstanding. All outstanding shares are duly
authorized, validly issued, fully paid and non-assessable. Following the
issuance of Company Shares, the share cancellation described in Section 6.02
and, and the placements described in Section 6.01, the capitalization of the
Company shall be 5,095,200 shares of common stock.
3.03. Subsidiaries and Investments. The Company does not
own any capital stock or have any interest in any corporation,
partnership, or other form of business organization.
3.04. Authority. The Company has full power and authority to enter into
this Agreement and to carry out the transactions contemplated herein. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, and the issuance of the Company Shares in accordance with
the terms hereof, have been duly authorized and approved by the Board of
Directors of the Company and no other corporate proceedings on the part of
Company are necessary to authorize this Agreement, the transactions contemplated
hereby and the issuance of the Company Shares in accordance with the terms
hereof.
3.05. No Undisclosed Liabilities. Other than as described
in Exhibit 3.05 attached hereto, the Company is not subject to any
material liability or obligation of any nature, whether absolute,
accrued, contingent, or otherwise and whether due or to become
due.
3.06. Litigation. There is no litigation, proceeding or
investigation pending or to the knowledge of the Company, threat-
ened against the Company affecting any of its properties or
5
assets, or, to the knowledge of the Company, against any officer, director, or
stockholder of the Company that might result, either in any case or in the
aggregate, in any material adverse change in the business, operations, affairs
or condition of the Company or any of its properties or assets, or that might
call into question the validity of this Agreement, or any action taken or to be
taken pursuant hereto.
3.07. Title To Assets. The Company has good and marketable title to all
of its assets and properties now carried on its books including those reflected
in the balance sheet contained in the Company's financial statements, free and
clear of all liens, claims, charges, security interests or other encumbrances,
except as described in the balance sheet included in the Company's financial
statements or on any Exhibits attached hereto.
3.08. Contracts and Undertakings. Exhibit 3.08 attached hereto contains
a list of all contracts, agreements, leases, licenses, arrangements, commitments
and other undertakings to which the Company is a party or by which it or its
property is bound. Each of said contracts, agreements, leases, licenses,
arrangements, commitments and undertakings is valid, binding and in full force
and effect. The Company is not in material default, or alleged to be in material
default, under any contract, agreement, lease, license, commitment, instrument
or obligation and, to the knowledge of the Company, no other party to any
contract, agreement, lease, license, commitment, instrument or obligation to
which the Company is a party is in default thereunder nor, to the knowledge of
the Company, does there exist any condition or event which, after notice or
lapse of time or both, would constitute a default by any party to any such
contract, agreement, lease, license, commitment, instrument or obligation.
3.09. Underlying Documents. Copies of all documents
described in any Exhibit attached hereto (or a summary of any such
contract, agreement or commitment, if oral) have been made
available to Rockport and are complete and correct and include all
amendments, supplements or modifications thereto.
3.10. Transactions with Affiliates, Directors and Shareholders. Except
as set forth in Exhibit 3.10 hereto, there are and have been no contracts,
agreements, arrangements or other transactions between the Company, and any
officer, director, or 5% stockholder of the Company, or any corporation or other
entity controlled by any such officer, director or 5% stockholder, a member of
any such officer, director or 5% stockholder's family, or any affiliate of any
such officer, director or 5% stockholder.
3.11. No Conflict. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach of any term or
provision of, or constitute a default under, the Certificate of
Incorporation or Bylaws of the Company, or any agreement, contract
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or instrument to which the Company is a party or by which it or
any of its assets are bound.
3.12. Disclosure. To the actual knowledge of the Company, neither this
Agreement nor any other agreement, document, certificate or written or oral
statement furnished to Rockport and the Shareholders by or on behalf of the
Company in connection with the transactions contemplated hereby, contains any
untrue statement of a material fact or when taken as a whole omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
3.13. Financial Statements. The financial statements of the Company set
forth in its Form 10K-SB for the year ended March 31, 1997 and its Form 10-QSB
for the quarter ended September 30, 1997 present fairly the financial position
and results of operations of the Company, on a consistent basis.
3.14. Absence of Material Changes. Since September 30,
1997, except as described in any Exhibit hereto or as required or
permitted under this Agreement, there has not been:
3.14(a). any material change in the condition (financial or
otherwise) of the properties, assets, liabilities or business of
Company, except changes in the ordinary course of business which,
individually and in the aggregate, have not been materially adverse.
3.14(b). any redemption, purchase or other acquisition of any
shares of the capital stock of Company, or any issuance of any shares
of capital stock or the granting, issuance or exercise of any rights,
warrants, options or commitments by Rockport relating to their
authorized or issued capital stock.
3.14(c). any amendment to the Certificate of
Incorporation of Company.
IV. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
All representations, warranties and covenants of the Company and
Rockport contained herein shall survive the consummation of the transactions
contemplated herein and remain in full force and effect.
V. CONDITIONS TO CLOSING
5.01. Conditions to Obligation of Rockport. The
obligations of Rockport under this Agreement shall be subject to
each of the following conditions:
5.01(a). The representations and warranties of Company
herein contained shall be true in all material respects at
the Closing with the same effect as though made at such time.
Company shall have performed in all material respects all
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obligations and complied in all material respects, to its actual
knowledge, with all covenants and conditions required by this Agreement
to be performed or complied with by it at or prior to the Closing.
5.01(b). No injunction or restraining order shall be in
effect, and no action or proceeding shall have been instituted and, at
what would otherwise have been the Closing, remain pending before a
court to restrain or prohibit the transactions contemplated by this
Agreement.
5.01(c). All statutory requirements for the valid consummation
by Company of the transactions contemplated by this Agreement shall
have been fulfilled. All authorizations, consents and approvals of all
governments and other persons required to be obtained in order to
permit consummation by Company of the transactions contemplated by this
Agreement shall have been obtained.
5.02. Conditions to Obligations of Company. The obli-
gation of Company under this Agreement shall be subject to the
following conditions:
5.02(a). The representations and warranties of Rockport herein
contained shall be true in all material respects as of the Closing, and
shall have the same effect as though made at the Closing; Rockport
shall have performed in all material respects all obligations and
complied in all material respects, to its actual knowledge, with all
covenants and conditions required by this Agreement to be performed or
complied with by it prior to the Closing.
5.02(b). No injunction or restraining order shall be in effect
prohibiting this Agreement, and no action or proceeding shall have been
instituted and, at what would otherwise have been the Closing, remain
pending before the court to restrain or prohibit the transactions
contemplated by this Agreement.
5.02(c). All statutory requirements for the valid consummation
by Rockport of the transactions contemplated by this Agreement shall
have been fulfilled. All authorizations, consents and approvals of all
governments and other persons required to be obtained in order to
permit consummation by Rockport of the transactions contemplated by
this Agreement shall have been obtained.
VI. CERTAIN AGREEMENTS
6.01. Private Placement. The Company upon Closing
commence the preparation of a private placement memorandum to sell
400,000 shares of Common Stock, at a price of $2.50 per share.
The Company shall rely on information provided by Rockport in the
preparation of such private placement memorandum. Rockport agrees
to indemnify the Company and persons who control the Company for
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any false statement of a material fact or the omission of any material fact
required to be included to make the statements made in the memorandum not
misleading, related to Rockport. The Company agrees to indemnify Rockport and
persons who control Rockport for any false statement of a material fact or the
omission of any material fact required to be included to make the statements
made in the memorandum not misleading, related to the Company. The parties
acknowledge, however, that it is the position of the Securities and Exchange
Commission that indemnification for liabilities under the federal securities
laws is against public policy and is unenforceable.
6.02. Cancellation of Shares. Immediately prior to the
Closing, shareholders of the Company shall cancel 254,760 of the
1,273,800 outstanding shares, resulting in 1,019,040 Shares
outstanding.
6.03. Reporting Requirements. The Company shall file all reports
required by Section 13 of the Securities Exchange Act of 1934 and shall maintain
its books and records in accordance with Sections 12 and 13 thereof. The parties
agree that the failure of the Company to make such filings with the Securities
and Exchange Commission shall constitute a material breach of this Agreement.
VII. MISCELLANEOUS
7.01. Finder's Fees, Investment Banking Fees. Neither Rockport nor the
Company have retained or used the services of any person, firm or corporation in
such manner as to require the payment of any compensation as a finder or a
broker in connection with the transactions contemplated herein, except that the
Company shall be responsible for any fee due Pan Asia Capital, Inc., and
Rockport shall pay $75,000 to Brighton Capital on Closing.
7.02. Tax Treatment. The transaction contemplated hereby is intended to
qualify as a so-called "tax-free" reorganization under the provisions of Section
368 of the Internal Revenue Code. The Company and Rockport acknowledge, however,
that they each have been represented by their own tax advisors in connection
with this transaction; that neither has made any representation or warranty to
the other with respect to the treatment of such transaction or the effect
thereof under applicable tax laws, regulations, or interpretations; and that no
attorney's opinion or private revenue ruling has been obtained with respect to
the effects thereof under the Internal Revenue Code of 1986, as amended.
7.03. Further Assurances. From time to time, at the other party's
request and without further consideration, each of the parties will execute and
deliver to the others such documents and take such action as the other party may
reasonably request in order to consummate more effectively the transactions
contemplated hereby.
7.04. Parties in Interest. Except as otherwise expressly
provided herein, all the terms and provisions of this Agreement
9
shall be binding upon, shall inure to the benefit of and shall be enforceable by
the respective heirs, beneficiaries, personal and legal representatives,
successors and assigns of the parties hereto.
7.05. Entire Agreement; Amendments. This Agreement, including the
Schedules, Exhibits and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by the parties or their respective successors or assigns.
7.06. Headings, Etc. The section and paragraph headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretations of this
Agreement.
7.07. Pronouns. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter,
singular or plural, as the identity of the person, persons, entity
or entities may require.
7.08. Counterparts; Facsimile. This Agreement may be
executed in several counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the
same instrument. This Agreement may be executed by facsimile
signatures by the parties.
7.09. Governing Law. This Agreement shall be governed by
the laws of the State of California (excluding conflicts of laws
principles) applicable to contracts to be performed in the State
of California.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto as the date first above written.
PROTOKOPOS CORPORATION ROCKPORT GROUP OF TEXAS, INC.
By: By:
Name: Name:
Title: Title:
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SCHEDULE I
NUMBER OF SHARES NUMBER OF
OF ROCKPORT SHARES OF
COMMON STOCK COMPANY
NAMES OF OWNED AND COMMON STOCK
SHAREHOLDERS TO BE DELIVERED TO BE RECEIVED
▇▇▇▇▇ ▇. ▇▇▇▇ 666.6 908,310
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 666.6 908,309
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 666.6 908,309
Totals 2,000 2,940,928
735,232 shares will be reserved for the acquisition of Management
Healthcare, Inc.
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