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Exhibit 2.0
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made
and entered
into as of October 15, 2007, by and among RPS GROUP, INC., a
Florida corporation
("Parent"), THE OZONE MAN, INC., a Nevada corporation
("Company"), HAROLD PAUL
("Paul"), and DAVID LINDNER ("Lindner"), individually and as
Controlling
Shareholders ("Controlling Shareholders") of the Parent.
WHEREAS, the Controlling Shareholders are the holders of
10,550,000 shares
of Parent's common stock, $.01 par value (the "Controlling
Shares"),
representing approximately 71% of Parent's Common Stock ("Parent
Common Stock");
WHEREAS, the respective Boards of Directors of Parent and
Company have
determined that an acquisition of the Company ("Acquisition")
upon the terms and
subject to the conditions set forth in this Agreement, would be
fair and in the
best interests of their respective shareholders, and such Boards
of Directors
have approved such Acquisition, pursuant to which (i) Parent
shall cause a 1:20
reverse stock split of its common stock resulting in 738,494
shares of Parent
Common Stock outstanding ("Reverse Stock Split"), (ii) Parent
shall issue an
additional 44,250,000 shares of Parent Common Stock in exchange
for all of the
issued and outstanding shares of common stock of the Company
(the "Exchange
Stock"), along with assigning the Note as provided for in
Paragraph 3.6 and
(iii) cash consideration of $50,000 shall be paid to Paul by the
Company (the
"Cash Consideration") as provided for in Paragraph 9.3.
WHEREAS, as a result of the foregoing, immediately after the
Acquisition,
the shareholders of the Company shall own 98.64% of the issued
and outstanding
total shares of Parent's Common Stock on a fully diluted basis,
and the
stockholders of the Parent (including the Controlling
Shareholder) shall own
1.36% of the Parent Common Stock;
WHEREAS, the parties hereto intend and accordingly designate
the
Acquisition so that the Acquisition shall qualify as a
reorganization for
federal income tax purposes under the provisions of Section 368
of the Internal
Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the parties hereto desire to make certain
representations,
warranties, covenants and agreements in connection with the
Acquisition and also
to prescribe various conditions to the Acquisition.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants
and agreements herein contained, and intending to be legally
bound hereby, the
parties hereby agree as follows:
ARTICLE I
THE ACQUISITION
1.1 The Acquisition. Upon the terms and subject to the
conditions set
forth in this Agreement, and in accordance with the Florida Law,
the Company
shall be acquired by the Parent. As a result of the Acquisition,
Company shall
be a wholly owned subsidiary of the Parent.
1.2 The Closing.
(a) The Closing of the transactions contemplated by this
Agreement
(the "Closing") shall take place by the 18th day of October,
2007 (the "Closing
Date"), or a date thereafter to be agreed upon by the
parties.
(b) At the Closing or prior thereto, Parent and Company
shall
exchange the various certificates, instruments and such
documents referred to in
Article VIII of this Agreement.
(c) Each party shall be responsible for its own fees and
expenses
except as set forth in Paragraph 3.6.
1.3 Directors. At the Closing Date, Paul and Lindner, the
incumbent
Directors of Parent shall stay in office and the Company shall
nominate three
additional members to the Board of Directors. Following the
Closing, Paul and
Lindner shall resign, and be replaced by the Directors chosen by
the holders of
a majority of the then outstanding shares of Common Stock of the
Parent.
1.4 Officers. At the Closing Date, the resignation letter of
Paul,
Acting Secretary of the Parent, shall become effective, and the
new officers of
the Company, as determined by the Company, shall be appointed as
officers of the
Parent until the earlier of their resignation or removal or
until their
respective successors are duly elected and qualified, as the
case may be. With
each resignation, the resigning officers shall confirm in
writing that he does
not owe and is not owed anything by Parent.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE SHAREHOLDERS
As an inducement to the Parent and Controlling Shareholders to
enter into
this Agreement, the Controlling Shareholders solely with respect
to the matters
set forth in Sections 2.1, 2.5, and 2.14 through 2.17 and the
Company jointly
and severally represent and warrant to the Parent as set forth
in this Article
II. The representations and warranties provided in Sections 2.1,
2.5 and 2.14
through 2.17, which are made without limitation, shall be
limited to the
knowledge of the Shareholders after reasonable inquiry.
2.1 Ownership of Company Shares. The Shareholders are the owners
of
all right, title and interest (legal, record and beneficial) in
and to the
Shares described in Schedule 2.1 of the disclosure schedules
attached to this
Agreement (the "Disclosure Schedules"), free and clear of any
and all liens,
charges, claims, encumbrances or restrictions of any nature
whatsoever (except
for any restrictions on transfer imposed by any federal
securities laws or state
blue sky laws). The delivery to the Parent of the Shares
pursuant to and in
accordance with the provisions of this Agreement will transfer
to the Parent
good and marketable title in and to all such Shares free and
clear of any and
all liens, charges, claims encumbrances or restrictions of any
kind or nature
whatsoever. Except as specifically contemplated in this
Agreement, no person
or entity has any interest, agreement, option, right,
participation or privilege
(whether preemptive or contractual) capable of becoming an
agreement or option
for the purchase of any of the Shares, or any interest therein,
from the
Shareholders. The Shares have been legally and validly issued
and are fully
paid and nonassessable, and were issued pursuant to a valid
exemption from
registration under (i) the Securities Act of 1933, as amended,
and (ii) all
applicable state securities laws. The Shares represent all of
the issued and
outstanding shares of capital stock of the Company. No shares of
the Company's
common stock are owned by the Company in treasury. None of the
Shares have been
issued or disposed of in violation of any preemptive rights,
rights of first
refusal or similar rights of the Shareholders. Other than the
Shares, the
Company has no securities, bonds, debentures, notes or other
obligations the
holders of which have the right to vote (or are convertible into
or exercisable
for securities having the right to vote) with the Shareholders
on any matter.
2.2 Transactions in Capital Stock. The Company has no
obligation
(contingent or otherwise) to purchase, redeem or otherwise
acquire any of its
equity securities or any interests therein or to pay any
dividend or make any
distribution in respect thereof.
2.3 Organization and Good Standing: Qualification. The Company
is a
corporation duly organized, validly existing and in good
standing under the laws
of its state of incorporation, with all requisite corporate
power and authority
to own, operate and lease its assets and properties and to carry
on its business
as currently conducted. The Company is in good standing in each
jurisdiction
where the character of the property owned or leased by it or the
nature of its
activities makes such qualification necessary. Copies of the
Articles of
Organization of the Company, as amended or restated, and the
Bylaws of the
Company, as amended or restated, and copies of the corporate
minutes of the
Company, all of which have been or will be made available to the
Parent for
review, are true and complete as in effect on the date of this
Agreement and
the Closing Date, and in the case of the corporate minutes,
accurately reflect
all material proceedings of the Shareholders and Directors of
the Company (and
all committees thereof). The stock record books of the Company,
which have
been or will be made available to the Parent for review, contain
true, complete
and accurate records of the stock ownership of record of the
Company and the
transfer record for all of its capital stock.
2.4 Authorization and Validity. The Company and the Shareholders
have
all requisite power and authority to enter into this Agreement
and all other
agreements entered into in connection with the transactions
contemplated hereby
and to consummate the transactions contemplated hereby and
thereby. The
execution, delivery and performance by the Company of this
Agreement and the
transactions contemplated herein are within the Company's
respective corporate
powers and have been duly authorized by all necessary action on
the part of the
Company's Board of Directors. This Agreement has been duly
executed by the
Company and the Shareholders, and this Agreement and all other
agreements and
obligations entered into and undertaken in connection with the
transactions
contemplated hereby to which the Company or the Shareholders is
a party
constitute, or upon execution will constitute, valid and binding
agreements of
such parties, enforceable against such parties in accordance
with their
respective terms, except as enforceability may be limited by
bankruptcy or
other laws affecting the enforcement of creditors' rights
generally, or by
general equity principles, or by public policy.
2.5 Absence of Conflicting Agreements or Required Consents.
Except as
set forth on Schedule 2.5, the execution, delivery and
performance of this
Agreement by the Company and the Shareholders and any other
documents
contemplated hereby (with or without the giving of notice, the
lapse of time,
or both): (i) does not require the consent of any governmental
or regulatory
body or authority or any other third party; (ii) will not
conflict with any
provision of the Company's Articles of Organization, as amended
or restated, or
Bylaws, as amended or restated; (iii) will not conflict with
result in a
violation of, or constitute a default under any law, ordinance,
regulation,
ruling, judgment, order or injunction of any court or
governmental
instrumentality to which the Company or the Shareholders is a
party or by which
the Company or the Shareholders or any of their properties are
subject or bound;
(iv) will not conflict with, constitute grounds for termination
of, result in a
breach of, constitute a default under, require any notice under,
or accelerate
or permit the acceleration of any performance required by the
terms of any
agreement, instrument, license or permit, material to this
transaction, to
which the Company or the Shareholders are a party or by which
the Company or
the Shareholders or any of their properties are bound; and (v)
will not create
any encumbrance or restriction upon any of the assets or
properties of the
Company or the Shareholders.
2.6 Absence of Changes. Except as permitted or contemplated by
this
Agreement, the Company has conducted its business only in the
ordinary course
and has not:
(a) suffered any changes in its working capital, condition
(financial or otherwise), assets, liabilities, reserves,
business or operations
(whether or not covered by insurance) that individually or in
the aggregate has
had or could reasonably be expected to have a material adverse
effect on the
Company's business, prospects or results of operations
("Material Adverse
Effect");
(b) paid, discharged or satisfied any material liability,
other
than the payment, discharge or satisfaction of liabilities in
the ordinary
course of business;
(c) written off as uncollectible any receivable, except for
write-
offs in the ordinary course of business;
(d) except in the ordinary course of business and consistent
with
past practice, canceled or compromised any debts or waived or
permitted to
lapse any claims or rights or sold, transferred or otherwise
disposed of any of
its properties or assets;
(e) entered into any commitment or transaction not in the
ordinary course of business that is material to the Company,
taken as a whole,
or made any capital expenditure or commitment in excess of
$5,000;
(f) made any material changes in any method of accounting or
accounting practice, credit practices, collection policies, or
payment policies;
(g) except in the ordinary course of business consistent with
past
practice, incurred any liabilities or obligations (absolute,
accrued or
contingent) in excess of $5,000;
(h) mortgaged, pledged, subjected or agreed to subject, any of
its
assets, tangible or intangible, to any claim or encumbrance,
except for liens
for current personal property taxes not yet due and payable for
mechanics,
landlords, materialmen, and other statutory liens, purchase
money security
interests, sale-leaseback interests granted and all other
encumbrances granted
in similar transactions;
(i) sold, redeemed, acquired or otherwise transferred any
equity
or other interest in itself;
(j) increased any salaries, wages or any employee benefits for
any
employee of the Company, except in the ordinary course of
business and
consistent with past practice;
(k) hired, committed to hire or terminated any employee except
in
the ordinary course of business;
(l) declared, set aside or made any payments, dividends or
other
distributions to any Shareholders, employee, independent
contractor or any other
holder of capital stock of the Company other than in accordance
with customary
and past practices pursuant to existing agreements; or
(m) agreed, whether in writing or otherwise, to take any
action
described in this Section.
2.7 Litigation and Claims. There are no claims, lawsuits,
actions,
arbitrations, administrative or other proceedings, governmental
investigations
or inquiries pending or, to the knowledge of the Company or the
Shareholders,
threatened against, or affecting the Company, the Shareholders,
any Company
employee or any other individual affiliated with the Company
affecting or that
would reasonably be likely to affect the Company, the value of
the Shares of the
operations, business condition, (financial or otherwise),
results of operations
or prospects of the Company.
2.8 Environmental Matters. Except as set forth on Schedule
2.8:
(a) the Company has not within the five years preceding the
date
hereof, through the Closing Date, received from any federal,
state or local
governmental body, agency, authority or entity, or any other
person, any written
notice, demand, citation, summons, complaint or order or any
notice of any
penalty, lien or assessment, and to the knowledge of the Company
or the
Shareholders no investigation or review is pending by any
governmental entity,
with respect to any (i) alleged violation by the Company of any
Environmental
Law (as defined below); (ii) alleged failure by the Company to
have any
environmental permit, certificate, license, approval,
registration or
authorization required pursuant to any Environmental Law in
connection with the
conduct of its business, or (iii) alleged illegal Regulated
Activity (as defined
below) by the Company;
(b) the Company has not engaged in any activity or failed to
undertake any activity which action or failure to act has given,
or would
reasonably be likely to give, rise to any Environmental
Liabilities or
enforcement action by any federal, state or local regulatory
agency or
authority, or has resulted, or would reasonably be likely to
result, in any
fine or penalty imposed pursuant to any Environmental Law;
(c) to the knowledge of the Company or the Shareholders, there
is
no friable asbestos in or on the Company's owned or leased
premises;
(d) to the knowledge of the Company or the Shareholders, no
soil
or water in or under any assets currently or formerly held for
use or sale by
the Company is or has been contaminated by any Hazardous
Substance (as defined
below) while such assets or premises were owned, leased or
operated,
directly or indirectly by the Company, where such contamination
had, or would
be reasonably likely to have, a Material Adverse Effect; and
(e) there have been no environmental audits and other
similar
reports which have been prepared by, for or, to the knowledge of
the Company or
the Shareholders, concerning the Company within the five years
preceding the
date hereof through the Closing Date with respect to any real
property now or
previously owned or leased by the Company or any of its
predecessors.
For the purpose of this Section 2.8 the following terms have the
following
meanings:
"Environmental Laws" shall mean any federal, state or local
laws,
ordinances, codes, regulations, rules, policies and orders that
are intended to
assure the protection of the environment, or that classify,
regulate, call for
the remediation of, require reporting with respect to, or list
or define air,
water, groundwater, solid waste, hazardous, toxic, or
radioactive substances,
materials, wastes, pollutants or contaminants, or which are
intended to assure
the safety of employees, workers or other persons, including the
public in each
case as in effect on the date hereof;
"Environmental Liabilities" shall mean all liabilities of the
Company,
whether contingent or fixed, which (i) have arisen, or would
reasonably be
likely to arise, under Environmental Laws and (ii) relate to
actions occurring
or conditions existing on or prior to the date hereof or the
Closing Date;
"Hazardous Substances" shall mean any toxic or hazardous
substances,
material or waste or any pollutant or contaminant, or infectious
or radioactive
substance or material, including without limitation, those
substances, materials
and wastes defined in or regulated under any Environmental Laws;
and
"Regulated Activity" shall mean any generation, treatment,
storage,
recycling, transportation, disposal or release of any Hazardous
Substances.
2.9 Licenses and Authorizations. The Company and each of its
employees
or independent contractors is the holder of all valid licenses,
approvals,
orders, consents, permits, registrations, qualifications and
other rights and
authorizations required by law, ordinance, regulation or ruling
of any
governmental regulatory authority necessary to operate
its/his/her business.
A true, correct and complete list of such licenses, permits and
other
authorizations (if any), is set forth on Schedule 2.9, true,
complete and
correct copies of which have been provided to the Parent. No
violation,
default, order or deficiency exists with respect to any of the
items listed on
Schedule 2.9.
2.10 Proprietary Rights and Information.
(a) Set forth on Schedule 2.10 is a complete and accurate list
and
summary description of the following: (i) all trademarks
(registered and
unregistered), trade-names, service marks and other trade
designations,
including common law rights, registrations and applications
therefor, currently
owned in whole or part, or used by the Company, (ii) all patents
and
applications therefor and inventions and discoveries that may be
patentable
currently owned, in whole or in part, or used by the Company,
(iii) all
licenses, royalties, and assignments thereof to which the
Company is a party
(iv) all copyrights (for published and unpublished works)
currently owned in
whole or part, or used by the Company and (v) other similar
agreements relating
to the foregoing to which the Company is a party (including
expiration date if
applicable) (collectively, the "Proprietary Rights").
(b) Set forth on Schedule 2.10 is a complete and accurate list
and
summary description of all agreements relating to technology,
trade secrets,
know-how or processes that the Company is licensed or authorized
to use by
others (other than technology, know-how or processes that are
generally
available) or which it licenses or authorizes others to use,
true, correct and
complete copies of which have been provided to the Parent.
Except as set forth
on Schedule 2.10, there are no outstanding and, to the Company's
knowledge or
knowledge of the Shareholders, any threatened disputes or
disagreements with
respect to any such agreement.
(c) Except as set forth on Schedule 2.10 (i) the Company owns
or
has the legal right to use the Proprietary Rights without
conflicting with,
infringing or violating the rights of any other person; (ii) no
consent of any
person will be required for the use thereof by the Parent upon
consummation of
the transactions contemplated hereby and the Proprietary Rights
are freely
transferable; (iii) to the knowledge of the Company or the
Shareholders, no
claim has been asserted by any person to the ownership of or for
infringement
by the Company of any Proprietary Right of any other person and
neither the
Company nor the Shareholders is aware of any valid basis for any
such claim;
(iv) to the knowledge of the Company or the Shareholders, no
proceedings have
been threatened which challenge the Proprietary Rights of the
Company; and
(v) the Company has the right to use, free and clear of any
adverse claims or
rights of others, all trade secrets, customer lists and
proprietary information
required for the performance and marketing of its business.
2.11 Agreements in Full Force and Effect. All contracts,
agreements,
plans, leases, policies and licenses referred to, or required to
be referred to,
in the Disclosure Schedules are valid and binding, and are in
full force and
effect and are enforceable in accordance with their terms,
except to the extent
that the validity or enforceability thereof may be limited by
bankruptcy or
other laws affecting the enforcement of creditors' rights
generally, or by
general equity principles, or by public policy. Except as set
forth on Schedule
2.11, there is no pending or, to the knowledge of the Company
and the
Shareholders, threatened bankruptcy, insolvency or similar
proceeding with
respect to any other party to such agreements, and no event has
occurred which
(whether with or without notice, lapse of time or the happening
or occurrence
of any other event) would constitute a default thereunder by the
Company or any
other party thereto.
2.12 Financial Statements. Attached hereto as part of the
Disclosure
Schedules are the Company's financial statements. The Company's
financial
statements have been prepared in accordance with generally
accepted accounting
principles consistently applied (except as may be indicated
therein or in the
notes thereto), present fairly the financial position of Company
as of the
dates indicated and present fairly the results of the Company's
operations for
the period then ended, and are in accordance with the books and
records of the
Company, which have been properly maintained and are complete
and correct in
all material respects. The Company's financial statements
present fairly the
financial position of the Company and its subsidiaries as at the
dates
thereof and the results of its operations and changes in
financial position for
the periods then ended other than as provided on Schedule
2.12.
2.13 Backlog. Set forth on Schedule 2.13 is the backlog of
orders that
the Company is to ship or contract work to be performed as of
the date hereof
(the "Backlog"). The Company either possesses sufficient
inventory of parts,
materials and personnel to produce the same within their
scheduled delivery
dates or such parts or materials have lead times such that the
Company can
acquire such parts and materials in time to produce and ship or
perform such
backlog in accordance with the scheduled performance dates.
2.14 Exchange for Investment. The Shareholders acknowledge that
they
are acquiring the Exchange Shares for their own account and not
with a view to,
or present intention of, distribution thereof in violation of
the Securities Act
of 1933, as amended (the "1933 Act") or any state securities
laws, and the
Exchange Shares will not be disposed of in contravention of the
1933 Act or
state securities laws.
2.15 Exchange Stock Not Registered. The Shareholders acknowledge
that
the Exchange Shares being acquired hereunder have not been
registered under the
1933 Act or any state securities laws and, therefore, cannot be
sold, and must
be held indefinitely, unless subsequently registered under the
1933 Act and
state securities laws or unless an exemption from such
registration is
available, including without limitation an exemption pursuant to
Rule 144 under
the 1933 Act. Certificates for the Exchange Shares shall bear
the following
legends:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS. THE SHARES REPRESENTED HEREBY CANNOT BE SOLD,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS AND WILL NOT BE TRANSFERRED OF RECORD
EXCEPT IN COMPLIANCE WITH SUCH ACT AND LAWS.
2.16 Economic Risk. The Shareholders acknowledge that their
investment
in the Exchange Shares involves a high degree of risk and
represents that he is
able to bear the economic risk of such investment in the Parent
Shares for an
indefinite period of time.
2.17 Access to Information. The Shareholders acknowledge that
they have
made such investigations and inquiries as he has deemed
necessary for the
purpose of informing himself about the Parent and its business
prior to entering
into this Agreement.
2.18 No Undisclosed Liabilities. The Company does not have
any
liabilities or obligations of any nature, whether accrued,
absolute, contingent
or otherwise, asserted or unasserted, except for liabilities or
obligations
reflected or reserved against in the Company's current balance
sheet.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
AND STOCKHOLDERS
As an inducement to the Company and the Shareholders to enter
into this
Agreement and to sell the Shares, the Parent hereby represents
and warrants
as follows:
3.1 Organization and Good Standing: Qualification. The Parent is
a
corporation duly organized, validly existing and in good
standing under the
laws of the state of Florida, with all requisite corporate power
and aut
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