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AGREEMENT AND PLAN OF REORGANIZATION

Agreement and Plan of Merger

AGREEMENT AND PLAN OF REORGANIZATION | Document Parties: OZONE MAN, INC | RPS Group, Inc You are currently viewing:
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OZONE MAN, INC | RPS Group, Inc

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Title: AGREEMENT AND PLAN OF REORGANIZATION
Governing Law: Florida     Date: 4/3/2008

AGREEMENT AND PLAN OF REORGANIZATION, Parties: ozone man  inc , rps group  inc
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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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