<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-KSB
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR END MARCH 31, 1998
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER 0-23514
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ROCKPORT HEALTHCARE GROUP, INC.
(Exact name of small business issuer in its charter)
DELAWARE 33-0611497
(State of other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
50 BRIAR HOLLOW LANE, SUITE 515W 77027
HOUSTON, TEXAS (Zip Code)
(Address of principal executive offices)
(713) 621-9424
Registrant's telephone number, including area code:
------------------------
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, PAR
VALUE $.001
Indicated by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in part III of this Form 10-K
or any amendment to this Form 10-K Yes /X/.
State issuer's revenues for its most recent fiscal year: $25,487
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 31, 1998 was not determinable since the Common Stock was
not traded.
The number of shares outstanding of the issuer's classes of Common Stock as
of March 31, 1998:
COMMON STOCK, $.001 PAR VALUE--2,461,472 SHARES
DOCUMENTS INCORPORATED BY REFERENCE: NONE
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PART 1
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
Rockport Healthcare Group, Inc., a Delaware corporation (the "Company"),
formerly Protokopos Corporation was incorporated on May 4, 1992. The Company had
no operating history other than organizational matters until December 17, 1997,
at which time the Company acquired all of the issued and outstanding common
stock of The Rockport Group of Texas, Inc. Protokopos Corporation was originally
formed specifically to be a "clean public shell" and for the purpose of either
merging with or acquiring an operating company with operating history and
assets.
On December 17, 1997, Protokopos Corporation acquired all of the issued and
outstanding common stock of The Rockport Group of Texas, Inc. in exchange for
1,442,432 shares of common stock of Protokopos. As of the same date, 254,760
shares of Protokopos Corporation common stock previously outstanding were
cancelled leaving total outstanding Protokopos shares of 2,461,472. On January
16, 1998, the name of the corporation was changed from Protokopos Corporation to
Rockport Healthcare Group, Inc.
The primary activity of the Company is the implementation and/or acquisition
of various enterprises involved or related to managed healthcare for benefits to
be provided by payors under various accident and sickness and workers'
compensation plans. The Company has currently commenced operations and has
identified and entered into contracts to acquire several companies in the
managed healthcare industry.
The executive offices of the Company are located at 50 Briar Hollow Lane,
Suite 515W, Houston, Texas 77027. Its telephone number is (713) 621-9492.
PLAN OF OPERATION--GENERAL
The Company was organized for the purpose of creating a corporate holding
company to establish or acquire businesses in the managed healthcare industry.
The Company has incorporated the following subsidiaries: Rockport Community
Network, Inc., Rockport Occupational Network, Inc. and Rockport Advanced Care,
Inc. The Company has entered into an agreement to acquire all of the issued and
outstanding stock of MedCorp Southwest, Inc., an existing preferred provider
organization for accident and health. A letter of intent has been completed for
the acquisition of Key Information Services, Inc., a medical access savings card
processing company.
The initial products and services include a health and medical access
savings card, a national exclusive healthcare provider network for workers'
compensation, a national preferred healthcare provider organization for accident
and health and workers' compensation and a national specialty network for
catastrophic diseases and injuries.
Rockport Community Network, Inc. (RCN) was incorporated in the State of
Nevada on November 14, 1997, and is a wholly-owned subsidiary of the Company.
RCN will be a national preferred healthcare provider organization for both
accident and health, auto medical liability and workers' compensation. The
provider network will be made available to health insurance companies, self
insured employers as well as to other managed healthcare organizations. Fees for
use of the network will be based on a fixed amount per covered individual per
month or as a percentage of the savings; i.e., the difference between billed
charges for healthcare services and the rates contracted by RCN. RCN currently
has network access agreements signed with Medview for national coverage for
accident and health and workers' compensation. Other network access agreements
in place include one with the most comprehensive network in the State of
Louisiana and another network for the State of Texas. RCN has in effect three
client agreements for use of its networks and is in final negotiations with four
other clients with agreements expected to be completed in July, 1998.
2
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Rockport Occupational Network, Inc. (RON) was incorporated in the State of
Nevada on March 19, 1998, and is a wholly-owned subsidiary of the Company. RON
is an equity model exclusive occupational healthcare network directed at medium
sized employers and workers' compensation insurance companies. The primary care
occupational physicians will own up to twenty percent of the local network, and
RON will own the balance of eighty percent or more. The goal of RON is to
properly align the incentives for the employers, providers, employees and RON,
to significantly reduce the costs of occupational illnesses and injuries. RON is
currently finalizing its ownership structure. Provider contracts have been
completed and sent to six primary occupational industrial clinics in Houston,
Texas, for review and comment. The network is expected to be completed in the
initial market, Houston, Texas, as early as August, 1998.
Rockport Advanced Care, Inc. (RAC) was incorporated in the State of Nevada
on March 19, 1998, and is a wholly-owned subsidiary of the Company. RAC is a
specialized network managing the entire episode of care for catastrophic
diseases and injuries. The areas targeted for this network include
cardiovascular care, oncology, transplants, neurosurgery, and trauma and burns.
Contracting for this network will begin in 1998 and be completed in 1999.
The Company intends to sell a medical access savings card aimed primarily at
the uninsured, uninsurable and underinsured market estimated at 110 million
individuals in the United States. The card will afford discounted healthcare
services and goods throughout the United States provided by physicians,
healthcare facilities, dentists, chiropractors, vision care, and hearing
providers. One of the Company's proposed acquisitions, currently in negotiation,
is Key Information Services, Inc. which has developed and owns the systems
necessary to service the savings card market. Additionally, an agreement has
been reached in principle with a Hispanic owned marketing organization located
in Houston, Texas, to provide marketing services to the Hispanic community for
the Card. Card sales are anticipated to begin in September, 1998.
The Company has signed a Memorandum of Understanding to acquire all of the
issued and outstanding common stock of MedCorp Southwest, Inc., an Austin, Texas
based preferred provider organization. MedCorp has approximately 9,700
healthcare providers under contract in the States of Texas, Oklahoma and
Arkansas. MedCorp has an existing client base which is producing approximately
$26,000.00 per month in revenue. It is anticipated that the acquisition will
occur in July, 1998.
The Company intends to obtain funds in one or more private placements to
finance operations and acquisitions. There can be no assurance that the Company
will be able to raise any funds in private placements. In any private placement,
management may purchase shares on the same terms as offered in the private
placement. (See "Risk Factors" and "Management".)
Management anticipates that it will only participate in one business
industry, the managed healthcare industry. This lack of diversification should
be considered a substantial risk in investing in the Company because it will not
permit the Company to offset potential losses from one venture against gains
from another (see "Risk Factor").
COMPETITION
The managed healthcare industry and the Company's markets are highly
competitive. The Company will compete by delivering comprehensive, integrated
services and/or products to defined healthcare populations with excellent
customer services and very competitive pricing. There are many managed
healthcare organizations including many that are larger and have financial
resources significantly greater than the Company's.
3
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EMPLOYEES
At March 31, 1998, the Company employed eleven full time individuals, ten in
Houston, Texas and one in Monument, Colorado. None of the Company's employees is
represented by a labor union, and the Company considers its relations with its
employees to be good.
ITEM 2. DESCRIPTION OF PROPERTY
The Company rents office space in Houston, Texas and an executive suite in
Palmer City, Colorado.
ITEM 3. LEGAL PROCEEDINGS
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended March 31, 1998.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock has not traded. As of March 31, 1998, there were
approximately 300 stockholders of record. No dividends have been paid in the
history of the Company. On December 17, 1997, Protokopos Corporation acquired
all of the issued and outstanding common stock of The Rockport Group of Texas,
Inc. in exchange for 1,442,432 shares of common stock of Protokopos.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
The Company is seeking capital to fully commence operations and implement
its business plan. Sales of the Company's common stock, as well as loans and
advances from shareholders and officers have funded organizational activities to
date.
The goal of the Company is to deliver, through various subsidiaries,
comprehensive, integrated services and/or products to defined healthcare
populations. The companies will be a managed care organization comprised of
doctors, hospitals, clinics, chiropractors, dentists, prescription drug, hearing
and vision care providers, focused to address three health care markets:
Workers' Compensation; Catastrophic diseases and injuries; and the nearly 110
million Americans who are uninsured, non-insurable and underinsured.
Healthcare is a massive and dynamic industry in which significant niche
opportunities exist. The Company has targeted a number of these inadequately
served niche markets believed to afford the prospect of a high rate of return
for stockholders. The Company will employ innovative and cost effective
techniques and procedures for the delivery of these services. The strategy for
accomplishing responsible but rapid growth and obtaining the competitive edge,
includes entry into strategic alliances and acquisition of compatible quality
networks and health care service companies.
Substantial resources has been invested in developing the infrastructure to
include core management functions, such as customer service, provider relations
and finance, designed to support each of the Company's product lines. This will
reduce the cost of operating each separate subsidiary and will improve the
quality of services rendered.
4
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The Rockport Healthcare Group, Inc. subsidiaries include:
Rockport Community Network, Inc. is a preferred provider organization
(PPO) dedicated to developing national networks of high quality doctors,
hospitals, dentists, chiropractors, prescription drug, hearing, vision
care providers and other healthcare providers of goods and services to
serve the workers' compensation and accident and health markets.
Rockport Occupational Network, Inc. is an equity model exclusive provider
organization (EPO) designed specifically to align the incentives among
the stakeholders: employees, payors, providers and the network and offers
highly managed workers' compensation health services.
Rockport Advanced Care, Inc. is a comprehensive and integrated
catastrophic disease and injury network organization comprised of
nationally recognized providers of disease/illness/injury specific
tertiary and quartinary care including: trauma; burns; transplants;
hearts; high risk maternal; perinatal and neonatal; cancer; gamma knife;
neurological and gastrointestinal disease.
Rockport Group of Texas, Inc. provides consulting services to the managed
care industry and houses the core management functions of the Company.
The Company is also in the process of establishing or acquiring a company to
market a medical access savings card. This savings card will be marketed to the
uninsured, non-insurable and under-insured populations. The initial marketing of
the card will be in Texas and Louisiana. An agreement in principle has been
reached with a Hispanic owned marketing company located in Houston, Texas to
market the card to the Hispanic population initially in Texas. The medical
access savings card not only provides for savings on healthcare products and
services, it also assists, through the toll free provider referral telephone
number, those individuals not knowledgeable in healthcare specialties to locate
and use the proper type of healthcare provider .
The following activities, acquisitions and investments are required to begin
operations and generate revenue:
Rockport Community Network--Network access agreements have been executed
with Medview Services, Incorporated, F. A. Richard and Associates and TARACO,
Inc. Several payor contracts have been signed which will generate revenue
beginning in August, 1998.
Rockport Occupational Network, Inc.--Establishment of the exact equity
structure, with accompanying legal opinions that the structure does not violate
any Federal or state regulations, is in the process of being completed. Primary
care physicians in the Houston market have been identified and contacted. It is
anticipated that the legal review will be completed, providers in the Houston
market will be contracted, initial payor agreements signed and revenue will
begin in September, 1998. Costs for these legal work are estimated to amount to
$10,000.00.
Rockport Advanced Care, Inc. will begin development of its specialty
networks for catastrophic diseases and injuries in early 1999 and will not begin
to produce revenue until the last quarter of 1999.
The acquisition of MedCorp Southwest, Inc. is scheduled to be completed on
August 1, 1998. The purchase price is $550,000.00 with $100,000.00 down payment
at closing and a note payable in the amount of $450,000.00 payable in equal
monthly installments at eight percent interest over sixty months. Monthly
revenue on the existing business of MedCorp is anticipated to amount to
$26,000.00 per month. The remaining note balance at any time during the note
period may be converted to common stock of the Company at $2.50 per share.
Development of the Medical Access Savings Card is scheduled to begin in
July, 1998, and Card sales to begin in September, 1998. Acquisition and
installation of the systems necessary to process the Card will cost
approximately $100,000.00.
5
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Current funds of the Company are currently inadequate to accomplish the
tasks and acquisitions above and to fund the negative cash flow from operations,
the total of which is expected to amount to approximately $800,000.00. This
amount is anticipated to be raised from the sale of the Company's stock.
For several years, the Federal government has proposed various forms of
national health insurance. Should a comprehensive national health insurance
program be enacted, the Company would have to modify its business plan
accordingly.
The Company employed eleven full time staff as of March 31, 1998. As the
Company implements its business plan, more employees will be added as required
by the Company's operations.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Company required to be included
in Item 7 are set forth in the Financial Statements Index.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company has selected Warfield & Co., Certified Public Accountants,
Scottsdale, Arizona as its auditors. Prior to their appointment, the Company did
not have auditors.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
DIRECTORS AND EXECUTIVE OFFICERS
The members of the Board of Directors of the Company serve until the next
annual meeting of stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors. Information as to the
director and executive officer of the Company is as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------------------------------------- --- ------------------------------------
<S> <C> <C>
John K. Baldwin................................... 62 Chairman of the Board
Harry M. Neer..................................... 58 President and Director
Larry K. Hinson................................... 52 Secretary-Treasurer and Director
</TABLE>
John K. Baldwin, Chairman of the Board, and Director, an attorney with an
MBA in Finance, during the period 1961 through 1970 served as corporate counsel
and held various executive positions with Litton Industries and Dart Industries.
Thereafter, as an entrepreneur, he founded businesses which operated profitably
in the areas of real estate development, direct sales to consumers and providing
marketing and financial services to health care providers. His wholly owned
Athena Company was sold to the Gillette Company in 1976. In 1977, he co-founded
and served as Vice-Chairman of of American Sterling Corporation which engaged in
providing insurance and data processing services to major financial
institutions. This business was sold to Zurich Insurance Company in 1997.
Harry M. Neer, President and Director, has a Masters degree in Hospital
Administration and has spent his entire career has been in healthcare delivery
and managed healthcare. His experience includes serving as President of USA
Health Network Company, Division Vice President of the Hospital Corporation of
America (HCA) and President of the Presbyterian Hospital System in Oklahoma
City, Oklahoma. From November, 1994, to November, 1997, Mr. Neer was a
Partner/Principal in the Rockport Group. From January, 1993, to October, 1994,
Mr. Neer was President of USA Health Holding Company, a holding company for a
group of managed healthcare companies. Prior to January, 1993, Mr. Neer was a
consultant for USA Health Network, Inc. and the Columbia Hospital System.
6
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Larry K. Hinson, Secretary-Treasurer and Director, has 29 years experience
as a CPA in a wide variety of industries. He has served as Chief Financial
Officer of USA Health Network Company, Vice President-Treasurer of Reserve Life
Insurance Company, Dallas, Texas, and was formerly with Peat, Marwick, Mitchell
& Co. in Dallas and Austin, Texas. Mr. Hinson was a Partner/Principal in the
Rockport Group from November, 1994, to November, 1997. From March, 1989, to
October, 1994, Mr. Hinson was Vice Chairman of the Board of Directors and Chief
Financial Officer of USA Health Holding Company and its subsidiaries and also
served as President of USA Health Network Company.
The Company has no arrangement, understanding or intention to enter into any
transaction for participating in any business opportunity with any officer,
director, or principal shareholder or with any firm or business organization
with which such persons are affiliated, whether by reason of stock ownership,
position as an officer or director, or otherwise.
ITEM 10. EXECUTIVE COMPENSATION
Senior management has been compensated with a monthly draw as funds have
become available.
Management has loaned the following amounts to the Company through March 31,
1998:
<TABLE>
<CAPTION>
NAME AMOUNT
- ------------------------------------------------------------------------------- -------------
<S> <C>
John K. Baldwin................................................................ $ 100,000.00
Harry M. Neer.................................................................. $ 125,000.00
</TABLE>
The Rockport Group of Texas expended $75,000.00 to effect the merger with
Protokopos Corporation. This amount has been charged to the three executives in
the amount of $25,000.00 each which offsets the amounts above. Mr. Hinson owes
the Company $7,500.00 for his portion of the $25,000.00 at March 31, 1998.
During the period December 17, 1997, through March 31, the following
compensation was paid to the executive officers and owed to the officers as of
March 31, 1998:
<TABLE>
<CAPTION>
NAME PAID ACCRUED
- ------------------------------------------------------------------ ------------ ------------
<S> <C> <C>
John K. Baldwin................................................... $ -0- $ -0-
Harry M. Neer..................................................... $ 24,500.00 $ 20,500.00
Larry K. Hinson................................................... $ 23,500.00 $ 21,500.00
</TABLE>
On funding of the Company, the following annual salaries are proposed to be
paid to the officers of the company:
<TABLE>
<CAPTION>
NAME COMPENSATION
- --------------------------------------------------------------------------- -----------------
<S> <C>
John K. Baldwin............................................................ $ 160,000.00
Harry M. Neer.............................................................. $ 200,000.00
Larry K. Hinson............................................................ $ 160,000.00
</TABLE>
Directors currently receive no compensation for their duties as directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT
The following table sets forth information relating to the beneficial
ownership of Company Common Stock by those persons beneficially holding more
than 5% of the Company capital stock, by the Company's
7
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directors and executive officers, and by all of the Company's directors and
executive officers as a group, as of March 31, 1997.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF OUTSTANDING
NAME OF STOCKHOLDER SHARES OWNED COMMON STOCK
- --------------------------------------------------------------- ------------- -----------------
<S> <C> <C>
Jehu Hand ..................................................... 209,680 8.5%
24901 Dana Point Harbor Dr.
Suite 200
Dana Point, CA 92629
William Prince ................................................ 240,000 9.8%
24901 Dana Point Harbor Dr.
Suite 200
Dana Point, CA 96629
Pan Asia ...................................................... 234,760 9.5%
P. O. Box 260050
Highlands Ranch, CO 80163
Eric Anderson ................................................. 180,000 7.3%
24901 Dana Point Harbor Dr.
Suite 200
Dana Point, CA 96629
John K. Baldwin ............................................... 427,774 17.4%
901 Highland Ave.
Del Mar, CA 92014
Harry M. Neer(1)............................................... 397,774 16.2%
Larry K. Hinson(1)............................................. 397,774 16.2%
Michael Kove(1)................................................ 159,110 6.5%
</TABLE>
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(1) The address of such person is in care of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Prior to the merger of Protokopos Corporation and The Rockport Group of
Texas, Inc. on December 17, 1997, all of the issued and outstanding stock of The
Rockport Group of Texas, Inc. was equally owned by John K. Baldwin, Harry M.
Neer and Larry K. Hinson. Subsequent to the merger, Baldwin, Neer and Hinson
served on the Company's Board of Directors and as officers of the Company.
8
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PART V
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following exhibits of the Company are included herein.
<TABLE>
<CAPTION>
SEQUENTIAL PAGE
EXHIBIT NO. DOCUMENT DESCRIPTION NO.
- ------------------------ ---------------------------------------------------------------------------- ---------------
<C> <S> <C>
3. (Previously filed) Certificate of Incorporation and Bylaws
3.1 Articles of Incorporation(1)
3.2 Bylaws(1)
10. Material Contracts
10.1 Memorandum of Understanding--Acquisition of MedCorp Southwest, Inc.
10.2 Network Access Agreement--F. A. Richard & Associates
10.3 Network Access Agreement--Savings Card--F. A. Richard & Associates
10.4 Network Access Agreement--TARACO, Inc.
10.5 Network Access Agreement--Medview Services, Incorporated
</TABLE>
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(1) Incorporated by reference to such exhibit as filed with the Company's
registration statement form 10-SB, File No. 0-2351
(b) Reports on Form 8-K
99.1 December 17, 1997, Acquisition or Disposition of Assets dated
December 30, 1997
99.2 December 17, 1997, Acquisition or Disposition of Assets, Amended
dated July 17, 1998
9
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
FINANCIAL STATEMENTS
MARCH 31, 1998
(AUDITED)
MARCH 31, 1997
(COMPILED)
10
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Of Rockport Healthcare Group, Inc.
We have audited the accompanying balance sheet of Rockport Healthcare Group
f/k/a Protokopos Corporation (a Delaware Corporation) as of March 31, 1998, and
the related statements of income, changes in stockholders' equity and cash flows
for the year then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates make by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Rockport Healthcare Group,
Inc., as of March 31, 1998, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
The March 31, 1997 financial statements of Protokopos Corporation were
compiled by other accountants. We did not audit or review those financial
statements and, accordingly, express no opinion or other form of assurance on
them.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is unable to meet its
financial commitments which give rise to substantial doubt about its ability to
continue as a going concern. As discussed in Note 11 to the financial
statements, the Company is hopeful of obtaining additional funding through plans
to raise additional capital from the private placement of common stock of its
parent. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Warfield & Company, CPA's
Scottsdale, Arizona
June 19, 1998
11
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ROCKPORT HEALTHCARE GROUP, INC.
(FORMALLY KNOWN AS PROTOKOPOS CORPORATION)
COMPANIES IN THE DEVELOPMENTAL STAGE
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---------- ---------
<S> <C> <C>
ASSETS
Current:
Cash..................................................................................... $ 1,398 $
Receivables:
Due from employee...................................................................... 100
Prepaid expenses....................................................................... 7,449
----------
Total Current Assets................................................................... 8,947
----------
Property, Plant and Equipment (Note 1)
Office furniture and equipment........................................................... 25,317
Computer equipment and software.......................................................... 39,450
Telephone equipment...................................................................... 12,617
----------
77,384
Less: accumulated depreciation........................................................... (5,724)
----------
Net Property, Plant and Equipment...................................................... 71,660
----------
Other
Deposits................................................................................. 12,071
Notes Receivable......................................................................... 20,000
Organization costs, net of amortization.................................................. 1,785 5
---------- ---------
Total Other Assets..................................................................... 33,856 5
---------- ---------
Total Assets......................................................................... $ 114,463 $ 5
---------- ---------
---------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Advances payable (Note 5)................................................................ $ 25,000
Accounts payable....................................................................... 30,112 $ 1,168
Payroll taxes payable.................................................................... 13,662
Accrued payroll.......................................................................... 15,417
Accrued interest payable................................................................. 4,340
Due to shareholder, director, officers, and employee (Note 3)............................ 174,983
---------- ---------
Total Current Liabilities.............................................................. 263,514 1,168
---------
Long-Term Debt
Note Payable (Note 4 & 10)............................................................... 75,000
----------
Total Liabilities...................................................................... 338,514
----------
Commitments and contingencies (Notes 6, 10 & 11)
Shareholders' Equity:
Preferred stock, $.001 par value, 1,000,000 authorized,
No shares issued and outstanding.......................................................
Common stock, $.001 par value, 20,000,000 authorized,
2,461,472 shares issued and outstanding (March 31, 1998)............................... 2,462
1,273,800 shares issued and outstanding (March 31, 1997)............................... 1,274
Additional paid-in capital............................................................... 84,298 821
Accumulated deficit during the developmental stage....................................... (310,811) (3,258)
---------- ---------
Total Shareholders' Equity............................................................. (224,051) (1,163)
---------- ---------
Total Liabilities & Shareholders' Equity............................................. $ 114,463 $ 5
---------- ---------
---------- ---------
</TABLE>
See accompanying notes to financial statements
12
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(FORMALLY KNOWN AS PROTOKOPOS CORPORATION)
COMPANIES IN THE DEVELOPMENTAL STAGE
CONSOLIDATED INCOME STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Income:
Consulting Fees..................................................................... $ 25,487 $ 0
Operating Expenses:
Administrative and General.......................................................... (331,367) 214
------------ ------------
Net (Loss) Before Other Income (Expense) and Income Taxes............................. $ (305,880) (214)
Other Income (Expense)
Interest Expense.................................................................... (2,841)
------------ ------------
Net (Loss) Before Income Taxes........................................................ (308,721) (214)
Income Taxes (Note 1 & 12)........................................................ 0 0
------------ ------------
Net (Loss)............................................................................ $ (308,721) $ (214)
------------ ------------
------------ ------------
Net (Loss) Per Share.................................................................. $ (.19) $ (nil)
------------ ------------
------------ ------------
Weighted Averaged Number of Shares Outstanding........................................ 1,615,459 1,273,800
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(FORMERLY KNOWN AS PROTOKOPOS CORPORATION)
COMPANIES IN THE DEVELOPMENTAL STAGE
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
----------- ---------
<S> <C> <C>
Operating Activities:
Net (Loss)................................................................................ $ (308,721) $ (214)
Adjustments to reconcile net (Loss) to cash flow
Provided From (Used In) Operating Activities:
Depreciation............................................................................ 4,435
Amortization............................................................................ 5 54
Changes in assets and liabilities:
Accrued interest receivable........................................................... 257
Accounts payable...................................................................... 11,540 160
Payroll taxes payable................................................................. 5,064
Accrued payroll....................................................................... 15,417
Accrued interest payable.............................................................. 2,258
Prepaid expenses...................................................................... 3,285
Bad Debts............................................................................. 15,000
Management fees owed/Amts due to shareholders......................................... 27,833
----------- ---------
Cash (Used in) Operating Activities......................................................... (223,627) 0
----------- ---------
Financing Activities:
Proceeds from loans from shareholders, officer, directors................................. 113,483
Proceeds from collections of stock subscriptions.......................................... 93,000
Proceeds from accounts receivable-other................................................... 11,513
----------- ---------
Cash From Financing Activities.............................................................. 217,996 0
----------- ---------
Investing Activities:
Loans to employees........................................................................ (100)
Purchase fixed assets..................................................................... (588)
Deposits made............................................................................. (1,100)
Organization costs........................................................................ (1,785)
----------- ---------
Cash (Used in) Investing Activities......................................................... (3,573) 0
----------- ---------
Net Decrease in Cash........................................................................ (9,204) 0
---------
Cash and Cash Equivalents, beginning of period.............................................. 10,602 0
----------- ---------
Cash and Cash Equivalents, end of period.................................................... $ 1,398 $ 0
----------- ---------
----------- ---------
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(FORMERLY KNOWN AS PROTOKOPOS CORPORATION)
COMPANIES IN THE DEVELOPMENTAL STAGE
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
FOR THE TWO YEAR PERIOD ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK ADD'L TOTAL
-------------------------- ----------------------- PAID IN RETAINED SHAREHOLDERS'
SHARES AMOUNT SHARES AMOUNTS CAPITAL DEFICIT EQUITY
----------- ------------- ---------- ----------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at March 31, 1996
(unaudited)................... 1,273,800 $ 1,273 $ 822 $ (3,044) $ (949)
Net (Loss) (unaudited)...... (214) (214)
---------- ----------- --------- ----------- -------------
Balances at March 31, 1997
(unaudited)................... 1,273,800 1,273 822 (3,258) (1,163)
Prior Period Adjustment
(Note 2).................... 0 0 0 1,168 1,168
Surrender and Redemption of
Treasury Stock................ (254,760) (254) 254 0 0
Stock Issued in Acquisition
Of Subsidiary................. 1,442,432 1,443 83,222 0 84,665
Net (Loss)...................... 0 0 0 (308,721) (308,721)
--
----- ---------- ----------- --------- ----------- -------------
Balances:
End of Period--
March 31, 1998.............. None $ 0 2,461,472 $ 2,462 $ 84,298 $ (310,811) $ (224,051)
--
--
----- ---------- ----------- --------- ----------- -------------
----- ---------- ----------- --------- ----------- -------------
</TABLE>
15
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(FORMERLY KNOWN AS PROTOKOPOS CORPORATION)
COMPANIES IN THE DEVELOPMENTAL STAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
The company was incorporated under the laws of the State of Delaware on May
4, 1992. On December 17, 1997, the Company purchased Rockport Group of Texas,
Inc. through the issuance of 1,442,432 shares of common stock, and the
surrender, redemption, and retirement of 254,760 of Treasury common stock
shares. These financial statements have been consolidated effective December 17,
1997.
In connection with the company's purchase of its subsidiary, Rockport Group
of Texas, Inc., the then management of the company resigned and was replaced by
the management of Rockport Group of Texas, Inc.
Effective January 16, 1998, the Company filed and has been approved by the
State of Delaware to change its name to Rockport Healthcare Group, Inc. The
Company is in the process of notifying and effectuating this name change with
the Securities and Exchange Commission.
In addition to Rockport Group of Texas, Inc., on March 31, 1998, the
following wholly owned subsidiaries were formed:
<TABLE>
<CAPTION>
<S> <C>
1. Rockport Occupational Network, Inc.
2. Rockport Advanced Care, Inc.
3. Rockport Community Network, Inc.
</TABLE>
These three newly organized subsidiaries are non-operating for this year-end
and have no operating effects except for the effect of organizational costs and
licensing fees.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and held in bank in
unrestricted accounts.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Expenditures for renewals
and betterment's are capitalized and maintenance and repairs are expensed as
incurred. Depreciation and amortization are computed by the straight-line method
over the estimated useful lives of the assets as follows:
<TABLE>
<CAPTION>
<S> <C>
Office furniture and equipment................................................. 7 years
Computer equipment and software................................................ 3 to 5 years
Telephone equipment............................................................ 7 years
</TABLE>
ORGANIZATION COSTS
Prior to the acquisition of Rockport Group of Texas, Inc., the company's
activities had been limited to organizational matters. The company's
organization costs of $271 have been amortized on a straight-line basis over a
period of five years. As of March 31, 1997, all but $5 had been expensed, with
this $5 expensed during this reporting period. Organization costs for
subsidiaries are amortized on the straight-line basis over a period of five
years.
16
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(FORMERLY KNOWN AS PROTOKOPOS CORPORATION)
COMPANIES IN THE DEVELOPMENTAL STAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1998
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The Company has adopted the liability method of accounting for income taxes
in accordance with SFAS No. 109, ACCOUNTING FOR INCOME TAXES. Under the new
accounting standard, the Company provides deferred income taxes based on enacted
income tax rates in effect on the dates temporary differences between financial
reporting and tax bases of assets and liabilities reverse. The effect on
deferred tax assets and liabilities of a change in income tax rates is
recognized in the period that includes the enactment date.
The Company will file its initial income tax return using the cash basis of
accounting. Since the utilization of net operating loss, carryforwards are not
assured, no benefit for future offset of taxable income has been recognized.
REVENUE RECOGNITION
Revenue will be recognized as products and services are delivered and
earned. Losses are recognized when reasonable estimates of the amount of the
loss can be made.
NOTE 2: PRIOR PERIOD ADJUSTMENT
The company's prior president and controlling shareholder, Jehu Hand had
advanced $1,198 to fund operations; $1,168 had been expensed in prior periods,
with $30 having been expensed during the first six months of this reporting
period. In connection with the purchase of the company's subsidiary, Mr. Hand
released the Company of this liability, such that the $1,168 expensed in
previous years has been reported as an adjustment of prior periods.
NOTE 3: DUE TO SHAREHOLDER, DIRECTOR, OFFICER, EMPLOYEE
Shareholders who are also directors and officers of the Company and an
employee of the company's subsidiary have advanced funds to the company's
subsidiary for operations, and have deferred receipt of a portion of
remuneration owed during this reporting period, the balance of which remains in
the amount of $174,983, $53,500 of which is represented by deferred management
fees, as of March 31, 1998. These monies are to be repaid as funds become
available.
The Company has expensed management fees in the consolidated income
statement of $122,500 of which $53,500 has been accrued and reported as due to
the shareholders or the employees of the Company as of March 31, 1998.
Prior to its acquisition, the company's subsidiary had expensed management
fees of $36,667.
NOTE 4. NOTES PAYABLE
The subsidiary's preferred stock shareholder who is also a director of both
the Company and it's subsidiary has loaned the company's subsidiary $100,000 for
an 8% note payable due over a one year period, commencing upon the Company first
obtaining a positive cash flow. This note payable has been reduced by $25,000,
as a result of the payment made by the Company to the prior controlling
shareholder on behalf of this shareholder to effectuate the transfer of control
of the Company.
17
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(FORMERLY KNOWN AS PROTOKOPOS CORPORATION)
COMPANIES IN THE DEVELOPMENTAL STAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1998
NOTE 5: ADVANCES PAYABLE
Advances have been made to the company's subsidiary to assist in meeting its
financial commitments by a disinterested party. These advances total $25,000,
and are due upon demand and are without interest.
NOTE 6: LEASES
The company's subsidiary has assumed leases for office space and office
equipment under operating leases originally contracted through SecureHealth
Savings Corporation expiring at various dates through 2002. Management expects
that in the normal course of business, leases will be renewed or replaced by
similar leases. Future minimum lease payments for each year in the five-year
period ending March 31, 2002 are as follows:
<TABLE>
<CAPTION>
<S> <C>
1998............................................................................... $ 91,536
1999............................................................................... 95,303
2000............................................................................... 49,482
2001............................................................................... 3,660
2002............................................................................... 1,830
</TABLE>
NOTE 7: LEGAL PROCEEDINGS
There are no legal proceedings against the Company.
NOTE 8: ACQUISITION
As of December 12, 1997, the Company entered into an agreement with Rockport
Group of Texas, Inc. ("ARGT"), a Nevada corporation, for the shareholders of the
Company to exchange 80% of the company's issued and outstanding common stock for
all of the issued and outstanding stock of RGT. Effective December 17, 1997, the
exchange of stock occurred, making the RGT a wholly owned subsidiary of the
Company.
The company's subsidiary has remitted to Jehu Hand, the controlling
shareholder prior to this acquisition, $5,000 for legal fees in connection with
effectuating this acquisition and change in control.
The Company changed its name to Rockport Healthcare Group, Inc. effective
January 16, 1998, and plans to issue additional common stock in mid-July 1998.
Upon the successful funding of this private placement, funds are expected to be
provided therefrom to effectuate its on-going operations.
NOTE 9: CONTINGENT LIABILITIES
The company's subsidiary has issued 1,000 shares of its 8%, cumulative,
non-participating preferred stock. The stock is redeemable at $200 per share and
is expected to be redeemed out of the proceeds of proposed private placement.
18
<PAGE>
ROCKPORT HEALTHCARE GROUP, INC.
(FORMERLY KNOWN AS PROTOKOPOS CORPORATION)
COMPANIES IN THE DEVELOPMENTAL STAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1998
NOTE 10: RELATED PARTY TRANSACTION
In connection with the acquisition by the Company of RGT, RGT remitted on
behalf of the then three common stock shareholders $75,000 ($25,000 for each) to
the controlling shareholder of the Company, Jehu Hand, for the right to exchange
the common stock of RGT for that of stock of the Company. The company's
subsidiary has reflected in their consolidated financial statements this
remittance made on behalf of its then shareholders as a $25,000 reduction in the
prior advances and/or the note payable made by each of these
shareholders/directors.
NOTE 11: PROSPECTIVE SUBSEQUENT EVENTS/GOING CONCERN
The Company has proposed through the sale of additional common stock to
raise additional funding which will allow and provide for on-going operations,
as well as future potential acquisitions and the ability for the Company to meet
its financial responsibilities and commitments. Should the proposed funding not
materialize, the Company would not be able to proceed prospectively, and
therefore, would no longer anticipate being a going concern.
NOTE 12: INCOME TAXES
The fiscal year end of the Company is March 31. As of March 31, 1997, the
Company would have had a net operating loss carryforward of $3,258 that would
begin expiring in the year 2010; however, due to the effects of the prior period
adjustment (Note 2), this net operating loss carryforward will be adjusted to
$2,090. The consolidated tax return filed for the March 31, 1998 fiscal year
reflects a loss of $232,886, which will increase the carryover loss. This
component would expire in the year 2013.
NOTE 13: STOCK OPTION PLAN
The Company had stock option plans for directors, officers, employees,
advisors, and employees of companies that do business with the Company, which
provide for non-qualified stock options. The Stock Option Committee of the Board
determined the option price which can not be less than the fair market value at
the date of the grant of 110% of the fair market value if the Optionee holds 10%
or more of the company's common stock. The price per share of shares subject to
a Non-Qualified Option shall not be less than 85% of the fair market value at
the date of the grant. Options generally expire either three months after
termination of employment, or ten years after date of grant (five years if the
Opitonee holds 10% or more of the company's common stock at the time of grant).
On May 4, 1997, all outstanding stock option agreements had expired, and
there were no extensions or renewals.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized July XX10, 1998.
<TABLE>
<S> <C> <C>
ROCKPORT HEALTHCARE GROUP, INC.
By:
------------------------------------------
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities on .
<TABLE>
<CAPTION>
<S> <C>
By: Title:
------------------------------------
--------------------------------------------
</TABLE>
20
<PAGE>
MEMORANDUM OF UNDERSTANDING
AND
AGREEMENT TO PURCHASE
This Memorandum of Understanding ("MOU") is between Rockport Healthcare
Group, Inc. ("Rockport"), a Delaware corporation, Boon-Chapman Benefit
Administrators, Inc. ("B-C"), a Texas corporation, MedCorp Southwest, Inc.
("MSI"), a Texas corporation, and The Chapman Family Revocable Living Trust,
Kevin Chapman and Rhonda Chapman (collectively, "Owners"), all residents of the
State of Texas.
1. PURCHASE AND SALE OF STOCK. Rockport agrees to buy and Owners agree to
sell all of the issued and outstanding stock of all classes of MSI (the "MSI
Stock") for a total consideration of $550,000.00, payable by delivery at closing
of $100,000 cash and a note payable (the "Note") in the amount of $450,000.00.
The purchase and sale shall be consummated by the execution and delivery of a
stock purchase agreement (the "Stock Purchase Agreement") and other documents
incorporating the terms of this MOU.
2. TRANSITION AGREEMENT. Concurrently with the execution and delivery of
the Stock Purchase Agreement, the parties shall enter into a Transition Services
Agreement under which B-C will agree to perform certain administrative services
for MSI, including billing, collection of fees, repricing of claims, customer
service, provider service, reporting, provider data entry, and data base
maintenance, during July of 1998 and, at Rockport's option, August of 1998.
Services provided will not include recruiting and credentialling of providers,
recontracting of providers, management, accounting or paying for insurance
coverages. B-C shall receive a payment of 50% of the total MSI monthly revenue
for any month these transition services are provided.
3. PROMISSORY NOTE. Beginning on October 1, 1998, all remaining principal
and interest due on the Note will be paid in full in equal monthly payments over
a 60-month period.
- All amounts paid on the Note shall be applied first to accrued but unpaid
interest, which shall accrue at the rate of 8% per annum, then to
principal.
- At any time on or after of October 1, 1998 (the "Conversion Date"), the
Owners may elect, from time to time, to convert any or all of the
outstanding Note balance to Rockport Stock at a conversion rate equal to
$2.50 per share, up to a maximum number of 180,000 shares. The Rockport
Stock so acquired will be subject to SEC Rule 144 providing for a one-year
holding period from the date the Note is issued before the stock may be
sold.
- Subsequent to the Conversion Date, the Note may be prepaid by Rockport
without penalty; provided however, that the Owners shall have a period of
30 days following receipt by them of written notice of an anticipated
prepayment, within which to exercise the conversion privilege should they
so desire.
4. SECURITY. The Note at all times shall be secured by a pledge of all of
the MSI stock. Owners shall retain possession of the MSI stock certificates
issued to Rockport and a stock power, executed in blank, during the term of the
pledge. The Pledge Agreement will contain affirmative covenants relative to the
operation of MSI to be observed as long as the Note is outstanding, including
without limitation, the following:
(i) Rockport will not (a) change the name of the corporation, (b)
transfer, assign or encumber the assets of MSI, (c) permit MSI to incur any
debt other than in the ordinary course of business or permit MSI to incur
any debt (other than trade payables) which is not subordinate to the Note,
(d) permit MSI to issue additional debt or equity securities, or (e) permit
MSI to enter into a merger, acquisition or other transaction that would
result in the assumption of liabilities of any other entity, or (f) permit
MSI to guaranty the payment or performance of obligations by any other
entity;
21
<PAGE>
(ii) Rockport will not, directly or indirectly, use any MSI contracts or
covered lives to create or improve a competing network;
(iii) Rockport will increase the number of non-occupational Texas health
care providers by 200 and the number of Texas acute care hospitals by two
each calendar quarter, beginning with the quarter starting on October 1,
1998. By June 30, 2000, Rockport will have increased the number of non-
occupational Texas health care providers by 2,000 and number of Texas acute
care hospitals by 20. These increases will be through direct contracts with
providers or contracts with organizations authorized to contract on behalf
of providers and not through network access agreements. The contracts will
provide a significant discount off of billed charges. For any quarter in
which Rockport fails to achieve the required growth, it will pay a $10,000
prepayment of the Note within 15 days after the end of the quarter;
(iv) Rockport will institute and maintain a credentialling and
recredentialling process for new and existing providers that meets the
standards of the National Commission on Quality Assurance or the American
Health Care Accreditation Commission. Rockport will complete the process for
at least 5% of the network providers each quarter beginning with the quarter
ending September 30, 1998. By June 30, 2000, Rockport will have all
providers properly credentialled. For any quarter in which Rockport fails to
achieve the required percentage, it will pay a $10,000 prepayment of the
Note within 15 days after the end of the quarter;
(v) Beginning on or before August 1, 1998, Rockport shall begin
recontracting network providers and recruiting new providers that meet the
Rockport's standards and will complete this process by June 30, 2000. During
this process Rockport will make a diligent and commercially reasonable
effort to obtain maximum discounts from new and existing providers;
(vi) Rockport will promptly pay, as they come due, all local, state and
federal taxes, all trade payables, all lease obligations and all other
obligations as long as the Note is outstanding.
(vii) Rockport will provide a quarterly report, within 15 days of the end
of each calendar quarter, to the Owners confirming its compliance with he
covenants outlined in paragraphs (iii)-(vi) above, or detailing any events
of non-compliance. An officer of Rockport shall certify the accuracy of each
report. The Note will provide that the Owners will have the right, from time
to time, to audit the books and records of Rockport by giving five days
notice;
(viii) Rockport will submit to Owners a monthly balance sheet, income
statement and statement of cash flows, all prepared in accordance with
generally accepted accounting principles within 30 days of the end of each
month, and annual audited financial statements within 90 days of each year
end;
(ix) Neither Rockport nor its employees, agents or representatives
shall, directly or indirectly, divulge any confidential information of MSI;
(x) Rockport will continue MSI's current professional liability policy
through the end of its term by making timely payments on the premium finance
note dated January 6, 1998 payable to Imperial Premium Finance, Inc. or
alternatively by paying such note in full at closing. Thereafter, during the
term of the Note, Rockport will maintain professional liability coverage for
MSI, through the same or a new policy, that contains a retroactive date of
January 5, 1989, has policy provisions at least as favorable to the MST as
the current provisions, and is written by an insurance company with a Best
rating of "A" or better. During the term of the Note, Rockport will maintain
comprehensive general liability coverage for MSI, with limits not less than
$1,000,000 per claim. If during the term of the Note, Rockport or an
affiliated company has worker's compensation insurance or commercial
automobile liability coverage, then Rockport will add MSI to such policy as
an additional named insured;
22
<PAGE>
(xi) One representative of the Owners shall be designated to receive all
information provided to the Board of Directors and to members of committees
of the Board of Directors of Rockport, and shall be allowed to attend all
meetings of the Board of Directors and of committees of the Board of
Directors of Rockport;
(xii) MSI will not enter into any employment or consulting arrangements
that cannot be terminated on 30 days notice, which provide for more than 30
days severance pay, or which contain provisions for payments to be made to
employees or consultants on a change of control of the Company; and
(xiii) Each calendar quarter beginning October 1, 1998, and continuing
until the Note is paid. Rockport will provide MSI with a complete provider
data base.
If Rockport defaults on the Note or the Pledge Agreement and such default is
not cured within 10 business days, Owners may exercise their rights under the
Pledge Agreement to have the MSI shares reissued in their names and Rockport
shall immediately transfer possession of all of the books, records and other
assets of MSI to the Owners and cooperate with the Owners in the transition of
ownership of MSI to the Owners. In that event, all agreements referred to in
this MOU shall terminate.
5. ADMINISTRATIVE SERVICES AGREEMENT. Concurrently with the execution and
delivery of the Stock Purchase Agreement, B-C and MSI shall enter into an
Administrative Services Agreement pursuant to which B-C will have the right for
10 years to reprice the claims on all current and future B-C clients that use
the MSI network. The Administrative Services Agreement will provide that
Rockport will pay B-C a repricing fee on such business equal to:
(i) on all future business directed to MSI by B-C, the fees or
commissions that MSI is paying brokers at the time the subscriber agreements
are executed or 10% of the total subscriber fee, whichever is greater, plus
(ii) on all current and future business directed to MSI by B-C, 30% of
the total subscriber fee or $1.00 per month per covered employee, whichever
is less.
6. CONTINUING RELATIONSHIP. It is the intention of Rockport and B-C to
seek to maintain an ongoing relationship to the mutual best interests of both
parties. Rockport agrees to meet the network needs of the B-C clients on a
reasonable, best efforts basis. Should B-C decide to enter the claims
adjudication for workers' compensation business, Rockport agrees to provide
technical assistance on a reasonable basis.
7. B-C'S REPRESENTATIONS AND WARRANTIES. B-C acknowledges and represents
that:
- For the first four months of 1998, gross revenue of MSI has averaged
approximately $25,000.00 to $26,000.00 per month;
- The repricing fee to B-C, under section 6, based on MSI business for the
first four months of 1998 would approximate $3,000.00 per month, but the
actual repricing fee will vary depending upon the actual business in
force;
- The Owners have been provided with the Rockport Private Placement
Memorandum and are aware of the risks of such an investment;
- The Owners of MSI and B-C will make a capital contribution to the equity
of MSI of any inter-company payable which may exist on the books of MSI;
- All current assets of MSI, other than the contracts with providers, will
be distributed to the Owners prior to the closing of the purchase;
- MSI will have no known liabilities as of the date of closing. At the time
of closing B-C will assume all liabilities for unpaid broker fees and
network access fees that relate to periods prior to the closing date;
23
<PAGE>
- The preferred provider network owned by MSI has approximately 9,700
providers under contract located in Texas, Oklahoma and Arkansas.
8. ROCKPORT'S REPRESENTATIONS AND WARRANTIES. Rockport acknowledges,
represents and warrants that:
- Rockport has been made aware that the current MSI client, the Texas Oil
Marketers Association, is liquidating its business and that this MSI
business will decline from now and be eliminated by September 30, 1998,
and that the net revenue from this business for January, February, March
and April of 1998 was about $5,125, $4,290, $3,267, and $8,526
respectively;
- Rockport has been made aware that the current MSI client, Principal Mutual
Life Insurance Company, has notified MSI that it intends to begin moving
it business beginning on or about September 1, 1998, and that it may take
up to one year from that point to move all of its business. The monthly
revenue from the Principal business for the first four months of 1998 was
approximately $5,400.00 per month; and
- The disclosures in the Private Placement Memorandum are true and correct
in all material respects and do not omit any information necessary to make
the information therein complete.
9. SOUTHWEST HEALTH NETWORK. Owners shall have the option, through one
year from the closing of the Stock Purchase Agreement, to require Rockport to
assign all contracts executed in the name of Southwest Health Network to any
individual or entity named by Sellers for the sum of $1.00. If Sellers exercise
this option, Rockport shall cause MSI to assign its "Southwest Health Network"
assumed name, and all common law or other rights to that name, and all goodwill
associated therewith, to the entity receiving the assignment of the contracts.
Likewise, Rockport shall have the option, through one year from the closing of
the Stock Purchase Agreement, to require Owners to move the contracts and
assumed name out of MSI.
10. CLOSING. The closing of the purchase of MSI by Rockport shall occur no
later than July 1, 1998, unless such time is extended by the mutual agreement of
both parties. The transaction may close on an earlier date if possible.
11. NO PUBLICITY. Rockport may inform its potential investors about this
MOU. The parties shall not otherwise disclose to any person the existence of
this MOU, nor shall they issue, prior to the closing date, any press release,
public statement or other public notice with respect to the transactions
contemplated in this MOU without the consent of the other parties.
12. PROPRIETARY INFORMATION. Each party to this MOU shall keep all
Proprietary Information (as hereinafter defined) obtained by either party from
the other party hereto confidential and shall disclose such information only to
their respective employees and representatives who have a need to know of such
information in connection with the proposed transaction. If the Stock Purchase
Agreement is not signed, all Proprietary Information shall be promptly returned
to the other party and deleted from any computer storage to which the other
party has access. Proprietary Information shall mean information which is not in
the public domain.
13. BINDING LETTER OF INTENT. The parties intend that this Letter of
Intent be a binding agreement and the parties agree to negotiate in good faith
with respect to the completion of final documents.
Dated this day of May, 1998.
ROCKPORT HEALTHCARE GROUP, INC.
/s/ HARRY M. NEER
- -------------------------------------------
Harry Neer, President
24
<PAGE>
BOON-CHAPMAN BENEFIT ADMINISTRATORS, INC.
/s/ T. J. CHAPMAN
- -------------------------------------------
T. J. Chapman, President
MEDCORP SOUTHWEST, INC.
/s/ T.J. CHAPMAN
- -------------------------------------------
T.J. Chapman, President
OWNERS:
The Chapman Family Revocable Living Trust
/s/ T. J. CHAPMAN
- -------------------------------------------
T. J. Chapman, Co-Trustee
/s/ BETTY CHAPMAN
- -------------------------------------------
Betty Chapman, Co-Trustee
/s/ KEVIN CHAPMAN
- -------------------------------------------
Kevin Chapman
/s/ RHONDA CHAPMAN
- -------------------------------------------
Rhonda Chapman
25
<PAGE>
NETWORK ACCESS AGREEMENT
BETWEEN
ROCKPORT COMMUNITY NETWORK, INC.
AND
F.A. RICHARD AND ASSOCIATES
THIS NETWORK ACCESS AGREEMENT is by and between Rockport Community Network, Inc.
hereinafter referred to as "RCNI," a Nevada corporation, and F. A. Richard and
Associates hereinafter referred to as "FARA," a Louisiana corporation.
RECITALS
WHEREAS RCNI has entered into various agreements with its clients to make
available to its clients' eligible employees or insureds and their dependents
and other persons certain health care services at reduced costs, and
WHEREAS FARA has entered into agreements with various providers of health care
in the State of Louisiana who have agreed to make available certain health care
services at reduced costs, hereinafter referred to as the "Network,"
WHEREAS RCNI desires to utilize the Network of FARA, in the state of Louisiana,
for the use and benefits of RCNI's clients and their eligible participants.
NOW THEREFORE for and in consideration of the premises and the mutual covenants
in this agreement, the receipt and adequacy of which are acknowledged, RCNI and
FARA agree as follows:
I. DEFINITIONS
For the purpose of this agreement, certain terms are defined as follows:
1.1 AGREEMENT: This RCNI agreement between RCNI and FARA.
1.2 NORMAL OR BILLED CHARGES: This charge of participating providers,
physicians, or hospitals for a service, based upon fees that are usual
and customary to that provider and consistent with community standards
or based upon hospital standard charges, as adjusted from time to time
by participating providers, physicians, or hospitals during the term of
this agreement and before any discount is applied in accordance with
this agreement.
1.3 PARTICIPANT: Any individual eligible to receive covered health care
services through the network.
1.4 PARTICIPATING HOSPITALS: Any hospital that has an agreement with FARA
to provide hospital services to participants at reduced rates.
1.5 PARTICIPATING PROVIDER: Those hospitals, physicians, and other
organizations or individuals who have agreements directly with FARA or
have subcontracted with a party who has an agreement with FARA to
provide certain health care services to participants at reduced rates.
1.6 CLIENTS: Any employer, third-party administrator, trust, insurance
company, or entity that has entered into a contract with RCNI to obtain
services for participants from participating providers.
1.7 THIRD-PARTY ADMINISTRATOR: Any organization that, through a contract
with a Client, is responsible for the administration of claims (also
called "claims payor").
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II. DUTIES OF RCNI
2.1 INCENTIVES AND PROMOTIONS: RCNI shall only accept as Clients those
organizations and entities that establish and maintain significant
incentives that will encourage participants to obtain health care
services from participating providers. Clients shall be required to use
its best efforts to communicate and promote the use of the network to
the participants and to provide RCNI with appropriate information
relating to participants. RCNI shall require the right to review all
plan documents, descriptions, and other information furnished to
participants regarding the network.
2.2 REPRICING: RCNI shall receive bills for health services rendered to
participants from either the provider, the client or the clients
contracted claims payor, apply the discounts in the provider's agreement
with FARA, and send the repriced bills to Client or claims payor for
adjudication and payment.
2.3 REPORTS: RCNI shall provide FARA with a monthly report of each claim
repriced that month showing billed charges, savings, PPO rate and fee
charged if the fee is based on a percentage of savings. The report will
also reflect for those Client's charges a capitated per participant, per
month fee and have participants located in Louisiana, the name of the
client, number of participants in Louisiana, per month rate and the
total fee charged for those participants in Louisiana.
2.4 IDENTIFICATION: RCNI shall require its Clients to agree that it shall
require all of their participants to identify themselves as RCNI/Richard
Associates PPO members to FARA's facilities and physicians at the time
health care services are required.
2.5 NOTIFICATION OF COMPLAINTS: RCNI agrees to refer to FARA in a timely
manner any complaint, controversy or contract problem arising out of
delivery of services by FARA's participating providers.
2.6 RCNI agrees to inform, encourage and where possible, enforce a prompt
payment schedule on its Clients. All provider contracts are payable
within thirty (30) days of receipt of all necessary information to
complete the claim or the claim shall be paid at billed charges.
III. DUTIES OF FARA
3.1 PROVIDERS: FARA shall provide a network of providers located in the
state of Louisiana that shall have entered into an agreement, directly
or through an entity that has the right to enter into such an agreement
on their behalf, to provide certain health care services to participants
for fees that are less than their usual and customary fees.
3.2 PROVIDER LOCATIONS: FARA shall provide RCNI with a list of
participating providers in the state of Louisiana.
3.3 CONTRACTUAL RATES: FARA shall provide RCNI with all of the information
necessary to apply the contractual rates of the providers to the health
claims of RCNI's Clients in an accurate manner.
3.4 HOSPITAL ADMISSIONS: FARA shall, unless otherwise set forth in this
agreement or an attachment hereto, require that participants of RCNI's
Clients requiring admission to a participating hospital be considered
for admission in accordance with the policies and procedures of
participating hospitals.
3.5 PHYSICIAN SERVICES: FARA shall use its best efforts to require
participating physicians, according to individual provider agreements
with FARA, to make available to RCNI's Client's participants their usual
and customary services.
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3.6 RESULTS, ACCESS, QUALITY, AND AVAILABILITY OF SERVICES: FARA does not
guarantee the results of, quality of, availability of, or access to
services provided under the network that participants seek from
participating provider. In the event a participant cannot obtain
services from a participating provider, FARA shall not be responsible
for any portion of the costs relating to such services obtained from a
non-participating provider.
3.7 CREDENTIALING: FARA shall warrant that credentialing standards and
practices have been adhered to by their staff in accordance with the
usual and customary practices in the industry. FARA shall be solely,
exclusively and independently liable for the negligent review and/or
approval of its provider's credentials, and with respect hereto, shall
hold RCNI and its Clients harmless. FARA agrees to immediately notify
RCNI of any changes in the credentials of a provider(s).
3.8 NOTIFICATION TO PROVIDERS: FARA shall transmit in a timely manner to
their providers, notification of this Network Access Agreement and
instructions regarding compliance with the administrative procedures,
billing and accounting procedures and any utilization program required.
IV. PAYMENT AND CHARGES
4.1 ACCESS FEES: RCNI agrees to pay to FARA monthly access fees to use the
FARA network as follows:
RCNI Clients with fee based on a percentage of savings--RCNI agrees to
pay an access fee for each claim submitted by its Clients using the
participating providers of FARA's Network in Louisiana and repriced by
RCNI equal to thirty--three and one third percent (33 1/3%) of the net
fee billed and collected by RCNI for the claim.
RCNI Clients with fixed fee based on per participant, per month--RCNI
agrees to pay an access fee for each of its Client's participants living
in Louisiana where a FARA participating provider is located or available
equal to thirty-three and one third percent (33 1/3%) of the net monthly
fee charged to the Client by RCNI for those participants.
4.2 ADJUSTMENTS: Any adjustment by RCNI to a prior month's billing for a
client reducing or increasing the fees above will be reflected on the
current month's payment to FARA.
4.3 PAYMENTS: All payments from RCNI to FARA for a month's activity will be
paid within 15 days after they have been received from Clients by RCNI.
V. RELATIONSHIP OF PARTIES
5.1 INDEPENDENT CONTRACTORS: RCNI is an independent contractor and is not
an agent or employee of FARA, and nothing in this agreement shall be
construed to create a relationship of employee--employer or
agent--principal.
5.2 FARA'S RELATIONSHIP TO PROVIDERS: RCNI acknowledges that FARA makes no
representation or warranty regarding the quality or availability of the
services of the participating providers, and FARA shall not be
responsible for any claim or expense that arises from such services, the
failure or refusal to provide such services, or the provision of such
services to individuals not eligible. RCNI acknowledges that the
discounts provided under the network are subject to change without
notice and that such discounts may not apply to all services provided by
participating providers.
5.3 PROVIDER--PATIENT RELATIONSHIP: Participating providers are exclusively
responsible for the maintenance of the physician--patient and
hospital--patient relationship with participants and are solely
responsible to such persons for all services.
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VI. INDEMNIFICATION
6.1-1 INDEMNIFICATION OF FARA: In addition to the other indemnity provisions
of this agreement, RCNI agrees to indemnify and hold FARA and its
officers, directors, employees, and agents harmless from all claims,
causes of action, and damages of whatever nature arising out of the acts
or omissions of RCNI. This indemnity shall extend to and include all
costs and expenses, including attorney's fees and costs of court,
incurred by RCNI in any lawsuit, threatened litigation, arbitration,
dispute resolution proceeding, bankruptcy, or administrative proceeding.
6.1-2 INDEMNIFICATION OF RCNI: In addition to the other indemnity provisions
of this agreement, FARA agrees to indemnify and hold RCNI and its
officers, directors, employees, and agents harmless from all claims,
causes of action, and damages of whatever nature arising out of the acts
of omissions of FARA. This indemnity shall extend to and include all
costs and expenses, including attorney's fees and costs of court,
incurred by RCNI in any lawsuit, threatened litigation, arbitration,
dispute resolution proceeding, bankruptcy, or administrative proceeding.
6.2 LEGAL DEFENSE: The defense of any legal action instituted on a claim
for benefits under the network shall not be an obligation of RCNI. RCNI
shall, however, cooperate with FARA by furnishing such material or
information as is available in connection with the defense of any such
action.
6.3 RCNI NOT GUARANTOR OR INSURER: RCNI will not be liable for the payment
of any claims relating to benefits provided under this agreement. RCNI
is neither the insurer, guarantor, indemnifier, nor underwriter of
Client's responsibility to provide benefits to participants.
VII. TERM AND TERMINATION OF AGREEMENT
7.1 TERM: This agreement shall remain in force and effect for a term of one
year commencing on February 2, 1998, the "effective date," and expiring
on February 2, 1999, the "Term," and automatically renew unless either
party notifies the other party not later than thirty days prior to the
renewal date.
7.2 NOTICE OF TERMINATION: Either party, at any time during the term of
this agreement, may cancel this agreement, with or without cause, upon
providing the other party with sixty days' prior written notice.
7.3 EFFECT OF TERMINATION: Termination of this agreement shall not affect
the rights and obligations of the parties arising out of transactions
occurring prior to termination. RCNI acknowledges that the participating
provider may refuse to provide services at a discount immediately upon
termination even if a participant's hospitalization or course of
treatment is not yet complete.
7.4 AUTOMATIC TERMINATION: This agreement shall automatically terminate
upon business failure of the parties, appointment of a receiver or
trustee for any asset or assets or operations of the parties, insolvency
or the commission of any act of bankruptcy by the parties, assignment
for the benefit of creditors, the commencement of any proceedings under
any bankruptcy or insolvency law or against the parties, or levy,
seizure, or attachment of any assets of the parties.
VIII. MISCELLANEOUS
8.1 LEGAL FEES AND COSTS: If any action at law or in equity, including an
action for declaratory relief, is brought to enforce any covenant or
provision contained herein, the prevailing party in such litigation
shall be entitled to recover reasonable attorneys' fees from the other
party, which fees may be sent by the court in the trial of such action
or may be enforced in a separate action brought for that purpose, and
which fees shall be in addition to any other relief that may be awarded.
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8.2 CHOICE OF LAW AND VENUE: This agreement shall be construed under and in
accordance with the law of the state of Texas, and all obligations of
the parties created hereunder are performable in Travis County, Texas.
8.3 ASSIGNMENT: This agreement in whole or in part shall not be assigned
without the prior written consent of the other party.
8.4 WAIVER OF BREACH: the waiver by either party of breach or violation of
any provision of the agreement shall not operate as, nor be construed to
be, a waiver of any subsequent breach of the same or other provision
hereof.
8.5 FORCE MAJEURE: Neither party shall be liable nor deemed to be in
default for any delay or failure to perform under this agreement deemed
to result, directly or indirectly, from acts of God, civil or military
authority, acts of public enemy, war, accidents, fires, explosions,
earthquake, floods, failure of transportation, strikes or other work
interruptions by either party's employees, or any other cause beyond the
reasonable control of either party.
8.6 NOTICE: Any notice, demand, or communication required, permitted, or
desired to be given hereunder shall be deemed effectively given when
personally delivered or mailed by prepaid certified mail, return receipt
requested, addressed as follows:
Rockport Community Network, Inc.
Larry K. Hinson
Secretary-Treasurer
50 Briar Hollow Lane, Suite 515W
Houston, TX 77027
F. A. Richard and Associates
Reed Bell
2360 Fifth Avenue, Suite 100
Mandeville, LA 70471
or to such other address and to the attention of such other person or
officer as either party may designate in writing
8.7 SEVERABILITY: In the event any provision of this agreement is held to
be invalid, illegal, or unenforceable for any reason and in any respect,
such invalidity, illegality, or unenforceability shall in no event
affect, prejudice, or disturb the validity of the remainder of this
agreement, which shall be in full force and effect, enforceable in
accordance with its terms.
8.8 ENTIRE AGREEMENT/AMENDMENT: This agreement supersedes all previous
contracts and constitutes the entire agreement between or among the
parties. No party shall be entitled to benefits other than those
specified herein. As between or among the parties, no oral statements or
prior written material not specifically incorporated herein shall be of
any force and effect. The parties specifically acknowledge that in
entering into and executing this agreement, the parties rely solely upon
the representations and agreements contained in this agreement and that
all representations or agreements, whether written or verbal, not
expressly incorporated herein are superseded, and no changes in or
additions to this agreement shall be recognized unless and until made in
writing and signed by all parties hereto.
8.9 COUNTERPARTS: This agreement may be executed in two or more
counterparts, each and all of which shall be deemed an original and all
of which together shall constitute but one and the same instrument.
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8.10 REFERENCE TO RCNI: RCNI agrees that FARA may refer to RNCI in informing
participating providers and potential participating providers about the
organizations, funds, and employers participating in the network.
8.11 THIRD-PARTY RIGHTS: This agreement is entered into by and between the
parties hereto and for their benefits. No third party shall have any
right to enforce or enjoy any benefit created or established under this
agreement.
8.12 HEADINGS: The headings used in this agreement are used for
administrative services only and do not constitute substantive matter to
be considered in construing the terms of this agreement.
The parties hereto have caused this agreement to be executed in multiple
originals by their duly authorized officers, as of the day and year indicated
below.
<TABLE>
<CAPTION>
<S> <C>
F. A. RICHARD AND ASSOCIATES ROCKPORT COMMUNTIY NETWORK, INC.
By: /s/ REED BELL By: /s/ LARRY K. HINSON
- --------------------------------------- ---------------------------------------
Title: Executive V. P. Title: Sec.- Treasurer
- ------------------------------------- -------------------------------------
Date: 2/10/98 Date: 2/16/98
- ------------------------------------- -------------------------------------
</TABLE>
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NETWORK ACCESS AGREEMENT
BETWEEN
ROCKPORT COMMUNITY NETWORK, INC.
AND
F. A. RICHARD AND ASSOCIATES
THIS NETWORK ACCESS AGREEMENT is by and between Rockport Community Network, Inc.
hereinafter referred to as "RCN," a Nevada corporation, a wholly- owned
subsidiary of Rockport Healthcare Group, Inc., and F. A. Richard and Associates,
Inc. hereinafter referred to as "FARA," a Louisiana corporation.
RECITALS
WHEREAS RCN, or one of its affiliated (sister) companies plans to sell, issue
and service a Medical Access Discount Card to the uninsured, uninsurable and
underinsured individuals in the State of Louisiana and elsewhere so that these
individuals may receive health care services at reduced costs, and
WHEREAS FARA has entered into agreements with various providers of health care
in the State of Louisiana who have agreed to make available certain health care
services at reduced costs, hereinafter referred to as the "Network,"
WHEREAS RCN desires to utilize the Network of FARA in the State of Louisiana,
for the use and benefits of RCN's eligible Qualified Participants.
NOW THEREFORE for and in consideration of the premises and the mutual covenants
in this agreement, the receipt and adequacy of which are acknowledged, RCN and
FARA agree as follows:
1. DEFINITIONS
For the purpose of this agreement, certain terms are defined as follows:
1.1 AGREEMENT: This RCN agreement between RCN and FARA.
1.2 NORMAL OR BILLED CHARGES: This charge of Participating Providers,
Physicians, or Hospitals for a service, based upon fees that are usual
and customary to that provider and consistent with community standards
or based upon hospital standard charges, as adjusted from time to time
by Participating Providers, Physicians, or Hospitals during the term of
this agreement and before any discount is applied in accordance with
this agreement.
1.3 QUALIFIED PARTICIPANT: Individuals and/or families eligible to receive
contracted rates by virtue of their verified participation in the
Medical Access Discount Card Program, which is neither an insurance or
benefit plan. For services rendered to Qualified Participants of the
Medical Access Discount Care Program, Participating Provider can and
should make payment arrangements prior to the delivery of care with the
patient or responsible party. Services provided under the provision of
the Medical Access Discount Card must be documented by a receipt that
the Qualified Participant may use for tax purposes or in conjunction
with other coverage. Participating Provider can pursue collection
efforts directly with these Qualified Participants if necessary.
Qualified Participants have agreed to pay for such services, pursuant to
a Payor Agreement with RCN.
1.4 PARTICIPATING HOSPITALS: Any hospital that has an agreement with FARA
to provide hospital services to Qualified Participants at reduced rates.
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<PAGE>
1.5 PARTICIPATING PROVIDER: Those hospitals, physicians, and other
organizations or individuals who have agreements directly with FARA or
have subcontracted with a party who has an agreement with FARA to
provide certain health care services to Qualified Participants at
reduced rates.
1.6 THIRD-PARTY ADMINISTRATOR: Any organization that, through a contract
with a Client, is responsible for the administration of claims (also
called "claims payor").
2. DUTIES OF RCN
2.1 INCENTIVES AND PROMOTIONS: RCN Medical Access Discount Card Program
shall establish and maintain significant incentives that will encourage
Qualified Participants to obtain health care services from participating
providers. RCN shall be required to use its best efforts to communicate
and promote the use of the network to the Qualified Participants.
2.2 REPRICING: RCN shall reprice health services rendered to Qualified
Participants by the Provider at the time of service utilizing a
telephonic repricing system.
2.3 REPORTS: RCN shall provide FARA with a monthly report of the number of
Qualified Participants residing in the State of Louisiana.
2.4 IDENTIFICATION: RCN shall require its Qualified Participants to
identify themselves with the Medical Access Discount Card bearing the
name and/or logo of FARA to FARA's facilities and physicians at the time
health care services are required.
2.5 NOTIFICATION OF COMPLAINTS: RCN agrees to refer to FARA in a timely
manner any complaint, controversy or contract problem arising out of
delivery of services by FARA's Participating Providers.
3. DUTIES OF FARA
3.1 PROVIDERS: FARA shall provide a network of providers located in the
State of Louisiana that shall have entered into an agreement, directly
or through an entity that has the right to enter into such an agreement
on their behalf, to provide certain health care services to Qualified
Participants of RCN's Medical Access Discount Card Program for fees that
are less than their usual and customary fees.
3.2 PROVIDER LOCATIONS: FARA shall provide RCN with a list of participating
providers.
3.3 CONTRACTUAL RATES: FARA shall provide RCN with all of the information
necessary to apply the contractual rates of the providers for the health
services delivered to RCN's Medical Access Discount Card Program in an
accurate manner.
3.4 HOSPITAL ADMISSIONS: FARA shall, unless otherwise set forth in this
agreement or an attachment hereto, require that Qualified Participants
of RCN requiring admission to a Participating Hospital be considered for
admission in accordance with the policies and procedures of
Participating Hospitals.
3.5 PHYSICIAN SERVICES: FARA shall use its best efforts to require
Participating Physicians, according to individual provider agreements
with FARA, to make available to RCN's Medical Access Discount Card
Program Qualified Participants their usual and customary services.
3.6 RESULTS, ACCESS, QUALITY, AND AVAILABILITY OF SERVICES: FARA does not
guarantee the results of, quality of, availability of, or access to
services provided under the network that RCN's Medical Access Discount
Card Program Qualified Participants seek from participating provider. In
the event a Qualified Participant cannot obtain services from a
participating provider, FARA shall not be responsible for any portion of
the costs relating to such services obtained from a non-participating
provider.
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3.7 CREDENTIALING: FARA shall warrant that credentialing standards and
practices have been adhered to by their staff in accordance with the
usual and customary practices in the industry. FARA shall be solely,
exclusively and independently liable for the negligent review and/or
approval of its provider's credentials, and with respect hereto, shall
hold RCN and its Clients harmless. FARA agrees to immediately notify RCN
of any changes in the credentials of a provider(s).
3.8 NOTIFICATION TO PROVIDERS: RCN and FARA shall transmit in a timely
manner to FARA's providers, notification of this Network Access
Agreement in regard to the Medical Access Discount Card Program.
4. PAYMENT AND CHARGES
4.1 ACCESS FEES: RCN agrees to pay to FARA monthly access fees to use the
FARA network as follows:
For each Medical Access Discount Card issued to a Louisiana resident
and valid for that month, RCN will pay to FARA One Dollar ($1.00) per
month for each card still valid and outstanding that month.
4.2 PAYMENTS: All payments from RCN to FARA for a month's activity will be
paid within 15 days after the month end for the previous month.
5. RELATIONSHIP OF PARTIES
5.1 INDEPENDENT CONTRACTORS: RCN is an independent contractor and is not an
agent or employee of FARA, and nothing in this agreement shall be
construed to create a relationship of employee--employer or
agent--principal.
5.2 FARA'S RELATIONSHIP TO PROVIDERS: Except as defined in 3.7, RCN
acknowledges that FARA makes no representation or warranty regarding the
quality or availability of the services of the Participating Providers,
and FARA shall not be responsible for any claim or expense that arises
from such services, the failure or refusal to provide such services, or
the provision of such services to individuals not eligible. RCN
acknowledges that the discounts provided under the network are subject
to change without notice and that such discounts may not apply to all
services provided by Participating Providers.
5.3 PROVIDER--PATIENT RELATIONSHIP: Participating providers are exclusively
responsible for the maintenance of the physician--patient and
hospital--patient relationship with Qualified Participants and are
solely responsible to such persons for all services.
6. INDEMNIFICATION
6.1.1 INDEMNIFICATION OF FARA: In addition to the other indemnity provisions
of this agreement, RCN agrees to indemnify and hold FARA and its
officers, directors, employees, and agents harmless from all claims,
causes of action, and damages of whatever nature arising out of the acts
or omissions of RCN. This indemnity shall extend to and include all
costs and expenses, including attorney's fees and costs of court,
incurred by RCN in any lawsuit, threatened litigation, arbitration,
dispute resolution proceeding, bankruptcy, or administrative proceeding.
6.1.2 INDEMNIFICATION OF RCN: In addition to the other indemnity provisions
of this agreement, FARA agrees to indemnify and hold RCN and its
officers, directors, employees, and agents harmless from all claims,
causes of action, and damages of whatever nature arising out of the acts
of omissions of FARA. This indemnity shall extend to and include all
costs and expenses,
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<PAGE>
including attorney's fees and costs of court, incurred by RCN in any
lawsuit, threatened litigation, arbitration, dispute resolution
proceeding, bankruptcy, or administrative proceeding.
6.2 RCN NOT GUARANTOR OR INSURER: RCN will not be liable for the payment of
any claims relating to health services provided under this agreement.
RCN is neither the insurer, guarantor, indemnifier, nor underwriter of
Medical Access Discount Card Program Qualified Participants
responsibility to pay for healthcare services rendered.
7. TERM AND TERMINATION OF AGREEMENT
7.1 TERM: This agreement shall remain in force and effect for a term of one
year commencing on June 1, 1998, the "effective date," and expiring on
May 31, 1999, the "Term," and automatically renew unless either party
notifies the other party not later than thirty days prior to the renewal
date.
7.2 NOTICE OF TERMINATION: Either party, at any time during the term of
this agreement, may cancel this agreement, with or without cause, upon
providing the other party with one hundred twenty (120) days' prior
written notice.
7.3 EFFECT OF TERMINATION: Upon termination of this Agreement, neither
party shall have any further obligation hereunder except for (i)
obligations accruing prior to the date of termination, including without
limitation, any obligation by Provider to continue to provide health
care services to Qualified Participants, and (ii) obligations, promises
or covenants contained herein which are expressly made to extend beyond
the term of this Agreement.
7.4 AUTOMATIC TERMINATION: This agreement shall automatically terminate
upon business failure of the parties, appointment of a receiver or
trustee for any asset or assets or operations of the parties, insolvency
or the commission of any act of bankruptcy by the parties, assignment
for the benefit of creditors, the commencement of any proceedings under
any bankruptcy or insolvency law or against the parties, or levy,
seizure, or attachment of any assets of the parties.
8. MISCELLANEOUS
8.1 LEGAL FEES AND COSTS: If any action at law or in equity, including an
action for declaratory relief, is brought to enforce any covenant or
provision contained herein, the prevailing party in such litigation
shall be entitled to recover reasonable attorneys' fees from the other
party, which fees may be sent by the court in the trial of such action
or may be enforced in a separate action brought for that purpose, and
which fees shall be in addition to any other relief that may be awarded.
8.2 CHOICE OF LAW AND VENUE: This agreement shall be construed under and in
accordance with the law of the state of Texas, and all obligations of
the parties created hereunder are performable in Harris County, Texas.
8.3 ASSIGNMENT: This agreement in whole or in part shall not be assigned
without the prior written consent of the other party.
8.4 WAIVER OF BREACH: The waiver by either party of breach or violation of
any provision of the agreement shall not operate as, nor be construed to
be, a waiver of any subsequent breach of the same or other provision
hereof.
8.5 FORCE MAJEURE: Neither party shall be liable nor deemed to be in
default for any delay or failure to perform under this agreement deemed
to result, directly or indirectly, from acts of God, civil or military
authority, acts of public enemy, war, accidents, fires, explosions,
earthquake, floods, failure of transportation, strikes or other work
interruptions by either party's employees, or any other cause beyond the
reasonable control of either party.
4
<PAGE>
8.6 NOTICE: Any notice, demand, or communication required, permitted, or
desired to be given hereunder shall be deemed effectively given when
personally delivered or mailed by prepaid certified mail, return receipt
requested, addressed as follows:
Rockport Community Network, Inc.
Larry K. Hinson
Secretary-Treasurer
50 Briar Hollow Lane, Suite 515W
Houston, TX 77027
F. A. Richard and Associates
Reed Bell
2360 Fifth Avenue, Suite 100
Mandeville, LA 70471
or to such other address and to the attention of such other person or
officer as either party may designate in writing
8.7 SEVERABILITY: In the event any provision of this agreement is held to
be invalid, illegal, or unenforceable for any reason and in any respect,
such invalidity, illegality, or unenforceability shall in no event
affect, prejudice, or disturb the validity of the remainder of this
agreement, which shall be in full force and effect, enforceable in
accordance with its terms.
8.8 ENTIRE AGREEMENT/AMENDMENT: This agreement supersedes all previous
contracts and constitutes the entire agreement between or among the
parties. No party shall be entitled to benefits other than those
specified herein. As between or among the parties, no oral statements or
prior written material not specifically incorporated herein shall be of
any force and effect. The parties specifically acknowledge that in
entering into and executing this agreement, the parties rely solely upon
the representations and agreements contained in this agreement and that
all representations or agreements, whether written or verbal, not
expressly incorporated herein are superseded, and no changes in or
additions to this agreement shall be recognized unless and until made in
writing and signed by all parties hereto.
8.8 COUNTERPARTS: This agreement may be executed in two or more
counterparts, each and all of which shall be deemed an original and all
of which together shall constitute but one and the same instrument.
8.9 REFERENCE TO RCN: RCN agrees that FARA may refer to RCN in informing
Participating Providers and potential Participating Providers about the
Associations, Affinity Groups, Other Organizations, Funds, and Employers
participating in the network.
8.10 THIRD-PARTY RIGHTS: This agreement is entered into by and between the
parties hereto and for their benefits or for the benefit of their
affiliated companies, those companies with common ownership. No third
party shall have any right to enforce or enjoy any benefit created or
established under this agreement.
8.11 HEADINGS: The headings used in this agreement are used for
administrative purposes only and do not constitute substantive matter to
be considered in construing the terms of this agreement.
5
<PAGE>
The parties hereto have caused this agreement to be executed in multiple
originals by their duly authorized officers, as of the day and year indicated
below.
<TABLE>
<CAPTION>
<S> <C>
F. A. RICHARD AND ASSOCIATES ROCKPORT COMMUNTIY NETWORK, INC.
By: /s/ REED BELL By: /s/ LARRY K. HINSON
- --------------------------------------- ---------------------------------------
Title: Executive V.P. Title: Sec.-Treasurer
- ------------------------------------- -------------------------------------
Date: 5/21/98 Date: 5/21/98
- ------------------------------------- -------------------------------------
</TABLE>
6
<PAGE>
NETWORK ACCESS AGREEMENT
BETWEEN
ROCKPORT COMMUNITY NETWORK, INC.
AND
TARECO, INC.
THIS NETWORK ACCESS AGREEMENT is by and between Rockport Community Network, Inc.
hereinafter referred to as "RCN," a Nevada corporation, and Tareco, Inc.
hereinafter referred to as "TI," a Texas corporation.
RECITALS
WHEREAS RCN has entered into various agreements with its clients to make
available to its clients' eligible employees or insureds and their dependents
and other persons certain health care services at reduced costs, and
WHEREAS TI has entered into agreements with various providers of health care,
who have agreed to make available certain health care services at reduced costs,
hereinafter referred to as the "Network,"
WHEREAS RCN desires to utilize the Network of TI for the use and benefits of
RCN's clients and their eligible Qualified Participants.
NOW THEREFORE for and in consideration of the premises and the mutual covenants
in this agreement, the receipt and adequacy of which are acknowledged, RCN and
TI agree as follows:
I. DEFINITIONS
For the purpose of this agreement, certain terms are defined as follows:
1.1 AGREEMENT: This RCN agreement between RCN and TI.
1.2 NORMAL OR BILLED CHARGES: This charge of participating providers,
physicians, or hospitals for a service, based upon fees that are usual
and customary to that provider and consistent with community standards
or based upon hospital standard charges, as adjusted from time to time
by participating providers, physicians, or hospitals during the term of
this agreement and before any discount is applied in accordance with
this agreement.
1.3 QUALIFIED PARTICIPANT: Any individual eligible to receive covered
health care services through the network.
1.4 PARTICIPATING HOSPITALS: Any hospital that has an agreement with TI to
provide hospital services to Qualified Participants at reduced rates.
1.5 PARTICIPATING PROVIDER: Those hospitals, physicians, and other
organizations or individuals who have agreements directly with TI or
have subcontracted with a party who has an agreement with TI to provide
certain health care services to Qualified Participants at reduced rates.
1.6 CLIENTS: Any employer, third-party administrator, trust, insurance
company, or entity that has entered into a contract with RCN to obtain
services for Qualified Participants from participating providers.
1.7 THIRD-PARTY ADMINISTRATOR: Any organization that, through a contract
with a Client, is responsible for the administration of claims (also
called "claims payor").
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II. DUTIES OF RCN
2.1 INCENTIVES AND PROMOTIONS: RCN shall only accept as Clients those
organizations and entities that establish and maintain significant
incentives that will encourage Qualified Participants to obtain health
care services from participating providers. Clients shall be required to
use its best efforts to communicate and promote the use of the network
to the Qualified Participants and to provide RCN with appropriate
information relating to Qualified Participants. RCN shall require the
right to review all plan documents, descriptions, and other information
furnished to Qualified Participants regarding the network.
2.2 REPRICING: Initially, TI will reprice bills for health services
rendered to Qualified Participants within 48 hours of receipt of claim.
As soon as RCN can demonstrate to TI's satisfaction that they are
prepared to reprice, RCN shall receive bills for health services
rendered to their Client's Qualified Participants from either the
provider, the client or the clients contracted claims payor, apply the
discounts in the provider's agreement with TI, and send the repriced
bills to Client or claims payor for adjudication and payment with a copy
to TI.
2.3 REPORTS: Initially, TI will provide RCN with a monthly report of each
claim repriced that month showing billed charges, savings, PPO rate and
fee charged if the fee is based on a percentage of savings. As soon as
RCN can demonstrate to TI's satisfaction that they are prepared to
reprice, RCN shall provide TI with a monthly report of each claim
repriced that month showing billed charges, savings, PPO rate and fee
charged if the fee is based on a percentage of savings for the claims
processed for their Clients. The report will also reflect for those
Client's charges a capitated per Qualified Participant, per month fee
and have Qualified Participants located in currently contracted areas,
the name of the client, number of Qualified Participants, per month rate
and the total fee charged for those Qualified Participants.
2.4 IDENTIFICATION: RCN shall require its Clients to agree that it shall
require all of their Qualified Participants to identify themselves as
RCN/Tareco PPO members to TI's facilities and physicians at the time
health care services are required.
2.5 NOTIFICATION OF COMPLAINTS: RCN agrees to refer to TI in a timely
manner any complaint, controversy or contract problem arising out of
delivery of services by TI's participating providers.
2.6 RCN agrees to inform, encourage and where possible, enforce a prompt
payment schedule on its Clients. All provider contracts are payable
within thirty (30) days of receipt of all necessary information to
complete the claim or the claim shall be paid at billed charges.
III. DUTIES OF TI
3.1 PROVIDERS: TI shall provide a network of providers located in the state
of Texas that shall have entered into an agreement, directly or through
an entity that has the right to enter into such an agreement on their
behalf, to provide certain health care services to Qualified
Participants for fees that are less than their usual and customary fees.
3.2 PROVIDER LOCATIONS: TI shall provide RCN with a current list of
participating providers monthly.
3.3 CONTRACTUAL RATES: TI shall provide RCN with all of the information
necessary to apply the contractual rates of the providers to the health
claims of RCN's Clients in an accurate manner.
3.4 HOSPITAL ADMISSIONS: TI shall, unless otherwise set forth in this
agreement or an attachment hereto, require that Qualified Participants
of RCN's Clients requiring admission to a participating hospital be
considered for admission in accordance with the policies and procedures
of participating hospitals.
2
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3.5 PHYSICIAN SERVICES: TI shall use its best efforts to require
participating physicians, according to individual provider agreements
with TI, to make available to RCN's Client's Qualified Participants
their usual and customary services.
3.6 RESULTS, ACCESS, QUALITY, AND AVAILABILITY OF SERVICES: TI does not
guarantee the results of, quality of, availability of, or access to
services provided under the network that Qualified Participants seek
from participating provider. In the event a Qualified Participant cannot
obtain services from a participating provider, TI shall not be
responsible for any portion of the costs relating to such services
obtained from a non-participating provider.
3.7 CREDENTIALING: TI shall warrant that credentialing standards and
practices have been adhered to by their staff in accordance with the
usual and customary practices in the industry. TI shall be solely,
exclusively and independently liable for the negligent review and/or
approval of its provider's credentials, and with respect hereto, shall
hold RCN and its Clients harmless. TI agrees to immediately notify RCN
of any changes in the credentials of a provider(s).
3.8 NOTIFICATION TO PROVIDERS: TI shall transmit in a timely manner to
their providers, notification of this Network Access Agreement and
instructions regarding compliance with the administrative procedures,
billing and accounting procedures and any utilization program required.
IV. PAYMENT AND CHARGES
4.1 ACCESS FEES: RCN agrees to pay to TI monthly access fees to use the TI
network as follows:
RCN Clients with fee based on a percentage of savings--RCN agrees to pay
an access fee for each claim submitted by its Clients using the
participating providers of TI's Network and repriced by RCN equal to
forty percent (40%) of the net fee billed and collected by RCN for the
claim.
RCN Clients with fixed fee based on per Qualified Participant, per
month--RCN agrees to pay an access fee for each of its Client's
Qualified Participants where a TI participating provider is located or
available equal to forty percent (40%) of the net monthly fee charged to
the Client by RCN for those Qualified Participants.
4.2 ADJUSTMENTS: Any adjustment by RCN to a prior month's billing for a
client reducing or increasing the fees above will be reflected on the
current month's payment to TI.
4.3 PAYMENTS: All payments from RCN to TI for a month's activity will be
paid within 15 days after they have been received from Clients by RCN.
V. RELATIONSHIP OF PARTIES
5.1 INDEPENDENT CONTRACTORS: RCN is an independent contractor and is not an
agent or employee of TI, and nothing in this agreement shall be
construed to create a relationship of employee-- employer or
agent--principal.
5.2 TI'S RELATIONSHIP TO PROVIDERS: RCN acknowledges that TI makes no
representation or warranty regarding the quality or availability of the
services of the participating providers, and TI shall not be responsible
for any claim or expense that arises from such services, the failure or
refusal to provide such services, or the provision of such services to
individuals not eligible. RCN acknowledges that the discounts provided
under the network are subject to change without notice and that such
discounts may not apply to all services provided by participating
providers.
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<PAGE>
5.3 PROVIDER--PATIENT RELATIONSHIP: Participating providers are exclusively
responsible for the maintenance of the physician--patient and
hospital--patient relationship with Qualified Participants and are
solely responsible to such persons for all services.
VI. INDEMNIFICATION
6.1-1 INDEMNIFICATION OF TI: In addition to the other indemnity provisions of
this agreement, RCN agrees to indemnify and hold TI and its officers,
directors, employees, and agents harmless from all claims, causes of
action, and damages of whatever nature arising out of the acts or
omissions of RCN. This indemnity shall extend to and include all costs
and expenses, including attorney's fees and costs of court, incurred by
RCN in any lawsuit, threatened litigation, arbitration, dispute
resolution proceeding, bankruptcy, or administrative proceeding.
6.1-2 INDEMNIFICATION OF RCN: In addition to the other indemnity provisions
of this agreement, TI agrees to indemnify and hold RCN and its officers,
directors, employees, and agents harmless from all claims, causes of
action, and damages of whatever nature arising out of the acts of
omissions of TI. This indemnity shall extend to and include all costs
and expenses, including attorney's fees and costs of court, incurred by
RCN in any lawsuit, threatened litigation, arbitration, dispute
resolution proceeding, bankruptcy, or administrative proceeding.
6.2 LEGAL DEFENSE: The defense of any legal action instituted on a claim
for benefits under the network shall not be an obligation of RCN. RCN
shall, however, cooperate with TI by furnishing such material or
information as is available in connection with the defense of any such
action.
6.3 RCN NOT GUARANTOR OR INSURER: RCN will not be liable for the payment of
any claims relating to benefits provided under this agreement. RCN is
neither the insurer, guarantor, indemnifier, nor underwriter of Client's
responsibility to provide benefits to Qualified Participants.
VII. TERM AND TERMINATION OF AGREEMENT
7.1 TERM: This agreement shall remain in force and effect for a term of one
year commencing on June 1, 1998, the "effective date," and expiring on
May 31, 1999, the "Term," and automatically renew unless either party
notifies the other party not later than thirty days prior to the renewal
date.
7.2 NOTICE OF TERMINATION: Either party, at any time during the term of
this agreement, may cancel this agreement, with or without cause, upon
providing the other party with sixty days' prior written notice.
7.3 EFFECT OF TERMINATION: Termination of this agreement shall not affect
the rights and obligations of the parties arising out of transactions
occurring prior to termination. RCN acknowledges that the participating
provider may refuse to provide services at a discount immediately upon
termination even if a Qualified Participant's hospitalization or course
of treatment is not yet complete.
7.4 AUTOMATIC TERMINATION: This agreement shall automatically terminate
upon business failure of the parties, appointment of a receiver or
trustee for any asset or assets or operations of the parties, insolvency
or the commission of any act of bankruptcy by the parties, assignment
for the benefit of creditors, the commencement of any proceedings under
any bankruptcy or insolvency law or against the parties, or levy,
seizure, or attachment of any assets of the parties.
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<PAGE>
VIII. MISCELLANEOUS
8.1 LEGAL FEES AND COSTS: If any action at law or in equity, including an
action for declaratory relief, is brought to enforce any covenant or
provision contained herein, the prevailing party in such litigation
shall be entitled to recover reasonable attorneys' fees from the other
party, which fees may be sent by the court in the trial of such action
or may be enforced in a separate action brought for that purpose, and
which fees shall be in addition to any other relief that may be awarded.
8.2 CHOICE OF LAW AND VENUE: This agreement shall be construed under and in
accordance with the law of the state of Texas, and all obligations of
the parties created hereunder are performable in Harris County, Texas.
8.3 ASSIGNMENT: This agreement in whole or in part shall not be assigned
without the prior written consent of the other party.
8.4 WAIVER OF BREACH: the waiver by either party of breach or violation of
any provision of the agreement shall not operate as, nor be construed to
be, a waiver of any subsequent breach of the same or other provision
hereof.
8.5 FORCE MAJEURE: Neither party shall be liable nor deemed to be in
default for any delay or failure to perform under this agreement deemed
to result, directly or indirectly, from acts of God, civil or military
authority, acts of public enemy, war, accidents, fires, explosions,
earthquake, floods, failure of transportation, strikes or other work
interruptions by either party's employees, or any other cause beyond the
reasonable control of either party.
8.6 NOTICE: Any notice, demand, or communication required, permitted, or
desired to be given hereunder shall be deemed effectively given when
personally delivered or mailed by prepaid certified mail, return receipt
requested, addressed as follows:
Rockport Community Network, Inc.
Larry K. Hinson
Secretary-Treasurer
50 Briar Hollow Lane, Suite 515W
Houston, TX 77027
Tareco, Inc.
William O'Keefe
One Cornerstone Plaza
P.O. Box 680185
Houston, Texas 77268-0185
or to such other address and to the attention of such other person or
officer as either party may designate in writing
8.7 SEVERABILITY: In the event any provision of this agreement is held to
be invalid, illegal, or unenforceable for any reason and in any respect,
such invalidity, illegality, or unenforceability shall in no event
affect, prejudice, or disturb the validity of the remainder of this
agreement, which shall be in full force and effect, enforceable in
accordance with its terms.
8.8 ENTIRE AGREEMENT/AMENDMENT: This agreement supersedes all previous
contracts and constitutes the entire agreement between or among the
parties. No party shall be entitled to benefits other than those
specified herein. As between or among the parties, no oral statements or
prior written material not specifically incorporated herein shall be of
any force and effect. The parties specifically acknowledge that in
entering into and executing this agreement, the parties rely solely upon
the representations and agreements contained in this agreement and that
all
5
<PAGE>
representations or agreements, whether written or verbal, not expressly
incorporated herein are superseded, and no changes in or additions to
this agreement shall be recognized unless and until made in writing and
signed by all parties hereto.
8.8 COUNTERPARTS: This agreement may be executed in two or more
counterparts, each and all of which shall be deemed an original and all
of which together shall constitute but one and the same instrument.
8.9 REFERENCE TO RCN: RCN agrees that TI may refer to RNCI in informing
participating providers and potential participating providers about the
organizations, funds, and employers participating in the network.
8.10 THIRD-PARTY RIGHTS: This agreement is entered into by and between the
parties hereto and for their benefits. No third party shall have any
right to enforce or enjoy any benefit created or established under this
agreement.
8.11 HEADINGS: The headings used in this agreement are used for
administrative services only and do not constitute substantive matter to
be considered in construing the terms of this agreement.
The parties hereto have caused this agreement to be executed in multiple
originals by their duly authorized officers, as of the 29th day of May, 1998.
<TABLE>
<CAPTION>
<S> <C>
ROCKPORT COMMUNTIY NETWORK, INC. TARECO, INC.
By: /s/ WILLIAM O'KEEFE By: /s/ HARRY M. NEER
- --------------------------------------- ---------------------------------------
Title: Pres Title: President
- ------------------------------------- -------------------------------------
Date: 5/29/98 Date: 5/29/98
- ------------------------------------- -------------------------------------
</TABLE>
6
<PAGE>
MEDVIEW SERVICES, INCORPORATED
NETWORK ACCESS AGREEMENT
THIS NETWORK ACCESS AGREEMENT (the "Agreement") is made this 1ST day of
DECEMBER, 1997 ("Effective Date"), and is by and between MEDVIEW SERVICES,
INCORPORATED Florida corporation ("MedView"), and ROCKPORT COMMUNITY NETWORK,
INC., a HOUSTON, TEXAS corporation ("Company"), together referred to
hereinafter as the "parties."
WHEREAS, MedView has developed and operates health care provider networks
comprised of primary care physicians, specialists, hospitals, pharmacies,
ancillary health care professionals and other health care providers which
have contracted with MedView to provide health care services to Subscribers
who are referred through the Network(s); and
WHEREAS, commencing on the Effective Date and continuing until the
expiration or termination of this Agreement, MedView agrees to grant Company
access to all or certain portions of its Network(s) and its negotiated
Network Provider rates, for the purpose of facilitating the provision of
health care services to Subscribers.
NOW, THEREFORE, in consideration of the following terms and conditions and
the mutual covenants contained herein, the parties agree as follows:
1. DEFINITIONS
1.1 "Client" means a person or entity which has authorized Company to
enter into a network access agreement for the benefit and on behalf of such
Client and (a) that is responsible to pay for Covered Services provided to
Subscribers ("Payor") or (b) that has been authorized by a Payor, as such
Payor's third party administrator or contractor to Payor ("Contractor") to
administer or reprice claims or (c) where Company is an insurer, Client is
its insured.
1.2 "Covered Services" means those medically necessary health care
services, medications, equipment and supplies to which a Subscriber is
entitled in accordance with applicable law or pursuant to a Health Benefits
Program.
1.3 "Networks" means the preferred provider programs and health care
delivery systems developed and/or operated by MedView.
1.4 "Network Providers" means health care professionals, such as primary
care physicians, specialists, ancillary providers, hospitals, clinics and
other health care facilities, that have directly or indirectly contracted
with MedView to participate in its Network(s).
1.5 "Service Area(s)" in the context of Covered Services means those
geographic areas in which MedView has established Network(s), and which are
identified by Company on Attachment I as areas in which MedView's Network(s)
will be accessed hereunder.
1.6 "Subscriber" means a person eligible to receive health care benefits
by reason of an injury suffered by Subscriber in the course of Subscriber's
employment or pursuant to Subscriber's group health or automobile medical
insurance or a health care benefits plan or program sponsored or provided by
Company or a Company Client ("Health Benefits Program").
2. MEDVIEW'S OBLIGATIONS
2.1 MedView shall require that its Network Providers be, and at all times
during the term of this Agreement, remain authorized and duly licensed to
provide Covered Services to Subscribers, and shall provide
<PAGE>
evidence of such licensure to Company upon its reasonable request.
2.2 MedView shall contract with Network Providers which have appropriate
professional credentials, including but not limited to, unrestricted
admitting privileges at a Network Provider hospital, and shall require them
to maintain malpractice insurance coverage in such amounts as are consistent
with industry and community standards. MedView shall be responsible for
credentialing and re-credentialing Network Providers, and by requiring
Network Providers to submit copies of current medical licenses and
certificates of malpractice insurance, board specialty and DEA privileges. A
copy of MedView's current Network Provider credentialing standards and
criteria is attached hereto as Attachment II.
2.3 MedView shall contract with Network Providers which have agreed to
provide Covered Services to Subscribers substantially in accordance with the
terms of this Agreement. MedView will require Network Providers to perform
Covered Services for Subscribers in the same manner and pursuant to the same
professional medical standards offered to all of their patients, and such
providers shall provide said services in the most efficient and prompt manner
available, including giving priority attention to the scheduling of
Subscribers' medical services.
2.4 MedView will further require Network Providers to agree not to
differentiate or discriminate in the treatment of Subscribers or in the
quality of services delivered to Subscribers on the basis of race, sex, age,
religion, place of residence, health status or source of payment.
2.5 MedView shall provide, on a monthly basis or more frequently as
reasonably required by Company, updated information in a mutually acceptable
format regarding Network Provider effective dates and termination dates,
current listings of Network Providers, including names, billing addresses,
facility office addresses, telephone numbers, tax identification numbers, and
in the case of physicians, their specialties, and, where Company is
performing repricing, Network Provider contract rate information, and any
other relevant information known to MedView about the Network Providers in
its Network(s).
2.6 MedView shall continue to develop its Network(s) in ways which ensure
that the Network Provider mix can provide a full range of providers in
sufficient numbers and specialties to meet the needs of Clients in the Service
Area(s).
3. COMPANY'S OBLIGATIONS
3.1 Company shall use its best efforts to notify MedView no less than
thirty (30) days prior to the implementation date of a new Client to allow
for adequate Network Provider communications and verification of Clients'
implementation information.
3.2 Company shall identify MedView's Network(s) by using MedView's name on
Subscriber identification cards, and Network Provider directories. Company
shall use, or require Clients' use of, MedView's logos and stylized service
marks on Subscribers' identification cards and Network Provider directories
to ensure Network recognition. Company may not otherwise use MedView's names
and trademarks without its prior written permission.
3.3 Company shall ensure that all Clients seeking access to MedView's
Network(s) for group health purposes, shall have established and implemented,
prior to the initiation and for the duration of access to MedView's
Network(s), tangible steering mechanisms designed to direct Subscribers to
Network Providers ("Steering Mechanisms"). These Steering Mechanisms shall
include Plan Design, or comparable financial incentives and/or discentives
program, and the issuance and required use by Subscribers of identification
cards, and may also include distributing Network Provider directories to
Subscribers, the use of wall cards, and educating Subscribers on, and
encouraging the use of, toll-free referral telephone numbers. Company
acknowledges and agrees that Network Provider contract rates may not apply to
claims for group health Covered Services where Clients have failed to
implement Steering Mechanisms.
<PAGE>
3.4 Company shall promptly, but in no event later than ten (10) days
after Company learns of such claims, notify MedView in writing of any
disputes regarding adjustments to Network Provider bills, including any and
all claims, demands or lawsuits threatened or brought against Company,
Company Clients or Subscribers relating to Covered Services provided
hereunder. Company shall thereafter promptly provide MedView with all
information and documents relevant to the dispute, and shall allow MedView
the opportunity to intervene in an attempt to resolve such disputes or claims.
3.5 Company must print its own Network Provider directories or
purchase same from MedView at MedView's cost plus ten percent (10%).
3.6 Company agrees to make full and adequate disclosure of all facts
required by state and federal statutes and regulations to be disclosed to all
of its employer and plan administrators Clients utilizing MedView's
Network(s).
3.7 Company shall, on behalf of Company Clients, collect and remit
payment to Network Providers promptly and within the time mandated by
applicable law. Company acknowledges and agrees that Network Provider
contracted rates may not apply to Network Provider bills paid more than
thirty (30) days after the date the bill is submitted by the Network Provider
for payment.
3.8 Company shall use its best efforts to encourage Company Clients to
utilize MedView's Network(s) in all Services Area(s) in which they have
business facilities, employee sites or insureds.
3.9 Company shall promptly pay MedView's access fees in accordance
with Section 5 herein.
4. NETWORK ACCESS
4.1 MedView shall facilitate the provision of Covered Services by
Network Providers at such times, and in such locations within the Service
Area(s), as shall be necessary for the prompt and proper rendition thereof,
in order to fulfill its obligations under this Agreement. The scope of
Network access to be provided to Company hereunder shall be as outlined on
Attachment III.
4.2 The lines of Health Benefits Program business for which Company
shall have access to MedView's Network(s) are described on Attachment IV.
4.3 MedView has the right to offer Network access to any Client in any
service area in which Company has not accessed MedView's Network(s) hereunder.
4.4 The right of Network access established herein shall not be
construed to permit Company to afford direct or indirect access to MedView's
Network(s) to other health care networks or managed care organizations,
unless Company obtains MedView's prior written consent to such secondary
Network access.
5. NETWORK ACCESS FEES
5.1 As compensation to MedView for Company's access to its Network(s),
MedView shall be entitled to receive from Company the Network access rates
referenced on Attachment V.
5.2 For purposes of this Agreement, "Savings" shall be defined in the
context of workers' compensation business as (a) in fee schedule states, the
difference between the state-mandated fee schedule and the Network Provider
contracted rate, and (b) in non-fee schedule states, the difference between
the billed charge and the Network Provider contract rate. "Savings" shall be
defined in the context of other lines of Health Benefits Program business as
the difference between billed charge and the Network Provider contracted rate.
5.3 Network access fees applicable to Company shall remain in effect
during the initial year of the term of this Agreement, and thereafter shall
be subject to adjustment on an annual basis on the anniversary of the
<PAGE>
Effective Date by mutual written agreement of the parties.
5.4 Network Provider bill repricing will be preformed by the party
specified in Attachment VI, and will be performed in accordance with the
criteria referenced therein.
5.5 Company shall, within thirty (30) days after the close of any
month in which Covered Services are provided to Subscribers, remit the
appropriate access fee to MedView. In the event Company fails to remit the
appropriate access fee within said thirty (30) day period, (a) a late charge
of five percent (5%) of the outstanding monthly access fee shall be attached,
and (b) interest shall accrue on the outstanding balance from the due date at
the highest rate allowed by law. In the event late charges are deemed to be
interest and the aggregate of accrued interest and late charges exceed the
highest rates then allowed by Michigan law, the aggregate of interest and
late charges shall be reduced to comply with Michigan usury statutes
currently in effect.
6. GENERAL PROVISIONS
6.1 CONFIDENTIALITY. The parties agree to preserve as confidential the
other parties' trade secrets, Client lists and rates, Network Provider data
base information and contracted rates, software, systems and data processes,
plans and procedures, confidential marketing, pricing and Network Provider
rate information (collectively "Confidential Information"). Except with the
express written consent of the protected party, the other party shall not
disclose to others or take or use for its own purposes or the purposes of
others at any time, any Confidential Information which may have been or may be
obtained by it by reason of its relationship with the protected party. This
provision shall not apply to information which is commonly known or otherwise
in the public domain.
6.2 INDEMNIFICATION. Each party shall indemnify and hold the other
harmless from and against any and all claims, losses, liabilities, damages,
costs, penalties, interest and expenses, including reasonable attorneys' fees
arising from such party's actions or omissions regarding its obligations
under this Agreement. Further, Company shall indemnify and hold MedView
harmless from any claims by Network Providers or other third parties arising
from or relating to Company's failure to fully comply with its obligations
pursuant to Section 3.3 herein or Company Clients' failure to utilize
financial incentives programs in the context of group health business.
Notwithstanding the foregoing provisions, no party shall be liable to the
other party nor provide any indemnification protection whatsoever regarding
claims of professional negligence by patients against or involving Network
Providers.
6.3 NONSOLICITATION. Company agrees that, for so long as Company is
accessing MedView's Network(s) pursuant to this Agreement, Company shall not
directly or indirectly communicate with Network Providers for the purpose of
negotiating with such Network Providers to enter into preferred provider
organization or manage care organization contracts with, or on behalf of,
Company.
6.4 LIABILITY INSURANCE. MedView and Company agree to obtain and keep
in force all appropriate insurance coverages, with limits that are reasonable
and customary for their businesses to cover liabilities and claims which may
arise in relation to or in connection with this Agreement.
7. TERM AND TERMINATION
7.1 This Agreement shall commence on the Effective Date and shall
continue in full force and effect for a period of one (1) year, subject only
to the early termination provisions of Section 7.2. It shall thereafter
automatically renew for successive one (1) year periods unless the party
seeking not to renew gives written notice to the other at least ninety (90)
days prior to expiration of the then-current term. Termination of this
Agreement shall not relieve either party of its obligations which arose prior
to the effective date thereof.
7.2 Either party may terminate this Agreement (i) without cause upon
giving one hundred eighty (180) days prior written notice to the other, or
(ii) if either party materially breaches this Agreement in any manner, and
such breach continues for a period of thirty (30) days after written notice
is given to the breaching
<PAGE>
party, specifying the nature of the breach and requesting that it be cured.
8. MISCELLANEOUS
8.1 INDEPENDENT CONTRACTOR. MedView and Company are, and shall at all
times during the term of this Agreement remain, independent contractors for
purposes of this Agreement.
8.2 ASSIGNMENT. This Agreement cannot be assigned by either party
without the mutual written consent of the other parties.
8.3 NO THIRD PARTY BENEFICIARIES. Nothing contained herein shall be
construed to give any person other than the parties hereto any legal or
equitable right, remedy or claim, under or with respect to this Agreement.
8.4 GOVERNING LAW, JURISDICTION AND VENUE. The terms of this Agreement
shall be governed by and construed in accordance with the laws of the State
of Michigan, and the parties hereto consent to jurisdiction and venue in the
state and federal courts located in Oakland County, Michigan.
8.5 SURVIVAL. The provisions of Sections 5.5, 6.1, 6.2, 6.3 and 8.7
shall survive the termination of this Agreement.
8.6 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and all attachments
and other documents furnished pursuant to this Agreement, and expressly made
a part hereof, shall constitute the entire agreement relating to the subject
matter hereof betweeen the parties hereto. No modifications, waivers or
amendments shall be effective unless in writing and signed by both parties.
8.7 ATTORNEYS' FEES. In the event of any litigation between the
parties to enforce any provision of this Agreement or to protect or establish
any right or remedy of any party hereunder, the prevailing party shall be
entitled to an award of legal fees and costs of proceedings, including but
not limited to reasonable attorneys' fees, expert witness fees, and legally
recoverable expenses iuncurred by such prevailing party in connection with
such dispute.
IN WITNESS WHEREOF, authorized representatives of the parties have
confirmed the Agreement of the parties to the foregoing terms as of the date
first set forth above by affixing their signatures below.
MEDVIEW: COMPANY:
MEDVIEW SERVICES, INCORPORATED ROCKPORT COMMUNITY NETWORK, INC.
By: /s/ [Illegible] By: /s/ Michael E. Kove
---------------------------- --------------------------------
Its: Sen R.V.P. Its: President
--------------------------- ----------------------------
<PAGE>
ATTACHMENT I
Service Area(s)
NATIONAL SERVICE AREA
<PAGE>
ATTACHMENT II
MedView's Credentialing Requirements
- - Valid and current DEA certificate
- - Valid, current and sufficient medical malpractice coverage as follows:
$100,000/$300,000 for Internal Medicine, Pediatrics, General
Practice and Family Practice (not practicing Obstetrics). All other
providers must carry $1,000,000/$3,000,000 or as dictated by the
medical staff bylaws of participating hospital.
- - Valid and current medical license
- - No recorded conviction or charge of a criminal offense
- - No recorded expulsion or suspension from receiving payment under Medicare
or Medicaid programs
- - No recorded revocation or limitation of medical license
- - Willingness to participate in review functions of utilization review and
quality assurance programs
- - Admitting privileges to, and be in good standing with, a hospital
- - No involuntary reduction or scope of admitting privileges at any hospital
- - Never been subject to any medical staff monitoring or special review
activity of public record or reasonably discoverable upon proper inquiry
- - Each hospital who is a provider shall be and shall remain accredited by
the JCAHO
Credentialing Process
1. Provider completes application and forwards to MedView.
2. Provider application is reviewed by the provider relations staff. Any
providers with a history of litigation are sent to the medical director for
review.
3. Upon receipt of provider credentialing approval, the facilities are visited
and equipment, facility inspection and staffing levels are observed.
4. Contracted facilities receive periodic visits to verify that facilities
continue to meet MedView standards, following network inclusion.
5. All providers are re-credentialed every two years.
<PAGE>
ATTACHMENT III
SCOPE OF ACCESS
CLIENT SPECIFIC EXCLUSIVITY
A. CLIENTS.
The scope of Company's permitted access to MedView's Network(s) shall
extend to permit the following Clients or classes of Clients to have access
to MedView's Network(s), for the lines of business referenced on Attachment IV:
CHECK ALL THAT APPLY:
TYPES OF CLIENTS
/ / Participating Employer Insureds (WHERE COMPANY IS AN INSURANCE
COMPANY)
/ / Member Employer Groups (WHERE COMPANY IS A SELF-INSURANCE FUND OR
PURCHASING GROUP)
/X/ Employer Clients (WHERE COMPANY IS A BILL REVIEW COMPANY OR A THIRD
PARTY ADMINISTRATOR)
/ / Employer Clients
/ / Units, Divisions or Branch Officers of Employer (WHERE COMPANY IS A
SELF-INSURED EMPLOYER)
B. CLIENT EXCLUSIVITY.
During the term of this Agreement, the Company shall use its best efforts
to promote the selection of the MedView Network(s) to Company Clients in the
Service Area(s), and such other service areas as the parties may, from time
to time, agree to access. Each Company Client which accesses MedView's
Network(s) hereunder shall exclusively utilize the MedView Network(s) in the
Service Area(s) accessed to the extent this is subject to Company's control.
Stated another way, once a Company Client determines to access MedView's
Network in a particular Service Area, said Client must agree to abide by
MedView's requirements herein relating to exclusivity, and shall be prohibited
from accessing any network other than MedView's Network in the accessed
Service Area for the duration of the term of the Company's access to the
MedView Network. In the event a Company Client fails to abide by this
exclusivity requirement, Company shall immediately terminate Network access to
such Client.
<PAGE>
ATTACHMENT IV
HEALTH BENEFITS PROGRAM LINES OF BUSINESS
CHECK ALL THAT APPLY:
/X/ Workers' Compensation
/X/ Group Health
/ / Automobile Medical (including personal injury protection, assigned
risk, but not to include uninsured motorist coverage or assigned
claims)
/ / General Liability
<PAGE>
ATTACHMENT V
NETWORK ACCESS RATES
WORKERS' COMPENSATION
Company shall pay EIGHTEEN percent (18%) of Savings for Network access
for workers' compensation business.
<PAGE>
ATTACHMENT V
NETWORK ACCESS RATES
GROUP HEALTH
Company shall pay N/A ($._____) per member per month ("PMPM") for
hospital only access and SEE BELOW cents ($._____) PMPM for hospital and
other provider access, where the Company's Client's method of payment is
based upon capitated payments and EIGHTEEN (18%) of Savings for hospital and
other provider access, where Company's Client's method of payment is based on
percentage of Savings and such Client has a Plan Design in place.
<TABLE>
<CAPTION>
NUMBER OF LIVES PEPM
--------------- ----
<S> <C>
0 - 25,000 $2.50
25,001 - 50,000 2.35
50,001 - 100,000 2.25
100,000 + 2.00
</TABLE>
<PAGE>
ATTACHMENT VI
NETWORK PROVIDER BILL REPRICING
COMPANY REPRICES
1. In the event, upon prior written notice to MedView, Company
requests to perform Network Provider bill repricing, Company must be
preapproved by MedView, and must satisfy MedView's attached minimum
repricing, audit and data field requirements, including criteria for
identification of Network charges, savings, compensable claims and other data.
2. Company must provide to MedView monthly cost savings and
utilization review reports as outlined in the attached repricing criteria.
3. Company shall be required to attach an Explanation of Benefits
("EOB") for each Network Provider bill which identifies the MedView Network
and which indicates the Network Provider, the billed charges and adjustments.
4. Clients and Company shall identify MedView (using MedView's logo)
and Company on Subscriber group health identification cards, EOBs and Network
Provider directories to ensure Network Provider recognition. MedView's names
and trademarks may not otherwise be used without its prior written permission.
5. Company shall perform repricing of claims in Service Area(s) with
the Network and Provider appropriately identified.
6. Company agrees that the Network Provider data bases of MedView that
are in the possession of the Company cannot be released by the Company to its
Clients. Provider data bases audits will be accomplished by MedView with
notification to the Company no less than fifteen (15) days in advance of the
date on which it desires to undertake the audit. Audits shall be performed no
more frequently than once each quarter, unless MedView identifies substantive
issues which may negatively impact MedView or its Network. Audits may be
performed as frequently as needed to ensure that the Company is meeting
operational standards. The audit shall be conducted entirely at the auditing
party's expense, and will be coordinated through the Company's offices to
accommodate Client confidentiality and competitive sensitivities.
<PAGE>
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- ------------------------------------------------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
----------------------------------------------
Date of Report (Date of earliest event reported) December 17, 1997
-----------------------------
PROTOKOPOS CORPORATION
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- ------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
0-23514 33-0601497
- ------------------------------ -----------------------------------
(Commission File Number) (IRS Employer Identification No.)
50 Briar Hollow Lane, Suite 515 West, Houston, Texas 77027
- ----------------------------------------------------- --------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (800) 734-4460
<PAGE>
ITEM 1. CHANGE IN CONTROL OF REGISTRANT.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to an Agreement and Plan of Reorganization dated December
12, 1997 (the Agreement) the registrant acquired effective December 17, 1997.
All of the Capital Stock of The Rockport Group of Texas, Inc., a Nevada
Corporation ("Rockport") for 2,940,928 shares of the Registrant's Common
Stock. Prior management of the Registrant resigned and was replaced by
management of Rockport. Immediately prior to the acquisition the Registrant
had 1,019,040 shares outstanding. Based on 3,959,968 shares outstanding, the
ownership by executive officers, directors, and holders of more than 5% of
the outstanding capital stock of the Registrant are as follows:
<TABLE>
<CAPTION>
Name, address Number of shares
and Position Beneficially held Percentage
------------- --------------------- ----------
<S> <C> <C>
Harry M. Neer(1) 980,310 24.83%
President and Director
Larry K. Hinson(1) 980,309 24.83%
Chief Financial Officer,
Secretary and Director
John K. Baldwin 980,309 24.83%
Chairman and Director
- ------------------
All officers and Directors 2,940,928 74.26%
as a group
</TABLE>
(1) The address of this person is C/O of the Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a)(b) The required financial statements and pro forma financial
information is unavailable as of the date hereof and will be filed by the
Registrant pursuant to the requirements of the Securities Exchange Act and
the rules and regulations promulgated thereunder within 60 days of the date
of the event reported herein.
(c) Exhibits
2. Plan of acquisition, reorganization, arrangement,
liquidation or succession
2.1 Agreement and Plan of Reorganization, dated
December 12, 1997, between the Registrant and
Rockport.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: December 30, 1997 PROTOKOPOS CORPORATION
By: /s/ Harry M. Neer
-----------------------------
Harry M. Neer
President
3
<PAGE>
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- ------------------------------------------------------------------------------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
---------------------------------------
Date of Report (Date of earliest event reported) December 17, 1997
---------------------------
ROCKPORT HEALTHCARE GROUP, INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- ------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
0-23514 33-0601497
- ------------------------ ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
50 Briar Hollow Lane, Suite 515 West, Houston Texas 77027
- --------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (800) 734-4460
<PAGE>
ITEM 1. CHANGE IN CONTROL OF REGISTRANT.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to an Agreement and Plan of Reorganization dated December 12,
1997 as amended (the Agreement), the registrant acquired effective December
17, 1997 all of the capital Stock of The Rockport Group of Texas, Inc., a
Nevada corporation ("Rockport") for 1,513,275 shares of the Registrant's
Common Stock. Prior management of the Registrant resigned and was replaced by
management of Rockport. Immediately prior to the acquisition the Registrant
had 1,019,040 shares outstanding, Based on 2,532,315 shares outstanding, the
ownership by executive officers, directors, and holders of more than 5% of the
outstanding capital stock of the Registrant are as follows:
<TABLE>
<CAPTION>
Name, address Number of shares
and Position Beneficially held Percentage
------------- ----------------- ----------
<S> <C> <C>
Harry M. Neer (1) 504,425 19.9%
President and Director
Larry K. Hinson (1) 504,425 19.9%
Chief Financial Officer,
Secretary and Director
John K. Baldwin 504,425 19.9%
Chairman and Director
- ------------------------
All officers and Directors 1,513,275 59.8%
as a group
</TABLE>
(1) The address of this person is c/o of the Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a)(b) The required financial statements and pro forma financial
information is unavailable as of the date hereof and will be filed by the
Registrant pursuant to the requirements of the Securities Exchange Act and
the rules and regulations promulgated thereunder within 60 days of the date
of the event reported herein.
(c) Exhibits
2. Plan of acquisition, reorganization, arrangement,
liquidation or succession.
2
<PAGE>
2.1. Agreement and Plan of Reorganization, dated
December 12, 1997, between the Registrant and
Rockport, as amended.
3. Certificate of Incorporation
3.1. Amendment to Certificate of Incorporation
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: February 28, 1998 ROCKPORT HEALTHCARE GROUP, INC.
By: /s/ Harry M. Neer
----------------------------
Harry M. Neer
President
4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
---------
Rockport Healthcare Group, Inc.
- -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.001 par value
- -------------------------------------------------------------------------------
(Title of Class of Securities)
74371T102
- -------------------------------------------------------------------------------
(CUSIP Number)
Jehu Hand, Esq.
Hand & Hand
24901 Dana Point Harbor Drive, Suite 200, Dana Point, California 92629
(714) 489-2400
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications)
December 17, 1997
- -------------------------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
Check the following box if a fee is being paid with the Statement / /. (A fee
is not required only if the reporting person: (1) has a previous statement of
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such
class.) (See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities and
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP Page 2 of 4 Pages
1. NAME OF REPORTING PERSON - SS OR IRS IDENTIFICATION NUMBER OF ABOVE PERSON:
Harry M. Neer
---------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
/ / A
/ / B
3. SEC USE ONLY:
---------------------------------------------------------------------------
4. SOURCE OF FUNDS:
Exchange of shares of The Rockport Group of Texas, Inc.
---------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2E:
/ /
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Mr. Neer is a citizen of the United States of America
---------------------------------------------------------------------------
7. SOLE VOTING POWER 504,425 shares
---------------------------------------------------------
8. SHARED VOTING POWER
-------------------------------------------------------
9. SOLE DISPOSITIVE POWER 504,425 shares
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
--------------------------------------------------
11. AGGREGATE AMOUNT OWED BY EACH REPORTING PERSON.
504,425
---------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
/ /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.9%
---------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON:
Individual
---------------------------------------------------------------------------
2
<PAGE>
ITEM 1. SECURITY AND ISSUER.
Common Stock, $.001 par value, of Rockport Healthcare Group, Inc.
(the "Company"), 50 Briar Hollow Lane, Suite 515 West, Houston
Texas 77027.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed on behalf of:
(a) Name: Harry M. Neer
(b) Principal Office address: The Rockport Group of Texas, Inc.
50 Briar Hollow Lane
Suite 515 West
Houston, Texas 77027
(c) During the last five years, Mr. Neer has not been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(d) During the last five years, Mr. Neer has not been a party to a
civil proceeding of a judicial or administrative proceeding,
the result of which was to make him subject to a judgement,
decree or final order enjoining future violations of or
prohibiting or mandatory activities subject to, federal or
state securities laws or funding any violations with respect
to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Mr. Neer exchanged all of his shares in The Rockport Group of Texas,
Inc., a Nevada corporation ("Rockport") in the transaction.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the transaction was to obtain the benefits of a
publicly tradeable company through the exchange by the Rockport
shares for Company shares.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Of the 2,532,315 shares of Common Stock outstanding Mr. Neer has
sole dispositive and voting power over 504,425 shares, or 19.9% of
the total outstanding shares.
3
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
None.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
None.
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: July 17, 1998 /s/ Harry M. Neer
----------------------------------
Harry M. Neer
4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
----
Rockport Healthcare Group, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.001 par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
74371T102
- --------------------------------------------------------------------------------
(CUSIP Number)
Jehu Hand, Esq.
Hand & Hand
24901 Dana Point Harbor Drive, Suite 200, Dana Point, California 92629
(714) 489-2400
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications
December 17, 1997
- --------------------------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
Check the following box if a fee is being paid with the Statement / /. (A
fee is not required only if the reporting person: (1) has a previous
statement of file reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities and
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP Page 2 of 4 Pages
1. NAME OF REPORTING PERSON - SS OR IRS IDENTIFICATION NUMBER OF ABOVE PERSON:
Larry K. Hinson
---------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
/ / A
/ / B
3. SEC USE ONLY:
----------------------------------------------------------------------------
4. SOURCE OF FUNDS:
Exchange of shares of The Rockport Group of Texas, Inc.
----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2B:
/ /
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Mr. Hinson is a citizen of the United States of America
----------------------------------------------------------------------------
7. SOLE VOTING POWER 504,425 shares
--------------------------------------------------------
8. SHARED VOTING POWER
------------------------------------------------------
9. SOLE DISPOSITIVE POWER 504,425 shares
---------------------------------------------------
10. SHARED DISPOSITIVE POWER
--------------------------------------------------
11. AGGREGATE AMOUNT OWED BY EACH REPORTING PERSON:
504,425
---------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
/ /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.9%
---------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON:
Individual
---------------------------------------------------------------------------
2
<PAGE>
ITEM 1. SECURITY AND ISSUER.
Common Stock, $.001 par value, of Rockport Healthcare Group, Inc. (the
"Company"), 50 Briar Hollow Lane, Suite 515 West, Houston Texas 77027.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed on behalf of:
(a) Name: Larry K. Hinson
(b) Principal Office address: The Rockport Group of Texas, Inc.
50 Briar Hollow Lane
Suite 515 West
Houston, Texas 77027
(c) During the last five years, Mr. Hinson has not been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).
(d) During the last five years, Mr. Hinson has not been a party to
a civil proceeding of a judicial or administrative proceeding, the
result of which was to make him subject to a judgement, decree or
final order enjoining future violations of or prohibiting or
mandatory activities subject to, federal or state securities laws
or funding any violations with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Mr. Hinson changed all of his shares in The Rockport Group of Texas,
Inc., a Nevada corporation ("Rockport") in the transaction.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the transaction was to obtain the benefits of a publicly
tradeable company through the exchange by the Rockport shares for
Company shares.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Of the 2,532,315 shares of Common Stock outstanding Mr. Hinson has sole
dispositive and voting power over 504,425 shares, or 19.9% of the total
outstanding shares.
3
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
None.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
None.
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: July 17, 1998 /s/ Larry K. Hinson
-----------------------------------------
Larry K. Hinson
4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
-------
Rockport Healthcare Group, Inc.
- -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.001 par value
- -------------------------------------------------------------------------------
(Title of Class of Securities)
74371T102
- -------------------------------------------------------------------------------
(CUSIP Number)
Jehu Hand, Esq.
Hand & Hand
24901 Dana Point Harbor Drive, Suite 200, Dana Point, California 92629
(714) 489-2400
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications
December 17, 1997
- -------------------------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
Check the following box if a fee is being paid with the Statement / /. (A
fee is not required only if the reporting person: (1) has a previous
statement of file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities and
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP Page 2 of 4 Pages
1. NAME OF REPORTING PERSON - SS OR IRS IDENTIFICATION NUMBER OF ABOVE
PERSON:
John K. Baldwin
---------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
/ / A
/ / B
3. SEC USE ONLY:
---------------------------------------------------------------------------
4. SOURCE OF FUNDS:
Exchange of shares of The Rockport Group of Texas, Inc.
---------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2E:
/ /
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Mr. Baldwin is a citizen of the United States of America
---------------------------------------------------------------------------
7. SOLE VOTING POWER 504,425 shares
---------------------------------------------------------
8. SHARED VOTING POWER
-------------------------------------------------------
9. SOLE DISPOSITIVE POWER 504,425 shares
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
--------------------------------------------------
11. AGGREGATE AMOUNT OWED BY EACH REPORTING PERSON:
504,425
---------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
/ /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.9%
---------------------------------------------------------------------------
14. TYPE REPORTING PERSON:
Individual
---------------------------------------------------------------------------
2
<PAGE>
ITEM 1. SECURITY AND ISSUER.
Common Stock, $.001 par value, of Rockport Healthcare Group, Inc.
(the "Company"), 50 Briar Hollow Lane, Suite 515 West, Houston
Texas 77027.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed on behalf of:
(a) Name: John K. Baldwin
(b) Principal Office address: The Rockport Group of Texas, Inc.
50 Briar Hollow Lane
Suite 515 West
Houston, Texas 77027
(c) During the last five years, Mr. Baldwin has not been convicted
in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(d) During the last five years, Mr. Baldwin has not been a party to
a civil proceeding of a judicial or administrative proceeding,
the result of which was to make him subject to a judgement,
decree or final order enjoining future violations of or
prohibiting or mandatory activities subject to, federal or state
securities laws or funding any violations with respect to such
laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Mr. Baldwin changed all of his shares in The Rockport Group of
Texas, Inc., a Nevada corporation ("Rockport") in the transaction.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the transaction was to obtain the benefits of a
publicly tradeable company through the exchange by the Rockport
shares for Company shares.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Of the 2,532,315 shares of Common Stock outstanding Mr. Baldwin has
sole dispositive and voting power over 504,425 shares, or 19.9% of
the total outstanding shares.
3
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
None.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
None.
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: July 17, 1998 /s/ John K. Baldwin
----------------------------------------
John K. Baldwin
4
