DISTRIBUTION AGREEMENT
THIS
DISTRIBUTION AGREEMENT (the “Agreement”) is made and entered into this
19th
day of
December 2005, by and between OCG
Technology,Inc.
(“OCGT”), a Delaware corporation, and PrimeCare
Systems, Inc. (“PrimeCare”),
a Delaware corporation and wholly-owned subsidiary of OCGT.
W
I T N E
S S E T H:
WHEREAS,
OCGT is the parent of PrimeCare and PrimeCare is a wholly-owned subsidiary
of
OCGT;
WHEREAS,
OCGT anticipates closing a Share Purchase Agreement (the “Share Purchase”) with
Xxxxx Vavithis (“Vavithis”), which transaction in expected to close on or about
December 30, 2005;
WHEREAS,
conditioned upon the closing of the Share Purchase, the Board of Directors
of
OCGT has resolved that it would be in the best interests of OCGT and its
stockholders that (i) all of the outstanding securities of PrimeCare (the
“PrimeCare Shares”) should be distributed to the record common and preferred
stockholders of OCGT, entitled to receive a dividend, existing at the close
of
business on December 29, 2005 (the “Record Date”) and immediately prior to the
closing of those certain Stock Purchase Agreements Dated December 19, 2005,
subject to adjustment by the National Association of Securities Dealers,
Inc.
(the “NASD”) setting an ex-dividend date, pro rata, on a one share for one share
basis (the “Distribution”); and (ii) that all shares of common stock of OCGT
issued after the opening of business on December 30, 2005, would be issued
subject to waiver of the Dividend only; and
WHEREAS,
the respective Boards of Directors of OCGT and PrimeCare have adopted
resolutions pursuant to which OCGT shall deposit all of the PrimeCare Shares
with Registrar and Transfer Company (“Transfer Company”), a transfer agency
registered with the Securities and Exchange Commission, to be held by Transfer
Company for Distribution to the OCGT stockholders, subject to the filing
and
effectiveness by PrimeCare of a registration statement on the appropriate
form
and related prospectus with the Securities and Exchange Commission (the
“Registration Statement” and the Prospectus) and such comparable applicable
state agencies, or in reliance upon an available exemption from the applicable
federal and state registration requirements as may be necessary, to lawfully
effect the Distribution by dividend (the “Dividend) to the OCGT stockholders of
all of the PrimeCare Shares on OCGT's behalf, subject to the terms and
provisions hereof (the “Plan of Distribution”);
NOW,
THEREFORE, in consideration of the closing of the Share Purchase and the
mutual
covenants and promises contained herein, it is agreed:
Section
1. Plan
of Distribution, Effective Date and Stockholders Entitled to
Participate.
1.1
The
effective date (the “Effective Date”) of the Dividend will be the same date as
the closing of the Share Purchase, at which time this Agreement shall take
effect. At the close of business on December 29, 2005, there shall be 49,901,121
outstanding shares of common stock of OCGT and 200 outstanding shares of
Series
C Preferred stock of OCGT. Only OCGT stockholders of record at that time
on
December 29, 2005 ( and prior to the closing of those certain Stock Purchase
Agreements Dated December 19, 2005), the Record Date for the Dividend (subject
to the effects of any adjustments resulting from the NASD setting an ex-dividend
date immediately following the closing of the Share Purchase), will be entitled
to participate in the Dividend and Distribution of the PrimeCare
Shares.
1.2
OCGT
hereby conveys all of the assets of OCGT and PrimeCare at the Record Date
to
PrimeCare.
Page
- 1
1.3
PrimeCare will assume, pay and indemnify and hold OCGT harmless from and
against
any and all liabilities of OCGT and PrimeCare that existed at the Record
Date,
of every kind and nature whatsoever, whether by contract, lease, license
or
otherwise, without qualification, including the costs and expenses of the
Dividend, the Distribution and the Plan of Distribution.
1.4
The
Distribution and the Plan of Distribution will be subject to the following
conditions:
(a)
All
of the PrimeCare Shares that are owned by OCGT, amounting to 69,901,121 shares,
will be deposited with Transfer Company and held by Transfer Company in escrow
(the “Distribution Escrow”) with a list of stockholders of OCGT at the Record
Date, subject to Distribution, on satisfaction of the following
conditions:
(i)
The
prior filing and effectiveness of a Registration Statement and Prospectus
with
the Securities and Exchange Commission or an available exemption from the
applicable federal and state registration requirements applicable to the
Distribution of the PrimeCare Shares by OCGT, in accordance with all applicable
federal and state securities laws, rules and regulations at PrimeCare's sole
cost and expense within a reasonable time, but not later than six months
from
the date hereof; and
(ii)
Compliance with applicable “blue sky” laws, rules and regulations respecting the
Dividend and the Distribution, by registration or exemption, in any state
in
which any stockholder of OCGT resided at the Record Date, as may be adjusted
by
any ex-dividend date set by the NASD, by PrimeCare, in accordance with all
applicable federal and state securities laws, rules and regulations at
PrimeCare's sole cost and expense within a reasonable time but not later
than
six months from the date hereof.
1.5
PrimeCare will timely file with the NASD advising it of the Distribution
and
Plan of Distribution including, as necessary, a description of this
Agreement.
Section
2. Closing.
The
closing of the Agreement (the “Closing”) will occur immediately on the closing
of the Share Purchase. The Closing may be accomplished by wire, express mail
or
other courier service, conference telephone communications or as otherwise
agreed by the respective parties or their duly authorized
representatives.
Section
3. Representations
and Warranties of OCGT.
OCGT
represents and warrants to, and covenants with, PrimeCare as
follows:
3.1
OCGT
is a corporation duly organized, validly existing and in good standing under
the
laws of the State ofDelaware and is licensed or qualified as a foreign
corporation in all states or jurisdictions in which the nature of its business
or the character or ownership of its properties makes such licensing or
qualification necessary.
3.2
The
current pre-Dividend and pre-Distribution authorized capital stock of OCGT
consists of 50,000,000 shares of common stock, $.01 par value per share (the
“OCG Common Stock”), and 1,000,000 shares of preferred stock, par value of $.10
per share (“OCG Preferred Stock” and, together with OCG Common Stock, the “OCG
Capital Stock”), of which OCG Preferred Stock, 200,000 shares have been
designated as Series C Preferred Stock (the “Series C Stock”), 100,000 shares
have been designated as Series E Preferred Stock (the “Series E Stock”) and
400,000 shares have been designated as Series F Preferred Stock (the “Series F
Stock”). As of the Record Date, OCG shall have issued and outstanding:
49,901,121 shares of OCG Common Stock; 200,000 shares of Series C Stock;
and
33,000 shares of Series E Stock, all of which are fully paid and non-assessable
and issued in accordance with applicable state corporate law and federal
and
state securities laws, rules and regulations. No other shares of OCG Capital
Stock shall be issued before or subsequent to the Record Date, unless pursuant
to the Share Purchase Agreement and unless the issuance shall be conditioned
upon waiver of the Dividend.
Page
- 2
3.3
OCGT
has full corporate power and authority to enter into this Agreement and to
carry
out its obligations hereunder and will deliver to PrimeCare or its
representatives at the Closing a copy of resolutions of its Board of Directors
authorizing execution of this Agreement by OCGT's officers and performance
thereunder.
3.4
Execution of this Agreement and performance by OCGT hereunder have been duly
authorized by all requisite corporate action on the part of OCGT, and this
Agreement constitutes a valid and binding obligation of OCGT and performance
hereunder will not violate any provision of the Articles of Incorporation,
By-Laws, agreements, mortgages or other commitments of OCGT.
Section
4. Representations,
Warranties and Covenants of PrimeCare.
PrimeCare
represents and warrants to, and covenant with, OCGT as follows:
4.1
PrimeCare is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is licensed or qualified as a
foreign corporation in all states or jurisdictions in which the nature of
its
business or the character or ownership of its properties makes such licensing
or
qualification necessary.
4.2
The
current authorized capital stock of PrimeCare consists of 200,000,000 shares
of
$0.001 par value per share common stock, of which 69,901,121 shares, all
owned
by OCGT, are and will be issued and outstanding at the Closing and 10,000,000
shares of $0.10 par value per share preferred stock, none of which will be
issued and outstanding. There are no outstanding options or calls pursuant
to
which any person has the right to purchase any authorized and unissued common
stock or other securities of PrimeCare. However, there are 14,151,262 warrants
outstanding to purchase common stock of PrimeCare at prices ranging between
$0.02 and $0.07.
4.3
PrimeCare has full corporate power and authority to enter into this Agreement
and to carry out its obligations hereunder and will deliver to OCGT or its
representative at the Closing a copy of the resolutions of its Board of
Directors authorizing execution of this Agreement by its officers and
performance thereunder.
4.4
Execution of this Agreement and performance by PrimeCare hereunder have been
duly authorized by all requisite corporate action on the part of PrimeCare,
and
this Agreement constitutes a valid and binding obligation of PrimeCare and
performance hereunder will not violate any provision of the Articles of
Incorporation, Bylaws, agreements, mortgages or other commitments of
PrimeCare.
Section
5. Conditions
Precedent to Obligations of PrimeCare.
All
obligations of PrimeCare under this Agreement are subject, at its option,
to the
fulfillment, before or at the Closing, of each of the following
conditions:
5.1
The
representations and warranties of OCGT contained in this Agreement shall
be
deemed to have been made again at and as of the Closing and shall then be
true
in all material respects and shall survive the Closing.
5.2
OCGT
shall have performed and complied with all of the terms and conditions required
by this Agreement to be performed or complied with by it before the Closing
and/or the Distribution.
Page
- 3
5.3
All
of the conditions respecting OCGT set forth herein shall have been satisfied
by
OCGT prior to the Closing and/or the Distribution.
5.4
The
Share Purchase between OCGT and HXP shall have been completed and
closed.
Section
6. Conditions
Precedent to Obligations of OCGT.
All
obligations of OCGT under this Agreement are subject, at OCGT's option, to
the
fulfillment, before or at the Closing, of each of the following
conditions:
6.1
The
representations and warranties of PrimeCare contained in this Agreement shall
be
deemed to have been made again at and as of the Closing and shall then be
true
in all material respects and shall survive the Closing.
6.2
PrimeCare shall have performed and complied with all of the terms and conditions
required by this Agreement to be performed or complied with by it before
the
Closing and/or the Distribution.
6.3
All
of the conditions respecting PrimeCare that are set forth herein shall have
been
satisfied by PrimeCare prior to the Closing and/or the
Distribution.
6.4
The
Share Purchase between OCGT and Vavithis shall have been completed and
closed.
Section
7. Termination.
Prior
to Closing, this Agreement may be terminated (1) by mutual consent in writing;
(2) by the directors of either OCGT or PrimeCare, if there has been a material
misrepresentation or material breach of any warranty or covenant by the other
party; or (3) by the directors of either OCGT or PrimeCare if the Share Purchase
shall not have timely taken place, unless adjourned to a later date by mutual
consent in writing, by the date fixed in the Share Purchase.
Section
8
General
Provisions.
8.1
Expenses.
All
costs and expenses incurred in connection with this Agreement will be paid
by
the party incurring such expenses.
8.2
Parties
in Interest.
This
Agreement will inure to the benefit of and be binding upon the parties hereto
and the respective successors and assigns. Nothing in this Agreement is intended
to confer, expressly or by implication, upon any other person any rights
or
remedies under or by reason of this Agreement.
8.3
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which will
be
deemed an original and all together will constitute one document. The delivery
by facsimile of an executed counterpart of this Agreement will be deemed
to be
an original and will have the full force and effect of an original executed
copy.
8.4
Severability.
The
provisions of this Agreement will be deemed severable and the invalidity
or
unenforceability of any provision hereof will not affect the validity or
enforceability of any of the other provisions hereof. If any provisions of
this
Agreement, or the application thereof to any person or any circumstance,
is
illegal, invalid or unenforceable, (a) a suitable and equitable provision
will
be substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision,
and (b) the remainder of this Agreement and the application of such provision
to
other persons or circumstances will not be affected by such invalidity or
unenforceability, nor will such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof,
in any
other jurisdiction.
Page
- 4
8.5
Governing
Law.
This
Agreement will be deemed to be made in and in all respects will be interpreted,
construed and governed by and in accordance with the law of the State of
New
York without regard to the conflict of law principles thereof.
8.6
Amendment.
This
Agreement may be amended only with the approval of all the parties hereto,
but
no amendment will be made which substantially and adversely changes the terms
hereof. This Agreement may not be amended except by an instrument, in writing,
signed on behalf of each of the parties hereto.
IN
WITNESS WHEREOF, the parties have executed this Agreement and Plan of Share
Purchase effective the day and year first above written.
OCG
Technology,Inc. PrimeCare
Systems, Inc.
By:
/s/
Xxxxxx X. Xxxxxx By:
/s/
Xxxxxx X. Xxxxxx
Xxxxxx
X.
Xxxxxx, Xxxxxx
X.
Xxxxxx,
President President
Page
- 5