Exhibit No. 10.1
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AGREEMENT AND PLAN OF REORGANIZATION
by, between and among
OCG TECHNOLOGY, INC.
EPIDEMIC INTERVENTION SYSTEMS, INC.
CENTERSTAGING MUSICAL PRODUCTIONS, INC.
and
OTHER SIGNATORIES HERETO
Dated as of March 15, 2005
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), dated as
of March 15, 2005, is made and entered into by and among OCG TECHNOLOGY, INC., a
Delaware corporation ("OCG"), EPIDEMIC INTERVENTION SYSTEMS, INC., a Delaware
corporation and direct, wholly-owned subsidiary of OCG ("Merger Sub"),
CENTERSTAGING MUSICAL PRODUCTIONS, INC., a California corporation ("CMPI"),
Johnny Caswell, Howard Livingston, Roger Paglia and Jan Parent (collectively,
the "CMPI Shareholders"), PrimeCare Systems, Inc., a Delaware corporation and
direct, wholly-owned subsidiary of OCG ("PSI"), and Edward Levine, the President
and a stockholder of OCG ("Levine"), with reference to the following facts:
RECITALS:
WHEREAS, after carrying out the transactions described in Section 1.1,
the respective boards of directors of OCG, Merger Sub and CMPI deem it advisable
and in the best interests of their respective stockholders that Merger Sub merge
with and into CMPI (the "Merger") upon the terms and subject to the conditions
set forth herein; and
WHEREAS the respective boards of directors of OCG, Merger Sub and CMPI
have approved the Merger; and
WHEREAS, as in inducement to the other parties to enter into this
Agreement and to consummate the Merger and the other transactions contemplated
herein, the parties hereto are willing to make certain representations and
warranties as set forth herein; and
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, the parties hereto
agree as follows:
ARTICLE I
PRE-CLOSING TRANSACTIONS AND THE MERGER
1.1 Spin-off of PSI
(a) Prior to the Effective Time (as defined in Section
1.5), OCG shall (I) transfer, assign and contribute to PSI (1) all of
Cog's shares of capital stock of its wholly-owned subsidiaries,
Optronics Labs, Inc., a New York corporation, and Mooney Edwards
Enterprises, Inc., a Florida corporation, (2) all of OCG's operating
assets, if any, but excluding the Excluded Assets (as hereinafter
defined), and (3) all of OCG's Liabilities (as hereinafter defined),
and (ii) declare and pay with respect to the OCG Common Stock and OCG
Series C Stock (each as defined in Section 5.2) outstanding as of the
record date therefor established by OCG (the "Record Date") a dividend
of all of the shares of capital stock of PSI held by OCG in a spin-off
transaction as provided in Section 8.10 (collectively, the "Spin-off").
(b) "Excluded Assets" for purposes of this Section 1.1,
means all stock books, minute books, tax returns and other books and
records of OCG.
(c) "Liabilities" for purposes of this Agreement means
any and all direct or indirect liabilities, indebtedness, obligations,
commitments, claims, deficiencies, expenses, deferred income,
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guaranties or endorsements of any type, whether known, unknown,
accrued, absolute, contingent, matured or unmatured.
(d) In connection with the Spin-off, OCG shall use its
best efforts to obtain from all or substantially all of its creditors
written statements, in form and content satisfactory to CMPI, by which
such creditors agree to PSI's assumption of all of OCG's Liabilities to
such creditors pursuant to the Spin-off and to release and hold
harmless OCG and the Surviving Corporation from and against such
Liabilities following the Closing.
1.2 Exchange of Options
Prior to the Effective Time, OCG shall cause PSI to offer, as of the
Record Date, to each holder on such date of options, warrants or other rights to
subscribe for or purchase OCG Common Stock (collectively, the "OCG Stock
Rights"), in exchange therefor, an option, warrant or similar right to subscribe
for or purchase an equivalent number of shares of stock of PSI on substantially
the same terms and conditions as those contained in such corresponding OCG Stock
Rights (the "Exchange Offer"). The Exchange Offer shall occur as of, and shall
be conditioned upon, the Closing (as defined in Section 3.6).
1.3 Authorization of Series F Preferred Stock
OCG has, or before the Closing will have, duly created a series of the
authorized shares of its preferred stock, designated Series F Preferred Stock
(the "OCG Series F Stock") and having the rights, restrictions, privileges and
preferences set forth in the form of Certificate of Designation Creating Series
F Preferred Stock (the "Certificate of Designations") attached as Exhibit A to
this Agreement. OCG also has, or before the Closing will have, duly authorized
the issuance and sale of shares of OCG Series F Stock pursuant to the Merger.
1.4 Advances by CMPI
Prior to the date hereof, CMPI has advanced to OCG the principal sum of
$75,000, including $50,000 evidenced by that certain Promissory Note of OCG,
dated November 24, 2004 (the "Original Promissory Note"). Concurrently with the
execution of this Agreement, CMPI shall advance to OCG an additional $25,000,
and, following the date hereof, CMPI agrees to make further advances to OCG of
up to $75,000 in the aggregate upon request by OCG as follows and in the
following order of priority:
(a) $25,000 upon the later to occur of (i) March 23, 2005
or (ii) OCG's filing with the Securities and Exchange Commission
("SEC") of a registration statement on Form SB-2 or other available
form relating to the Spin-off contemplated in Section 1.1, above;
(b) subject to the prior advance in subparagraph (a),
above, an additional $25,000 upon the later to occur of (i) March 30,
2005 or (ii) OCG furnishing to CMPI the signed statements referred to
in Section 1.1(d) of the holders of not less than 80% of the aggregate
Liabilities of OCG (excluding for this purpose all Liabilities owed to
telephone service providers and public utilities); and
(i) subject to the prior advances pursuant to
subparagraph (a) and (b), above, an additional $25,000 on
April 6, 2005.
Concurrently with the execution of this Agreement, OCG shall surrender
to CMPI for cancellation the Original Promissory Note in exchange for a
promissory note of OCG, in the form attached hereto as Exhibit B to this
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Agreement, which promissory note shall evidence all of the foregoing sums
advanced by CMPI (the "New Promissory Note").
1.5 Additional Cash Requirements
PSI and Levine agree, jointly and severally, that they shall pay or
provide to OCG any and all cash in excess of the amounts advanced by CMPI under
Section 1.4, above, as is necessary to enable OCG to meet its obligations under
this Agreement and other working capital and general corporate needs for the
period prior to the Closing. To the extent any such amounts are provided in the
form of an advance or loan to OCG, they shall be forgiven as of the Closing
without any further obligation or Liability on the part of OCG.
1.6 The Merger
Upon the terms and subject to the conditions hereof, at the Effective
Time, Merger Sub shall merge with and into CMPI and the separate corporate
existence of Merger Sub shall thereupon cease, and CMPI shall be the surviving
corporation in the Merger (the "Surviving Corporation"). The Merger shall have
the effects set forth in this Agreement and in Chapter 11 of the California
General Corporation Law (the "CGCL") and Subchapter IX of the Delaware General
Corporation Law (the "DGCL").
1.7 Effective Time of the Merger
The Merger shall become effective at or following the Closing upon the
filing with the respective Secretaries of State of the States of California and
Delaware of an agreement of merger (the "Agreement of Merger") in accordance
with the requirements of the CGCL and the DGCL (the "Effective Time").
1.8 Tax Treatment
It is intended that the Merger shall qualify as a reorganization under
Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the
"Code"), and related sections and Treasury Regulations thereunder.
ARTICLE II
THE SURVIVING CORPORATION
2.1 Certificate of Incorporation
The articles of incorporation of CMPI in effect immediately prior to
the Effective Time shall be the articles of incorporation of the Surviving
Corporation at and after the Effective Time, and thereafter may be amended in
accordance with the terms thereof and the CGCL.
2.2 Bylaws
The bylaws of CMPI in effect immediately prior to the Effective Time
shall be the bylaws of the Surviving Corporation at and after the Effective
Time, and thereafter may be amended in accordance with their terms and as
provided by the articles of incorporation of the Surviving Corporation and the
CGCL.
2.3 Directors and Officers
At and after the Effective Time, the directors and officers of the
Surviving Corporation shall be the directors and officers of CMPI immediately
prior to the Effective Time, until their respective successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the articles of incorporation and bylaws of the
Surviving Corporation.
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ARTICLE III
CONVERSION OF SHARES
3.1 Conversion of Capital Stock
As of the Effective Time, by virtue of the Merger and without any
action on the part of the holders of any capital stock or other securities
described below:
(a) Each share of the common stock, no par value per
share, of CMPI ("CMPI Common Stock") issued and outstanding immediately
prior to the Effective Time shall be converted into and exchanged for
the right to receive fully paid and nonassessable shares of OCG Series
F Stock as provided herein. All such CMPI Common Stock, when so
converted and exchanged, shall no longer be outstanding and shall
automatically be canceled and retired, and the holder of a certificate
("CMPI Stock Certificate") that, immediately prior to the Effective
Time, represented outstanding shares of CMPI Common Stock shall cease
to have any rights with respect thereto, except the right to receive,
upon the surrender of such CMPI Stock Certificate, the shares of OCG
Series F Stock (the "Merger Shares") to which such holder is entitled
pursuant to this Section 3.1(a). Until surrendered as contemplated by
this Section 3.1(a) and Section 3.3(a), each CMPI Stock Certificate
shall be deemed at any time after the Effective Time to represent only
the right to receive upon such surrender the Merger Shares as
contemplated by this Section 3.1(a). Subject to Section 3.1(c), below,
the number of shares of OCG Series F Stock that will be issued as a
result of the Merger for each share of CMPI Common Stock will equal the
quotient determined by dividing (i) the number of shares of OCG Series
F Stock determined by the formula [(X / .04) x .96)] / 10,000, where X
equals the sum of (1) the total number of shares of OCG Common Stock
outstanding as of the Effective Time plus (2) the total number of
shares of OCG Common Stock issuable upon conversion, in full, of all
OCG Series C Stock (as defined in Section 5.2) outstanding as of the
Effective Time plus (3) the total number of shares of OCG Common Stock
issuable upon the exercise, in full, of any and all shares of OCG Stock
Rights outstanding as of the Effective Time by (ii) the total number of
shares of CMPI Common Stock issued and outstanding immediately prior to
the Effective Time. The number of shares of OCG Series F Stock to be so
issued for each share of CMPI Common Stock is referred to herein as the
"Exchange Ratio."
(b) All outstanding convertible promissory notes of CMPI
(the "CMPI Convertible Notes") outstanding immediately prior to the
Effective Time shall be assumed by and become the principal liabilities
and obligations of OCG on the same terms and conditions thereof as
existed immediately prior to the Effective Date, which notes shall be
convertible into such number of shares of OCG Common Stock (as defined
in Section 5.2) determined in accordance with the terms of such notes.
The "Retained Merger Shares" (as defined in Section 3.2(c)) otherwise
to be received in the Merger by the CMPI Shareholders shall be subject
to cancellation as provided in Section 9.1 based upon such future
conversion of the CMPI Convertible Notes.
(c) Notwithstanding the foregoing, if, between the date
of this Agreement and the Effective Time, the outstanding shares of OCG
Series F Stock or other class or series of OCG Capital Stock (as
defined in Section 5.2) or CMPI Common Stock shall have been changed
into a different number of shares or a different class, by reason of
any stock dividend, subdivision, reclassification, recapitalization,
split, combination or exchange of shares, the Exchange Ratio shall be
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correspondingly adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of
shares; and
(d) Each share of the common stock, $.001 par value per
share, of Merger Sub (the "Merger Sub Common Stock") issued and
outstanding immediately prior to the Effective Time shall automatically
be converted into the same number of shares of common stock of the
Surviving Corporation, and shall, immediately after the Merger, be the
only shares of capital stock of the Surviving Corporation issued and
outstanding.
(e) Each share of each class and series of OCG Capital
Stock issued and outstanding immediately prior to the Effective Time
shall remain outstanding and shall not be affected by the Merger.
(f) All OCG Series F Stock issued upon the surrender of
the CMPI Stock Certificates in accordance with the terms hereof shall
be deemed to have been issued in full satisfaction of all rights
pertaining to such CMPI Stock Certificates and the CMPI Common Stock
formerly represented thereby; and from and after the Effective Time
there shall be no further registration of transfers effected on the
stock transfer books of the Surviving Corporation of shares of the CMPI
Common Stock which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, CMPI Stock Certificates are
presented to the Surviving Corporation for any reason, they shall be
canceled and exchanged as provided in this Article III.
(g) The parties agree that, notwithstanding any other
provision of this Agreement, the holders of the shares denominated as
"X" in the equation set forth in Section 3.1(a), above, shall own in
the aggregate 4% of total number of shares of OCG Common Stock
outstanding and issuable upon conversion of outstanding OCG Series C
Stock and any outstanding OCG Stock Rights as of the Effective Time and
after giving effect to the conversion, in full, of the CMPI Convertible
Notes following the Closing (but without giving effect to any other
transactions or events subsequent to the Closing).
3.2 Initial Merger Shares
(a) For purposes of this Agreement the following terms
shall have the meanings indicated:
(i) "Maximum CMPI Note Conversion Shares" shall
mean the maximum possible number of shares of OCG Common Stock
issuable upon the conversion, in full, of the CMPI Convertible
Notes outstanding as of the Effective Time;
(ii) "Actual CMPI Note Conversion Shares" shall
mean the actual cumulative aggregate number of shares of CMPI
Common Stock issued upon the conversion, in full, of the CMPI
Convertible Notes;
(iii) "Series F Conversion Shares" shall mean the
number of shares of OCG Common Stock issuable upon the
conversion, in full, of the aggregate Merger Shares issuable
in the Merger to the CMPI Shareholders; and
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(iv) "Retention Ratio" shall mean the ratio that
the Maximum CMPI Note Conversion Shares bears to the Series F
Conversion Shares.
(b) Notwithstanding any other provisions of this
Agreement, the initial aggregate number of shares of OCG Series F Stock
to be issued and delivered to the CMPI Shareholders at the Closing (the
"Initial Merger Shares") shall be equal to the product of the total
Merger Shares to which they otherwise would be entitled under Section
3.1(a) multiplied by the Retention Ratio. The Initial Merger Shares
shall be issuable and distributable at the Closing to the CMPI
Shareholders pro rata in accordance with their ownership of CMPI Common
Stock.
(c) In addition to the Initial Merger Shares issuable
pursuant to subparagraph (b), above, at the Closing the balance of the
Merger Shares to which the CMPI Shareholders are entitled under Section
3.1(a) (the "Retained Merger Shares") shall be issued by OCG in the
names of the CMPI Shareholders entitled thereto, and in such
denominations to which such holders are entitled, pursuant to Section
3.1(a), but shall be retained by OCG in escrow as provided in Article
IX. Upon the future conversion or satisfaction and cancellation, as the
case may be, of the CMPI Convertible Notes, the Retained Merger Shares
shall be cancelled by OCG or released to the CMPI Shareholders, as the
case may be, in accordance with Article IX.
3.3 Surrender and Payment
(a) At the Closing, OCG shall issue and deliver to each
holder of a CMPI Stock Certificate that immediately prior to the
Effective Time represented outstanding CMPI Common Stock, the Merger
Shares or the Initial Merger Shares, as the case may be, to which such
holder is entitled, in exchange for the holder's surrender for
cancellation of such CMPI Stock Certificate.
(b) If any shares of OCG Series F Stock are to be issued
to a Person (as hereinafter defined) other than the registered holder
of the CMPI Stock Certificates surrendered in exchange therefor, it
shall be a condition to such issuance that the CMPI Stock Certificates
so surrendered shall be properly endorsed or otherwise be in proper
form for transfer and that the Person requesting such issuance shall
pay to OCG any transfer or other taxes required as a result of such
issuance to a Person other than the registered holder or establish to
the satisfaction of the OCG that such tax has been paid or is not
applicable.
(c) For purposes of this Agreement, "Person" means an
individual, a corporation, a limited-liability company, a partnership,
an association, a trust or any other entity or organization, including
a governmental or political subdivision or any agency or
instrumentality thereof.
(d) If any CMPI Stock Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such CMPI Stock Certificate to be lost, stolen or
destroyed, OCG will issue in exchange for such lost, stolen or
destroyed CMPI Stock Certificate the Merger Shares deliverable in
respect thereof pursuant to this Agreement. OCG, in its discretion, may
require as a condition to such issuance that such Person also agree to
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indemnify, defend and hold harmless OCG from and against any Liability
to any Person with respect to such lost, stolen or destroyed CMPI Stock
Certificate.
3.4 OCG Preferred Stock
Prior to the Closing, OCG shall take such actions as are necessary to
retire the classes of OCG Control Stock designated "Series A Preferred Stock"
and "Series B Preferred Stock," respectively, so that neither such class of
shares shall be authorized as of the Closing.
3.5 No Fractional Shares
[Intentionally Omitted.]
3.6 Closing
(a) The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Troy &
Gould Professional Corporation, 1801 Century Park East, Suite 1600, Los
Angeles, California, at 10:00 A.M., local time, on the third business
day following the first date as of which all of the conditions set
forth in Article X hereof shall have been satisfied or waived, or at
such other date and time as OCG and CMPI shall otherwise agree in
writing (either such date, (the "Closing Date").
(b) At the Closing, (i) OCG and Merger Sub shall deliver
the various certificates, instruments, and documents referred to in
subparagraph (c), below, (ii) CMPI shall deliver the various
certificates, instruments and documents referred to in subparagraph
(d), below, (iii) CMPI and Merger Sub shall execute and file the
Agreement of Merger with the respective Secretaries of State of the
States of California and Delaware, and (v) the parties hereto shall
make any payments and undertake any other actions provided for in this
Section 3.6 in accordance with the terms of this Agreement.
(c) At the Closing, OCG or Merger Sub, as applicable,
shall deliver the following:
(i) OCG shall issue and deliver the Merger
Shares and issue and retain the Retained Merger Shares as
provided in Sections 3.2(a) and 3.3(a), respectively; and
(ii) OCG and Merger Sub shall furnish CMPI with:
(A) a certificate executed by the Secretary or an
Assistant Secretary of each of OCG and Merger Sub certifying
as of the date of the Closing Date (1) a true and complete
copy of the respective certificate of incorporation of OCG and
Merger Sub, certified as of a recent date by the Secretary of
State of the State of Delaware, and a true and complete copy
of the respective bylaws of OCG and Merger Sub, as certified
by the Secretary or an Assistant Secretary of OCG and Merger
Sub, as applicable, and (2) a true and complete copy of the
resolutions of the respective boards of directors of OCG and
Merger Sub authorizing the execution, delivery and performance
of this Agreement by OCG and Merger Sub and the consummation
of the transactions contemplated hereby; and
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(B) a certificate of the Secretary of State of the State
of Delaware certifying the good standing of OCG and Merger Sub
in such State, in each case, dated within 10 days of the
Closing Date.
(d) At the Closing, CMPI shall furnish OCG and Merger Sub
with:
(i) a certificate executed by the Secretary or
an Assistant Secretary of CMPI certifying as of the date of
the Closing Date (1) a true and complete copy of the articles
of incorporation of CMPI, certified as of a recent date by the
Secretary of State of the State of California, and a true and
complete copy of the bylaws of CMPI, certified by the
Secretary or an Assistant Secretary of CMPI, and (2) a true
and complete copy of the resolutions of the board of directors
of CMPI authorizing the execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated hereby; and
(ii) a certificate of each appropriate Secretary
of State certifying the good standing of CMPI in California
and in all states in which it is qualified to do business, in
each case, dated within 10 days of the Closing Date.
(e) At the Closing, CMPI shall pay and deliver to PSI, by
wire transfer to an account of PSI designated by PSI in writing prior
to the Closing Date, an amount equal to the difference, if any, between
$200,000 and the cumulative amount theretofore advanced by CMPI to OCG
as evidenced by the New Promissory Note referred to in Section 1.4.
(f) At the Closing, OCG shall deliver to CMPI the signed
statements of the former creditors of OCG referred to in Section
1.1(d).
(g) At the Closing, OCG shall deliver to CMPI the
resignation and release agreements provided for in Section 8.9.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CMPI
CMPI represents and warrants to OCG that the statements contained in
this Article IV are true and correct except as disclosed in a disclosure letter,
if any, delivered by CMPI to OCG as of the date hereof:
4.1 Organization and Qualification
(a) CMPI is a corporation duly organized, validly
existing and in good standing under the laws of the State of
California, is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which the character of
CMPI's properties or the nature of its business makes such
qualification necessary, except in jurisdictions, if any, where the
failure to be so qualified would not result in a CMPI Material Adverse
Effect (as defined below). CMPI has all requisite corporate or other
power and authority to own, use or lease its properties and to carry on
its business as it is now being conducted. CMPI has made available to
OCG a complete and correct copy of its articles of incorporation and
bylaws, each as amended to date, and CMPI's articles of incorporation
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and bylaws as so delivered are in full force and effect. CMPI is not in
default in any respect in the performance, observation or fulfillment
of any provision of its articles of incorporation or bylaws.
(b) CMPI has no Subsidiaries (as defined below).
(c) For purposes of this Agreement, (i) a "CMPI Material
Adverse Effect" shall mean any event, circumstance, condition,
development or occurrence causing, resulting in or having (or with the
passage of time likely to cause, result in, or have) a material adverse
effect on the financial condition, business, assets, properties,
prospects or results of operations of CMPI; and (ii) "Subsidiary" shall
mean, with respect to any party, any corporation or other organization,
whether incorporated or unincorporated, of which (x) at least a
majority of the securities or other interests having by their terms
voting power to elect a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly beneficially owned or controlled
by such party or by any one or more of its subsidiaries, or by such
party and one or more of its subsidiaries, or (y) such party or any
Subsidiary of such party is a general partner of a partnership or a
manager of a limited liability company.
4.2 Capitalization
The authorized capital stock of CMPI consists of 3,000 shares of CMPI
Common Stock, of which 2,000 shares were issued and outstanding as of the date
of this Agreement and owned of record by the CMPI Shareholders. As of the date
of this Agreement, CMPI also has outstanding options or other rights entitling
the holders to acquire an aggregate of 138 shares of CMPI Common Stock, all of
which shares shall be issued and outstanding as of the Closing. As of the
Closing, there will be no outstanding subscriptions, options, rights, warrants,
convertible securities, stock appreciation rights, phantom equity or other
agreements or commitments obligating CMPI to issue, transfer, sell, redeem,
repurchase or otherwise sell, issue or acquire any shares of CMPI Common Stock,
except for the CMPI Convertible Notes, which by their terms are convertible into
shares of OCG Common Stock following the Closing.
4.3 Authority
CMPI has full corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by CMPI's
board of directors and the CMPI Shareholders, and no other corporate proceedings
on the part of CMPI are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by CMPI and, assuming the due authorization, execution
and delivery hereof and thereof by the other parties hereto, constitutes the
legal, valid and binding obligation of CMPI enforceable against CMPI in
accordance with its terms, except as such enforceability may be subject to the
effects of bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting the rights of creditors and of general principles of
equity (the "Enforceability Exception").
4.4 Consents and Approvals; No Violation
The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and the performance by CMPI of its obligations
hereunder will not:
(a) conflict with any provision of CMPI's articles of
incorporation or bylaws;
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(b) require any consent, waiver, approval, order,
authorization or permit of, or registration, filing with or
notification to, (i) any governmental or regulatory authority or agency
(a "Governmental Authority"), except for applicable requirements of the
Securities Act of 1933, as amended (the "Securities Act"), state
securities or blue sky laws, and approvals that are ministerial in
nature and are customarily obtained from Governmental Authorities after
the Effective Time in connection with transactions of CMPI of the same
nature as are contemplated hereby ("Customary Post-Closing Consents")
or (ii) any third party other than a Governmental Authority, other than
such non-Governmental Authority third party consents, waivers,
approvals, orders, authorizations and permits that would not (x) result
in a CMPI Material Adverse Effect, (y) materially impair the ability of
CMPI to perform its obligations under this Agreement or (z) prevent the
consummation of any of the transactions contemplated by this Agreement;
(c) result in any violation of or the breach of or
constitute a default (with notice or lapse of time or both) under, or
give rise to any right of termination, cancellation or acceleration or
guaranteed payments or a loss of a material benefit under, any of the
terms, conditions or provisions of any note, lease, mortgage, license,
agreement or other instrument or obligation to which CMPI or any of its
Subsidiaries is a party or by which CMPI or any of its Subsidiaries or
any of their respective properties or assets may be bound, except for
such violations, breaches, defaults, or rights of termination,
cancellation or acceleration, or losses as to which requisite waivers
or consents have been obtained or which, individually or in the
aggregate, would not (i) result in a CMPI Material Adverse Effect, (ii)
materially impair the ability of CMPI or any of its Subsidiaries to
perform its obligations under this Agreement or (iii) prevent the
consummation of any of the transactions contemplated by this Agreement;
(d) violate the provisions of any order, writ,
injunction, judgment, decree, statute, rule or regulation applicable to
CMPI or any of its Subsidiaries;
(e) result in the creation of any lien, mortgage, pledge,
security interest, encumbrance, claim or change of any kind ("Lien," if
singular, or "Liens," if plural) upon any shares of capital stock or
material assets of CMPI or any of its Subsidiaries under any agreement
or instrument to which CMPI or any of its Subsidiaries is a party or by
which CMPI or any of its Subsidiaries or any of their materials assets
is bound; or
(f) result in any holder of any securities of CMPI being
entitled to appraisal, dissenters' or similar rights.
4.5 Required Stockholder Vote or Consent
The only vote of the holders of any class or series of capital stock of
CMPI that will be necessary to consummate the Merger and the other transactions
contemplated by this Agreement is the approval of this Agreement by the CMPI
Shareholders.
4.6 Financial Statements
The unaudited consolidated financial statements of CMPI for the year
ended December 31, 2004 (the "CMPI Financial Statements") delivered to OCG have
been prepared from, and are in accordance with, the books and records of CMPI
and fairly present the consolidated financial position of CMPI as of the date
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thereof and the consolidated results of operations of CMPI for the periods
presented therein (subject to year-end adjustments).
4.7 Absence of Undisclosed Liabilities
Since the date of the balance sheet included in the CMPI Financial
Statements, CMPI has incurred no Liabilities other than the CMPI Convertible
Notes, except in the ordinary course of business.
4.8 Absence of Certain Changes
Except as contemplated by this Agreement, (a) CMPI has conducted its
business in all material respects in the ordinary course, (b) there has not been
any change or development, or combination of changes or developments that,
individually or in the aggregate, would have a CMPI Material Adverse Effect and
(c) there has not been any amendment of any term of any outstanding security of
CMPI.
4.9 Taxes
Except for matters that would not have a CMPI Material Adverse Effect,
CMPI has filed all material tax returns required by applicable law to be filed
by it and has paid or accrued all taxes shown as due thereon. CMPI has no
knowledge of a material tax deficiency which has been asserted or threatened
against CMPI.
4.10 Litigation
Except for matters that would not have a CMPI Material Adverse Effect,
there is no suit, claim, action, proceeding or investigation pending or, to
CMPI's knowledge, threatened against or directly affecting CMPI or any of the
directors or officers of CMPI in their capacity as such. Neither CMPI nor, to
its knowledge, any officer, director or employee of CMPI, has been permanently
or temporarily enjoined by any order, judgment or decree of any court or any
other Governmental Authority from engaging in or continuing any conduct or
practice in connection with the business, assets or properties of CMPI, nor, to
the knowledge of CMPI, is CMPI or any officer, director or employee of CMPI
under investigation by any Governmental Authority. There is not in existence any
order, judgment or decree of any court or other tribunal or other agency
enjoining or requiring CMPI to take any action of any kind with respect to its
business, assets or properties.
4.11 Compliance with Applicable Laws
CMPI holds all material approvals, licenses, permits, registrations and
similar type authorizations necessary for the lawful conduct of its business, as
now conducted, and, to CMPI's knowledge, such business is not being, and CMPI
has not received any notice from any Governmental Authority or person that any
such business has been or is being, conducted in violation of any law, ordinance
or regulation, including without limitation any law, ordinance or regulation
relating to occupational health and safety, except for possible violations which
either individually or in the aggregate have not resulted and would not result
in a CMPI Material Adverse Effect.
4.12 Insurance
CMPI currently has in place all policies of insurance which are
reasonably required in connection with the operation of the business of CMPI as
currently conducted in accordance with applicable laws and all agreements
relating to CMPI.
4.13 Permits
Immediately prior to the Effective Time and except for Customary
Post-Closing Consents, CMPI will hold all of the permits, licenses,
certificates, consents, approvals, entitlements, plans, surveys, relocation
plans, environmental impact reports and other authorizations of Governmental
Authorities ("Permits") required or necessary to own, operate, use and maintain
its properties and conduct its operations as presently conducted, except for
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such Permits, the lack of which, individually or in the aggregate, would not
have a CMPI Material Adverse Effect.
4.14 Employee Benefit Plans
Neither CMPI nor any trade or business, whether or not incorporated,
which together with CMPI would be deemed a "single employee" within the meaning
of Section 414(b), (c) or (m) of the Code or Section 4001(b)(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), has, or on or
before the Closing will have, sponsored, maintained or contributed to any
employee benefits, plan or arrangement (including, but not limited to, any plan
described in Section 3(3) of ERISA) written six years prior to the Effective
Time.
4.15 Required Stockholder Vote or Consent
The only vote of the holders of any class or series of capital stock of
CMPI that will be necessary to consummate the Merger and the other transactions
contemplated by this Agreement is the approval of this Agreement by the CMPI
Shareholders, which has been duly obtained as evidenced by their execution of
this Agreement.
4.16 Brokers
No broker, finder or investment banker is entitled to any brokerage,
finder's fee or other fee or commission payable by CMPI in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of CMPI.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF OCG AND LEVINE
OCG and Levine, jointly and severally, represent and warrant to CMPI as
follows, except as disclosed in a disclosure letter delivered by OCG to CMPI as
of the date hereof (the "OCG Disclosure Letter"):
5.1 Organization and Qualification
(a) OCG is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of OCG's
properties or the nature of its business makes such qualification
necessary. OCG has made available to the Company a complete and correct
copy of its certificate of incorporation and bylaws, each as amended to
date, and OCG's certificate of incorporation and bylaws as so delivered
are in full force and effect. OCG is not in default in any respect in
the performance, observation or fulfillment of any provision of its
certificate of incorporation or bylaws.
(b) As of the consummation of the Spin-off and as of the
Closing Date, OCG shall have no Subsidiaries other than Merger Sub, and
shall own or hold no investment or other interest in any Person.
(c) Merger Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
OCG has made available to the Company a complete and correct copy of
its certificate of incorporation and bylaws, each as amended to date,
and Merger Sub's certificate of incorporation and bylaws as so
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delivered are in full force and effect. Merger Sub is not in default in
any respect in the performance, observation or fulfillment of any
provision of its certificate of incorporation or bylaws.
(d) Merger Sub is a direct, wholly-owned Subsidiary of
OCG, was incorporated on September 9, 2004, and has not engaged in any
business activities or conducted any operations of any kind, entered
into any agreement or arrangement with any Person or entity, or
incurred, directly or indirectly, any Liabilities, in each case, except
in connection with its incorporation and the transactions contemplated
hereby.
5.2 Capitalization
The authorized capital stock of OCG consists of ^common stock, $0.01
par value per share (the "OCG Common Stock"), of which 50,000,000 shares are
authorized, and 1,000,000 shares of preferred stock, par value of $0.10 per
share ("OCG Preferred Stock" and, together with OCG Common Stock, the "OCG
Capital Stock"). Of the authorized shares of OCG Preferred Stock, 200,000 shares
have been designated as Series A Preferred Stock, 100,000 shares have been
designated as Series B Preferred Stock, 200,000 shares have been designated as
Series C Preferred Stock (the "OCG Series C Stock"), and 100,000 shares have
been designated as Series E Preferred Stock. As of the date of this Agreement,
OCG has issued and outstanding 49,901,121 shares of OCG Common Stock, no shares
of either A Preferred Stock or Series B Preferred Stock, 200,000 shares of OCG
Series C Stock, and 33,000 shares of Series E Preferred Stock. OCG also has
outstanding as of the date hereof OCG Stock Rights to acquire an aggregate of
18,841,262 shares of OCG Common Stock, which will be the subject of the Exchange
Offer and which, to the extent the Exchange Officer is accepted by the holders
of such OCG Stock Rights, will no longer be outstanding as of the Closing.
Schedule 5.2 of the OCG Disclosure Letter sets forth a true and complete list as
of the date hereof of all holders, and their holdings, of OCG Capital Stock and
OCG Stock Rights. The authorized capital stock of Merger Sub consists of 5,000
shares of Merger Sub Common Stock, all of which shares are outstanding and
owned, of record and beneficially, by OCG. There are no outstanding
subscriptions, options, rights, warrants, convertible securities, stock
appreciation rights, phantom equity or other agreements or commitments
obligating Merger Sub to issue, transfer, sell, redeem, repurchase or otherwise
sell, issue or acquire any shares of Merger Sub Common Stock. All outstanding
shares of OCG Capital Stock and Merger Sub Common Stock are validly issued,
fully paid and non-assessable, and free of preemptive rights. Except as set
forth above, and other than as contemplated in this Agreement, there are no OCG
Stock Rights, stock appreciation rights, phantom equity, or other agreements or
commitments obligating OCG or Merger Sub to issue, transfer, sell, redeem,
repurchase or otherwise acquire any shares of its respective capital stock of
any class.
5.3 Authority
(a) Each of OCG and Merger Sub has full corporate power
and authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the
respective board of directors of OCG and Merger Sub, and no other
corporate proceedings on the part of OCG and Merger Sub are necessary
to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed
and delivered by OCG and Merger Sub, and, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes the legal, valid, and binding obligations of OCG
and Merger Sub enforceable against OCG or Merger Sub, as applicable, in
accordance with its terms, except for the Enforceability Exception.
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(b) The Merger Shares have been duly and validly
authorized for issuance pursuant to the Merger and, when issued at the
Closing, will be validly issued, fully paid and non-assessable and free
of any preemptive right. The Merger Stock Rights have been duly
authorized for issuance pursuant to the Merger, and when issued at the
Closing will be validly issued and free of any preemptive right.
5.4 Consents and Approvals; No Violation
The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and the performance by each of OCG and Merger
Sub of their respective obligations hereunder will not:
(a) conflict with any provision of the respective
certificate or articles of incorporation or bylaws of OCG or Merger
Sub;
(b) require any consent, waiver, approval, order,
authorization or permit of, or registration, filing with or
notification to, (i) any Governmental Authority, except for applicable
requirements of the Securities Act, the Exchange Act, state securities
or blue sky laws and Customary Post-Closing Consents or (ii) any third
party other than a Governmental Authority, other than such
non-Governmental Authority third party consents, waivers, approvals,
orders, authorizations and permits that would not (x) materially impair
the ability of OCG or any of its Subsidiaries to perform its
obligations under this Agreement or (y) prevent the consummation of any
of the transactions contemplated by this Agreement;
(c) result in any violation of or the breach of or
constitute a default (with notice or lapse of time or both) under, or
give rise to any right of termination, cancellation or acceleration or
guaranteed payments or a loss of a material benefit under, any of the
terms, conditions or provisions of any note, lease, mortgage, license,
agreement or other instrument or obligation to which OCG or any of its
Subsidiaries is a party or by which OCG or any of its Subsidiaries or
any of their respective properties or assets may be bound, except for
such violations, breaches, defaults, or rights of termination,
cancellation or acceleration, or losses as to which requisite waivers
or consents have been obtained or which, individually or in the
aggregate, would not (i) materially impair the ability of OCG or any of
its Subsidiaries to perform its obligations under this Agreement or
(ii) prevent the consummation of any of the transactions contemplated
by this Agreement;
(d) violate the provisions of any order, writ,
injunction, judgment, decree, statute, rule or regulation applicable to
OCG or any of its Subsidiaries;
(e) result in the creation of any Lien upon any
properties or assets or on any shares of capital stock of OCG or its
Subsidiaries under any agreement or instrument to which OCG or any of
its Subsidiaries is a party or by which OCG or any of its Subsidiaries
or any of their properties or assets is bound; or
(f) result in any holder of any securities of OCG or any
of its Subsidiaries being entitled to appraisal, dissenters' or similar
rights.
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5.5 OCG SEC Reports
OCG filed with the Securities and Exchange Commission (the "SEC"), and
has heretofore made available to CMPI, true and complete copies of each form,
registration statement, report, schedule, proxy or information statement and
other document (including exhibits and amendments thereto), including without
limitation any annual reports to stockholders incorporated by reference in
certain of such reports, required to be filed by it or its predecessors with the
SEC since January 1, 2001 under the Securities Act or the Exchange Act
(collectively, the "OCG SEC Reports"). As of the respective dates such OCG SEC
Reports were filed or, if any such OCG SEC Reports were amended, as of the date
such amendment was filed, to OCG's and Levine's knowledge, each of the OCG SEC
Reports, including without limitation any financial statements or schedules
included therein, (a) complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act, as the case may be, and
the applicable rules and regulations promulgated thereunder, and (b) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
5.6 Financial Statements
To the best of their knowledge, each of the consolidated financial
statements of OCG contained in the OCG SEC Reports (including any related notes
and schedules) (the "OCG Financial Statements") has been prepared from, and is
in accordance with, the books and records of OCG and its consolidated
Subsidiaries, complies in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, has been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis (except as may be
indicated in the notes thereto and subject, in the case of quarterly financial
statements, to normal and recurring year end adjustments) and fairly presents,
in conformity with GAAP applied on a consistent basis (except as may be
indicated in the notes thereto), the consolidated financial position of OCG and
its Subsidiaries as of the date thereof and the consolidated results of
operations and cash flows (and changes in financial position, if any) of OCG and
its Subsidiaries for the periods presented therein (subject to normal year end
adjustments and the absence of financial footnotes in the case of any unaudited
interim financial statements).
5.7 Absence of Undisclosed Liabilities
Except as described in the most recent of the OCG SEC Reports, neither
OCG nor any of its Subsidiaries has incurred any material liabilities or
obligations of any nature (contingent or otherwise). As of the Closing Date, and
after giving effect to the Spin-off and the Exchange, OCG shall have no assets
and no Liabilities or other obligations other than its obligation to pay the
dividend of PSI shares as part of the Spin-off and other obligations under this
Agreement.
5.8 Absence of Certain Changes
Except as disclosed in the OCG SEC Reports or as contemplated by this
Agreement, (a) since at least December 31, 2002, OCG has conducted no business
and has had no operations other than its ownership of PSI, (b) there has not
been any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of OCG or any
repurchase, redemption or other acquisition by OCG of any outstanding shares of
capital stock or other securities of, or other ownership interests in, OCG or
its Subsidiaries and (c) there has not been any amendment of any term of any
outstanding security of OCG or its Subsidiaries.
5.9 Taxes
OCG and each of its Subsidiaries have filed all material tax returns
required by applicable law to be filed by any of them and have paid or accrued
all taxes shown as due thereon. OCG and Levine have no knowledge of a material
tax deficiency, which has been asserted or threatened against OCG or any of its
Subsidiaries.
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5.10 Litigation
There is no suit, claim, action, proceeding or investigation pending
or, to OCG's and Levine's knowledge, threatened against or directly affecting
OCG, or any of the directors or officers of OCG in their capacity as such.
Neither OCG nor any officer, director or employee of OCG, has been permanently
or temporarily enjoined by any order, judgment or decree of any court or any
other Governmental Authority from engaging in or continuing any conduct or
practice in connection with the business, assets or properties of OCG, nor, to
the knowledge of OCG, is OCG, or any officer, director or employee of OCG or
under investigation by any Governmental Authority. There is not in existence any
order, judgment or decree of any court or other tribunal or other agency
enjoining or requiring OCG to take any action of any kind with respect to its
business, assets or properties.
5.11 Employee Benefit Plans
Neither OCG nor any trade or business, whether or not incorporated,
which together with OCG would be deemed a "single employee" within the meaning
of Section 414(b), (c) or (m) of the Code or Section 4001(b)(1) of ERISA has, or
on or before the Closing will have, sponsored, maintained or contributed to any
employee benefits, plan or arrangement (including, but not limited to, any plan
described in Section 3(3) of ERISA) written six years prior to the Effective
Time.
5.12 Compliance with Applicable Laws
OCG holds all Permits, if any, necessary for the lawful conduct of its
businesses, as now conducted, and such businesses are not being, and OCG has not
received any notice from any Governmental Authority or Person that any such
business has been or is being, conducted in violation of any law, ordinance or
regulation, including without limitation any law, ordinance or regulation
relating to occupational health and safety
5.13 Insurance
OCG and its Subsidiaries currently have in place the policies of
insurance described in Schedule 5.13 of the OCG Disclosure Letter.
5.14 Employees
Schedule 5.14 of the OCG Disclosure letter sets forth a true and
complete list of all directors, officers and other employees of OCG.
5.15 Permits
Immediately prior to the Effective Time and except for Customary
Post-Closing Consents, OCG and its subsidiaries will hold all of the Permits
required or necessary to own, operate, use and maintain their respective
properties and conduct their respective operations as presently conducted.
5.16 Contracts
As of the Closing Date, OCG will not be party to any material contract,
lease, indenture, agreement, arrangement or understanding other than this
Agreement and the other agreements provided for herein.
5.17 Required Stockholder Vote or Consent
No vote or consent of the holders of any class or series of OCG Stock
is or will be necessary to consummate the Merger and the other transactions
contemplated by this Agreement.
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5.18 Brokers
Except for the finder's fee payable to Mercator Advisory Group pursuant
to the letter of intent among OCG, CMPI and Rehearsals.com, Inc. relating to the
transactions contemplated by this Agreement, no broker, finder or investment
banker is entitled to any brokerage, finder's fee or other fee or commission
payable by OCG or any of its Subsidiaries or the Surviving corporations in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of OCG or any of its Subsidiaries.
5.19 Issuance of the Securities
Upon the Effective Time, the OCG Series F Stock issuable pursuant to
the Merger will be duly authorized and validly issued, fully paid and
nonassessable, free and clear of all Liens other than restrictions on transfer
provided for or referred to in this Agreement.
5.20 Sarbanes-Oxley; Internal Accounting Controls
OCG is, or will be, in material compliance with all provisions of the
Sarbanes-Oxley Act of 2002 that are applicable to it as of the Closing Date. OCG
and its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. OCG's certifying officers have
evaluated the effectiveness of its controls and procedures as of the date prior
to the filing date of the most recently filed periodic report under the Exchange
Act (such date, the "Evaluation Date"). OCG presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no significant changes in OCG's internal controls (as such term is
defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to OCG's
and Levine's knowledge, in other factors that could significantly affect OCG's
internal controls.
5.21 Registration Rights
No person has any right to cause OCG to effect the registration under
the Securities Act of any securities of OCG or its Subsidiaries.
5.22 Exchange Act Requirements
OCG's Common Stock is registered pursuant to Section 12(g) of the
Exchange Act, and OCG has taken no action designed to, or which to its and
Levine's knowledge is likely to have the effect of, terminating the registration
of OCG Common Stock under the Exchange Act, nor has OCG received any
notification that the Commission is contemplating terminating such registration.
5.23 Transactions with Affiliates and Employees
Except as set forth in the OCG SEC Reports, none of the officers or
directors of OCG and, to OCG's and Levine's knowledge, none of the employees of
OCG is presently a party to any transaction with OCG or any of its Subsidiaries
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to OCG's and Levine's knowledge, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner, in each case other than reimbursement for expenses
incurred on behalf of OCG.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF CMPI SHAREHOLDERS
The CMPI Shareholders, severally and not jointly, each represents and
warrant, to OCG as follows:
6.1 Power and Authority Relative to this Transaction
Such CMPI Shareholder has full power and authority and has taken all
action necessary to permit it to execute and deliver and to carry out the terms
of this Agreement and all other documents or instruments required hereby. This
Agreement constitutes the legal, valid and binding obligation of such CMPI
Shareholder, enforceable in accordance with its terms, except for the
Enforceability Exception.
6.2 Accredited Investor
Such CMPI Shareholder is an "accredited investor" as that term is
defined in Rule 501 of Regulation D promulgated under the Securities Act.
6.3 Investment Representations
(a) Such CMPI Shareholder is acquiring the OCG Series F
Stock issuable pursuant to the Merger, and will acquire any Series F
Conversion Shares, for such CMPI Shareholder's own account for the
purpose of investment, and not with a view to distribution or resale
thereof in violation of the Securities Act and the rules and
regulations promulgated thereunder. Such CMPI Shareholder understands
that none of the OCG Series F Stock or the Series F Conversion Shares
has been registered under the Securities Act or any other applicable
securities laws, and, therefore, cannot be resold unless they are
subsequently registered under the Securities Act and other applicable
securities laws, or unless an exemption from such registration is
available. Such CMPI Shareholder agrees not to resell or otherwise
dispose of all or any part of the OCG Series F Stock or the Series F
Conversion Shares, except as permitted by law, including, without
limitation, any regulations under the Securities Act and other
applicable securities laws. Such CMPI Shareholder acknowledges that OCG
does not have any present intention and is under no obligation to
register the OCG Series F Stock or the Series F Conversion Shares under
the Securities Act and other applicable securities laws.
(b) Such CMPI Shareholder understands and agrees that all
certificates evidencing any of the OCG Series F Stock or Series F
Conversion Shares, whether upon initial issuance or upon any transfer
thereof, shall bear a legend, prominently stamped or printed thereon,
reading substantially as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR ANY OTHER SECURITIES LAWS. THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE. SUCH SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH
SECURITIES UNDER THE SECURITIES ACT OF 1933 AND ANY
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OTHER APPLICABLE SECURITIES LAWS, UNLESS THE HOLDER
SHALL HAVE OBTAINED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED OR THE TRANSFEREE IS AN
AFFILIATE OF THE HOLDER."
6.4 Access to Information
During the course of the transactions contemplated by this Agreement
and prior to the purchase of any OCG Series F Stock or Series F Conversion
Shares, such CMPI Shareholder has had the opportunity to ask questions of and
receive answers from representatives of OCG concerning the terms and conditions
of the offering of the OCG Series F Stock and the Series F Conversion Shares,
and to obtain additional information, documents, records and books relative to
OCG and an investment in OCG.
6.5 Knowledge and Experience
Such CMPI Shareholder has sufficient knowledge and experience in
business and financial matters so as to enable such CMPI Shareholder to analyze
and evaluate the merits and risks of the investment contemplated hereby and is
capable of protecting its interest in connection with this transaction. Such
CMPI Shareholder is able to bear the economic risk of such investment, including
a complete loss of the investment.
ARTICLE VII
CONDUCT OF BUSINESS PENDING THE MERGER
7.1 Conduct of Business by the OCG and CMPI Pending the Merger
From the date hereof until the Effective Time, unless OCG and CMPI
shall otherwise agree in writing, and expect as otherwise contemplated by this
Agreement, OCG and CMPI and their respective Subsidiaries shall conduct their
business in the ordinary course consistent with past practice. Except as
otherwise provided in this Agreement, and without limiting the generality of the
foregoing, from the date hereof until the Effective Time, without the written
consent of OCG and CMPI, which consent shall not be unreasonably withheld:
(a) Neither OCG nor CMPI will adopt or propose any change
to their respective certificate or articles of incorporation or bylaws;
(b) Neither OCG nor CMPI will (i) declare, set aside or
pay any dividend or other distribution with respect to any shares of
capital stock of the respective OCG and CMPI, or (ii) repurchase,
redeem or otherwise acquire any outstanding shares of capital stock or
other securities of, or other ownership interests in, OCG or CMPI, as
the case may be;
(c) Neither OCG nor CMPI will, nor permit any of its
Subsidiaries to, merge or consolidate with any other person or acquire
assets of any other person except in the ordinary course of business or
pursuant to transactions among wholly-owned subsidiaries of OCG or
CMPI, as the case may be;
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(d) Neither OCG nor CMPI will, nor permit any of its
Subsidiaries to, sell, lease, license or otherwise surrender,
relinquish or dispose of any material assets or properties except in
the ordinary course of business;
(e) Neither OCG nor CMPI will (i) issue any securities
(whether through the issuance or granting of options, warrants, rights
or otherwise, (ii) enter into any amendment of any term of any
outstanding security of such company or of any of its Subsidiaries,
(iii) incur any indebtedness, except trade debt in the ordinary course
of business and debt pursuant to existing or previously disclosed
contemplated credit facilities or arrangements, (iv) increase in any
material respect compensation, bonus or other benefits payable to, or
modify or amend any employment agreements or severance agreements with,
any executive officer, or (v) enter into any settlement or consent with
respect to any pending litigation, other than settlements in the
ordinary course of business or on terms which are not otherwise
materially adverse to such company and its Subsidiaries taken as a
whole;
(f) OCG and CMPI will not change any method of accounting
or accounting practice by OCG and CMPI or any of their Subsidiaries,
except for any such change required by GAAP;
(g) Neither OCG nor CMPI will, nor permit any of its
Subsidiaries to, (i) take, or agree or commit to take, any action that
would make any representation and warranty of the respective company
hereunder inaccurate in any material respect at, or as of any time
prior to, the Effective Time or (ii) omit, or agree or commit to omit,
to take any action necessary or appropriate to prevent any such
representation or warranty from being inaccurate in any material
respect at any such time; and
(h) Neither OCG nor CMPI will, nor permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 Amendment of Certificate of Incorporation
As soon as is practicable following the Effective Time, OCG shall amend
its certificate of incorporation to increase the authorized shares of OCG Common
Stock as necessary to permit the conversion, in full, of the OCG Series C Stock
and OCG Series F Stock and the issuance of the shares of OCG Common Stock
issuable upon conversion of OCG Series C Stock and OCG Series F Stock in
accordance with the terms thereof, and shall reserve out of such increased
authorized shares of OCG such number of shares equal at all times to the
aggregate shares of OCG Common Stock issuable upon such conversion.
8.2 Expenses
(a) All Expenses (as defined below) incurred by the
parties hereto shall be borne solely and entirely by the party that has
incurred such Expenses.
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(b) "Expenses" as used in this Agreement shall include
all out-of-pocket expenses (including, without limitation, all
reasonable fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates)
incurred by a party or on its behalf in connection with or related to
the authorization, preparation, negotiation, execution and performance
of this Agreement and all other matters related to the consummation of
the transactions contemplated hereby.
8.3 Cooperation
Subject to compliance with applicable law, from the date hereof until
the Effective Time, each of the parties hereto shall confer on a regular and
frequent basis with one or more representatives of the other parties to report
operational matters of materiality and the general status of ongoing operations
and shall promptly provide the other parties or their counsel with copies of all
filings made by such party with any Governmental Authority in connection with
this Agreement and the transactions contemplated hereby.
8.4 Publicity
Neither the parties hereto nor any of their respective affiliates shall
issue or cause the publication of any press release or other announcement with
respect to the Merger, this Agreement or the other transactions contemplated
hereby without the prior consultation of the other parties, except as may be
required by law, and will use reasonable efforts to provide copies of such
release or other announcement to the other parties hereto, and give due
consideration to such comments as such other parties may have, prior to such
release.
8.5 Additional Actions
Subject to the terms and conditions of this Agreement, each of the
parties hereto agrees to use all reasonable efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations, or to remove any injunctions
or other impediments or delays, to consummate and make effective the Merger and
the other transactions contemplated by this Agreement.
8.6 Filings
Each party hereto shall make all filings required to be made by such
party in connection herewith or desirable to achieve the purposes contemplated
hereby, and shall cooperate as needed with respect to any such filing by any
other party hereto.
8.7 Consents
Each party hereto shall use all reasonable efforts to obtain all
consents necessary or advisable in connection with such party's obligations
hereunder.
8.8 Notice of Certain Events
Each party to this Agreement shall promptly as reasonably practicable
notify the other parties hereto of:
(a) any notice or other communication from any Person
alleging that the consent of such Person (or other Person) is or may be
required in connection with the transactions contemplated by this
Agreement;
(b) any notice or other communication from any
Governmental Authority in connection with the transactions contemplated
by this Agreement; or
21
(c) any actions, suits, claims, investigations or
proceedings commenced or, to the best of such party's knowledge,
threatened against, relating to or involving or otherwise affecting
such party or any of such party's Subsidiaries which, if pending on the
date of this Agreement, would have rendered untrue any representation
contained in Article IV, V or VI, or which relate to the consummation
of the transactions contemplated by this Agreement.
8.9 Resignations and Releases
Prior to the Closing Date, OCG shall use its best efforts to obtain
from each of its directors, officers and employees a written resignation and
release agreement, substantially in the form attached hereto as Exhibit C, by
which each such Person agrees to resign from OCG effective as of the Closing
Date and to release OCG and its affiliates from any and all Liability.
8.10 Spin-off and Exchange Offer
Following the execution of this Agreement, OCG and PSI shall promptly
take such steps as are necessary and appropriate to consummate the Spin-off, the
Exchange Offer and the other transactions contemplated hereby in compliance with
all applicable laws, rules and regulations, including, without limitation, SEC
requirements.
8.11 Employee Covenants
(a) Effective as of the Closing Date, PSI shall rehire on
an "at-will" basis and at their then present rate of pay all employees
of OCG ("Employees"), including Employees who are absent from work due
to disability or illness or who are on approved leave of absence or
layoff status.
(b) PSI shall assume at the Closing and be responsible
for all obligations and Liabilities of OCG to Employees and any former
employees or retirees of OCG, if any, including without limitation,
those which arise under or pursuant to any Employee Benefit Plan.
Without limiting the foregoing or the generality of the assumption of
the Liabilities pursuant to the Spin-off, PSI shall assume from and
after the Closing and thereafter be responsible for:
(i) all Liabilities for holiday and vacation pay
to which any Employee is entitled; and
(ii) all Liabilities under the worker's
compensation laws of any jurisdiction with respect to
Employees.
(c) PSI shall be responsible for any and all severance
benefits as may arise with respect to the termination of employment of
any Employee at any time, whether prior to, at or after the Closing
Date.
8.12 Related-Party Transactions
During the one-year period following the Closing Date, OCG shall not
sell or issue, directly or indirectly, to any of the CMPI shareholders or any of
their respective affiliates any shares of OCG Capital Stock or any securities or
other instruments convertible into or exchangeable for any such Capital Stock,
and shall not merge with or acquire, directly or indirectly, Rehearsals.com or
any other affiliate of OCG or of the Surviving Corporation, or any of their
respective affiliates, except, if at all, in a transaction in which the holders
of OCG Capital Stock immediately prior to the Effective Time receive shares of
OCG Capital Stock sufficient to prevent any dilution to such holders in their
22
respective percentage ownership of OCG Capital Stock as of the date of such
sale, issuance or other transaction.
ARTICLE IX
ESCROW
9.1 Escrow Generally
(a) From and after the Closing, OCG shall hold in escrow
the Retained Merger Shares until the same have been cancelled or
released as provided in this Section 9.1.
(b) For purposes of this Section 9.1, the following terms
shall have the meanings indicated:
(i) "Conversion Rate" shall mean the ratio that
the Actual CMPI Note Conversion Shares bears to the Maximum
CMPI Note Conversion Shares; and
(ii) "Escrow Release Date" means the date as of
which all of the outstanding CMPI Convertible Notes shall have
been converted, in full, into shares of OCG Common Stock.
(c) As of the Escrow Release Date, OCG shall cancel and
retire a number of the Retained Merger Shares (the "Cancelled Retained
Shares") determined by multiplying the Conversion Rate by the number of
the Retained Merger Shares. Such cancellation and retirement shall be
made ratably among the CMPI Shareholders in whose names such Retained
Merger Shares are held.
(d) Promptly following the Escrow Release Date, OCG shall
prepare, execute and deliver to each CMPI Shareholder a stock
certificate evidencing the net number of Retained Merger Shares, after
deducting the Cancelled Retained Shares, to which such holder is
entitled hereunder and after giving effect to the provisions of the
CMPI Convertible Notes with respect to the relative percentage
ownership of OCG by the "Existing Shareholders" (as defined in the CMPI
Convertible Notes) and the holders of the CMPI Convertible Notes.
9.2 Transfer of Retained Shares and Stock Rights
No CMPI Shareholder may sell, assign, transfer or otherwise dispose of
any Retained Merger Shares, or any interest therein, other than by reason of the
laws of descent and distribution or succession by operation of law. Any
contemplated transfer in violation of this Section 9.2 shall be null and void ab
initio.
23
ARTICLE X
CONDITIONS TO CONSUMMATION OF THE MERGER
10.1 Conditions to the Obligation of Each Party
The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) no action, suit or proceeding instituted by any
Governmental Authority shall be pending and no statute, rule or
regulation and no injunction, order, decree or judgment of any court or
Governmental Authority of competent jurisdiction shall be in effect, in
each case which would prohibit, restrain, enjoin or restrict the
consummation of the Mergers;
(b) OCG and CMPI shall have obtained such permits,
authorizations, consents, or approvals required to consummate the
transactions contemplated hereby; and
(c) the Spin-off and the Exchange Offer shall have been
consummated as contemplated herein.
10.2 Conditions to the Obligations of OCG and Merger Sub
The obligations of OCG and Merger Sub to effect the Merger are subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) CMPI shall have performed in all material respects
its obligations under this Agreement required to be performed by it at
or prior to the Effective Time, and the representations and warranties
of CMPI contained in this Agreement, to the extent qualified with
respect to materiality shall be true and correct in all respects, and
to the extent not so qualified shall be true and correct in all
material respects, in each case, as of the date of this Agreement and
at and as of the Effective Time as if made at and as of such time, and
OCG shall have received a certificate of the Chief Executive Officer
and the Chief Financial Officer of CMPI as to the satisfaction of this
condition;
(b) all proceedings to be taken by CMPI in connection
with the transactions contemplated by this Agreement and all documents,
instruments and certificates to be delivered by CMPI in connection with
the transactions contemplated by this Agreement shall be reasonably
satisfactory in form and substance to OCG and its counsel; and
(c) from the date of this Agreement through the Effective
Time, there shall not have occurred any change in the financial
condition, business, operations or prospects of CMPI and its
Subsidiaries, taken as a whole, that would constitute a CMPI Material
Adverse Effect.
10.3 Conditions to the Obligations of CMPI
The obligation of CMPI to effect the Merger is subject to the
satisfaction at or prior to the Effective Time of the following conditions:
24
(a) OCG shall have performed in all material respects its
obligations under this Agreement required to be performed by it at or
prior to the Effective Time and the representations and warranties of
OCG contained in this Agreement, to the extent qualified with respect
to materiality shall be true and correct in all respects, and to the
extent not so qualified shall be true and correct in all material
respects, in each case as of the date of this Agreement and at and as
of the Effective Time as if made at and as of such time, and CMPI shall
have received a certificate of the Chief Executive Officer and the
Chief Financial Officer of OCG as to the satisfaction of this
condition;
(b) all OCG Stock Rights shall have been duly exchanged
pursuant to the Exchange Offer;
(c) the Series A Preferred Stock and Series B Preferred
Stock of OCG shall have been retired as provided in Section 3.4;
(d) OCG shall have delivered to CMPI the signed
statements referred to in Section 1.1(d) from the holders of all of the
aggregate Liabilities of OCG other than holders of Liabilities which do
not exceed as of the Closing $25,000 in the aggregate;
(e) OCG shall have received the resignations and release
agreements from each of its directors, officers and other employees as
contemplated in Section 8.9; and
(f) all proceedings to be taken by OCG and Merger Sub, as
the case may be, in connection with the transactions contemplated by
this Agreement and all documents, instruments and certificates to be
delivered by OCG and Merger Sub, as the case may be, in connection with
the transactions contemplated by this Agreement shall be reasonably
satisfactory in form and substance to CMPI and its counsel.
ARTICLE XI
SURVIVAL AND INDEMNIFICATION
11.1 Survival of Representations and Warranties
The representations and warranties of the parties contained in this
Agreement shall survive the Effective Time for a period of two years following
the Effective Time.
11.2 Indemnification
(a) From and after the Closing, PSI (as such, the
"Indemnifying Party") shall indemnify, reimburse, defend and hold
harmless OCG and the Surviving Corporation and OCG's other Subsidiaries
and affiliates, successors or assigns (each, an "Indemnified Party")
for any and all direct or indirect claims, losses, liabilities, damages
(including special and consequential damages), costs (including court
costs) and expenses, including all reasonable attorneys' and
accountants' fees and expenses (hereinafter a "Loss" or "Losses"),
arising from or in connection with (i) any breach or inaccuracy of any
representation or warranty of OCG, whether such breach or inaccuracy
exists or is made on the date of this Agreement or as of the Closing,
(ii) any breach of or noncompliance by OCG or PSI of or with any
covenant or agreement contained in this Agreement or in any other
agreement or instrument delivered in connection herewith, (iii) any and
all Liabilities of OCG or any of its Subsidiaries existing on or prior
25
to the Closing; and (iv) any attempt (whether or not successful) by any
Person to cause or require any Indemnified Party to pay or discharge
any Liability, or alleged Liability, of OCG or any of its Subsidiaries
existing on or prior to the Closing. If, by reason of the claim of any
Person relating to any of the matters subject to indemnification under
this Section 11.2, an encumbrance, attachment, garnishment or execution
is placed upon any of the property or assets of any Indemnified Party,
the Indemnifying Party shall also, promptly upon demand, furnish an
indemnity bond satisfactory to the Indemnified Party to obtain the
prompt release of such encumbrance, attachment, garnishment or
execution.
(b) The Indemnifying Party shall be entitled to defend
any claim, action, suit or proceeding made by any third party against
an Indemnified Party with counsel approved by the Indemnified Party,
such approval not to be unreasonably withheld; provided, however, that
the Indemnified Party shall be entitled to participate in such defense
with counsel of its choice and at its own expense and, if the
Indemnifying Party does not provide a competent and vigorous defense,
then the Indemnified Party's participation shall be at the expense of
the Indemnifying Party. The Indemnified Party shall provide such
cooperation and access to its books, records and properties as the
Indemnifying Party shall reasonably request with respect to such
matter; and the parties shall cooperate with each other in order to
ensure the proper and adequate defense thereof. An Indemnifying Party
shall not settle any claim subject to indemnification hereunder without
the prior written consent of the Indemnified Party, which consent shall
not be unreasonably withheld or delayed.
(c) With regard to claims of third parties for which
indemnification is payable hereunder, such indemnification shall be
paid by the Indemnifying Party (or amounts may be set off by the
Indemnified Party) upon the earliest to occur of: (i) the entry of a
judgment against the Indemnified Party and the expiration of any
applicable appeal period, (ii) the entry of an unappealable judgment or
final appellate decision against the Indemnified Party, (iii) the
settlement of the claim, (iv) with respect to indemnities for tax
liabilities, upon the issuance of any final resolution by a taxation
authority, or (v) with respect to claims before any administrative or
regulatory authority, when the Loss is finally determined and not
subject to further review or appeal; provided, however, that the
Indemnifying Party shall pay on the Indemnified Party's demand any cost
or expense reasonably incurred by the Indemnified Party in defending or
otherwise dealing with such claim.
(d) To seek indemnification hereunder, an Indemnified
Party shall notify the Indemnifying Party of any claim for
indemnification, specifying in reasonable detail the nature of the Loss
and the amount or an estimate of the amount thereof.
ARTICLE XII
TERMINATION, AMENDMENT AND WAIVER
12.1 Termination
This Agreement may be terminated at any time prior to the Effective
Time:
26
(a) by the mutual written consent of OCG and CMPI;
(b) by either OCG or CMPI if the Effective Time shall not
have occurred on or before July 31, 2005 (the "Termination Date");
provided, that the party seeking to terminate this Agreement pursuant
to this Section 12.1(b) shall not have breached in any material respect
its obligations under this Agreement in any manner that shall have
proximately contributed to the failure to consummate the Mergers on or
before the Termination Date;
(c) by OCG or CMPI if there has been a material breach by
one of the other parties of any representation, warranty, covenant or
agreement set forth in this Agreement which breach (if susceptible to
cure) has not been cured in all material respects within 20 business
days following receipt by each party of notice of such breach; or
(d) by OCG or CMPI if there shall be any applicable law,
rule or regulation that makes consummation of the Merger illegal or if
any judgment, injunction, order or decree of a court or other
Governmental Authority of competent jurisdiction shall restrain or
prohibit the consummation of the Merger, and such judgment, injunction,
order or decree shall become final and nonappealable.
12.2 Effect of Termination
In the event of termination of the Agreement and the abandonment of the
Merger pursuant to this Article XII, all obligations of the parties shall
terminate, except the obligations of the parties pursuant to this Section 12.2
and except for the provisions of Sections 8.2 and 8.4; provided, however, that
OCG shall remain obligated to CMPI under the New Promissory Note in accordance
with the terms thereof, and nothing herein shall relieve any party from
liability for any breach of this Agreement.
ARTICLE XIII
MISCELLANEOUS
13.1 Notices
All notices or communications hereunder shall be in writing (including
facsimile or similar writing) addressed as follows:
To OCG or Merger Sub: Edward Levine
President
OCG Technologies, Inc.
56 Harrison Street
New Rochaelle, New York 10801
Facsimile No: (914) 576-7821
with a copy to: Wynne B. Stern, Jr.
6858 Treves Way
Boyton Beach, Florida 33437
Facsimile No: (561) 742-7878
27
To CMPI: CenterStaging Musical Productions, Inc.
3407 Winona Avenue
Burbank, California 91504
Facsimile No.: (818) 848-4016
with a copy to: Troy & Gould Professional Corporation
1801 Century Park East
Los Angeles, California 90067
Attention: Alan B. Spatz
Facsimile No: (310) 201-4746
Any such notice or communication shall be deemed given (i) when made,
if made by hand delivery, and upon confirmation of receipt, if made by
facsimile, (ii) one business day after being deposited with a next-day courier,
postage prepaid, or (iii) three business days after being sent certified or
registered mail, return receipt requested, postage prepaid, in each case
addressed as above (or to such other address as such party may designate in
writing from time to time).
13.2 Separability
If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof which shall remain in full force and
effect.
13.3 Assignment
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, legal representatives, successors,
and assigns; provided, however, that neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to hypothecation and any
assignment in violation hereof shall be null and void.
13.4 Interpretation
The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
13.5 Counterparts
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same Agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to each party.
13.6 Entire Agreement
This Agreement and the Ancillary Agreements represent the entire
agreement of the parties with respect to the subject matter hereof and shall
supersede any and all previous contracts, arrangements or understandings between
the parties hereto with respect to the subject matter hereof, including, without
limitation, the letter of intent dated November 23, 2004.
13.7 Governing Law
This Agreement shall be construed, interpreted, and governed in
accordance with the laws of California, without reference to rules relating to
conflicts of law.
13.8 Attorneys' Fees
If any action at law or equity, including an action for declaratory
relief, is brought to enforce or interpret any provision of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
28
expenses from the other party, which fees and expenses shall be in addition to
any other relief which may be awarded.
13.9 No Third Party Beneficiaries
Except as provided in Section 11.2, no person or entity other than the
parties hereto is an intended beneficiary of this Agreement or any portion
hereof.
13.10 Amendments and Supplements
Prior to the Effective Time, this Agreement may be amended or
supplemented in writing by OCG and CMPI with respect to any of the terms
contained in this Agreement, except as otherwise provided by law.
13.11 Extensions, Waivers, Etc.
At any time prior to the Effective Time, either party may:
(a) extend the time for the performance of any of the
obligations or acts of the other party;
(b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document
delivered pursuant hereto; or
(c) waive compliance with any of the agreements or
conditions of the other party contained herein.
Notwithstanding the foregoing, no failure or delay by any party hereto
in exercising any right hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right hereunder. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
29
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
OCG:
----
OCG TECHNOLOGY, INC.
By: /s/ EDWARD LEVINE
-------------------------------------
Name: Edward Levine
Title: President
MERGER SUB:
-----------
EPIDEMIC INTERVENTION SYSTEMS, INC.
By: /s/ EDWARD LEVINE
-------------------------------------
Name: Edward Levine
Title: President
CMPI:
-----
CENTERSTAGING MUSICAL PRODUCTIONS, INC.
By:______________________________________
Name: ________________________________
Title:________________________________
PSI:
----
PRIMECARE SYSTEMS, INC.
By: /s/ EDWARD LEVINE
-------------------------------------
Name: Edward Levine
Title: President
LEVINE:
-------
By: /s/ EDWARD LEVINE
-------------------------------------
Edward Levine
CMPI SHAREHOLDERS:
------------------
----------------------------------------
Roger Paglia
----------------------------------------
Howard Livingston
----------------------------------------
Jan Parent
----------------------------------------
Johnny Caswell
Schedule 4.2
------------
List of CMPI Shareholders and Stock Rights Holders
--------------------------------------------------
Name Number of Shares of
CMPI Common Stock
Roger Paglia.............................................. 400
Howard Livingston......................................... 400
Jan Parent................................................ 600
Johnny Caswell............................................ 600
Others.................................................... 138(1)
2,138
- ---------------------------
(1) All of such shares are issuable pursuant to outstanding rights in favor
of the holders and will be issued and outstanding as of the Closing.