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Exhibit 10
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the
“Agreement”), made and effective as of November 23,
2007, is entered into by and between ComCam, Inc., a Delaware
corporation (the “Parent”) and ComCam International,
Inc., a Delaware corporation (the
“Subsidiary”).
WITNESSETH, WHEREAS the Parent currently owns 100%
of the outstanding common stock of the Subsidiary, which is the
only issued and outstanding class of capital stock of the
Subsidiary; and
WHEREAS, the Board of Directors of the Parent has
determined that it is in the best interest of the Parent to
distribute its entire ownership interest in the Subsidiary through
a pro-rata distribution of all the outstanding common shares of the
Subsidiary to the holders of the Parent’s common stock in the
form of a dividend pursuant to the terms and subject to the
conditions of this Agreement (the “Distribution”);
and
WHEREAS, the Distribution is intended to qualify as
a tax-free spin-off pursuant to Section 355 of the Internal Revenue
Code of 1986; and
WHEREAS, the parties hereto intend this agreement to
set forth the principal terms and arrangements among and between
them regarding the Distribution.
NOW THEREFORE, in consideration of the premises and
the mutual covenants herein contained and intending to be legally
bound hereby, the parties hereto agree as follows:
1.
Distribution . The
Parent’s Board of Directors, as of the date of this
Agreement, has authorized the Distribution, payable to shareholders
of record of the Parent as of the Record Date and entitled to
shareholders of record of the Parent as of the Dividend Date. The
Distribution shall be pro rata, so that shareholders of the Parent
have the same proportionate interest and ownership in the
Subsidiary as held by them in the Parent immediately prior to the
Dividend Date of this spin-off. The Distribution also shall be
conducted to qualify as a tax-free spin-off.
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a)
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Record Date – the
close of business on December 7, 2007, being the date for
determining the holders of the Parent’s common stock that
will receive common shares of the Subsidiary in the Distribution,
as well as the date for determining the registered holders of the
Parent’s common stock that will receive an information
statement regarding the Distribution.
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b)
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Dividend Date –
the close of business on December 28, 2007, being the date for
determining the holders of the Parent’s common stock that are
entitled to the common shares of the Subsidiary in the
Distribution, as well as being the date when the Parent and the
Subsidiary are effectively separated.
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c)
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Ex-Dividend Date – the close of business on or about December 31, 2007, as
determined by NASDAQ, the date when the Subsidiary’s common
shares are distributed to the Parent’s shareholders as of the
Record Date.
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3.
Distribution Ratio .
Shareholders of the Parent will receive in the Distribution that
number of common shares of the Subsidiary which is equal to one (1)
common share of the Subsidiary for each twenty (20) common shares
of the Parent held by them as of the close of business on the
Record Date. No fractional shares or payment therefore shall be
made incident to the Distribution; rather any fractional shares of
the Subsidiary to be received by the Parent’s shareholders
shall be rounded up to the next whole share.
3
Exhibit 10
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4.
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Conditions to Distribution . The consummation of the Distribution will be subject to the
following:
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a)
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A minimum of ten (10) days prior to the Dividend
Date, the parties hereto will prepare and mail to the registered
shareholders of the Parent on the Record Date, such information
regarding the Subsidiary and the Distribution as the parties
reasonably determine and as may be required by law.
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b)
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Prior to the Dividend Date, the Parent will file
with the Securities and Exchange Commission any such documentation
that the Parent determines is necessary or desirable to effect the
Distribution.
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c)
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Prior to the Dividend date, the Parent shall sell or
convey all of its assets and rights, intellectual property, and any
other tangible or intangible property related to the
Subsidiary’s products, to the Subsidiary.
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d)
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No order, injunction, decree or regulation issued by
any court or agency of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the
Distribution will be in effect and no other event outside the
control of the Subsidiary will have occurred or failed to occur
that prevents the con
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