Exhibit 10.1
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AGREEMENT AND PLAN OF MERGER
by and among
Omnis Technology Corporation,
a Delaware corporation
Raining Merger Sub, Inc.,
a Delaware corporation
PickAx, Inc.
a Delaware corporation
and
The Named PickAx, Inc. Stockholder
Dated as of August 23, 2000
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AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
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1. The Merger; Effective Time .................................................... 1
1.1 The Merger ............................................................... 1
1.2 Effective Time of the Merger ............................................. 2
2. The Surviving Corporation ..................................................... 2
2.1 Certificate of Incorporation ............................................. 2
2.2 Bylaws ................................................................... 2
2.3 Directors and Officers ................................................... 2
3. Treatment of Shares ........................................................... 4
3.1 Exchange of Shares; Holdback Shares ...................................... 4
3.2 Mechanics of Exchange .................................................... 9
3.3 No Further Rights in Stock ............................................... 11
3.4 Closing .................................................................. 11
3.5 Supplementary Action ..................................................... 11
3.6 Appraisal Rights; Dissenting Shares ...................................... 12
4. Closing Conditions ............................................................ 13
4.1 Conditions Precedent to Obligations of Omnis and Merger Sub .............. 13
4.2 Conditions Precedent to Obligations of PickAx and the Named
PickAx Stockholder ....................................................... 17
5. Representations and Warranties of PickAx and the Named PickAx Stockholder ..... 19
5.1 Organization, Good Standing, Qualification ............................... 19
5.2 Certificate of Incorporation and Bylaws; Records ......................... 20
5.3 Capitalization ........................................................... 21
5.4 Authority; Binding Nature of Agreements .................................. 23
5.5 Non-Contravention; Consents .............................................. 23
5.6 Intellectual Property .................................................... 25
5.7 Proceedings; Orders ...................................................... 28
5.8 Financial Statements ..................................................... 28
5.9 Title to Assets .......................................................... 29
5.10 Contracts ................................................................ 30
5.11 Employees ................................................................ 31
5.12 Compliance with Legal Requirements ....................................... 32
5.13 Governmental Authorizations .............................................. 33
5.14 Tax Matters .............................................................. 33
5.15 Securities Laws Compliance; Registration Rights .......................... 36
5.16 [Reserved] ............................................................... 36
5.17 Environmental Compliance ................................................. 36
5.18 Insurance ................................................................ 36
5.19 Related Party Interests or Transactions .................................. 37
5.20 Absence of Changes ....................................................... 38
5.21 The Named PickAx Stockholder; Investment Intent and Restrictions ......... 39
5.22 Powers of Attorney ....................................................... 45
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5.23 Benefit Plans; ERISA .................................................... 45
5.24 Knowledge ............................................................... 47
5.25 Full Disclosure ......................................................... 48
5.26 No Brokers' and Finders' Fees ........................................... 48
5.27 Effective Dates ......................................................... 49
6. Representations and Warranties of Omnis and Merger Sub ....................... 49
6.1 Organization, Good Standing, Authority; Binding Nature of Agreement ..... 49
6.2 [Reserved] .............................................................. 49
6.3 Omnis Stock ............................................................. 49
6.4 Authority; Binding Nature of Agreements ................................. 50
6.5 Non-Contravention; Consents ............................................. 50
6.6 [Reserved] .............................................................. 51
6.7 Reports and Financial Statements; Absence of Certain Changes ............ 51
6.8 Compliance with Applicable Law .......................................... 53
6.9 Complete Copies of Requested Reports .................................... 53
6.10 Full Disclosure ......................................................... 53
6.11 Contracts ............................................................... 53
6.12 Effective Dates ......................................................... 54
7. Pre-Closing Covenants of PickAx and the Named PickAx Stockholder ............. 54
7.1 Corporate Proceedings; Stockholder Approval ............................. 54
7.2 Access and Investigation ................................................ 55
7.3 Operation of Business ................................................... 55
7.4 Filings and Consents .................................................... 57
7.5 Notification; Updates to Disclosure Schedule ............................ 58
7.6 No Plan Amendments. During the Pre-Closing Period, PickAx shall not
amend or modify or cause the amendment or modification of the terms
of any Plan ............................................................. 59
7.7 Best Efforts ............................................................ 59
8. Pre-Closing Covenants of Omnis and Merger Sub ................................ 59
8.1 Corporate Proceedings ................................................... 59
8.2 Access and Investigation ................................................ 60
8.3 Filings and Consents .................................................... 61
8.4 Notification ............................................................ 61
8.5 Best Efforts ............................................................ 62
9. Other Agreements ............................................................. 62
9.1 Registration of PickAx Options .......................................... 62
9.2 Change of Names, Ticker Symbol and Address .............................. 62
9.3 Confidentiality ......................................................... 63
9.4 Public Disclosure ....................................................... 63
9.5 No Inconsistent Action .................................................. 63
9.6 Restrictive Legend ...................................................... 63
9.7 Certain Tax and Other Matters ........................................... 64
10. Termination .................................................................. 66
10.1 Termination Events ...................................................... 66
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10.2 Termination Procedures .................................................. 66
10.3 Effect of Termination ................................................... 67
10.4 Exclusivity of Termination Rights ....................................... 67
11. Survival; Pledge of Shares and Security Interest ............................. 67
11.1 Survival of Representations and Covenants ............................... 67
11.2 Pledge of Holdback Shares; Indemnity; Security Interest ................. 68
12. Miscellaneous ................................................................ 72
12.1 Further Assurances ...................................................... 72
12.2 Fees and Expenses ....................................................... 72
12.3 Attorneys' Fees ......................................................... 73
12.4 Other Taxes ............................................................. 73
12.5 Governing Law ........................................................... 73
12.6 Successors and Assigns .................................................. 73
12.7 Entire Agreement ........................................................ 74
12.8 Severability ............................................................ 74
12.9 Amendments .............................................................. 74
12.10 Notices ................................................................ 74
12.11 Publicity and Use of Confidential Information .......................... 76
12.12 Counterparts ........................................................... 76
12.13 Delays or Omissions; Waivers ........................................... 76
12.14 Remedies Cumulative; Specific Performance .............................. 77
12.15 Headings ............................................................... 77
12.16 Construction ........................................................... 77
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into as of
August 23, 2000 ("Agreement Date"), by and among OMNIS TECHNOLOGY CORPORATION,
a Delaware corporation ("Omnis"), RAINING MERGER SUB, INC., a Delaware
corporation and a wholly-owned subsidiary of Omnis ("Merger Sub"), PICKAX,
INC., a Delaware corporation ("PickAx"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Named
PickAx Stockholder"). Certain capitalized terms in this Agreement are defined
in Exhibit A.
RECITALS
A. The Board of Directors of Omnis and PickAx and the sole director of Merger
Sub have determined that it is in the best interests of their respective
stockholders for Omnis to acquire PickAx by the merger of Merger Sub with
and into PickAx upon the terms, and subject to the conditions, set forth
herein as a reverse triangular merger (the "Merger").
B. Merger Sub is a wholly-owned subsidiary of Omnis.
C. For federal income tax purposes, it is intended that the Merger constitute
a "reorganization" within the meaning of Section 368(a)(2)(E) of the
Internal Revenue Code of 1986, as amended (the "Code"), and that each of
Omnis, Merger Sub and PickAx be a "party to a reorganization" within the
meaning of Section 368(b) of the Code in respect of the Merger.
AGREEMENT
Omnis, Merger Sub, PickAx and the Named PickAx Stockholder, intending to
be legally bound, agree as follows:
1. The Merger; Effective Time.
1.1 The Merger.
Subject to the terms and conditions of this Agreement, at the Effective
Time (as defined in Section 1.2 hereof), Merger Sub shall be merged with and
into PickAx, and PickAx shall be the surviving corporation in such Merger, and
the separate existence of Merger Sub shall thereupon cease. PickAx as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation."
The Merger shall have the effects set forth in this Agreement and the
applicable provisions of Delaware Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time the Surviving Corporation
(i) shall be subject to all actions previously taken by each of the Board of
Directors of Merger Sub and PickAx as herein further provided, and (ii) shall
retain or succeed to without other transfer and shall possess all of the
assets, rights, powers and property as constituted immediately prior to the
Effective Time of each of PickAx and Merger Sub, all as more fully provided
under the applicable provisions of the Delaware General Corporation Law.
1.2 Effective Time of the Merger.
The Merger shall become effective upon the completion of the filing of a
properly executed Certificate of Merger with the Secretary of State of the
State of Delaware, which filing shall be made as soon as practicable after the
Closing of the Transactions. When used in this Agreement, the term "Effective
Time" with respect to the Merger shall mean the date and time at which such
Certificate of Merger has been accepted for filing by the Secretary of State of
Delaware.
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2. The Surviving Corporation.
2.1 Certificate of Incorporation.
The Certificate of Incorporation of PickAx as in effect immediately prior
to the Effective Time shall be at the Effective Time the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law.
2.2 Bylaws.
The Bylaws of PickAx, as in effect immediately prior to the Effective
Time, shall be at the Effective Time the Bylaws of the Surviving Corporation
until thereafter amended as provided by law.
2.3 Directors and Officers.
(a) The initial directors of the Surviving Corporation shall be the
director or directors of PickAx as of the Effective Time, until their
respective successors are duly elected or appointed and qualified in the manner
provided in the Certificate of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by law. The initial officers of the
Surviving Corporation shall be the officers of PickAx immediately prior to the
Effective Time, until their respective successors are duly appointed in the
manner provided in the Certificate of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by law.
(b) Immediately prior to the Effective Time, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇ shall resign as directors of Omnis effective as of the Effective Time and
the remaining directors of Omnis shall appoint ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ as successors thereto effective as of the Effective Time. The
directors of Omnis at the Effective Time shall hold office from the Effective
Time until their respective successors are duly elected or appointed and
qualified in the manner provided in the Certificate of Incorporation and Bylaws
of Omnis, or as otherwise provided by law.
(c) Immediately prior to the Effective Time, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall resign as officers of Omnis effective as of the
Effective Time and the Board of Directors of Omnis shall appoint the following
persons to the offices set forth opposite their names, which officers shall
hold office as officers of Omnis from the Effective Time subject to the
pleasure of the Board and to any express written contractual rights between
Omnis and each of such persons:
Name Title
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▇▇▇▇▇ ▇▇▇▇▇ Chairman of the Board of Directors
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Chief Executive Officer and President
▇▇▇▇▇▇▇ ▇▇▇▇▇ Chief Operating Officer and Vice President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Vice President, Finance; Treasurer and Secretary
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ President, Omnis Technology Division
3. Treatment of Shares.
3.1 Exchange of Shares; Holdback Shares.
At the Effective Time, by virtue of the Merger and without any further
action on the part of the holders thereof, subject to the other terms and
conditions hereof:
(a) Outstanding Omnis Capital Stock.. The shares of Omnis capital stock
which shall be outstanding immediately prior to the Effective Time of the
Merger shall remain outstanding and shall not be affected by the Merger.
(b) Exchange Ratio. Subject to Sections 3.1(c) and 3.2 hereof, each
share of common stock, $0.01 par value per share, of PickAx (the "PickAx Common
Stock") issued and outstanding immediately prior to the Effective Time will be
canceled and extinguished and automatically converted into the fraction of a
share of Common Stock of Omnis, $0.10 par value per share (the "Omnis Common
Stock") determined pursuant to the following formula ("Exchange Ratio"):
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The greater of:
(i) (39,700,000 / the average bid closing price of Omnis Common
Stock during the twenty (20) trading days prior to the two trading
days prior to the Agreement Date (the "Average Omnis Stock
Price")), divided by the Fully Diluted PickAx Shares; or
(ii) 0.5 multiplied by (13,176,000/Fully Diluted PickAx Shares).
Fractional shares of Omnis Common Stock determined under the foregoing Exchange
Ratio shall be aggregated as to each PickAx Stockholder to determine the total
number of shares of Omnis Common Stock issuable to such Stockholder hereunder.
Each share of PickAx Common Stock held by or for PickAx or owned by or for
Omnis or held or owned by or for any direct or indirect subsidiary of PickAx or
of Omnis immediately prior to the Effective Time shall be canceled and
extinguished without any payment of consideration therefor or any conversion
thereof.
(c) Holdback Shares. The maximum number of shares of Omnis Common Stock
into which PickAx Common Stock is exchangeable pursuant to Section 3.1(b) above
shall be referred to herein as the "Maximum Shares". Ninety percent (90%) of the
Maximum Shares shall be issued to the PickAx stockholders as of the Effective
Time pursuant to Section 3.1(g) hereof (the "Closing Shares"). With respect to
the remaining ten percent (10%) of the Maximum Shares (the "Holdback Shares"),
such shares shall be issued to the PickAx stockholders as follows:
(i) The Holdback Shares shall be issued in the respective names of
the PickAx stockholders pursuant to Section 3.1(b) hereof and delivered to Union
Bank of California, N.A. (the "Escrow Agent") at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention Corporate Trust Department. The
parties agree that the Holdback Shares shall be held in escrow until release of
such shares is authorized by the Board of Directors of Omnis pursuant to the
terms hereof.
(ii) The combined gross revenues of Omnis and the Surviving
Corporation, on a consolidated basis, for the period (the "Earn Out Measurement
Period") beginning on the first day of the first full month after the Effective
Time and ending on the first anniversary of such date (the "Earn Out Date") are
referred to herein as the "Earn Out Revenues." All Earn Out Revenues shall be
computed pursuant to GAAP applied on a consistent basis.
(iii) If the Earn Out Revenues during or for the Earn Out
Measurement Period are at least Twenty Five Million Dollars ($25,000,000) (the
"Target Earn Out"), the Board of Directors of Omnis shall provide written
instructions to its escrow agent to transfer to the PickAx stockholders the
certificates for all of the Holdback Shares, within thirty (30) days after the
date on which the Earn Out Revenues first equal (or exceed) the Target Earn Out
and subject to Section 3.2 hereof.
(iv) If the Earn Out Revenues for the Earn Out Measurement Period
are less than Twenty Two Million Five Hundred Thousand Dollars ($22,500,000)
(the "Minimum Earn Out"), the Holdback Shares shall be cancelled as of the Earn
Out Date by virtue of this Agreement and without any further action on the part
of Omnis or any other party and all of the shares of Common Stock represented by
the Holdback Shares thereupon shall be eligible for reissuance by Omnis.
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(v) If the Earn Out Revenues are greater than the Minimum Earn Out
and less than the Target Earn Out for the Earn Out Measurement Period, Omnis
shall (A) provide written instructions to its escrow agent to transfer to the
PickAx stockholders within thirty (30) days after the Earn Out Date certificates
for the number of the Holdback Shares computed using the following formula,
subject to Section 3.2 hereof:
X = ((A / B) x C) - D
Where: X = The aggregate number of Holdback Shares to be issued to the
PickAx stockholders,
A = The Earn Out Revenues,
B = The Target Earn Out,
C = The Maximum Shares, and
D = The total number of the Closing Shares;
and (B) the portion of the Holdback Shares not issued or issuable to the PickAx
stockholders pursuant to the preceding clause (A) shall be cancelled as of the
Earn Out Date by virtue of this Agreement and without any further action on the
part of Omnis or any other party and all of the shares of Common Stock
represented by such Holdback Shares thereupon shall be eligible for reissuance
by Omnis. In such event Omnis shall promptly notify each of the PickAx
stockholders in writing at their last address known to Omnis (a "Cancellation
Notice") of such cancellation of such Holdback Shares hereunder.
(vi) Notwithstanding any of the foregoing provisions to the
contrary, all of the Holdback Shares shall be security for and none of the
Holdback Shares shall be transferred to any of the PickAx stockholders until the
discharge of the rights and obligations of the PickAx stockholders and Omnis as
expressly provided by Section 11.2 hereof; and in the event of any conflict the
provisions of Section 11.2 shall be controlling.
(d) PickAx Options. At the Effective Time, all PickAx Options listed in
Schedule III hereto shall be assumed by Omnis in accordance with the following
provisions:
(i) At the Effective Time, each such PickAx Option, whether vested
or unvested, shall be, in connection with the Merger, assumed by Omnis. Each
PickAx Option so assumed by Omnis under this Agreement shall continue to have,
and be subject to, the same terms and conditions set forth in the PickAx 2000
Stock Plan (the "Option Plan") and/or as provided in the respective option
agreements governing such PickAx Option immediately prior to the Effective Time,
except that (A) such PickAx Option shall be exercisable for that number of whole
shares of Omnis Common Stock equal to the product of the number of shares of
Common Stock that were issuable upon exercise of such PickAx Option immediately
prior to the Effective Time multiplied by the Exchange Ratio, rounded down to
the nearest whole number of shares of the common stock of Omnis and (B) the per
share exercise price for the shares of the Common Stock of Omnis issuable upon
exercise of such assumed PickAx Option shall be equal to the quotient determined
by dividing the exercise price per share of PickAx Common Stock at which such
PickAx Option was exercisable immediately prior to the Effective Time by the
Exchange Ratio, rounded up to the nearest whole cent.
(ii) It is the intention of the parties that the PickAx Options
assumed by Omnis hereunder qualify as of the Effective Time as incentive stock
options as defined in Section 422 of the Code to the extent the PickAx Options
qualified as incentive stock options immediately prior to the Effective Time.
(iii) Promptly following the Effective Time, Omnis will issue to
each holder of any outstanding PickAx Option a document evidencing the foregoing
assumption of such PickAx Option by Omnis.
(iv) All PickAx Options not listed in Schedule III hereto shall
not be assumed and shall terminate as of the Closing.
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(e) PickAx Warrants. At the Effective Time, the PickAx Warrants listed in
]Schedule I hereto shall be deemed cancelled and exchanged for similar warrants
of Omnis, subject to the following provisions:
(i) Each of such PickAx Warrants shall be exercisable for the
number of whole shares of Omnis Common Stock equal to the product of the number
of shares of Common Stock that were issuable upon exercise of such PickAx
Warrant immediately prior to the Effective Time multiplied by the Exchange
Ratio, rounded down to the nearest whole number of shares of the common stock of
Omnis (the "Maximum Warrant Shares"), at the times and subject to the additional
conditions set forth below:
(A) Each of such PickAx Warrants shall be exercisable for ninety
percent (90%) of the Maximum Warrant Shares at the times and subject to the
additional conditions set forth in the original certificate representing such
securities ("Warrant Closing Shares");
(B) If the Earn Out Revenues are greater than or equal to the Target
Earn Out, then each of such PickAx Warrants shall be exercisable for the
additional ten percent (10%) of Maximum Warrant Shares (the "Holdback Warrant
Shares") at the later of (1) the date on which Earn Out Revenues first equal or
exceed the Target Earn Out or (2) the date set forth in the original
certificate. If the Earn Out Revenues are less than the Minimum Earn Out for
the Earn Out Measurement Period, then each of such PickAx Warrants shall
terminate with respect to the Holdback Warrant Shares and such Warrants shall
be deemed amended to such effect by virtue of this Agreement and without
further action by Omnis or any other party. If the Earn Out Revenues are
greater than the Minimum Earn Out and less than the Target Earn Out for the
Earn Out Measurement Period, then (x) each of such PickAx Warrants shall be
exercisable for the number of the Holdback Warrant Shares computed using the
following formula:
X = ((A / B) x C) - D
Where: X = The number of Holdback Warrant shares for which the PickAx
Warrant is exercisable,
A = The Earn Out Revenues,
B = The Target Earn Out,
C = The Maximum Warrant Shares,
D = The total number of Warrant Closing Shares; and
and (y) any right to exercise the PickAx Warrant for the remaining portion of
the Holdback Warrant Shares shall terminate with respect to such Shares and the
Warrants shall be deemed amended to such effect by virtue of this Agreement and
without any further action on the part of Omnis or any other party. In such
event Omnis shall promptly notify each of the Warrant Holders in writing at
their last address known to Omnis (also a "Cancellation Notice") of such
termination of rights with respect to such remaining Holdback Warrant Shares.
All PickAx Warrants not listed in Schedule I shall terminate as of the Closing.
(ii) The per share exercise price for the shares of the Common
Stock of Omnis issuable upon exercise of such PickAx Warrants shall be equal to
the quotient determined by dividing the exercise price per share of PickAx
Common Stock at which such PickAx Warrant was exercisable immediately prior to
the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent.
(f) PickAx Convertible Debt. As of the Effective Time, the Astoria PickAx
Convertible Debt shall be amended and superseded in its entirety by the Omnis
Loan Promissory Note containing the terms and conditions and in substantially
the form of Exhibit B. As of the Effective Time the holder of the Astoria PickAx
Convertible Debt at the Closing ("Convertible Debt Holder") shall also be
granted a warrant to purchase Five Hundred Thousand (500,000) shares of the
Common Stock of Omnis at a warrant exercise price of Seven Dollars ($7.00) per
share pursuant to the terms and conditions of the Astoria Warrant containing the
terms and conditions and in substantially the form of Exhibit C.
(g) Merger Sub Capital Stock. Each share of Common Stock, $0.01 par value
per share, of Merger Sub (the "Merger Sub Common Stock") issued and outstanding
immediately prior to the Effective Time shall be converted into one validly
issued, fully paid and nonassessable share of Common Stock,
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$0.01 par value per share, of the Surviving Corporation. Each certificate
evidencing ownership of shares of Merger Sub Common Stock shall evidence
ownership of such shares of capital stock of the Surviving Corporation.
(h) Fractional Shares. Notwithstanding any other provision of this
Agreement, no fraction of a share of Omnis Stock shall be issued in the Merger.
In lieu of fractional shares, the PickAx stockholders upon surrender of their
Certificates as set forth in Section 3.2 shall be paid an amount in cash by
Omnis, without interest, rounded down to the nearest cent, determined by
multiplying the fractional interest to which such Stockholder would otherwise be
entitled by the Average Omnis Stock Price.
(i) Restricted Shares. The shares of Omnis Stock issued in connection
with the Transactions will not be registered under the Securities Act, subject
solely to the Rights Agreement. Such shares may not be transferred or resold
thereafter, except in compliance with the terms of this Agreement and the other
Transactional Agreements and following registration under the Securities Act or
in reliance on an exemption from registration under the Securities Act.
3.2 Mechanics of Exchange.
At the Effective Time each PickAx Stockholder shall be entitled to
surrender the certificate or certificates that immediately prior to the
Effective Time represented the PickAx Stock (the "Certificates"), and which
were cancelled and converted into the Omnis Stock pursuant to Section 3.1
hereof, to Omnis in exchange for a stock certificate or certificates
representing such stockholder's allocable portion of Omnis Stock as herein
provided. It shall be a condition of such exchange that the Certificates so
surrendered shall be properly endorsed or otherwise in proper form for transfer
to Omnis.
(j) From and after the Effective Time, there shall be no transfers on the
stock transfer books of PickAx of the PickAx Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates formerly representing the PickAx Stock set forth on Schedule I
attached hereto are presented to Omnis for payment or for any other purpose,
they shall be cancelled and exchanged for the applicable portion of Omnis Stock
in accordance with the procedures set forth in this Section.
(k) In the event that any Certificate shall have been lost, stolen or
destroyed, upon the making of a bona fide affidavit of that fact by the PickAx
Stockholder claiming such Certificate to be lost, stolen or destroyed, Omnis
will issue or cause to be issued in exchange for such lost, stolen or destroyed
Certificate a stock certificate or certificates representing the portion of
Omnis Stock for which the shares of PickAx Stock represented by the Certificate
have been exchanged in accordance with this Section 3. When authorizing such
issuance in exchange therefor, Omnis may, in its discretion and as a condition
precedent to the issuance thereof, require such PickAx Stockholder to give Omnis
a bond in such sum as Omnis may direct as indemnity, or such other form of
indemnity, as Omnis shall direct, against any claim that may be made against
Omnis with respect to the Certificate alleged to have been lost, stolen or
destroyed.
(l) Omnis may, at its option, meet its obligations under this Section
3.2 through a bank or trust company selected by Omnis to act as exchange or
transfer agent in connection with the Transactions.
(m) If any stock certificate for Omnis Stock is to be issued in a name
other than that in which the Certificate surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the person requesting
such exchange shall (i) pay to Omnis any transfer or other taxes required by
reason of the issuance of certificates for such securities in a name other than
that of the registered holder of the Certificate surrendered, or establish to
the satisfaction of Omnis that such tax has been paid or is not applicable; and
(ii) provide documentary evidence satisfactory to Omnis or its counsel
establishing the right of such person to have such Omnis Stock issued in such
name.
(n) Notwithstanding any contrary provision of this Agreement, neither
Omnis nor any officer or director or agent or employee thereof nor other party
hereto shall be liable to a holder of shares of PickAx Stock for any portion of
Omnis Stock, or dividends thereon, or in accordance with Section 3.1 hereof the
cash payment for any fractional interests, delivered to a public official
pursuant to applicable escheat laws following the passage of time specified
therein.
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(o) Each of the Exchange Agent, Omnis and the Surviving Corporation
shall be entitled to deduct and withhold from any consideration payable or
otherwise deliverable pursuant to this Agreement to any holder or former holder
of PickAx Common Stock such amounts as may be required to be deducted or
withheld therefrom under the Code or under any provision of state, local or
foreign tax law or under any other applicable legal requirement. To the extent
such amounts are so deducted or withheld, such amounts shall be treated for all
purposes under this Agreement as having been paid to the person to whom such
amounts would otherwise have been paid.
3.3 No Further Rights in Stock.
All cash, cash equivalents or securities received by each PickAx
stockholder pursuant to this Agreement shall be deemed to have been delivered
and received in full satisfaction of all rights pertaining to such PickAx
stockholder's shares of PickAx Stock. At the Effective Time of the Merger, the
PickAx stockholders shall cease to have any rights with respect to any of the
PickAx Stock, and their sole right shall be to receive Omnis Stock (or cash for
fractional shares).
3.4 Closing.
The closing of the Transactions (the "Closing") shall take place at the
offices of PickAx, 1691 ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 1:00 p.m., local
time, on the later of (x) September 29, 2000 or (y) the second business day
after the day on which all of the conditions set forth in Sections 4.1 and 4.2
hereof are satisfied or waived as reasonably certified by the respective legal
counsel for PickAx and Omnis in good faith, or at such other date, time and
place as the parties shall otherwise agree (the date of such Closing, the
"Closing Date").
3.5 Supplementary Action.
If at any time after the Effective Time, any further assignments or
assurances in law or any other acts or documents or instruments are necessary
or desirable to vest or to perfect or confirm of record in the Surviving
Corporation the title to any property or rights of PickAx or to vest or perfect
or confirm of record in Omnis to any of the PickAx Securities, or otherwise to
carry out the provisions of this Agreement, effective as of the Closing the
then current officers and directors of Omnis are hereby each irrevocably
appointed and authorized and empowered on behalf of Omnis or PickAx or the
Surviving Corporation, by each of such corporations and in the name of and on
behalf of either of such corporations as necessary or desirable and in the
capacity of such persons as officers or directors of Omnis, to act as their
attorneys-in-fact and to execute and deliver any and all documents or
instruments and to do such other acts as necessary or desirable to vest or to
perfect or confirm title to such property or rights in the Surviving
Corporation or Omnis (as the case may be), and otherwise to carry out the
purposes and provisions of this Agreement.
3.6 Appraisal Rights; Dissenting Shares.
(a) If any holders of PickAx Stock are entitled to dissent from the
Merger and any such holders demand appraisal of their PickAx Stock under
applicable law (each person electing to exercise such rights, a "Dissenting
Holder"), any shares of PickAx Stock held by a Dissenting Holder for which
appraisal has been so demanded in accordance with applicable law ("Dissenting
Shares") shall not be cancelled and exchanged as described in Section 3.1
hereof, but from and after the Effective Time shall represent only the right to
receive such consideration as may be determined to be due such Dissenting Holder
under applicable law; provided however that (i) each share of PickAx Stock held
by a Dissenting Holder who shall, after the Effective Time, withdraw its demand
for appraisal or lose its rights of appraisal with respect to such shares of
PickAx Stock, in either case pursuant to applicable law, shall not be deemed a
Dissenting Share, but shall be deemed to be cancelled and converted, as of the
Effective Time, into Omnis Stock as set forth in Section 3.1 hereof; and (ii)
each Dissenting Share shall be counted as a share of PickAx Common Stock for
purposes of all computations made under Section 3.1 hereof.
(b) PickAx shall give Omnis prompt notice of any written demands for
appraisal of any shares of PickAx Stock, withdrawals of such demands or failures
to perfect appraisal rights resulting in a loss of such rights, and any other
instruments received by PickAx which relate to any such demand for appraisal.
PickAx shall not voluntarily make any payment with respect to any demands or
potential demands for
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appraisal of PickAx Stock or agree to or offer to settle or settle any such
demands or potential demands. Omnis shall be responsible for any settlement of
any lawful claims for consideration for any Dissenting Shares, which
settlements may be paid in cash, Omnis Stock or such other consideration as
Omnis may determine, except as otherwise required under applicable law.
4. Closing Conditions.
4.1 Conditions Precedent to Obligations of Omnis and Merger Sub.
The obligations of Omnis and Merger Sub to consummate the Merger and to
take the other actions required to be taken by Omnis at the Closing are subject
to the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by Omnis and Merger Sub, in whole or in
part, in accordance with Section 12.13):
(a) The representations and warranties made by PickAx in or pursuant to
this Agreement or in any other Transactional Agreement shall have been true and
accurate in all material respects as of the date of this Agreement and as of the
Closing as though made on and as of the Closing, without giving effect to any
Disclosure Schedule Update and without waiving any rights or remedies of Omnis
in the event of any breach thereof;
(b) The representations and warranties made by the Named PickAx
Stockholder in or pursuant to Section 5.21 hereof or in any other Transactional
Agreement shall have been true and accurate in all material respects as of the
date of this Agreement and as of the Closing as though made on and as of the
Closing, without giving effect to any Disclosure Schedule Update and without
waiving any rights or remedies of Omnis in the event of any breach thereof;
(c) All covenants, agreements and/or conditions contained in this
Agreement or in any other Transactional Agreement to be observed by any of the
PickAx stockholders and/or PickAx or PickAx Systems on or prior to the Closing
shall have been performed or complied with in all material respects;
(d) The PickAx stockholders or PickAx or the Convertible Debt Holder, as
the case may be, shall have delivered the following documents to Omnis:
(i) A Registration Rights Agreement in substantially the form of
Exhibit D (the "Rights Agreement"), duly executed by the PickAx stockholders and
the holders of PickAx Warrants;
(ii) Employment and Non-Competition Agreements for each of the Key
Employees, contain such terms and conditions acceptable to Omnis and its counsel
and duly executed by each of the Key Employees;
(iii) The legal opinion of ▇▇▇▇▇▇▇▇▇ Traurig, counsel to PickAx,
dated the Closing Date, in substantially the form of Exhibit E, duly executed by
said firm;
(iv) The duly executed and irrevocable written consents of each of
the holders of the PickAx Warrants to the terms and conditions of this Agreement
and any other Transactional Agreement, for the joint benefit of Omnis and Merger
Sub.
(v) Investment Representation Statements in substantially the form
of Exhibit F, duly executed for the benefit of Omnis by each of the PickAx
stockholders other than the Named PickAx Stockholder ; and the representations
and warranties made by the said PickAx stockholders shall be true and accurate
in all material respects as of the Closing and without waiving any rights or
remedies of Omnis in the event of any breach thereof;
(vi) Certificates (the "Named PickAx Stockholder Closing
Certificate" and "PickAx Closing Certificate," respectively) executed by the
Named PickAx Stockholder and a duly authorized senior executive officer of
PickAx, respectively, dated as of the Closing, and certifying to the
satisfaction of the conditions specified in Sections 4.1(a) and (b);
(vii) The written resignations of all of the members of the PickAx
Board other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, who shall be the sole director of PickAx as
of the Effective Time;
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(viii) Written evidence reasonably satisfactory to Omnis and its
counsel of the grant of PickAx Options to the employees or consultants of PickAx
or other Persons as set forth on Schedule III attached hereto;
(ix) Such other documents reasonably satisfactory to Omnis as
Omnis may request in good faith for the purpose of (A) evidencing the accuracy
of any representation or warranty made by PickAx or the PickAx stockholders, (B)
evidencing the compliance by PickAx or PickAx Systems or the PickAx stockholders
with, or the performance by PickAx or PickAx Systems or the PickAx stockholders
of, any covenant or obligation set forth in this Agreement or any other
Transactional Agreement, (C) evidencing the satisfaction of the conditions set
forth in this Section 4.1, or (D) otherwise facilitating the consummation or
performance of any of the Transactions; and
(x) The Astoria PickAx Convertible Debt instrument, duly endorsed
by the holder thereof in blank.
(e) Each of the Key Employees shall have accepted employment with Omnis
or the Surviving Corporation (or one of the other subsidiaries of Omnis), and
shall have executed and delivered legally binding and irrevocable releases of
all claims of any kind against PickAx and/or its Affiliates through and
including the Closing, in form and substance reasonably satisfactory to Omnis
and its counsel;
(f) To the satisfaction of Omnis and its counsel, the offer and sale of
Omnis Stock and Merger Sub Common Stock pursuant to the terms of this Agreement
shall comply with an exemption from registration under the Securities Act
and/or any applicable federal or state securities laws and regulations;
(g) All corporate and other proceedings required to be taken on the part
of the Board of Directors of PickAx in connection with this Agreement, the
Transactional Agreements and the Transactions, and all documents incident
thereto, shall have been taken and shall be reasonably satisfactory in form and
in substance to Omnis and its counsel; and the Board of Directors of PickAx
shall have ratified or approved the execution of this Agreement and the
Transactional Agreements by PickAx and shall have approved the consummation of
the Transactions under applicable law;
(h) All corporate and other proceedings required to be taken on the part
of the stockholders of PickAx in connection with this Agreement, the
Transactional Agreements and the Transactions, and all documents incident
thereto, shall have been taken and shall be reasonably satisfactory in form and
in substance to Omnis and its counsel; and the stockholders of PickAx shall
have approved the execution of this Agreement and the other Transactional
Agreements by PickAx and shall have approved the consummation of the
Transactions under applicable law;
(i) The stockholders of Omnis shall have approved the execution of this
Agreement and the other Transactional Agreements by Omnis and shall have
approved the consummation of the Transactions under applicable law;
(j) The stockholder of Merger Sub shall have approved the execution of
this Agreement and the other Transactional Agreements by Merger Sub and shall
have approved the consummation of the Transactions under applicable law;
(k) There shall not be shares of PickAx Stock entitled to appraisal
rights pursuant to Section 262 of the Delaware General Corporation Law or other
appraisal or dissenters' rights under applicable law, constituting more than
one percent (1%) of the capital stock of PickAx calculated on a fully-diluted
basis immediately prior to the Closing Date;
(l) Each of the Consents identified or required to be identified in Part
5.4 of the Disclosure Schedule shall have been obtained and shall be in full
force and effect;
(m) Omnis and Merger Sub shall have completed their due diligence of
PickAx and its Affiliates to the reasonable satisfaction of Omnis and its legal
counsel;
(n) There shall have been no material adverse change in the business,
condition, assets, liabilities, operations, financial performance or prospects
of PickAx or any of its Subsidiaries since the Agreement Date, other than facts
or conditions relating exclusively to political or economic matters of general
applicability that will adversely affect comparable Entities generally;
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(o) There shall not have been commenced or expressly threatened against
Omnis or Merger Sub or PickAx or any of their respective Affiliates any
Proceeding (i) involving any challenge to, or seeking damages or other relief
in connection with, any of the Transactions, or (ii) that is likely to have the
effect of preventing, delaying, making illegal or otherwise interfering with
any of the Transactions or have a material adverse effect on PickAx or PickAx
Systems or Omnis or Merger Sub;
(p) Any and all liabilities of any kind or nature of PickAx or any of
its Affiliates or PickAx stockholders to Devonshire Holdings, LLC or any
Affiliate thereof, and any and all claims or actions or causes of action
related thereto, shall have been fully discharged or satisfied or settled by
PickAx prior to the Closing, on terms acceptable to Omnis;
(q) Omnis and Merger Sub shall have received a Fairness Opinion from
Alliant Partners with respect to the material terms of the Merger in form and
content satisfactory to the Board of Directors of Omnis and Merger Sub, which
Fairness Opinion is not withdrawn by Alliant Partners at any time prior to the
Closing;
(r) PickAx shall have obtained and received proceeds after July 15, 2000
and on or before the Closing from Astoria Capital Partners, L.P. or any
Affiliate thereof in the minimum amount of Four Million Dollars ($4,000,000)
pursuant to financing arrangements on terms and conditions reasonably
acceptable to Omnis and in a transaction exempt from the registration
requirements of the Securities Act and otherwise in material compliance with
applicable laws;
(s) PickAx Systems shall have fully consummated the acquisition of
certain assets of General Automation on or before the Closing pursuant to terms
and conditions reasonably acceptable to Omnis;
(t) No Person shall have made or expressly threatened any claim
asserting that such Person (i) may be the holder or the beneficial owner of, or
may have the right to acquire or to obtain beneficial ownership of, any capital
stock or other securities of PickAx or any of its Affiliates, or (ii) may be
entitle to all or any portion of the Omnis Stock or Surviving Corporation Stock
issuable or exchangeable in the Merger; and
(u) Neither the consummation nor the performance of any of the
Transactions will, directly or indirectly (with or without notice or lapse of
time), contravene or conflict with or result in a violation of, or cause Omnis
or Merger Sub or PickAx, or any Person affiliated with Omnis or Merger Sub or
PickAx, to suffer any material adverse consequence under, (a) any applicable
legal requirement or Order, or (b) any legal requirement or Order that has been
proposed by or before any Governmental Body, other than with respect to Taxes
for which Omnis may be liable.
4.2 Conditions Precedent to Obligations of PickAx and the Named PickAx
Stockholder.
The obligation of PickAx and the Named PickAx Stockholder to take the
actions required to be taken by such parties at the Closing, is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by PickAx, in whole or in part, in accordance with
Section 12.13):
(a) The representations and warranties made by Omnis and Merger Sub in
this Agreement or in any other Transactional Agreement shall have been true and
correct in all material respects as of the date of this Agreement and as of the
Closing as though made on and as of the Closing, without waiving any rights or
remedies of PickAx or the Named PickAx Stockholder in the event of any breach
thereof;
(b) All covenants, agreements and/or conditions contained in this
Agreement or in any other Transactional Agreement to be observed by Omnis on or
prior to the Closing shall have been performed or complied with in all material
respects;
(c) Omnis shall have delivered the following documents to the PickAx
stockholders and/or PickAx and/or the Key Employees, as the case may be:
(i) The Rights Agreement, duly executed by Omnis;
(ii) The Employment and Non-Competition Agreements duly executed
by the Surviving Corporation;
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(iii) The legal opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to
Omnis and Merger Sub, dated as the Closing Date in substantially the form of
Exhibit G, duly executed by said firm; and
(iv) A certificate (the "Omnis and Merger Sub Closing
Certificate") executed by a duly authorized senior executive officer of Omnis
and by a duly authorized senior executive officer of Merger Sub, dated as of the
Closing and certifying to the satisfaction of the conditions specified in
Sections 4.2(a) and (b);
(d) Omnis shall have delivered to the Convertible Debt Holder the
following documents, duly executed by Omnis:
(i) The Omnis Loan Promissory Note in substantially the form of
Exhibit B;
(ii) The Astoria Warrant in substantially the form of Exhibit C;
(e) All corporate and other proceedings required to be taken on the part
of the Boards of Directors of Omnis and Merger Sub in connection with this
Agreement, the Transactional Agreements and the Transactions, and all documents
incident thereto, shall have been taken and shall be reasonably satisfactory in
form and in substance to PickAx and its counsel; and the Boards of Directors of
Omnis and Merger Sub shall have ratified or approved the execution of this
Agreement and the Transactional Agreements by PickAx and shall have approved
the consummation of the Transactions under applicable law;
(f) All corporate and other proceedings required to be taken on the part
of the stockholders of Omnis and Merger Sub in connection with this Agreement,
the Transactional Agreements and the Transactions, and all documents incident
thereto, shall have been taken and shall be reasonably satisfactory in form and
in substance to PickAx and its counsel; and the stockholders of Omnis and
Merger Sub each shall have approved the execution of this Agreement and the
other Transactional Agreements by Omnis and Merger Sub and shall have approved
the consummation of the Transactions under applicable law;
(g) The certain Convertible Promissory Note made by Omnis and held by
Astoria Capital Partners, L.P. dated December 21, 1999 and as amended through
April 30, 2000 in the principal amount of Three Million Dollars ($3,000,000)
shall have been converted into shares of Omnis Common Stock pursuant to the
terms thereof, subject to any further amendment of said Note as required to
permit the full exercise of such conversion rights as of the Closing;
(h) Neither the consummation nor the performance of any of the
Transactions will, directly or indirectly (with or without notice or lapse of
time), contravene or conflict with or result in a violation of, or cause the
PickAx stockholders to suffer any adverse consequence under, (i) any applicable
legal requirement or Order, or (ii) any legal requirement or Order that has
been proposed by or before any Governmental Body; other than with respect to
Taxes for which PickAx or any PickAx stockholder may be liable;
(i) PickAx shall have completed its due diligence of Omnis and its
Affiliates to the reasonable satisfaction of PickAx and its legal counsel; and
(j) There shall have been no material adverse change in the business,
condition assets, liabilities, operations, financial performance or prospects of
Omnis and Merger Sub since the date of this Agreement, other than facts or
conditions relating exclusively to political or economic matters of general
applicability that will adversely affect comparable Entities generally.
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5. Representations and Warranties of PickAx and the Named PickAx Stockholder.
Except as specifically set forth in the disclosure schedule provided by
PickAx and attached hereto as Schedule IV (the "Disclosure Schedule"), the
parts of which shall be numbered to correspond to the Section numbers of this
Agreement, PickAx and the Named PickAx Stockholder (solely for the purposes of
Section 5.21) each hereby represent and warrant to each Omnis Person and to
each Merger Sub Person as follows:
5.1 Organization, Good Standing, Qualification.
(a) Each of PickAx and its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, is qualified to conduct business and is in both corporate and
tax good standing under the laws of each jurisdiction in which the nature of
its business or the ownership or leasing of its properties requires such
qualification; provided however that PickAx shall become qualified to conduct
business and be in both corporate and tax good standing under the laws of the
State of California promptly following the Agreement Date and prior to the
Closing. Each of PickAx and its Subsidiaries has the requisite corporate power
and authority to own and operate its properties and assets, and to carry out
the provisions hereof and thereof, and to carry on its business as currently
conducted.
(b) Neither PickAx nor any of its Subsidiaries has never approved, or
commenced any proceeding, or made any election contemplating, the dissolution
or liquidation of PickAx or any of its Subsidiaries or the winding up or
cessation of the business or affairs of PickAx or any of its Subsidiaries.
(c) PickAx has no subsidiaries and does not own, beneficially or
otherwise, any shares or other securities of, or any other direct or any other
indirect interest of any nature in, any Entity, other than PickAx Systems and
the other subsidiaries of PickAx identified in Part 5.1(c) of the Disclosure
Schedule (the "Subsidiaries").
(d) Neither PickAx nor any of its Subsidiaries was ever operated as a
sole proprietorship, or any other business entity, prior to its incorporation.
5.2 Certificate of Incorporation and Bylaws; Records.
(a) PickAx and its Subsidiaries have delivered to Omnis accurate and
complete copies of:
(i) The Certificate of Incorporation and bylaws, including all
amendments thereto, as presently in effect for each of PickAx and its
Subsidiaries;
(ii) The stock records of PickAx and its Subsidiaries; and
(iii) The minutes and other records of all of the meetings and
other proceedings (including any actions taken by written consent or otherwise
without a meeting) of the stockholders of PickAx or any of its Subsidiaries, the
Boards of Directors of PickAx or any of its Subsidiaries and/or all committees
of such Boards.
(b) There have been no meetings or other proceedings of the stockholders
of PickAx or any of its Subsidiaries, Boards of Directors of PickAx or any of
its Subsidiaries or any committee thereof that are not memorialized in such
minutes or other records.
(c) Neither PickAx nor any of its Subsidiaries has conducted any
business under or otherwise used, for any purpose or in any jurisdiction, any
fictitious name, assumed name, trade name or other name, other than the names
listed on Part 5.2 of the Disclosure Schedule.
(d) There has not been any material violation of the Certificates of
Incorporation or bylaws of PickAx or any of its Subsidiaries or of any
resolution adopted by the stockholders, Boards of Directors or any committee
thereof of PickAx or any of its Subsidiaries.
5.3 Capitalization.
(a) The authorized capital stock of PickAx consists of One Hundred Ten
Million (110,000,000) shares of capital stock, comprised of One Hundred Million
(100,000,000) shares of Common Stock, of
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which Five Million Three Hundred Seventy-Six Thousand Seven Hundred Thirty Four
(5,376,734) shares are issued and outstanding, and Ten Million (10,000,000)
shares of preferred stock, none of which are issued and outstanding.
(i) Schedule I accurately sets forth all issued and outstanding
shares of PickAx Stock; the PickAx stockholders are the only beneficial owners
of capital stock of PickAx. No other shares of capital stock are issued or
outstanding. All issued and outstanding shares of the capital stock of PickAx
have been duly authorized and validly issued, are fully paid and nonassessable,
and have been issued in full compliance with all applicable securities laws and
other applicable legal requirements.
(ii) Schedule I also accurately sets forth all issued and
outstanding warrants or other convertible securities for PickAx Stock or the
stock or securities of any Subsidiary of PickAx, including but not limited to
all PickAx Warrants and all PickAx Subsidiary Warrants, if any; and no other
warrants or other convertible securities of any kind or nature for PickAx Stock
or the stock or securities of any Subsidiary of PickAx are issued or
outstanding.
(iii) Schedule III accurately sets forth (i) the names of the
employees or consultants or other Persons who have been granted PickAx Options;
(ii) the number of PickAx Options held by such employees or consultants or other
Persons as of the date of this Agreement; and/or (iii) the number of PickAx
Options to be granted to employees or consultants or other Persons prior to the
Closing, if any.
(iv) Schedule III also accurately sets forth (i) the names of the
employees or consultants or other Persons who have been granted PickAx
Subsidiary Options, if any; (ii) the number of PickAx Subsidiary Options held by
such employees or consultants or other Persons as of the date of this Agreement,
if any; and/or (iii) the number of PickAx Subsidiary Options to be granted to
employees or consultants or other Persons prior to the Closing, if any.
(b) PickAx Systems is a wholly-owned subsidiary of PickAx and PickAx is
the sole legal and beneficial owner of all of the capital stock of PickAx
Systems. No other shares of capital stock of PickAx Systems are issued or
outstanding.
(c) PickAx owns all or a majority of all of the shares of (i) the
capital stock and (ii) the voting stock of all of the Subsidiaries of PickAx
other than PickAx Systems, as set forth in Part 5.1(c) of the Disclosure
Schedule.
(d) PickAx has no Affiliates other than those Entities listed in Part
5.1(c) of the Disclosure Schedule.
(e) The outstanding stock or other equity interests of PickAx in each
Subsidiary are duly authorized, validly issued, fully paid and nonassessable,
and all such stock or other equity interests are owned by PickAx free and clear
of all liens, pledges, hypothecations, charges, mortgages, security interests,
encumbrances, claims, infringements, interferences, options, right of first
refusals, preemptive rights, agreements, community property interests or
restriction of any nature (including any restriction on the voting of any
security, any restriction on the transfer of any security or other asset, any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).
(f) Except as set forth on Schedule I or Schedule III or Part 5.3 of the
Disclosure Schedule, there is no:
(i) Outstanding subscription, option, call, warrant or other right
(whether or not currently exercisable) to acquire any shares of the capital
stock or other securities of PickAx or any of its Subsidiaries, including but
not limited to any PickAx Subsidiary Option or any PickAx Subsidiary Warrant, or
any agreement, arrangement or understanding to grant or issue any of the
foregoing at any time;
(ii) Outstanding security, instrument or other obligation that is
or may become convertible into or exchangeable for any shares of the capital
stock or other securities of PickAx or any of its Subsidiaries at any time, or
any agreement, arrangement or understanding to grant or issue any of the
foregoing at any time; or
(iii) To the knowledge of PickAx, condition or circumstance that
may directly or indirectly give rise to or provide a basis for a claim by any
Person to the effect that such Person is entitled to acquire or receive any
shares of capital stock or other securities of PickAx or any of its Subsidiaries
at any time.
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(g) PickAx or any of its Subsidiaries have never repurchased, redeemed
or otherwise reacquired (or agreed, committed or offered (in writing or
otherwise) to repurchase, redeem or otherwise reacquire) any shares of capital
stock or other securities, except from employees of PickAx pursuant to the
terms of the Option Plan.
5.4 Authority; Binding Nature of Agreements.
PickAx has the corporate power and authority to enter into and to perform
its obligations under this Agreement and the other Transactional Agreements to
which it is or is contemplated to be a party, and the execution, delivery and
performance by PickAx of this Agreement and such Transactional Agreements have
been duly authorized by all necessary action on the part of PickAx Board and
its stockholders. This Agreement and the other Transactional Agreements
constitute, or upon execution and delivery will constitute, the legal, valid
and binding obligations of PickAx, enforceable against PickAx in accordance
with their respective terms, except to the extent that enforceability may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting the enforcement of creditor's rights generally and by
general principles of equity regardless of whether such enforceability is
considered in a proceeding in law or equity.
5.5 Non-Contravention; Consents.
The execution and delivery of this Agreement and the other Transactional
Agreements, and the consummation of the Transactions, by PickAx and any or all
of the PickAx stockholders will not, directly or indirectly (with or without
notice or lapse of time):
(a) contravene, conflict with or result in a material violation of (i)
the Certificate of Incorporation or bylaws of PickAx or any of its
Subsidiaries, or (ii) any resolution adopted by Board of Directors or any
committee thereof or the stockholders of PickAx or any of its Subsidiaries;
(b) to the knowledge of PickAx, contravene, conflict with or result in a
material violation of, or give any Governmental Body or other Person the right
to challenge any of the Transactions or to exercise any remedy or obtain any
relief (other than statutory dissenters' rights) under, any legal requirement
or any Order to which PickAx or any of its Subsidiaries or any material assets
owned or used by PickAx or any of its Subsidiaries are subject;
(c) to the knowledge of PickAx, cause any material assets owned or used
by PickAx or any of its Subsidiaries to be reassessed or revalued by any taxing
authority or other Governmental Body;
(d) to the knowledge of PickAx, contravene, conflict with or result in a
material violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or
modify, any Governmental Authorization that is held by PickAx or any of its
Subsidiaries or any employees thereof or that otherwise relates to the business
or to any of the material assets owned or used by PickAx or any of its
Subsidiaries;
(e) contravene, conflict with or result in a material violation or
material breach of, or material default under, any PickAx Contract;
(f) give any Person the right to any payment by PickAx or any of its
Subsidiaries or give rise to any acceleration or change in the award, grant,
vesting or determination of options, warrants, rights, severance payments or
other contingent obligations of any nature whatsoever of PickAx or any of its
Subsidiaries in favor of any Person, in any such case as a result of the change
in control of PickAx or any of its Subsidiaries or otherwise resulting from the
Transactions; or
(g) result in the imposition or creation of any encumbrance upon or with
respect to any material asset owned or used by PickAx or any of its
Subsidiaries.
Except as set forth in Part 5.5 of the Disclosure Schedule and as expressly
contemplated in this Agreement or the other Transactional Agreements, PickAx or
any of its Subsidiaries will not be required to make any filing with or give
any notice to, or obtain any Consent from, any Person in connection with the
execution and delivery of this Agreement and the other Transactional Agreements
or the consummation or performance of any of the Transactions.
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5.6 Intellectual Property.
(a) Part 5.6 of the Disclosure Schedule sets forth a complete list, in
all material respects, of all Patents, Patent Applications, Trademarks,
copyrights and maskworks, and any applications therefor in respect of any of
the foregoing, included in the Proprietary Assets, and specifies, where
applicable, the jurisdictions in which each such Proprietary Asset has been
issued or registered or in which an application for such issuance and
registration has been filed, including the respective registration or
application numbers and the names of all registered owners. Part 5.6 also sets
forth a complete list of all material licenses, sublicenses and other material
agreements as to which PickAx or any of its Subsidiaries is a party and
pursuant to which PickAx or any of its Subsidiaries or any other Person is
currently authorized to use any of the Proprietary Assets (but excluding object
code and end-user licenses granted to end-users in the ordinary course of
business that permit use of software products without a right to modify,
distribute or sublicense the same ("End-User Licenses")) or other trade secret
material to PickAx or any of its Subsidiaries, and includes the identity of all
parties thereto, a description of the nature and subject matter thereof, the
applicable royalty and the term thereof. Neither PickAx nor any of its
Subsidiaries is in material violation of any license, sublicense or agreement
described on such list.
(b) Except as set forth in Part 5.6 of the Disclosure Schedule, PickAx
or PickAx Systems has all right, title and interest in and to and is the sole
and exclusive owner throughout the universe of each and all of the Proprietary
Assets, and has sole and exclusive rights (and is not contractually obligated
to pay any compensation to any third party in respect thereof) to the Use
thereof. Without limiting the foregoing, as of and from the Closing the
Surviving Corporation shall have the sole and exclusive right throughout the
universe in perpetuity to develop, make, have made, manufacture, use, sell,
offer to sell, import, license, modify, improve, distribute, copyright, copy,
reproduce, display, perform (publicly or otherwise), publish, create and own
all derivative works and to otherwise transfer, disclose, assign and exploit
each and all of the Proprietary Assets and all derivative works thereof, and
refrain from doing so (collectively "Use"); to file Patent Applications and to
have and own and renew or extend any and all Patents and copyrights issued on
any of the Proprietary Assets; and to register and use the Trademarks in any
jurisdiction.
(c) Except as set forth in Part 5.6 of the Disclosure Schedule, PickAx
or PickAx Systems further has and at the Effective Time the Surviving
Corporation will have good and marketable title to each and all of the
Proprietary Assets free and clear of any and all Liens or Liabilities. PickAx
or PickAx Systems is and at the Effective Time the Surviving Corporation will
be in possession of each and all of the Proprietary Assets. Without limiting
the foregoing, there are no filings in any registry of deeds in any
jurisdiction or under the Uniform Commercial Code or similar statute in any
jurisdiction or country showing any of PickAx or its Affiliates as debtor which
create or perfect or which purport to create or perfect any Lien in or on any
of the Proprietary Assets.
(d) Except as set forth in Part 5.6 of the Disclosure Schedule, to the
knowledge of PickAx or any Affiliate thereof or any Named PickAx Stockholder,
no claims with respect to the Proprietary Assets have been asserted or are
threatened by any Person nor are there any valid grounds for any bona fide
claims (i) to the effect that the manufacture, sale, licensing or use of any of
the products or services of PickAx or any of its Affiliates as now
manufactured, sold, licensed or used or proposed for manufacture, sale,
licensing or use by PickAx or any of its Affiliates infringes on any
intellectual property or other rights of any third party; (ii) against the use
by PickAx or any of its Affiliates in the business of such entity as currently
conducted; or (iii) challenging the ownership by PickAx or any of its
Affiliates or the validity or effectiveness of any of the Proprietary Assets.
(e) All registered Patents, Trademarks and copyrights held by PickAx or
any of its Subsidiaries are valid and subsisting in the jurisdictions
registered.
(f) Neither PickAx nor any Affiliate thereof has entered into any
agreement under which PickAx or any Affiliate thereof is restricted from
selling, offering, licensing or otherwise distributing or exploiting any of its
or its Affiliate's current or anticipated products or services to any class of
customers, in any geographic area, during any period of time or in any segment
of the market.
(g) PickAx or any Affiliate thereof is not, or as a result of the
execution and delivery of this Agreement or the consummation of the
Transactions hereunder will not be, in violation of any license,
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sublicense or other agreement applicable to PickAx or any Affiliate thereof,
nor will such actions entitle any other party to any such license, sublicense
or agreement to terminate or modify such license, sublicense or agreement.
(h) To the knowledge of PickAx or any Affiliate thereof, no part of the
Software or the other Proprietary Assets (i) violates or infringes or will
violate or infringe on any Patent, Trademark, copyright, or other intellectual
property or other rights of any third person or entity under the laws of any
jurisdiction, (ii) constitutes or will constitute the unauthorized disclosure
or use or misappropriation of any trade secrets or other proprietary or
confidential information of any third person or entity, (iii) uses or
incorporates the software or technology of any third person or entity, or (iv)
is subject to any pending or threatened claims of infringement or
misappropriation or any pending or threatened claims challenging the ownership
by PickAx or any of its Affiliates or the validity or effectiveness of any of
the Proprietary Assets.
(i) To the knowledge of PickAx or any Affiliate thereof, there has been
or is no material unauthorized use, infringement or misappropriation of any of
the Proprietary Assets by any third party, including but not limited to any
employee or former employee of PickAx or any Affiliate thereof.
(j) Except as set forth in Part 5.6 of the Disclosure Schedule, no part
of the Proprietary Assets is subject to any outstanding order, judgment,
decree, stipulation or agreement restricting in any manner the licensing or
exploitation thereof by PickAx or any Affiliate thereof or its or its
Affiliate's licensees. Except as set forth in Part 5.6 of the Disclosure
Schedule, neither PickAx nor any Affiliate thereof has entered into any
agreement to indemnify any other person against any claim or action of
infringement or misappropriation relating to any of the Proprietary Assets.
(k) To the knowledge of PickAx, no employee of PickAx or any Affiliate
thereof is in material violation of any term of any employment contract
(whether written or oral), invention agreement, patent disclosure agreement,
proprietary information agreement, non-competition agreement or any other
contract or agreement relating to the relationship of any such employee with
PickAx or any Affiliate thereof . All consultants and employees of any of
PickAx or any Affiliate thereof have signed agreements containing proprietary
information protective provisions and, where applicable, agreements assigning
all rights in any work performed by them to PickAx or such Affiliate.
(l) Without limiting the foregoing, the Software is the original work of
PickAx and has been either created by employees of PickAx on a work-for-hire
basis or by consultants or contractors who have assigned all rights in such
Software to PickAx.
(m) PickAx and its Affiliates have taken reasonable security measures to
protect the secrecy, confidentiality and value of all trade secrets, know-how,
inventions, designs, processes and technical data required to conduct its
business. Without limiting the foregoing, no part of the Source Code or any
essential structure of the Software has been disclosed to any third person or
entity at any time.
5.7 Proceedings; Orders.
(a) Except as identified in Part 5.7 of the Disclosure Schedule, there
are no pending Proceedings, and, to PickAx's knowledge, no Person has
threatened to commence any Proceeding:
(i) that (x) involves PickAx or any of its Subsidiaries or (y)
otherwise relates to or might affect the business or any of the material assets
owned or used by PickAx or any of its Subsidiaries (whether or not PickAx or any
of its Subsidiaries is named as a party thereto), other than Proceedings to
which PickAx or any of its Subsidiaries are not parties that would affect
businesses generally; or
(ii) that challenges, or that may have the effect of preventing,
delaying, making illegal or otherwise interfering with, any of the Transactions
or PickAx's ability to comply with or perform its obligations and covenants
under the Transactional Agreements, and, to the knowledge of PickAx, no event
has occurred, and no claim, dispute or other condition or circumstance exists,
that might directly or indirectly give rise to or serve as a basis for the
commencement of any such Proceeding.
(b) PickAx has delivered to Omnis accurate and complete copies of all
pleadings, correspondence and other written materials to which PickAx has
access that relate to the Proceedings identified in Part 5.7 of the Disclosure
Schedule, if any.
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(c) There is no Order to which PickAx or any of its Subsidiaries, or any
of the assets owned or used by PickAx or any of its Subsidiaries, are subject.
(d) To PickAx's knowledge, no officer or employee of PickAx or any of
its Subsidiaries is subject to any Order that prohibits such officer or
employee from engaging in or continuing any conduct, activity or practice
relating to the business of PickAx or any of its Subsidiaries.
5.8 Financial Statements.
(a) PickAx has delivered to Omnis the following financial statements and
notes (collectively, the "Financial Statements"), which are attached as Exhibit
H:
(i) the audited consolidated balance sheet of PickAx and its
Subsidiaries as of February 29, 2000, and the related audited statement of
operations of PickAx and its Subsidiaries for the period ended February 29, 2000
(the "Balance Sheet Date"); and
(ii) the unaudited consolidated balance sheet of PickAx and its
Subsidiaries as of May 30, 2000 (the "Unaudited Interim Balance Sheet"), and the
related unaudited statement of operations of PickAx for the three (3) months
then ended.
(b) All the Financial Statements are accurate and complete in all
material respects, and the dollar amount of each line item included in the
Financial Statements is accurate in all material respects. The Financial
Statements are in accordance with the books and records of PickAx and its
Subsidiaries and present fairly the financial position of PickAx and its
Subsidiaries as of the respective dates thereof and the results of operations
of PickAx and its Subsidiaries for the periods covered thereby. The Financial
Statements have been prepared, stated and presented pursuant to GAAP applied on
a consistent basis throughout the periods covered.
(c) PickAx and its Subsidiaries have no Liabilities in excess of Ten
Thousand Dollars ($10,000), individually or in the aggregate, except for
Liabilities identified as such in the "liabilities" column of the Unaudited
Interim Balance Sheet and Liabilities arising out of the Transactional
Agreements and PickAx Contracts.
5.9 Title to Assets.
(a) PickAx and its Subsidiaries own, and has good, valid and marketable
title to, all assets purported to be owned by them, free and clear of any
material encumbrances or Liens or Liabilities, except liens for current taxes
and assessments not delinquent.
(b) Part 5.9(b) of the Disclosure Schedule identifies all equipment,
furniture, fixtures, improvements and other tangible assets owned by PickAx and
its Subsidiaries and included in the tangible assets as shown on the Unaudited
Interim Balance Sheet of PickAx prepared in accordance with GAAP consistently
applied, and sets forth the original cost and book value of each of said
assets.
(c) Each asset identified in Part 5.9(b) of the Disclosure Schedule:
(i) is free of material defects and deficiencies and in good
condition and repair, consistent with its age and intended use (ordinary wear
and tear excepted); and
(ii) is adequate for the uses to which it is being put.
(d) PickAx or any of its Subsidiaries do not own any real property or
any interest in real property, except for the leaseholds created under the real
property leases identified in Part 5.9(d) of the Disclosure Schedule (the
"Leased Premises"). Part 5.9(d) of the Disclosure Schedule lists the premises
covered by said leases. Each of PickAx and its Subsidiaries enjoy peaceful and
undisturbed possession of such premises.
(e) Part 5.9(e) of the Disclosure Schedule identifies all tangible
assets that are leased to PickAx or any of its Subsidiaries that have a value
in excess of Ten Thousand Dollars ($10,000). All leases pursuant to which
PickAx or any of its Subsidiaries leases real or personal property are in good
standing and are valid and effective in accordance with their respective terms
and, to the knowledge of PickAx, there exists no default thereunder.
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5.10 Contracts.
(a) Part 5.10 of the Disclosure Schedule identifies and describes each
material PickAx Contract. PickAx has delivered to Omnis accurate and complete
copies of all such PickAx Contracts, including all amendments thereto.
(b) Except as set forth on Part 5.10(b) of the Disclosure Schedule, each
PickAx Contract is currently valid and in full force and effect, and is
enforceable by PickAx or the relevant Subsidiary in accordance with its terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting the
enforcement of creditor's rights generally and by general principles of equity
regardless of whether such enforceability is considered in a proceeding in law
or equity.
(c) Except as set forth on Part 5.10(c) of the Disclosure Schedule,
PickAx or any of its Subsidiaries is not in material default under any PickAx
Contract, and, to the knowledge of PickAx, (i) no Person has violated or
breached, or declared or committed any material default under, any PickAx
Contract; and (ii) PickAx or any of its Subsidiaries has not waived any of its
rights under any PickAx Contract.
(d) Except as set forth on Part 5.10(c) of the Disclosure Schedule, to
the knowledge of PickAx, there are no material disputes or disagreements
between PickAx or any of its Subsidiaries and any other party with respect to
any PickAx Contract.
(e) (i) PickAx or any of its Subsidiaries has never guaranteed or
otherwise agreed to cause, insure or become liable for, and has never pledged
any of its assets to secure, the performance or payment of any obligation or
other Liability of any other Person; and (ii) PickAx or any of its Subsidiaries
has never been a party to or bound by any material joint venture agreement,
partnership agreement, profit-sharing agreement, cost-sharing agreement,
loss-sharing agreement or similar Contract.
(f) No Person is renegotiating any amount paid or payable to PickAx or
any of its Subsidiaries under any PickAx Contract or any other material term or
provision of any PickAx Contract.
(g) Part 5.10(f) of the Disclosure Schedule identifies and provides an
accurate and complete description of each proposed PickAx Contract (other than
this Agreement and the Transactional Agreements) as to which any bid, offer,
written proposal, term sheet or similar document has been submitted to or
received by PickAx or any of its Subsidiaries and is outstanding and which
would be material to the business or prospects of PickAx or any of its
Subsidiaries .
(h) Except as set forth on Part 5.10(h) of the Disclosure Schedule, no
party to any PickAx Contract has notified PickAx or any of its Subsidiaries to
the effect that PickAx or any of its Subsidiaries has failed to perform a
material obligation thereunder.
(i) Except as set forth on Part 5.10(i) of the Disclosure Schedule, each
other party to each PickAx Contract has consented or been given notice (or
prior to the Closing Date shall have consented or been given notice), where
such consent or the giving of such notice is necessary, sufficient that such
PickAx Contract shall remain in full force and effect following the
consummation of the Transactions, without material modification in the rights
or obligations of PickAx or any of its Subsidiaries or Omnis or the Surviving
Corporation thereunder.
5.11 Employees.
(a) Part 5.11(a) of the Disclosure Schedule contains a list of all
employees of PickAx or any of its Subsidiaries as of the Agreement Date and
their respective titles and annualized compensation.
(b) Part 5.11(b) of the Disclosure Schedule contains a list of Persons
who are currently performing services for the business of PickAx or any of its
Subsidiaries and are classified as "consultants" or "independent contractors,"
and the respective compensation of each such "consultant" or "independent
contractor."
(c) Neither PickAx nor any of its Subsidiaries have any collective
bargaining agreements or union contracts with any of their respective
employees. To the knowledge of PickAx, there is no labor union organizing
activity pending or threatened with respect to PickAx or any of its
Subsidiaries. The
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employment of each employee of PickAx or any of its Subsidiaries is terminable
at will; and, except as set forth in Part 5.11(c) of the Disclosure Schedule,
no employee has any agreement or contract, written or oral or express or
implied, regarding his or her employment.
(d) Except as set forth on Part 5.11(e) of the Disclosure Schedule, to
the knowledge of PickAx, (i) no employee of PickAx or any of its Subsidiaries
(an "Employee"), nor any consultant or independent contractor with whom PickAx
or any of its Subsidiaries has contracted, is in violation of any term of any
employment contract, proprietary information agreement or any other agreement
relating to the right of any such individual to be employed by, or to contract
with, PickAx or any of its Subsidiaries, and (ii) the continued employment by
PickAx or any of its Subsidiaries of present Employees, and the performance by
PickAx or any of its Subsidiaries of contracts with consultants or independent
contractors, will not result in any such violation. Neither PickAx nor any of
its Subsidiaries has received any notice (written or otherwise) alleging that
any such violation has occurred. No Employee has been granted the right to
continued employment by PickAx or any of its Subsidiaries or to any material
compensation following termination of employment. To the knowledge of PickAx,
no officer or key employee, or any group of employees, has given notice of his,
her or their intent to terminate his, her or their employment with PickAx, and
no Employee has received an offer to join a business that is or likely would be
competitive with the business of PickAx or any of its Subsidiaries.
(e) To the knowledge of PickAx, no Employee or consultant or independent
contractor of PickAx or any of its Subsidiaries has or may have any claim or
action or cause of action against PickAx or any Affiliate thereof or any
current or former officer, director or manager of PickAx or any Affiliate
thereof related in any manner to the employment or engagement of such employee
or consultant or independent contractor, including but not limited to any claim
of sexual or racial or age discrimination or comparable claim under any
applicable law.
5.12 Compliance with Legal Requirements.
(a) Each of PickAx and its Subsidiaries is in full compliance with each
legal requirement that is applicable to it or to the conduct of its business or
the ownership or use of any of its assets.
(b) Neither PickAx nor any of its Subsidiaries has received at any time
any notice or other communication from any Governmental Body or any other
Person, or has any other knowledge, regarding (i) any actual, alleged, possible
or potential violation of, or failure to comply with, any legal requirement by
PickAx or any of its Subsidiaries, including but not limited to any
Environmental Law, or (ii) any actual, alleged, possible or potential liability
or obligation on the part of PickAx or any of its Subsidiaries to undertake, or
to bear all or any portion of the cost of, any cleanup or any remedial,
corrective or response action of any nature relating to Hazardous Materials, or
any other circumstances that could give rise to liability under any
Environmental Law for any investigative, cleanup, remedial, corrective or
response action of any nature or for any costs thereof; except to the extent
such noncompliance or liability or obligation will not materially adversely
effect the business, prospects or financial condition of PickAx or any of its
Subsidiaries at any time.
5.13 Governmental Authorizations.
(a) Part 5.13 of the Disclosure Schedule identifies each Governmental
Authorization held by PickAx or any of its Subsidiaries. PickAx has delivered
to Omnis accurate and complete copies of all such Governmental Authorizations,
including all renewals thereof and all amendments thereto. Each Governmental
Authorization identified or required to be identified in Part 5.13 of the
Disclosure Schedule is valid and in full force and effect.
(b) The Governmental Authorizations identified in Part 5.13 of the
Disclosure Schedule constitute all the Governmental Authorizations necessary
(i) to enable PickAx and its Subsidiaries to conduct its business in the manner
in which its business is currently being conducted, and (ii) to permit PickAx
and its Subsidiaries to own and use its assets in the manner in which they are
currently owned and used. All such Governmental Authorizations shall remain in
full force and effect following the consummation of the Transactions, without
material modification in the rights or obligations of PickAx or Omnis or the
Surviving Corporation thereunder.
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5.14 Tax Matters.
(a) Except to the extent set forth in Part 5.14 of the Disclosure
Schedule, each Tax required to have been paid, or claimed by any Governmental
Body to be payable, by PickAx and/or its Subsidiaries (whether pursuant to any
Tax Return or otherwise) has been duly paid in full on a timely basis. Any Tax
required to have been withheld or collected by PickAx and/or its Subsidiaries
has been duly withheld and collected, and (to the extent required) each such
Tax has been paid to the appropriate Governmental Body. PickAx and/or its
Subsidiaries have complied with all information reporting and backup
withholding requirements, including maintenance of required records with
respect thereto, in connection with amounts paid or owing to any employee,
creditor, consultant, independent contractor, or other third party.
(b) Part 5.14 of the Disclosure Schedule accurately identifies all Tax
Returns required to be filed by or on behalf of PickAx and/or its Subsidiaries
with any Governmental Body with respect to any taxable period ending on or
before the Closing Date ("PickAx Returns"). All such Returns (i) have been, or
will be, filed when due, and (ii) have been, or will be when filed, accurately
and completely prepared pursuant to applicable law. All amounts shown on PickAx
Returns to be due on or before the Closing Date, and all amounts otherwise
payable in connection with PickAx Returns on or before the Closing Date, have
been paid on or before the Closing Date. PickAx has delivered to Omnis copies
of all such Returns filed by or on behalf of PickAx or any other entity
acquired by or merged into PickAx prior to the Closing.
(c) The liability of PickAx and its Subsidiaries for unpaid Taxes for
all periods ending on or before the date of the Financial Statements does not,
in the aggregate, exceed the amount of the current liability accruals for Taxes
(excluding reserves for deferred taxes) reported in the Financial Statements.
PickAx and its Subsidiaries have established, in the Ordinary Course of
Business, reserves adequate for the payment of all Taxes for the period from
December 31, 1999 through the Closing Date, and PickAx and its Subsidiaries
have disclosed the dollar amount of such reserves to Omnis on or prior to the
Closing.
(d) Part 5.14 of the Disclosure Schedule identifies each examination or
audit of any such Return that has been conducted by any Governmental Body.
PickAx has delivered to Omnis copies of all audit reports and similar documents
(to which PickAx has access) relating to such Returns. No extension or waiver
of the limitation period applicable to any of PickAx Returns has been granted
(by PickAx or any other Person), and no such extension or waiver has been
requested from PickAx or any of its Subsidiaries.
(e) No claim or other Proceeding is pending or has been threatened in
writing or orally (formally or informally) against or with respect to PickAx or
any of its Subsidiaries in respect of any Tax. Neither PickAx nor any of its
Subsidiaries has entered into or become bound by any agreement or consent
pursuant to Section 341(f) of the Code. Neither PickAx nor any of its
Subsidiaries has been, and will not be, required to include any adjustment in
taxable income for any tax period (or portion thereof) pursuant to Section 481
or 263A of the Code or any comparable provision under state or foreign Tax laws
as a result of transactions or events occurring, or accounting methods
employed, prior to the Closing. Neither PickAx nor any of its Subsidiaries has
been in a "consolidated group" within the meaning of Treasury Regulations
Section 1.1502-1(h), other than a consolidated group of which PickAx has been
the common parent at all times; and neither PickAx nor any of its Subsidiaries
is liable for Taxes incurred by any individual, trust, corporation, partnership
or any other Entity either as a transferee, pursuant to Treasury Regulations
Section 1.1502-6, or pursuant to any other provision of federal, territorial,
state, local or foreign law or regulations. Except as set forth in Part 5.14 of
the Disclosure Schedule, neither PickAx nor any of its Subsidiaries is a party
to any joint venture, partnership or other arrangement or contract which could
be treated as a partnership for United States federal income tax purposes. None
of the assets of PickAx or any of its Subsidiaries (i) directly or indirectly
secures any debt the interest on which is tax exempt under Section 103(a) of
the Code or (ii) is "tax exempt use property" within the meaning of Section
168(h) of the Code. PickAx has not participated in an international boycott as
defined in Code Section 999. Neither PickAx nor any of its Subsidiaries has a
"permanent establishment," as defined in any applicable Tax treaty or
convention of the United States of America, or fixed place of business in any
foreign country.
(f) Neither PickAx nor any of its Subsidiaries is a party to any
agreement, plan, arrangement or other Contract covering any employee or
independent contractor or former employee or independent
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contractor that, individually or collectively, could give rise directly or
indirectly to the payment of any amount that would not be deductible pursuant
to Section 280G or Section 162(m) of the Code. Except as set forth in Part 5.14
of the Disclosure Schedule, neither PickAx nor any of its Subsidiaries is, nor
has it ever been, a party to or bound by any tax indemnity agreement,
tax-sharing agreement, tax allocation agreement or similar Contract, and has
not otherwise assumed the tax liability of any other Person under contract.
(g) Neither PickAx nor any of its Subsidiaries is a United States real
property holding corporation within the meaning of Section 897(c)(2) of the
Code and has not been a United States real property holding corporation within
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(h) Neither PickAx nor any of its Subsidiaries has net operating losses
or other tax attributes presently subject to limitation under Code Section 382,
383 or 384, or the federal consolidated return regulations.
(i) The final 2000 U.S. income tax return for PickAx and each of its
Subsidiaries to be prepared pursuant to Section 12.4(b) will contain, in all
material respects, an accurate and complete description of such entities' tax
basis in its assets, its current and accumulated earnings and profits, its tax
carryovers, and any tax elections.
5.15 Securities Laws Compliance; Registration Rights.
PickAx and its Subsidiaries have complied with all federal and state
securities laws in connection with all offers and sales of securities issued by
PickAx or any of its Subsidiaries. Neither PickAx nor any of its Subsidiaries
have heretofore granted any other holder of its securities the right to require
it to register any securities under the Securities Act or to qualify for any
exemption thereunder.
5.16 [Reserved]
5.17 Environmental Compliance.
To the knowledge of PickAx, PickAx and its Subsidiaries are and have been
at all times in compliance in all material respects with all Environmental
Laws.
5.18 Insurance.
(a) Part 5.18 of the Disclosure Schedule sets forth each insurance
policy maintained by or at the expense of, or for the direct or indirect
benefit of, PickAx.
(b) PickAx has delivered to Omnis copies of all of the insurance
policies identified in Part 5.18 of the Disclosure Schedule (including all
renewals thereof and endorsements thereto) and binders relating thereto.
(c) Each of the policies identified in Part 5.18 of the Disclosure
Schedule is in full force and effect. All of the information contained in the
applications submitted in connection with said policies was (at the times said
applications were submitted) accurate and complete, and all premiums and other
amounts owing with respect to said policies have been paid in full on a timely
basis. Each of the policies identified in Part 5.18 of the Disclosure Schedule
will continue in full force and effect following the Closing, and PickAx has
paid all premiums due, and has otherwise performed all of its obligations,
under each policy to which it is a party or that provides coverage to it or any
of its directors or officers in connection with their performance of services
to PickAx.
(d) There is no pending claim under or based upon any of the policies
identified in Part 5.18 of the Disclosure Schedule, and, to PickAx's knowledge,
no event has occurred, and no condition or circumstance exists, that might
(with or without notice or lapse of time) directly or indirectly give rise to
or serve as a basis for any such claim.
(e) PickAx has not received:
(i) any notice or other communication (in writing or otherwise)
regarding the actual or possible cancellation or invalidation of any of the
policies identified in Part 5.18 of the Disclosure Schedule or regarding any
actual or possible adjustment in the amount of the premiums payable with respect
to any of said policies; or
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(ii) any notice or other communication (in writing or otherwise)
regarding any actual or possible refusal of coverage under, or any actual or
possible rejection of any claim under, any of the policies identified in Part
5.18 of the Disclosure Schedule.
5.19 Related Party Interests or Transactions.
(a) No Related Party has, and no Related Party has at any time since the
Balance Sheet Date had, any direct or indirect material interest of any nature
in any material asset of PickAx or any of its Subsidiaries or any PickAx
Contract, including but not limited to any of the Proprietary Assets.
(b) No Related Party is, or has at any time since the Balance Sheet Date
been, indebted to PickAx or any of its Subsidiaries for an amount, individually
or in the aggregate, in excess of Ten Thousand Dollars ($10,000).
(c) Since the Balance Sheet Date, no Related Party has entered into, or
has had any direct or indirect material financial interest in, any PickAx
Contract, transaction or business dealing of any nature involving PickAx or any
of its Subsidiaries.
(d) No Related Party is competing, or has at any time since the Balance
Sheet Date competed, directly or indirectly, with PickAx or any of its
Subsidiaries in any market served by PickAx or any of its Subsidiaries.
5.20 Absence of Changes.
Since February 29, 2000:
(a) except to the extent set forth on Part 5.20(a) of the Disclosure
Schedule, there has not been any material adverse change in the business,
assets, liabilities, operations or prospects (or in any aspect or portion
thereof) of PickAx or any of its Subsidiaries, and, to the knowledge of PickAx,
no event has occurred that is likely to have a material adverse effect on the
business, assets, liabilities, operations or prospects (or on any aspect or
portion thereof) of PickAx or any of its Subsidiaries;
(b) neither PickAx nor any of its Subsidiaries has declared, accrued,
set aside or paid any dividend or made any other distribution in respect of any
shares of capital stock;
(c) neither PickAx nor any of its Subsidiaries has amended its
Certificate of Incorporation or Bylaws or has entered into any agreement
regarding, effected or been a party to any Acquisition Transaction (other than
this Merger), recapitalization, reclassification of shares, stock split,
reverse stock split or similar transaction;
(d) except as set forth on Part 5.20(d) of the Disclosure Schedule,
neither PickAx nor any of its Subsidiaries has made any individual capital
expenditure in excess of Twenty Five Thousand Dollars ($25,000);
(e) except as set forth on Part 5.20(e) of the Disclosure Schedule,
neither PickAx nor any of its Subsidiaries has pledged or hypothecated any of
its material assets or otherwise permitted any of its material assets to become
subject to any encumbrance;
(f) neither PickAx nor any of its Subsidiaries has made any loan or
advance in excess of Ten Thousand Dollars ($10,000) to any Person;
(g) except as set forth on Part 5.20(g) of the Disclosure Schedule,
neither PickAx nor any of its Subsidiaries has paid any bonus or made any
profit-sharing or similar payment to, or increased the amount of the wages,
salary, commissions, fringe benefits or other compensation or remuneration
payable to, any of its directors, officers or employees;
(h) except as set forth on Part 5.20(h) of the Disclosure Schedule,
there has been no resignation or termination of employment of any officer or
key employee of PickAx or any of its Subsidiaries;
(i) except as set forth on Part 5.20(i) of the Disclosure Schedule,
there has been no borrowing or agreement to borrow by PickAx or any of its
Subsidiaries or material change in the contingent obligations of PickAx or any
of its Subsidiaries by way of guaranty, endorsement, indemnity, warranty or
otherwise or grant of a mortgage or security interest in any property of PickAx
or any of its Subsidiaries;
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(j) except as set forth on Part 5.20(j) of the Disclosure Schedule,
neither PickAx nor any of its Subsidiaries has discharged any encumbrance or
discharged, paid or forgiven any indebtedness or other Liability in excess of
Ten Thousand Dollars ($10,000), individually or in the aggregate, except for
accounts payable that (i) are reflected as current liabilities in the
"liabilities" column of the Unaudited Interim Balance Sheet or have been
incurred by PickAx or any of its Subsidiaries since the date of the Unaudited
Interim Balance Sheet in the Ordinary Course of Business and (ii) have been
discharged or paid in the Ordinary Course of Business;
(k) except as set forth on Part 5.20(k) of the Disclosure Schedule,
neither PickAx nor any of its Subsidiaries has released or waived any material
right or claim;
(l) neither PickAx nor any of its Subsidiaries has changed any of its
methods of accounting or accounting practices in any material respect;
(m) neither PickAx nor any of its Subsidiaries has received notice that
there has been a loss of, or cancellation of a material order by, any customer;
and
(n) neither PickAx nor any of its Subsidiaries has agreed, committed or
offered (in writing or otherwise), and has not attempted, to take any of the
actions referred to in clauses (c) through (m) above.
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5.21 The Named PickAx Stockholder; Investment Intent and Restrictions.
The Named PickAx Stockholder represents and warrants as follows:
(a) Immediately prior to the Effective Time, the Named PickAx
Stockholder will own, beneficially and of record, that number of shares of
PickAx Stock specified opposite the Named PickAx Stockholder's name on Schedule
II attached hereto, free and clear of any Liens or Liabilities. The Named
PickAx Stockholder has delivered to Omnis copies of the stock certificate(s)
evidencing the PickAx Stock.
(b) The Named PickAx Stockholder has the absolute and unrestricted
right, power and authority to enter into and to perform his, her or its
respective obligations under this Agreement and the other Transactional
Agreements to which he, she or it is contemplated to be a party. This Agreement
and the other Transactional Agreements constitute, or upon execution and
delivery will constitute, the legal, valid and binding obligations of the Named
PickAx Stockholder, enforceable against him, her or it in accordance with their
respective terms, except to the extent that enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting the enforcement of creditor's rights generally and by general
principles of equity regardless of whether such enforceability is considered in
a proceeding in law or equity.
(c) To the knowledge of the Named PickAx Stockholder, the execution and
delivery of this Agreement and the other Transactional Agreements, and the
consummation of the Transactions, by the Named PickAx Stockholder will not,
directly or indirectly (with or without notice or lapse of time), contravene,
conflict with or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the Transactions or to exercise any
remedy or obtain any relief under, any legal requirement or any Order to which
the Named PickAx Stockholder is subject.
(d) There is no pending Proceeding, and, to the knowledge of the Named
PickAx Stockholder, no Person has threatened to commence any Proceeding, that
challenges, or that may have the effect of preventing, delaying or making
illegal, any of the Transactions or the Named PickAx Stockholder's ability to
comply with or perform his, her or its obligations and covenants under the
Transactional Agreements; and, to the knowledge of the Named PickAx
Stockholder, no event has occurred, and no claim, dispute or other condition or
circumstance exists, that might directly or indirectly give rise to or serve as
a basis for the commencement of any such Proceeding.
(e) The Named PickAx Stockholder is not subject to any Order that
relates to PickAx's business or to any of the assets owned or used by PickAx or
to the stock or rights held by or for such Stockholder; and to the knowledge of
the Named PickAx Stockholder, there is no proposed Order that, if issued or
otherwise put into effect, may have a material adverse effect on the ability of
the Named PickAx Stockholder to comply with or perform any covenant or
obligation under this Agreement and the other Transactional Agreements.
(f) To the knowledge of the Named PickAx Stockholder, no Governmental
Body has proposed any legal requirement (other than any legal requirement that
would be applicable generally to the Internet communications industry) that, if
adopted or otherwise put into effect, may adversely affect his, her or its
ability to comply with or perform any of his, her or its covenants or
obligations under this Agreement and the other Transactional Agreements.
(g) Neither the Named PickAx Stockholder nor any person acting on his,
her or its behalf has negotiated or contracted with any finder, broker,
intermediary or any similar person in connection with the transactions
contemplated herein. The Named PickAx Stockholder has not incurred, nor will
the Named PickAx Stockholder incur, directly or indirectly, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any Transactional Agreement or any of the
Transactions contemplated hereby; and the Named PickAx Stockholder shall fully
indemnify, defend and hold Omnis and Merger Sub and the Surviving Corporation
harmless from any such liabilities or claims, including but not limited to
reasonable attorney's fees and costs of defense.
(h) All information regarding the Named PickAx Stockholder that such
Named PickAx Stockholder has furnished to Omnis or any of its representatives
is accurate and complete in all material respects.
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(i) To the personal knowledge only of the Named PickAx Stockholder, each
and all of the representations and warranties made by PickAx in this Agreement
are true and accurate in all material respects as of the date of this Agreement
and as of the Closing as though made on and as of the Closing, without giving
effect to any Disclosure Schedule Update and without being qualified by the
knowledge or lack of knowledge of PickAx;
(j) The Named PickAx Stockholder has the capacity and financial
capability to comply with and perform all his, her or its covenants and
obligations under this Agreement and each of the other Transactional
Agreements.
With respect to Omnis Stock, the Named PickAx Stockholder further
represents and warrants as follows:
(k) The Named PickAx Stockholder is an "accredited investor" as that
term is defined in Rule 501(a) of Regulation D of the Securities Act (excerpts
of the definition of "accredited investor" are attached as Schedule VI hereto).
(l) The Named PickAx Stockholder, by reason of its business and
financial experience has such knowledge, sophistication and experience in
financial and business matters and in making investment decisions of this type
that it is capable of (i) evaluating the merits and risks of an investment in
Omnis Stock and making an informed investment decision, (ii) protecting its own
interest and (iii) bearing the economic risk of such investment. If the Named
PickAx Stockholder retained a representative with respect to the investment in
Omnis Stock that may be made hereby then the Named PickAx Stockholder shall,
prior to or at the Closing, (i) acknowledge in writing such representation and
(ii) cause such representative to deliver a certificate to Omnis containing
such representations as are reasonably requested by Omnis.
(m) The Named PickAx Stockholder is acquiring Omnis Stock for investment
for the Named PickAx Stockholder's own account, not as a nominee or agent and
not with the view to, or any intention of, a resale or distribution thereof, in
whole or in part, or the grant of any participation therein. The Named PickAx
Stockholder understands that Omnis Stock has not been registered under the
Securities Act or state securities laws and will be issued by reason of a
specific exemption from the registration provisions of the Securities Act and
applicable state securities laws that depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the Named PickAx
Stockholder's representations as expressed in this Agreement. The Named PickAx
Stockholder further understands that Omnis shall have no obligation to register
Omnis Stock under the Securities Act or any state securities laws or to take
any action that would make available any exemption from the registration
requirements of such laws, except as set forth in the Rights Agreement. The
Named PickAx Stockholder hereby acknowledges that because of the restrictions
on transfer or assignment of Omnis Stock to be issued in connection with the
Merger hereunder the Named PickAx Stockholder may have to bear the economic
risk of the investment commitment in Omnis Stock for an indefinite period of
time.
(n) The Named PickAx Stockholder will observe and comply with the
Securities Act and the rules and regulations promulgated thereunder, as now in
effect and as from time to time amended, in connection with any offer, sale,
pledge, transfer or other disposition of Omnis Stock. In furtherance of the
foregoing, and in addition to any restrictions contained in this Agreement or
the other Transactional Agreements, the Named PickAx Stockholder will not offer
to sell, exchange, transfer, pledge, or otherwise dispose of any of Omnis Stock
unless at such time at least one of the following is satisfied:
(i) a registration statement under the Securities Act covering
Omnis Stock proposed to be sold, transferred or otherwise disposed of,
describing the manner and terms of the proposed sale, transfer or other
disposition, and containing a current prospectus, shall have been filed with the
SEC and made effective under the Securities Act;
(ii) such transaction shall be permitted pursuant to the
provisions of Rule 144;
(iii) counsel representing the Named PickAx Stockholder shall have
advised Omnis in a written opinion letter reasonably satisfactory to Omnis and
its counsel, and upon which Omnis and its counsel may rely, that no registration
under the Securities Act would be required in connection with the proposed sale,
transfer or other disposition; or
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(iv) an authorized representative of the SEC shall have rendered
written advice to the Named PickAx Stockholder (sought by the Named PickAx
Stockholder or counsel to the Named PickAx Stockholder, with a copy thereof and
of all other related communications delivered to Omnis) to the effect that the
SEC would take no action, or that the staff of the SEC would not recommend that
the SEC take action, with respect to the proposed sale, transfer or other
disposition if consummated.
(o) The Named PickAx Stockholder understands that an investment in Omnis
Stock involves substantial risks. The Named PickAx Stockholder has been given
the opportunity to make a thorough investigation of the proposed activities of
Omnis and, upon request to Omnis, has been furnished with materials relating to
Omnis and its proposed activities. The Named PickAx Stockholder has been
afforded the opportunity to obtain any additional information deemed necessary
by the Named PickAx Stockholder to verify the accuracy of any representations
made or information conveyed to the Named PickAx Stockholder. The Named PickAx
Stockholder confirms that all documents, records and books pertaining to its
investment in Omnis Stock and requested by the Named PickAx Stockholder have
been made available or delivered to the Named PickAx Stockholder. The Named
PickAx Stockholder has had an opportunity to ask questions of and receive
answers from Omnis, or from a person or persons acting on Omnis's behalf,
concerning the terms and conditions of this investment.
(p) The Named PickAx Stockholder has no knowledge of any actions, causes
of action or other claims that could have been or in the future could be
asserted by the Named PickAx Stockholder against PickAx or any of its
predecessors, successors, Affiliates, assigns, directors, officers, employees,
agents or representatives arising out of any events, matters, facts or
circumstances occurring at any time on or prior to the Closing and in any
manner relating to any duty or obligation of PickAx or any Affiliate thereof or
any of such other parties to the Named PickAx Stockholder in any capacity
(collectively "Stockholder Claims"). In partial consideration for the
undertakings of Omnis hereunder and acknowledging the reliance of each of Omnis
and PickAx and Merger Sub and the Surviving Corporation hereon, effective as of
the Closing the PickAx Stockholder hereby forever and irrevocably discharges
and releases each of PickAx and Omnis and Merger Sub and the Surviving
Corporation and each and all of their respective predecessors, successors,
Affiliates, assigns, directors, officers, employees, stockholders, agents or
representatives from any and all Stockholder Claims (collectively "Releases").
Such Releases are made by the Named PickAx Stockholder in his or her or its own
behalf and on behalf of the spouses, heirs, devisees, predecessors, successors,
Affiliates, assigns, agents or representatives of such Named PickAx
Stockholder. In this connection the Named PickAx Stockholder expressly waives
any rights or benefits of Section 1542 of the California Civil Code, which
states that:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR;"
and any rights or benefits of any comparable statute of any jurisdiction.
(q) The representations and warranties of the Named PickAx Stockholder
set forth in this Agreement and in any written statement or other disclosure
delivered by the Named PickAx Stockholder or any representative or agent
thereof under this Agreement are true in all material respects as of the date
of this Agreement and further shall be true in all material respects on and as
of the Closing as though made at that time.
5.22 Powers of Attorney.
Subject to Section 3.5 hereof in the case of Omnis, PickAx has not given a
power of attorney to any Person at any time.
5.23 Benefit Plans; ERISA.
(a) Part 5.23 of the Disclosure Schedule lists (i) all "employee benefit
plans" within the meaning of Section 3(3) of ERISA, (ii) all employment
agreements, including, but not limited to, any individual benefit arrangement,
policy or practice with respect to any current or former employee or director
of PickAx or Member of the Controlled Group, and (iii) all other employee
benefit, bonus or other incentive
A-26
compensation, stock option, stock purchase, stock appreciation, severance pay,
lay-off or reduction in force, change in control, sick pay, vacation pay,
salary continuation, retainer, leave of absence, educational assistance,
service award, employee discount, fringe benefit plans, arrangements, policies
or practices, whether legally binding or not, which PickAx or any Member of the
Controlled Group maintains, contributes to or has any obligation to or
liability for (collectively, the "Plans").
(b) None of the Plans is a Defined Benefit Plan, and neither PickAx nor
any Member of the Controlled Group has ever sponsored, maintained or
contributed to, or ever been obligated to contribute to, a Defined Benefit Plan
that could reasonably be expected to result in a material amount of liability
under Title IV of ERISA.
(c) None of the Plans is a Multiemployer Plan, and neither PickAx nor
any Member of the Controlled Group has ever contributed to, or ever been
obligated to contribute to, a Multiemployer Plan that could reasonably be
expected to result in a material amount of liability under Title IV of ERISA.
(d) Neither PickAx nor any Member of the Controlled Group maintains or
contributes to any welfare benefit plan which provides health benefits to an
employee after the employee's termination of employment or retirement except as
required under Section 4980B of the Code and Sections 601 through 608 of ERISA.
(e) Each Plan that is an "employee benefit plan," as defined in Section
3(3) of ERISA, complies in all material respects by its terms and in operation
with the requirements provided by any and all statutes, orders or governmental
rules or regulations currently in effect and applicable to the Plan, including
but not limited to ERISA and the Code.
(f) All reports, forms and other documents required to be filed with any
government entity with respect to any Plan (including, without limitation,
summary plan descriptions, Forms 5500 and summary annual reports) have been
timely filed and are accurate.
(g) Each Plan intended to qualify under Section 401(a) of the Code is
the subject of a favorable determination letter issued by the Internal Revenue
Service. To PickAx's knowledge, nothing has occurred since the date of the
Internal Revenue Service's favorable determination letter that could adversely
affect the qualification of the Plan and its related trust. PickAx and each
Member of the Controlled Group have timely and properly applied for a written
determination by the Internal Revenue Service on the qualification of each such
Plan and its related trust under Section 401(a) of the Code, as amended by the
Tax Reform Act of 1986 and subsequent legislation enacted through the date
hereof, and Section 501 of the Code.
(h) All contributions owed for all periods ending prior to the Closing
Date (including periods from the first day of the current plan year to the
Closing Date) under any Plan have been or will be made prior to the Closing
Date by PickAx in accordance with past practice and the recommended
contribution in any applicable actuarial report; and any contributions made on
or after the date of this Agreement shall be specifically disclosed to Omnis by
prompt written notice.
(i) All insurance premiums have been paid in full, subject only to
normal retrospective adjustments in the ordinary course, with regard to the
Plans for plan years ending on or before the Closing Date.
(j) With respect to each Plan:
(i) no prohibited transactions (as defined in Section 406 or 407
of ERISA or Section 4975 of the Code) have occurred for which an exemption is
not available that could reasonably be expected to result in a material amount
of liability to PickAx;
(ii) no actions or claims (other than routine claims for benefits
made in the ordinary course of Plan administration for which Plan administrative
review procedures have not been exhausted) are pending, threatened or imminent
against or with respect to the Plan, any employer who is participating (or who
has participated) in the Plan or any fiduciary (as defined in Section 3(21) of
ERISA) of the Plan that could reasonably be expected to result in a material
amount of liability to PickAx or any Member of the Controlled Group;
(iii) no facts exist which could give rise to any such action or
claim; and
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(iv) the Plan provides that it may be amended or terminated at any
time and, except for benefits protected under Section 411(d) of the Code, all
benefits payable to current, terminated employees or any beneficiary may be
amended or terminated by PickAx or the relevant Member of the Controlled Group
at any time without a material amount of liability.
(k) Neither PickAx nor any Member of the Controlled Group has any
Plan-related liability or is threatened with any liability (whether joint or
several) (i) for any excise tax imposed by Section 4971, 4975, 4976, 4977 or
4979 of the Code, or (ii) for a fine under Section 502 of ERISA that could
reasonably be expected to result in a material amount of liability to PickAx or
any Member of the Controlled Group.
(l) All the "group health plans" (as defined in Section 607(1) or
733(a)(1) of ERISA or Section 4980B(g)(2) of the Code) that are part of the
Plans listed in the Disclosure Schedule are in material compliance with the
continuation of group health coverage provisions contained in Section 4980B of
the Code and Sections 601 through 608 of ERISA.
(m) Copies of all documents creating or evidencing any Plan listed in
the Disclosure Schedule, and all reports, forms and other documents required to
be filed with any governmental entity (including, without limitation, summary
plan descriptions, Forms 5500 and summary annual reports for all plans subject
to ERISA), have been delivered or made available to Omnis; and are true and
complete in all respects. There are no negotiations, demands or proposals which
are pending or have been made which concern matters now covered, or that would
be covered, by any Plan listed in the Disclosure Schedule.
(n) All expenses and liabilities relating to contributions required by
law and the terms of the Plans described in the Disclosure Schedule have been,
and on the Closing Date will be, fully and properly accrued on the books and
records of PickAx and disclosed in accordance with GAAP applied on a consistent
basis in all Plan financial statements; and neither PickAx nor any Member of
the Controlled Group thereof has any unfunded or undisclosed obligation to fund
any contribution to any Plan.
5.24 Knowledge.
Notwithstanding any contrary provision herein:
(a) The knowledge of PickAx, PickAx Systems or any officer, director,
employee or agent of PickAx or PickAx Systems shall be fully attributed to and
deemed to be fully within the knowledge of PickAx for all purposes of this
Agreement.
(b) Any reference herein to the knowledge of one Entity "or" another
Entity shall be deemed to refer to and include the knowledge of either Entity
or both Entities.
5.25 Full Disclosure.
(a) Neither this Agreement (including all Schedules and Exhibits
hereto), nor any of the Transactional Agreements, contains any untrue statement
of material fact; and none of such documents omits to state any material fact
necessary to make any of the representations, warranties or other statements or
information contained therein when read collectively not misleading.
(b) There is no fact within the knowledge of PickAx (other than publicly
known facts relating exclusively to political or economic matters of general
applicability that will adversely affect all comparable Entities) that may have
a material adverse effect on (i) the business, financial condition, assets,
liabilities, operations, financial performance, net income or prospects (or on
any aspect or portion thereof) of PickAx or any of its Subsidiaries or (ii) the
ability of the Named PickAx Stockholder or PickAx to comply with or perform any
covenant or obligation under this Agreement or any of the other Transactional
Agreements to which it is contemplated to be a party.
PickAx has provided Omnis and the representatives of Omnis with full and
complete access to all of the records and other documents and data of PickAx
and PickAx Systems, and has produced all documents and related materials in
response to the reasonable requests of Omnis.
5.26 No Brokers' and Finders' Fees.
Except for Devonshire Holdings LLC, but without intending any admission of
law or fact or conceding any liability with respect to such entity and further
expressly reserving all rights and remedies of
A-28
PickAx with respect thereto, (a) neither PickAx nor any person acting on its
behalf has negotiated or contracted with any finder, broker, intermediary or
any similar person in connection with the transactions contemplated herein; and
(b) neither PickAx nor any Affiliate thereof has incurred, nor will PickAx or
any Affiliate thereof incur, directly or indirectly, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any Transactional Agreement or any of the
Transactions contemplated hereby; and PickAx shall fully indemnify, defend and
hold Omnis and the Surviving Corporation harmless from any such liabilities or
claims, including but not limited to reasonable attorney's fees and costs of
defense.
5.27 Effective Dates.
The representations and warranties of PickAx set forth in this Agreement
and in any written statement or other disclosure delivered by PickAx or any
representative or agent thereof under this Agreement are true in all material
respects as of the date of this Agreement and further shall be true in all
material respects on and as of the Closing as though made at that time.
6. Representations and Warranties of Omnis and Merger Sub.
Except as specifically set forth in the disclosure schedule provided by
Omnis and attached hereto (the "Disclosure Schedule"), the parts of which shall
be numbered to correspond to the Section numbers of this Agreement, Omnis and
Merger Sub hereby jointly represent and warrant to each of PickAx and the Named
PickAx Stockholder as follows:
6.1 Organization, Good Standing, Authority; Binding Nature of Agreement.
Omnis and Merger Sub each is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, is
qualified to conduct business and is in both corporate and tax good standing
under the laws of each jurisdiction in which the nature of its business or the
ownership or leasing of its properties requires such qualification. Omnis and
Merger Sub each has the requisite corporate power and authority to own and
operate its properties and assets and to carry on its business as currently
conducted.
6.2 [Reserved]
6.3 Omnis Stock.
Omnis Stock to be issued to the PickAx stockholders and upon exercise of
PickAx Options and PickAx Warrants assumed by Omnis, when issued in connection
with this Agreement and the other Transactional Agreements, will be duly
authorized, validly issued and nonassessable, subject to applicable federal and
state securities laws.
6.4 Authority; Binding Nature of Agreements.
(a) The execution, delivery and performance of this Agreement, the
Transactional Agreements, and all other agreements and instruments contemplated
to be executed and delivered by Omnis and Merger Sub in connection herewith
have been duly authorized by all necessary action on the part of Omnis and
Merger Sub and their respective boards of directors.
(b) This Agreement, the Transactional Agreements, and all other
agreements and instruments contemplated to be executed and delivered by Omnis
and Merger Sub each constitute the legal, valid and binding obligation of Omnis
and Merger Sub in accordance with their terms, except to the extent that
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting the enforcement of creditors'
rights generally and by general principles of equity regardless of whether such
enforceability is considered in a proceeding in law or equity.
(c) There is no pending Proceeding, and, to the knowledge of Omnis or
Merger Sub, no Person has threatened to commence any Proceeding that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, any of the Transactions or the ability of Omnis
or Merger Sub to comply with or perform its obligations and covenants under the
Transactional Agreements, and, to the knowledge of Omnis or Merger Sub, no
event has occurred, and no claim, dispute or other condition or circumstance
exists, that might directly or indirectly give rise to or serve as a basis for
the commencement of any such Proceeding.
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6.5 Non-Contravention; Consents.
The execution and delivery of this Agreement and the other Transactional
Agreements, and the consummation of the Transactions, by Omnis and Merger Sub
will not, directly or indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a material violation of (i)
the Certificate of Incorporation or bylaws of Omnis or Merger Sub, or (ii) any
resolution adopted by the Omnis or Merger Sub Board of Directors or any
committee thereof or the stockholders of Omnis or Merger Sub;
(b) to the knowledge of Omnis or Merger Sub, contravene, conflict with
or result in a material violation of, or give any Governmental Body the right
to challenge any of the Transactions or to exercise any remedy or obtain any
relief under, any legal requirement or any Order to which Omnis or Merger Sub
or any material assets owned or used by it are subject;
(c) to the knowledge of Omnis or Merger Sub, cause any material assets
owned or used by Omnis or Merger Sub to be reassessed or revalued by any taxing
authority or other Governmental Body;
(d) to the knowledge of Omnis or Merger Sub, contravene, conflict with
or result in a material violation of any of the terms or requirements of, or
give any Governmental Body the right to revoke, withdraw, suspend, cancel,
terminate or modify, any Governmental Authorization that is held by Omnis or
Merger Sub or any of their respective employees or that otherwise relates to
the business of Omnis or Merger Sub or to any of the material assets owned or
used by Omnis;
(e) contravene, conflict with or result in a material violation or
material breach of, or material default under, any Omnis Contract or any
contract to which Merger Sub is a party;
(f) give any Person the right to any payment by Omnis or Merger Sub or
give rise to any acceleration or change in the award, grant, vesting or
determination of options, warrants, rights, severance payments or other
contingent obligations of any nature whatsoever of Omnis or Merger Sub in favor
of any Person; or
(g) result in the imposition or creation of any material encumbrance
upon or with respect to any material asset owned or used by Omnis or Merger
Sub.
Except as set forth in Part 6.5 of the Disclosure Schedule and as expressly
contemplated in this Agreement and the other Transactional Agreements, Omnis
and Merger Sub will not be required to make any filing with or give any notice
to, or obtain any Consent from, any Person in connection with the execution and
delivery of this Agreement and the other Transactional Agreements or the
consummation or performance of any of the Transactions.
6.6 [Reserved]
6.7 Reports and Financial Statements; Absence of Certain Changes.
Except as set forth in Part 6.7 of the Disclosure Schedule, to the
knowledge of Omnis:
(a) Omnis has filed all reports required to be filed with the SEC
pursuant to the Exchange Act, if any, during the three years prior to the
Agreement Date (all such reports, including those to be filed prior to the
Closing Date, collectively, the "Omnis SEC Reports") and will promptly deliver
to PickAx any Omnis SEC Reports filed between the Agreement Date and the
Closing. All of such Omnis SEC Reports complied at the time they were filed in
all material respects with applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations thereunder. None of such Omnis
SEC Reports, as of their respective dates (as amended through the date hereof),
contained or, with respect to Omnis SEC Reports filed after the date hereof,
will contain any untrue statement of a material fact or omitted or, with
respect to Omnis SEC Reports filed after the date hereof, will omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The audited financial statements of Omnis included in Omnis SEC
Reports comply in all material respects with the published rules and
regulations of the SEC with respect thereto, and such audited financial
statements (i) were prepared from the books and records of Omnis, (ii) were
prepared in accordance with GAAP applied on a consistent basis (except as may
be indicated therein or in the notes or schedules thereto) and (iii) present
fairly the financial position of
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Omnis as of the dates thereof and the results of operations and cash flows for
the periods then ended. The unaudited financial statements included in Omnis
SEC Reports comply in all material respects with the published rules and
regulations of the SEC with respect thereto; and such unaudited financial
statements (i) were prepared from the books and records of Omnis, (ii) were
prepared in accordance with GAAP applied on a consistent basis, except as
otherwise permitted under the Exchange Act and the rules and regulations
thereunder or except as may be indicated therein or in the notes or schedules
thereto) and (iii) present fairly the financial position of Omnis as of the
dates thereof and the results of operations and cash flows (or changes in
financial condition) for the periods then ended, subject to normal year-end
adjustments and any other adjustments described therein or in the notes or
schedules thereto. The foregoing representations and warranties shall also be
deemed to be made with respect to all filings made with the SEC on or before
the Effective Time.
(b) Except as specifically contemplated by this Agreement or reflected
in Omnis SEC Reports, after June 29, 2000 through the date of the Agreement
there has not been (i) any change or event having a material adverse effect on
Omnis, (ii) any declaration setting aside or payment of any dividend or
distribution with respect to the common stock of Omnis other than consistent
with past practices, or (iii) any material change in Omnis's accounting
principles, procedures or methods.
6.8 Compliance with Applicable Law.
Except as disclosed in Omnis SEC Reports filed prior to the date of this
Agreement, Omnis and Merger Sub holds all licenses, franchises, permits,
variances, exemptions, orders, approvals and authorizations necessary for the
lawful conduct of its business in the United States and the United Kingdom
under and pursuant to, and the businesses of Omnis and Merger Sub are not being
conducted in violation of, any provision of any federal, state, local or other
statute, law, ordinance, rule, regulation, judgment, decree, order, concession,
grant, franchise, permit or license or other governmental authorization or
approval or the United States or United Kingdom or any political subdivision
thereof applicable to Omnis or Merger Sub, except to the extent that the
failure or violation would not in the aggregate have a material adverse effect.
6.9 Complete Copies of Requested Reports.
Omnis and Merger Sub each has delivered or made available (through public
sources or directly) true and complete copies of each document that has been
reasonably requested by PickAx or its counsel in connection with their legal
and accounting review of Omnis and Merger Sub.
6.10 Full Disclosure.
(a) Neither this Agreement (including all Schedules and Exhibits hereto)
nor any of the Transactional Agreements contemplated to be executed and
delivered by Omnis or Merger Sub in connection with this Agreement contains any
untrue statement of material fact; and none of such documents omits to state
any material fact necessary to make any of the representations, warranties or
other statements or information contained therein not misleading.
(b) All other information regarding Omnis and Merger Sub and the
business, condition, assets, liabilities, operations, financial performance,
net income and prospects of either that has been furnished to PickAx or any of
its representatives by or on behalf of Omnis or Merger Sub or any of their
representatives, is accurate and complete in all material respects.
6.11 Contracts.
(a) Except as set forth in Part 6.11 of the Disclosure Schedule, no
Omnis Contracts have come into existence since June 30, 2000 that will be
required to be filed as exhibits to Omnis's Quarterly Report on Form 10-Q for
the quarter ended September 30, 2000, other than this Agreement and any
Transaction Agreements.
(b) Omnis has previously made available for inspection and copying to
PickAx complete and correct copies (or, in the case of oral contracts, a
complete and correct description) of each Omnis Contract (and any amendments or
supplements thereto) listed on Part 6.11 of the Disclosure Schedule. Except as
set forth on Part 6.11 of the Disclosure Schedule, (i) each Omnis Contract
listed is in full force
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and effect; (ii) neither Omnis nor, to its knowledge, any other party is in
material default under any such Omnis Contract, and no event has occurred which
constitutes, or with the lapse of time or the giving of notice or both would
constitute, a material default, (iii) to the knowledge of Omnis, there are no
material disputes or disagreements between Omnis and any other party with
respect to any such Omnis Contract, and (iv) each other party to each such
Omnis Contract has consented or been given notice (or prior to the Closing Date
shall have consented or been given notice), where such consent or the giving of
such notice is necessary, sufficient that such Omnis Contract shall remain in
full force and effect following the consummation of the Transactions, without
material modification in the rights or obligations of Omnis thereunder.
6.12 Effective Dates.
The representations and warranties of Omnis and Merger Sub set forth in
this Agreement and in any written statement or other disclosure delivered by
Omnis or Merger Sub or any representative or agent thereof under this Agreement
are true in all material respects as of the date of this Agreement and further
shall be true in all material respects on and as of the Closing as though made
at that time.
7. Pre-Closing Covenants of PickAx and the Named PickAx Stockholder.
7.1 Corporate Proceedings; Stockholder Approval.
The Named PickAx Stockholder and PickAx shall ensure that resolutions (in
form and substance satisfactory to Omnis) of the PickAx Board approving or
adopting this Agreement, the other Transactional Agreements and the
Transactions and recommending approval by PickAx's stockholders of the
Agreement, the other Transactional Agreements and the Transactions, and
authorizing or approving all necessary further action by the officers of
PickAx, are passed as necessary pursuant to applicable law. PickAx, acting
through the PickAx Board, shall, in accordance with all applicable legal
requirements and its Certificate of Incorporation and Bylaws (i) promptly and
duly call, give notice of, convene and hold as soon as practicable a meeting
(or solicit an action by written consent in lieu thereof) of its stockholders
for the purpose of voting to approve and adopt the Merger and this Agreement
and the other Transactional Agreements to which PickAx is a party, and (ii)
recommend approval and adoption of the Merger and this Agreement and the other
Transactional Agreements to which PickAx is a party by PickAx's stockholders
and take all lawful action to solicit such approval. At the time this Agreement
is executed and delivered by PickAx, PickAx further shall deliver to Omnis a
Voting Trust Agreement in substantially the form of Exhibit I, duly executed by
the Named PickAx Stockholder.
7.2 Access and Investigation.
PickAx shall ensure that, at all times during the Pre-Closing Period:
(a) PickAx and its representatives provide Omnis and its representatives
with such copies of existing books, records, Tax Returns, work papers and other
documents and information relating to PickAx or its Subsidiaries as Omnis may
reasonably request in good faith; and
(b) PickAx and its representatives compile and provide Omnis and its
representatives with such additional financial, operating and other data and
information regarding PickAx or its Subsidiaries as Omnis may reasonably
request in good faith.
7.3 Operation of Business.
PickAx and the Named PickAx Stockholder shall ensure that, during the
Pre-Closing Period:
(a) The Named PickAx Stockholder shall not directly or indirectly sell
or otherwise transfer, or offer, agree or commit (in writing or otherwise) to
sell or otherwise transfer, any of his Stock or any interest in or right
relating to any of his PickAx Stock;
(b) The Named PickAx Stockholder shall not permit, or offer, agree or
commit (in writing or otherwise) to permit, any of the PickAx Stock to become
subject, directly or indirectly, to any encumbrance;
(c) PickAx and each of its Subsidiaries conduct their operations
exclusively in the Ordinary Course of Business and in the same manner as such
operations have been conducted prior to the date of this Agreement;
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(d) PickAx and each of its Subsidiaries preserve intact their current
business organization, keeps available the services of its current officers and
employees and maintains its relations and goodwill with all suppliers,
customers, landlords, creditors, licensors, licensees, employees and other
Persons having business relationships with PickAx or any of its Subsidiaries;
(e) Except as set forth on Part 7.3(e) of the Disclosure Schedule,
neither PickAx nor any of its Subsidiaries declare, accrue, set aside or pay
any dividend or make any other distribution in respect of any shares of capital
stock, or repurchase, redeem or otherwise reacquire any shares of capital stock
or other securities, except for shares for which PickAx has a repurchase right
under the Option Plan;
(f) Except as set forth on Part 7.3(f) of the Disclosure Schedule,
PickAx and its Subsidiaries do not sell or otherwise issue (or grant any
warrants, options or other rights to purchase) any shares of capital stock or
any other securities, unless approved in advance in writing by Omnis;
(g) Neither PickAx nor any of its Subsidiaries amend their respective
Certificates of Incorporation or Bylaws, or enter into any agreement regarding
or effect or become a party to any Acquisition Transaction (other than this
Merger), recapitalization, reclassification of shares, stock split, reverse
stock split or similar transaction, or enter into any transaction or take any
other action of the type referred to in Section 5.22(c) through (n);
(h) Neither PickAx nor any of its Subsidiaries form any subsidiary or
acquire any equity interest or other interest in any other Entity;
(i) Except as set forth on Part 7.3(i) of the Disclosure Schedule,
neither PickAx nor any of its Subsidiaries make any capital expenditure, except
for capital expenditures made in the Ordinary Course of Business that, when
added to all other capital expenditures made on behalf of PickAx and its
Subsidiaries during the Pre-Closing Period, do not exceed Ten Thousand Dollars
($10,000), unless approved in advance in writing by Omnis;
(j) Except as set forth on Part 7.3(j) of the Disclosure Schedule,
neither PickAx nor any of its Subsidiaries enter into, or permit any of the
material assets owned or used by PickAx or any of its Subsidiaries to become
bound by, any Contract;
(k) Except as set forth on Part 7.3(k) of the Disclosure Schedule,
neither PickAx nor any of its Subsidiaries incur, assume or otherwise become
subject to any Liability, except for current liabilities incurred in the
Ordinary Course of Business, unless approved in advance in writing by Omnis;
(l) Neither PickAx nor any of its Subsidiaries establish or adopt any
Employee Benefit Plan, or pay any bonus or make any profit-sharing or similar
payment to, or materially increase the amount of the wages, salary,
commissions, fringe benefits or other compensation or remuneration payable to,
any of its directors, officers or employees, other than annual adjustments made
in the Ordinary Course of Business;
(m) Neither PickAx nor any of its Subsidiaries change any of its methods
of accounting or accounting practices in any respect;
(n) Neither PickAx nor any of its Subsidiaries make any Tax election;
(o) Except as set forth on Part 7.3(o) of the Disclosure Schedule,
neither PickAx nor any of its Subsidiaries commence any Proceeding; and
(p) None of the Named PickAx Stockholder, PickAx or any of its
Subsidiaries agrees, commits or offers (in writing or otherwise) or attempts to
take any of the actions described in the preceding clauses of this Section 7.3.
7.4 Filings and Consents.
PickAx and the Named PickAx Stockholder shall ensure that:
(a) each filing or notice required to be made or given (pursuant to any
applicable legal requirement, Order or Contract, or otherwise) by PickAx or any
PickAx Stockholder in connection with the execution and delivery of any of the
Transactional Agreements or in connection with the consummation
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or performance of any of the Transactions (including each of the filings and
notices identified in Part 5.4 of the Disclosure Schedule) is made or given as
soon as possible after the date of this Agreement and prior to the Closing;
(b) each Consent required to be obtained (pursuant to any applicable
legal requirement, Order or Contract, or otherwise) by PickAx or the Named
PickAx Stockholder in connection with the execution and delivery of any of the
Transactional Agreements or in connection with the consummation or performance
of any of the Transactions (including each of the Consents identified in Part
5.4 of the Disclosure Schedule) is obtained as soon as possible after the date
of this Agreement and remains in full force and effect through the Closing
Date;
(c) PickAx promptly delivers to Omnis a copy of each filing made, each
notice given and each Consent obtained by PickAx or the Named PickAx
Stockholder during the Pre-Closing Period; and
(d) during the Pre-Closing Period, PickAx and its representatives
cooperate with Omnis and with Omnis's representatives, and prepare and execute
and deliver such documents and instruments and take such other actions as Omnis
may request in good faith, in connection with any filing, notice or Consent
that Omnis is required or elects to make, give or obtain.
7.5 Notification; Updates to Disclosure Schedule.
(a) During the Pre-Closing Period, PickAx and the Named PickAx
Stockholder shall promptly notify Omnis in writing of:
(i) The discovery by PickAx or the Named PickAx Stockholder of any
event, matter, condition, fact or circumstance that constitutes a material
breach of any representation or warranty of PickAx or any PickAx stockholder in
this Agreement or in any of the other Transactional Agreements;
(ii) The discovery of any material breach of any covenant or
obligation of PickAx or any PickAx stockholder; and
(iii) Any event, matter, condition, fact or circumstance known to
PickAx or any PickAx stockholder that may make the timely satisfaction of any of
the conditions set forth in Section 4.1 hereof impossible or unlikely.
(b) If any event, matter, condition, fact or circumstance that is
required to be disclosed pursuant to Section 7.5(a) requires any change in the
Disclosure Schedule, or if any such event, matter, condition, fact or
circumstance would require such a change assuming the Disclosure Schedule were
dated as of the date of the occurrence, existence or discovery of such event,
matter, condition, fact or circumstance, then PickAx and the Named PickAx
Stockholder shall promptly deliver to Omnis an update to the Disclosure
Schedule (a "Disclosure Schedule Update") specifying such change. Such
Disclosure Schedule Update shall be deemed to supplement or amend the
Disclosure Schedule for the purpose of (i) determining the accuracy of any of
the representations and warranties made by PickAx or the Named PickAx
Stockholder in this Agreement as of the Closing, or (ii) determining whether
the conditions set forth in Section 4.1 have been satisfied, unless objected to
in writing by Omnis.
7.6 No Plan Amendments.
During the Pre-Closing Period, PickAx shall not amend or modify or cause
the amendment or modification of the terms of any Plan.
7.7 Best Efforts.
During the Pre-Closing Period, PickAx and the Named PickAx Stockholder
shall use their Best Efforts to cause the conditions set forth in Section 4.1
to be satisfied on a timely basis, and shall not take any action or omit to
take any action, the taking or omission of which would or could reasonably be
expected to result in any of the representations and warranties set forth in
Section 5 of this Agreement becoming untrue, in any of the conditions of
Closing set forth in Section 4.1 not being satisfied in a timely manner.
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7.8 No ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
PickAx and each PickAx stockholder agree that it or he or she shall not
engage in any sales or purchases of Omnis Common Stock (a) prior to the public
announcement of this Agreement and the transactions contemplated hereby, or (b)
during any period such person or entity possesses material nonpublic
information relating to Omnis. Each of PickAx and each PickAx stockholder
agrees further (i) shall not disclose any material nonpublic information
relating to Omnis to any other person (including but not limited to family
members) where such information may be used by such person to profit by trading
in any Omnis securities, or (ii) make recommendations or express opinions on
the basis of such material nonpublic information as to trading in any Omnis
securities. All such material nonpublic information shall be part of the
Confidential Information of Omnis hereunder. PickAx and each PickAx stockholder
each acknowledges that trading in Omnis securities based on material nonpublic
information is a violation of United States federal securities laws, and may
subject the violator to severe civil and criminal penalties.
8. Pre-Closing Covenants of Omnis and Merger Sub.
8.1 Corporate Proceedings.
(a) Omnis shall ensure that resolutions (in form and substance
satisfactory to PickAx) of the Omnis Board of Directors ("Omnis Board")
approving or adopting this Agreement, the other Transactional Agreements and
the Transactions and recommending approval by Omnis's stockholders of the
Agreement, the other Transactional Agreements and the Transactions, and
authorizing or approving all necessary further action by the officers of Omnis,
are passed as necessary pursuant to applicable law. Omnis, acting through the
Omnis Board, shall, in accordance with all applicable legal requirements and
its Certificate of Incorporation and Bylaws (i) promptly and duly solicit its
stockholders for the purpose of voting to approve and adopt the Merger and this
Agreement and the other Transactional Agreements to which Omnis is a party, and
(ii) recommend approval and adoption of the Merger and this Agreement and the
other Transactional Agreements to which Omnis is a party by the stockholders of
Omnis and take all lawful action to solicit such approval as required.
(b) Merger Sub shall ensure that resolutions (in form and substance
satisfactory to PickAx) of the Merger Sub Board of Directors ("Merger Sub
Board") approving or adopting this Agreement, the other Transactional
Agreements and the Transactions and recommending approval by Merger Sub's
stockholders of the Agreement, the other Transactional Agreements and the
Transactions, and authorizing or approving all necessary further action by the
officers of Merger Sub, are passed as necessary pursuant to applicable law.
Merger Sub, acting through the Merger Sub Board, shall, in accordance with all
applicable legal requirements and its Certificate of Incorporation and Bylaws
(i) promptly and duly solicit its stockholders for the purpose of voting to
approve and adopt the Merger and this Agreement and the other Transactional
Agreements to which Merger Sub is a party, and (ii) recommend approval and
adoption of the Merger and this Agreement and the other Transactional
Agreements to which Merger Sub is a party by the stockholders of Merger Sub and
take all lawful action to solicit such approval as required.
8.2 Access and Investigation.
Omnis and Merger Sub shall ensure that, at all times during the
Pre-Closing Period:
(a) Omnis and its representatives provide PickAx and its representatives
with such copies of existing books, records, Tax Returns, work papers and other
documents and information relating to Omnis as PickAx may request in good
faith; and
(b) Omnis and its representatives compile and provide PickAx and its
representatives with such additional financial, operating and other data and
information regarding Omnis as PickAx may request in good faith.
8.3 Filings and Consents.
Omnis and Merger Sub shall ensure that:
(a) Each filing or notice required to be made or given (pursuant to any
applicable legal requirement, Order or Contract, or otherwise) by Omnis or
Merger Sub in connection with the execution and
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delivery of any of the Transactional Agreements or in connection with the
consummation or performance of any of the Transactions is made or given as soon
as possible after the date of this Agreement;
(b) Each Consent required to be obtained (pursuant to any applicable
legal requirement, Order or Contract, or otherwise) by Omnis or Merger Sub in
connection with the execution and delivery of any of the Transactional
Agreements or in connection with the consummation or performance of any of the
Transactions is obtained as soon as possible after the date of this Agreement
and remains in full force and effect through the Closing Date;
(c) Omnis and Merger Sub promptly deliver to PickAx a copy of each
filing made, each material notice given and each material Consent obtained by
Omnis or Merger Sub during the Pre-Closing Period; and
(d) during the Pre-Closing Period, Omnis and Merger Sub and the
representatives of either cooperate with PickAx and its representatives, and
prepare and execute and deliver such documents and instruments and take such
other actions as PickAx may request in good faith, in connection with any
filing, notice or Consent that PickAx is required or elects to make, give or
obtain consistent with this Agreement.
8.4 Notification.
During the Pre-Closing Period, Omnis and Merger Sub shall promptly notify
PickAx in writing of:
(a) the discovery by Omnis or Merger Sub of any event, condition, fact
or circumstance that constitutes a breach of any representation or warranty
made by Omnis or Merger Sub in this Agreement or in any of the other
Transactional Agreements;
(b) the discovery of any material breach of any covenant or obligation
of Omnis or Merger Sub; and
(c) any event, matter, condition, fact or circumstance known to Omnis or
Merger Sub that may make the timely satisfaction of any of the conditions set
forth in Section 4.2 impossible or unlikely.
8.5 Best Efforts.
During the Pre-Closing Period, Omnis and Merger Sub each shall use its
Best Efforts to cause the conditions set forth in Section 4.2 to be satisfied
on a timely basis, and shall not take any action or omit to take any action,
the taking or omission of which would or could reasonably be expected to result
in any of 4 the representations and warranties set forth in Section 6 of this
Agreement becoming untrue or in any of the conditions of Closing set forth in
Section 4.2 not being satisfied in a timely manner.
9. Other Agreements.
9.1 Registration of PickAx Options.
Omnis agrees that as soon as reasonably practicable after the Closing
Date, but in no event later than thirty (30) days following the Closing Date,
it will cause to be filed one or more registration statements on Form S-8 under
the Securities Act, or amendments to its existing registration statements on
Form S-8, in order to register the shares of Omnis Common Stock issuable upon
exercise of the aforesaid converted PickAx Options.
9.2 Change of Names, Ticker Symbol and Address.
Omnis agrees that as soon as reasonably practicable after the Closing
Date, but in no event later than twenty (20) days following the Closing Date,
it will cause to be filed one or more forms and/or applications with the
appropriate authorities requesting:
a. a change of corporate name from Omnis Technology, Inc. to "Raining Data
Corporation"; provided however that should the merger transaction
contemplated herein fail to close, all ownership and rights to the name,
trademark and logo "Raining Data" shall remain with PickAx and not be
transferred or conveyed to Omnis;
b. a change of corporate name from PickAx to "Raining Data Technologies,
Inc." or a similar name as determined by the Board of Directors of Omnis
following the Closing;
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c. a change of Omnis's NASDAQ ticker symbol to "RDTA" or another available
symbol that is mutually acceptable to the parties; and
d. a change of corporate address from ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ to 1691 ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
9.3 Confidentiality.
Each of the parties hereto hereby agrees to and reaffirms the terms and
provisions of the Mutual Nondisclosure Agreement by and between Omnis and
PickAx and Pick Systems, dated as of March 28, 2000.
9.4 Public Disclosure.
Unless otherwise required by law (including, without limitation,
securities laws) or, as to Omnis, by the rules and regulations of the National
Association of Securities Dealers, Inc. (NASD), and further subject to Section
7.8 hereof concerning ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ prohibitions, prior to the Effective Time
no disclosure (whether or not in response to an inquiry) of the subject matter
of this Agreement or any Transactional Agreement shall be made by any party
hereto unless approved by Omnis and PickAx prior to release; provided however
that such approval shall not be unreasonably withheld, provided further that
the parties agree and understand that certain disclosures regarding the
Transactions may be made to (i) employees of Omnis and PickAx, (ii) third
parties whose consent or approval may be required in connection with the
Transactions, and (iii) the professional advisors of Omnis, Merger Sub, PickAx
and the Named PickAx Stockholder, in each case without any prior written
consent.
9.5 No Inconsistent Action.
None of Omnis, Merger Sub, PickAx, the Named PickAx Stockholder or the
Surviving Corporation shall take any action inconsistent with the treatment of
the Merger as a reorganization under Section 368(a)(2)(E) of the Code.
9.6 Restrictive Legend.
All certificates representing Omnis Stock deliverable to the PickAx
stockholders pursuant to this Agreement and any certificates subsequently
issued with respect thereto or in substitution therefor, unless a sale,
transfer or other disposition is executed pursuant to one or more of the
alternative conditions set forth in Section 5.21(n) or in the Investment
Representation Statement shall have occurred, or unless the conditions of
paragraph (k) of Rule 144 promulgated under the Securities Act shall have been
satisfied, shall bear a legend substantially as follows, in addition to any
legend Omnis determines in its sole judgment is required pursuant to any
applicable legal requirement:
"The shares represented by this certificate may not be offered, sold,
pledged, transferred or otherwise disposed of except in accordance with the
requirements of the Securities Act of 1933, as amended, and the other
conditions specified in that certain Agreement and Plan of Merger dated as
of August _____, 2000 and that certain Registration Rights Agreement dated
as of September ___, 2000, copies of each of which the Company will
furnish, without charge, to the holder of this certificate upon written
request therefor."
Omnis, at its discretion, may cause a stop transfer order to be placed
with its transfer agent(s) with respect to the certificates for Omnis Stock but
not as to the certificates for any part of Omnis Stock as to which said legend
is no longer appropriate when one or more of the alternatives set forth in
Section 5.21(n) shall have been satisfied or the conditions of paragraph (k) of
Rule 144 promulgated under the Securities Act shall have been satisfied.
9.7 Certain Tax and Other Matters.
(a) The parties hereto adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Department of the Treasury Regulations.
(b) Omnis and Merger Sub each further represents, warrants, covenants
and agrees as follows:
(i) Omnis and Merger Sub are not aware of any facts or
circumstances that would cause the Merger to not qualify as a reorganization
within the meaning of the provisions of Section 368(a)(2)(E) of the Code or
cause this Agreement to not constitute a plan of reorganization for purposes of
Section 368 of the Code.
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(ii) Following the Merger, Omnis and the Surviving Corporation
agrees to report the Merger as a reorganization within the meaning of Section
368(a)(2)(E) of the Code, unless otherwise required by law or unless advised in
writing by counsel to Omnis that the Merger will not qualify as such a
reorganization.
(iii) Omnis has no current plan or intention to sell or otherwise
dispose of any of the assets of PickAx acquired in the Merger, except for
dispositions made in the Ordinary Course of Business or transfers permitted
under Section 368(a)(2)(C) of the Code or prescribed by Treas. Reg. Section
1.368-1(d).
(iv) Following the Merger, the historic business of Omnis will be
continued or a significant portion of Omnis's historic business assets will be
used in a business.
(v) Following the Merger, Omnis will comply with the
record-keeping and information filing requirements of Section 1.368-3 of the
Treasury Regulations.
(c) PickAx and the Named PickAx Stockholder each further represents,
warrants, covenants and agrees as follows:
(i) PickAx or the Named PickAx Stockholder is not aware of any
facts or circumstances that would cause the Merger to not qualify as a
reorganization within the meaning of the provisions of Section 368(a)(2)(E) of
the Code or cause this Agreement to not constitute a plan of reorganization for
purposes of Section 368 of the Code.
(ii) Following the Merger, the PickAx stockholders will report the
Merger as a "reorganization" within the meaning of Section 368(a)(2)(E) of the
Code, unless otherwise required by law or unless advised in writing by counsel
to the PickAx stockholders that the Merger does not constitute such a
reorganization.
(iii) The liabilities of PickAx, if any, and the liabilities to
which the assets of PickAx are subject, if any, were or will be incurred by
PickAx in the Ordinary Course of Business.
(iv) PickAx and each of the PickAx stockholders will pay all of
their own costs and expenses incurred in connection with the Merger, including
all tax liabilities of any kind incurred thereby.
(v) PickAx is not under the jurisdiction of a court in a "title 11
or similar case," within the meaning of Section 368(a)(3)(A) of the Code.
(vi) PickAx is not an investment company for purposes of Section
368(a)(2)(F) of the Code.
(vii) None of the employee compensation received by any PickAx
stockholder-employees of PickAx is or will be separate consideration for, or
allocable to, any of their shares of PickAx Stock to be surrendered in the
Merger. None of Omnis Stock received by any PickAx stockholder-employee of
PickAx in the Merger will be separate consideration for, or allocable to, any
employment, consulting or similar arrangement. Any compensation paid or to be
paid to any PickAx stockholder who will be an employee or who will provide
advisory services for PickAx, Omnis or any affiliate thereof after the Merger
will be determined by bargaining at arm's length.
(viii) PickAx's business conducted immediately before the
Effective Time will be its "historic business" and its assets held immediately
before the Effective Time will be its "historic business assets" for purposes of
Section 368 of the Code.
10. Termination.
10.1 Termination Events.
This Agreement may be terminated prior to Closing:
(a) by Omnis if there is a material breach of any covenant or
obligation of PickAx or the Named PickAx Stockholder contained in any of the
Transactional Agreements or in the Voting Trust Agreement and such breach has
not been cured within ten (10) business days after written notice of such
breach is given to PickAx;
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(b) by PickAx if there is a material breach of any covenant or
obligation of Omnis contained in any of the Transactional Agreements and such
breach has not been cured within ten (10) business days after written notice of
such breach is given to Omnis;
(c) by either Omnis or PickAx if the Closing has not taken place on or
before December 1, 2000 due to no fault of the terminating party; or
(d) by the mutual written consent of Omnis and PickAx.
10.2 Termination Procedures.
If Omnis desires to terminate this Agreement pursuant to Section 10.1(a)
or Section 10.1(c), Omnis shall deliver to PickAx and the Named PickAx
Stockholder a written notice stating that Omnis is terminating this Agreement
and setting forth a brief description of the basis on which Omnis is
terminating this Agreement. If PickAx desires to terminate this Agreement
pursuant to Section 10.1(b) or Section 10.1(c), PickAx shall deliver to Omnis a
written notice stating that PickAx is terminating this Agreement and setting
forth a brief description of the basis on which PickAx is terminating this
Agreement.
10.3 Effect of Termination.
If this Agreement is terminated pursuant to Section 10.1, all further
obligations of the parties under this Agreement shall terminate; provided
however that notwithstanding the foregoing, each party shall remain liable for
any breaches or violations of this Agreement at or prior to its termination and
provided further that Sections 9.3, 9.4, 10, 11.1, 12.2, 12.3, 12.5, 12.6 and
12.11 shall survive the termination of this Agreement.
10.4 Exclusivity of Termination Rights.
Except to the extent termination occurs due to the bad faith of the other
party, the termination rights and obligations provided in this Section 10 shall
be deemed to be exclusive. Subject to the provisions of Section 10.3, the
parties shall not have any other or further Liabilities to or with respect to
one another by reason of the termination of this Agreement.
11. Survival; Pledge of Shares and Security Interest.
11.1 Survival of Representations and Covenants.
(a) The representations and warranties of each party set forth in this
Agreement or any other Transactional Agreement or any Exhibit or Schedule shall
survive for a period of twelve (12) months from the Closing Date and thereafter
shall be deemed fully satisfied and waived for all purposes, provided however
that notwithstanding the foregoing, (i) such limitation shall not apply to any
act of fraud or intentional concealment by any such person; (ii) such
limitation shall not apply to any tax or environmental representation or
warranty, which shall survive until the expiration of the applicable statutes
of limitation; and (iii) any claim, action or cause of action for any breach or
violation of any such representation or warranty shall not terminate and shall
survive until the respective rights and obligations of the relevant parties are
fully discharged and satisfied, subject to applicable statutes of limitation.
(b) Except as qualified by the Disclosure Schedules, the
representations, warranties, covenants and obligations of the respective
parties, and the rights and remedies that may be exercised by any of them,
shall not be limited or otherwise affected by or as a result of any information
furnished to, or any investigation made by, or the Knowledge of, any of the
other parties or their respective representatives.
(c) For purposes of this Agreement, although each statement or other
item of information set forth in the Disclosure Schedules qualifies the
specific representation and warranty to which such information refers, all such
statements and other items of information set forth in the Disclosure Schedules
shall be deemed to be a representation and warranty made by PickAx and the
Named PickAx Stockholder, respectively, in this Agreement.
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11.2 Pledge of Holdback Shares; Indemnity; Security Interest.
(a) Pledge of Collateral. As collateral security for full and timely
performance and non-breach of the Secured Obligations (as such term is defined
below), the Named PickAx Stockholder (the "Pledgor") hereby pledges and grants
Omnis as the secured party (for purposes of this Section the "Secured Party") a
security interest in, and assigns, transfers and pledges to the Secured Party,
the following securities and other property:
(i) Pledgor's portion of the Holdback Shares delivered to and
deposited with the Escrow Holder pursuant to Section 3.1 (the "Pledged Shares");
and
(ii) Any and all new, additional or different securities or other
property subsequently distributed with respect to the Pledged Shares that are to
be delivered to and deposited with the Secured Party or the Escrow Holder
pursuant to the requirements of Section 11.2(c) hereof; and
(iii) The proceeds of any sale, exchange or disposition of the
property and securities described in the foregoing Paragraphs (i) or (ii).
All of said securities, property and money shall be herein referred to
collectively as the "Collateral" and shall be accompanied by one or more stock
power assignments properly endorsed by Pledgor. The Collateral shall be held in
accordance with the following terms and provisions of this Section 11.2.
(b) Secured Obligations.
(i) The Named PickAx Stockholder agrees to indemnify and hold
harmless Omnis and each of its Affiliates, officers, directors, employees,
agents, representatives, successors and assigns from any and against any and all
claims, actions, causes of actions, losses, damages, judgments, costs or
obligations (including but not limited to reasonable attorney's fees and costs
of defense) related to or arising from any material breach of any of the
representations, warranties or obligations of such Named PickAx Stockholder
under Section 5.21 of this Agreement ("Indemnity").
(ii) Such representations, warranties or obligations of the Named
PickAx Stockholder under Section 5.21 of this Agreement and such Indemnity shall
be the "Secured Obligations" of the Named PickAx Stockholder for purposes
hereof.
(iii) All reasonable costs and expenses (including reasonable
attorneys fees) incurred by the Secured Party or the Escrow Holder in the
exercise or enforcement of any right, power or remedy granted it under this
Section 11.2 shall become part of the Secured Obligations and shall constitute a
personal liability of Pledgor.
(c) Rights and Powers. The Secured Party may, without obligation to do
so, exercise any one or more of the following rights and powers with respect to
the Collateral directly or by written notice to the Escrow Holder:
(i) Accept in its discretion, but subject to the applicable
limitations of Section 11.2(e) hereof, other property of Pledgor in exchange for
all or part of the Collateral and release the Collateral to Pledgor to the
extent necessary to effect such exchange, and in such event the money, property
or securities received in the exchange shall be held by the Secured Party or the
Escrow Holder as substitute security for the Secured Obligations;
(ii) Perform such acts as are necessary to preserve and protect
the Collateral and the rights, powers and remedies granted with respect to such
Collateral by this Agreement;
(iii) If there is an Event of Default, transfer record ownership
of the Collateral to the Secured Party (or cancel Pledged Shares, as the case
may be) or its nominee and receive, endorse and give receipt for, or collect by
legal proceedings or otherwise, dividends or other distributions made or paid
with respect to the Collateral; and
(iv) Any and all other rights or remedies of a secured party as
otherwise provided herein.
Any action by the Secured Party or the Escrow Holder pursuant to the
provisions of this Subsection (c) may be taken without notice to Pledgor.
Expenses reasonably incurred in connection with such action shall be payable by
Pledgor and form part of the Secured Obligations. Neither the Secured Party nor
the
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Escrow Holder shall be obligated to take any action with respect to the
Collateral requested by Pledgor unless the request is made in writing and the
Secured Party determines that the requested action will not unreasonably
jeopardize the value of the Collateral as security for the Secured Obligations.
Any cash sums that the Secured Party may receive in the exercise of its rights
and powers under this Subsection (c) shall be applied to the payment of the
Secured Obligations, in such order of application as the Secured Party deems
appropriate. Any remaining cash shall be paid over to Pledgor.
(d) Duty of Pledgor to Deposit. Any new, additional or different
securities that may now or hereafter become distributable with respect to the
Collateral during the period of the Security Interest by reason of (i) any
stock dividend, stock split, conversion or reclassification of the capital
stock of Omnis or (ii) any merger, consolidation or other reorganization
affecting the capital structure of Omnis shall be delivered to the Escrow
Holder, and if delivered to Pledgor, upon receipt thereof shall be promptly
delivered to and deposited with the Escrow Holder as part of the Collateral
hereunder. Such securities shall be accompanied by one or more properly
endorsed stock power assignments.
(e) Release of Collateral; Transfer Date. As of the required date of the
transfer to Pledgor of the Collateral pursuant to Section 3.1(c) hereof
("Transfer Date"), the Secured Party shall instruct the Escrow Holder to
concurrently reconvey, retransfer and cause the Collateral to be delivered to
Pledgor and any and all instruments related thereto (including without
limitation any stock certificate or certificates representing the Collateral),
and the security interest in the Collateral granted hereby shall be released
and terminated; subject to any and all rights or remedies lawfully exercised by
the Secured Party against the Collateral prior to said Transfer Date; and
provided further that in the event the Secured Party or the Escrow Holder or
other essential party is prevented by court order or other process of law from
fully exercising the rights and remedies of the Secured Party with respect to
the Collateral at any time prior to or as of said Transfer Date (collectively
"Restrictions"), then the "Transfer Date" shall be the thirtieth (30th) day
following the last date of the termination of such Restrictions.
(f) Events of Default. An "Event of Default" shall have occurred upon
the breach of any Secured Obligation of the Named PickAx Stockholder. Upon the
occurrence of an Event of Default:
(i) The Secured Party directly or by written notice to the Escrow
Holder may exercise any or all of the rights and remedies granted to a secured
party under the provisions of the California Uniform Commercial Code (as now or
hereafter in effect), including (without limitation) the power to dispose of the
Collateral by public or private sale or to accept the Collateral in full or
partial payment of the Secured Obligations.
(ii) Without limiting the foregoing, Pledgor agrees that, to the
extent notice of sale shall be required by law, at least 10 days' notice to
Pledgor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The Secured
Party shall not be obligated to make any sale of the Collateral regardless of
notice of sale having been given. The Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor hereby waives any claims against the
Secured Party arising by reason of the fact that the price at which the
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if the Secured Party
accepts the first offer received and does not offer the Collateral to more than
one offeree. Until such time as the Pledged Shares are registered with the SEC
under the Securities Act, the Secured Party may, at its option, elect not to
require Pledgor to register the offering or sale of all or any part of the
Pledged Shares under the provisions of the Securities Act and may therefore be
compelled, with respect to any sale of all or any part of the Pledged Shares, to
limit purchasers to those who will agree, among other matters, to acquire such
securities for their own account, for investment, and not with a view to the
distribution or resale thereof. Pledgor acknowledges and agrees that any such
sale may result in prices and other terms less favorable to the seller than if
such sale were a public sale without such restrictions and notwithstanding such
circumstances, agrees that any such sale shall be deemed to have been made in a
commercially reasonable manner. The Secured Party shall be under no obligation
to delay the sale of any of the Pledged Shares for the period of time necessary
to permit Pledgor to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if Pledgor would
agree to do so.
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(iii) Any proceeds realized from the disposition of the Collateral
(if any) pursuant to the foregoing power of sale shall be applied first to the
payment of reasonable expenses incurred by the Secured Party in connection with
the disposition, then to the payment of the Secured Obligations. Any surplus
proceeds shall be paid over to Pledgor. However, in the event such proceeds
prove insufficient to satisfy all Secured Obligations of Pledgor, then Pledgor
shall remain personally liable for the resulting deficiency.
(g) Other Remedies. The rights, powers and remedies granted to the
Secured Party and Pledgor pursuant to the provisions of this Section 11.2 shall
be in addition to all rights, powers and remedies granted to said parties under
this Agreement or under any statute or rule of law. To the fullest extent
allowable by law, the provisions of this Section shall be binding on each of
the parties notwithstanding any contrary provision of applicable law, including
without limitation, Section 9505(2) of the California Uniform Commercial Code
or Section 701.040 of the California Code of Civil Procedure, as amended or
superseded.
(h) Attorney-in-Fact. The Secured Party is hereby appointed the
attorney-in-fact of the Pledgor for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any instrument that the
Secured Party reasonably may deem necessary or advisable to accomplish the
purposes hereof, which appointment as attorney-in-fact is irrevocable as one
coupled with an interest.
12. Miscellaneous.
12.1 Further Assurances.
Each party hereto shall execute and/or cause to be delivered to each other
party hereto such instruments and other documents, and shall take such other
actions, as such other party may reasonably request (prior to, at or after the
Closing) for the purpose of carrying out or evidencing any of the Transactions.
12.2 Fees and Expenses.
Subject to the provisions of this Agreement, each of Omnis, PickAx and the
Named PickAx Stockholder shall separately bear and pay all fees, costs and
expenses that have been incurred or that are in the future incurred by or on
behalf of such party in connection with the Transactions.
12.3 Attorneys' Fees.
If any legal action or other legal proceeding (including arbitration)
relating to the Transactions or the enforcement of any provision of any of the
Transactional Agreements is brought against any party hereto, the prevailing
party shall be entitled to recover reasonable attorneys' fees, costs and
disbursements (in addition to any other relief to which the prevailing party
may be entitled).
12.4 Other Taxes.
In addition to their other obligations hereunder, the PickAx stockholders
shall be responsible for sales, use and transfer taxes, including but not
limited to any value added, stock transfer, gross receipts, stamp duty and
real, personal or intangible property transfer taxes, due by reason of the
consummation of the Transactions, including but not limited to any interest or
penalties in respect thereof.
12.5 Governing Law.
This Agreement is to be construed in accordance with and governed by the
laws of the State of California (as permitted by Section 1646.5 of the
California Civil Code or any similar successor provision), without giving
effect to any choice of law rule that would cause the application of the laws
of any jurisdiction other than the State of California to the rights and duties
of the parties; provided however that notwithstanding the foregoing the rights
of any person as a stockholder shall be governed by the laws of the State of
Delaware.
12.6 Successors and Assigns.
This Agreement shall inure to the benefit of, and be binding upon, each of
the parties and their respective predecessors, successors, assigns, directors,
officers, employees, agents, representatives, Affiliates, spouses, heirs,
executors and administrators. None of the parties hereto may assign any of its
or their
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rights or obligations hereunder to any other party (by contract, operation of
law or otherwise) without the prior written consent of the other, which consent
shall not be unreasonably withheld, and any attempted assignment in violation
thereof shall be void and of no effect; provided however that Omnis may assign
its rights and obligations hereunder in connection with the subsequent merger
or acquisition of a controlling stock interest or all or substantially all of
the assets of Omnis.
12.7 Entire Agreement.
The Transactional Agreements, the Schedules and the Exhibits thereto and
the other documents contemplated expressly thereby constitute the full and
entire understanding and agreement among the parties thereto with regard to the
subjects hereof and thereof and supersede all prior agreements and
understandings among or between any of the Parties relating to the subject
matter hereof and thereof; provided however that in the event of any conflict
the terms of this Agreement shall prevail.
12.8 Severability.
In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
12.9 Amendments.
This Agreement may be amended or modified in writing by the consent of
Omnis and PickAx without the consent of the Named PickAx Stockholder, unless
such amendment or modification would be materially advise to the Named PickAx
Stockholder. Any amendment or modification effected pursuant to this Section
12.9 shall be binding upon the Named PickAx Stockholder, PickAx and Omnis. The
Boards of Directors of Omnis and PickAx and Merger Sub further may terminate or
amend this Agreement notwithstanding prior approval of the Agreement by the
stockholders of any such party to the fullest extent permitted by Section
251(d) of the Delaware General Corporation Law.
12.10 Notices.
Any notice or other communication required or permitted to be delivered to
any party under this Agreement shall be in writing and shall be deemed properly
delivered, given and received when delivered (by hand, by registered mail, by
courier or express delivery service or by telecopier during business hours) to
the address or telecopier number set forth beneath the name of such party below
(or to such other address or telecopier number as such party shall have
specified in a written notice given to the other parties hereto), with a
confirming copy of any notice by telecopier sent promptly by hand, registered
mail, courier or express delivery service:
If to PickAx:
PickAx, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ Traurig
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Named PickAx Stockholder, to the address set forth on Schedule II
hereof;
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If to Omnis:
Omnis Technology Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
12.11 Publicity and Use of Confidential Information.
(a) Notwithstanding anything to the contrary contained in any agreement
among the parties hereto, Omnis shall have the right to disclose PickAx's
financial statements and related information, the terms of this Agreement and
the identity of PickAx to potential investors of Omnis, through the use of
printed offering materials or otherwise or as otherwise required by applicable
legal requirements.
(b) The Named PickAx Stockholder, on the one hand, and Omnis, on the
other, shall keep strictly confidential, and shall not use, or disclose to any
other Person, any non-public document or other information in the Named PickAx
Stockholder's possession, on the one hand, and in Omnis's possession, on the
other, that relates directly or indirectly to the business of PickAx, Omnis or
any affiliate of Omnis; provided however that Omnis or the Named PickAx
Stockholder may disclose such non-public information as required by any
applicable law or rule to which Omnis or the Named PickAx Stockholder is
subject, including the Exchange Act and the rules of the National Association
of Securities Dealers, Inc.
(c) In addition to the other restrictions hereunder, the Named PickAx
Stockholder shall not issue or disseminate any press release or other publicity
concerning any of the Transactions, or permit any press release or other
publicity concerning any of the Transactions to be issued or otherwise
disseminated by or on behalf of the Named PickAx Stockholder without Omnis's
prior written consent, and the Named PickAx Stockholder shall continue to keep
the terms of this Agreement and the other Transactional Agreements strictly
confidential.
12.12 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
12.13 Delays or Omissions; Waivers.
(a) No failure on the part of any Person to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise or waiver of any such power, right, privilege
or remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy.
(b) No Person shall be deemed to have waived any claim arising out of
this Agreement, or any power, right, privilege or remedy under this Agreement,
unless the waiver of such claim, power, right, privilege or remedy is expressly
set forth in a written instrument duly executed and delivered on behalf of such
Person; and any such waiver shall not be applicable or have any effect except
in the specific instance in which it is given.
12.14 Remedies Cumulative; Specific Performance.
All remedies, either under this Agreement or by law or otherwise afforded
to the parties hereto, shall be cumulative and not alternative. Each of the
parties agrees that in the event of any breach or threatened breach by a party
of any covenant, obligation or other provision set forth in this Agreement, the
other
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party shall be entitled (in addition to any other remedy that may be available
to it) to (i) a decree or order of specific performance or mandamus to enforce
the observance and performance of such covenant, obligation or other provision,
and (ii) an injunction restraining such breach or threatened breach.
12.15 Headings.
The underlined headings contained in this Agreement are for convenience of
reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the construction or interpretation of
this Agreement.
12.16 Construction.
(a) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine gender
shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation."
(d) Except as otherwise specified, all references in this Agreement to
"Sections," "Exhibits" and "Schedules" are intended to refer to Sections of
this Agreement and Exhibits and Schedules to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT AND
PLAN OF MERGER as of the date set forth in the first paragraph hereof.
PICKAX: PICKAX, INC.,
a Delaware corporation
By: ________________________________
Name:
Title:
OMNIS: OMNIS TECHNOLOGY CORPORATION,
a Delaware corporation
By: ________________________________
Name:
Title:
NAMED PICKAX STOCKHOLDER: ____________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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INDEX OF SCHEDULES AND EXHIBITS
Schedule I Schedule of All PickAx Stockholders, Warrants and Convertible Securities
Schedule II Schedule of Named PickAx Stockholder
Schedule III Schedule of PickAx and PickAx Subsidiaries Options
Schedule IV Disclosure Schedule
Schedule V Certain PickAx Trademarks
Schedule VI Definition of "Accredited Investor"
Exhibit A Certain Definitions
Exhibit B Omnis Loan Promissory Note
Exhibit C Astoria Warrant
Exhibit D Form of Registration Rights Agreement
Exhibit E Form of Legal Opinion of ▇▇▇▇▇▇▇▇▇ Traurig
Exhibit F Form of Investment Representation Statement
Exhibit G Form of Legal Opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
Exhibit H Financial Statements of PickAx
Exhibit I PickAx Voting Trust Agreement
▇- ▇▇
Agreement and Plan of Merger
Exhibit A
CERTAIN DEFINITIONS
For purposes of this Agreement:
Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale or other disposition of all or any portion of the business or
assets of PickAx or any of its Subsidiaries (other than in the Ordinary
Course of Business);
(b) the issuance, sale or other disposition of (i) any capital stock of
PickAx or any of its Subsidiaries, (ii) any option, call, warrant or
right (whether or not immediately exercisable) to acquire any capital
stock of PickAx or any of its Subsidiaries, or (iii) any security,
instrument or obligation that is or may become convertible into or
exchangeable for any capital stock of PickAx or any of its
Subsidiaries; or
(c) any merger, consolidation, business combination, share exchange,
reorganization or similar transaction involving PickAx or any of its
Subsidiaries.
Affiliate. "Affiliate" means (i) any corporation or other Person or Entity
controlling, controlled by or under common control of any party or parties
through the direct or indirect ownership of stock or assets, including without
limitation any parent or subsidiary corporation of any party now or in the
future. Without limiting the foregoing, PickAx Systems and each of the other
Subsidiaries of PickAx are Affiliates of PickAx for all purposes hereof.
Agreement. "Agreement" shall mean the Agreement and Plan of Merger to
which this Exhibit A is attached (including the Disclosure Schedule and all
other schedules and exhibits attached thereto), as it may be amended from time
to time.
Agreement Date. "Agreement Date" shall mean the date of the Agreement as
set forth in the preamble to the Agreement.
Astoria PickAx Convertible Debt. "Astoria PickAx Convertible Debt" shall
mean that certain indebtedness of PickAx represented by the Convertible
Promissory Note made by PickAx to Astoria Capital Partners, L.P. dated March
15, 2000 in the principal amount of Seventeen Million Three Hundred Thousand
Dollars ($17,300,000) as of the Closing.
Astoria Warrant. "Astoria Warrant" shall mean the warrant to be issued to
the Convertible Debt Holder effective as of the Effective Time, in
substantially the form of Exhibit C of the Agreement.
Average Omnis Stock Price. "Average Omnis Stock Price" shall have the
meaning specified in Section 3.1(b).
Balance Sheet Date. "Balance Sheet Date" shall have the meaning specified
in Section 5.8(a)(i).
Best Efforts. "Best Efforts" shall mean the efforts that a prudent Person
desiring to achieve a particular result would use in order to ensure that such
result is achieved as expeditiously as possible.
Cancellation Notice. "Cancellation Notice" shall have the meaning
specified in Section 3.1(c)(v).
Certificates. "Certificates" shall have the meaning specified in Section
3.2(a).
Closing. "Closing" shall have the meaning specified in Section 3.4.
Closing Date. "Closing Date" shall have the meaning specified in Section
3.4.
Closing Shares. "Closing Shares shall have the meaning specified in
Section 3.1(c).
Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
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Contract. "Contract" shall mean, with respect to any Person, any written
or oral or other contract, arrangement or other agreement to which such Person
is a party or by which its properties or assets may be bound or affected or
under which it or its respective business, properties or assets receive
benefits.
Convertible Debt Holder. "Convertible Debt Holder" shall mean the holder
of the Astoria PickAx Convertible Debt as of the Closing.
Damages. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, Liability, settlement, judgment, award, fine, penalty,
Tax, fee (including any legal fee resulting from, but not limited to, the
defense of third party claims pursuant to Section 11.4 of this Agreement,
expert fee, accounting fee or advisory fee), charge, cost (including any cost
of investigation) or expense of any nature.
Defined Benefit Plan. "Defined Benefit Plan" shall mean either a plan
described in Section 3(35) of ERISA or a plan subject to the minimum funding
standards set forth in Section 302 of ERISA and Section 412 of the Code.
Disclosure Schedule. "Disclosure Schedule" shall have the meaning
specified in the introductory paragraph to Section 5.
Disclosure Schedule Update. "Disclosure Schedule Update" shall have the
meaning specified in Section 7.5(b).
Dissenting Holder. "Dissenting Holder" shall have the meaning specified in
Section 3.6(a).
Dissenting Shares. "Dissenting Shares" shall have the meaning specified in
Section 3.6(a).
Earn Out Date. "Earn Out Date" shall have the meaning specified in Section
3.1(c)(ii).
Earn Out Measurement Period. "Earn Out Measurement Period" shall have the
meaning specified in Section 3.1(c)(ii).
Earn Out Revenue. "Earn Out Revenue" shall have the meaning specified in
Section 3.1(c)(ii).
Effective Time. "Effective Time" shall have the meaning specified in
Section 1.2.
Employment and Non-Competition Agreement. "Employment and Non-Competition
Agreement" shall refer to the employment contract by and between Omnis and each
of the Key Employees as further provided in Section 4.1(d)(ii).
End-User Licenses. "End-User Licenses" shall have the meaning specified in
Section 5.6.
Entity. "Entity" shall mean any corporation (including any non profit
corporation), general partnership, limited partnership, limited liability
partnership, limited liability company, joint venture, joint stock company,
estate, trust or other company, firm or legal entity of any kind or nature.
Environmental Law. "Environmental Law" shall mean any federal, state,
local or foreign legal requirement relating to pollution or protection of human
health or the environment.
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
Escrow Agent. "Escrow Agent" shall have the meaning specified in Section
3.1(c)(i).
Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
Exchange Ratio. "Exchange Ratio" shall have the meaning specified in
Section 3.1(b).
Fairness Opinion. "Fairness Opinion" means the written opinion of Alliant
Partners to Omnis that concludes that the value of the total consideration paid
by Omnis in the Merger and related Transactions is fair from a financial point
of view to the stockholders of Omnis.
Final Returns. "Final Returns" shall have the meaning specified in Section
12.4(b).
Financial Statements. "Financial Statements" shall have the meaning
specified in Section 5.8(a).
Fully Diluted PickAx Shares. "Fully Diluted PickAx Shares" shall mean the
total of all outstanding shares of PickAx Stock plus all shares of PickAx Stock
issuable upon the exercise of any PickAx Warrant or PickAx Subsidiary Warrant
or PickAx Option or PickAx Subsidiary Option or other agreement or arrangement,
or upon the exercise of any other conversion rights, exchange rights, warrants
or options (on
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an as converted basis; and whether such right is exercisable immediately or
only after passage of time; and as if all such rights were fully vested and
accelerated and exercised on the relevant date of determination); excluding
only the Astoria PickAx Convertible Debt.
GAAP. "GAAP" shall mean generally accepted accounting principles in the
United States.
PickAx Assets. "PickAx Assets" shall mean any and all intangible and
tangible assets of any kind, nature or description being transferred to Omnis
hereunder as part of the Merger.
PickAx Closing Certificate. "PickAx Closing Certificate" shall have the
meaning specified in Section 4.1(c)(vi).
PickAx Common Stock. "PickAx Common Stock" shall have the meaning
specified in Section 3.1(b).
PickAx Contract. "PickAx Contract" shall mean any of the following
agreements, contracts and commitments of PickAx and/or any of its Subsidiaries:
(i) any employment or consulting agreement, contract or commitment with
any officer or director, other than those that are terminable by PickAx or any
of its Subsidiaries on no more than thirty (30) days' notice without liability
or financial obligation to the PickAx or such Subsidiary;
(ii) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, or any of
the benefits of which will be increased by the occurrence of any of the
Transactions or the value of any of the benefits of which will be calculated on
the basis of any of the Transactions;
(iii) any agreement of indemnification or any guaranty other than any
agreement of indemnification entered into in connection with the sale or
license of products of PickAx or any of its Subsidiaries in the ordinary course
of business;
(iv) any agreement, contract or commitment containing any covenant
limiting in any respect the right of PickAx or any of its Subsidiaries to
engage in any line of business or to compete with any person or granting any
exclusive distribution rights;
(v) any agreement, contract or commitment currently in force relating to
the disposition or acquisition by PickAx or any of its Subsidiaries after the
date of this Agreement of a material amount of assets not in the ordinary
course of business or pursuant to which PickAx or any of its Subsidiaries has
any material ownership interest in any corporation, partnership, joint venture
or other business enterprise;
(vi) any dealer, distributor, joint marketing or development agreement
currently in force under which PickAx or any of its Subsidiaries have
continuing material obligations to jointly market any product, technology or
service and which may not be canceled without penalty upon notice of ninety
(90) days or less, or any material agreement pursuant to which PickAx or any of
its Subsidiaries have continuing material obligations to jointly develop any
intellectual property that will not be owned, in whole or in part, by PickAx or
any of its Subsidiaries and which may not be canceled without penalty upon
notice of ninety (90) days or less;
(vii) any agreement, contract or commitment currently in force to
provide source code to any third party for any product or technology that is
material to PickAx and its Subsidiaries taken as a whole;
(viii) any agreement, contract or commitment currently in force to
license any third party to manufacture or reproduce any product, service or
technology or any agreement, contract or commitment currently in force to sell
or distribute or license or sublicense any products, service or technology
except agreements with distributors or sales representative in the normal
course of business cancelable without penalty upon notice of ninety (90) days
or less and substantially in the form previously provided to Omnis;
(ix) any mortgages, indentures, guarantees, loans or credit agreements,
security agreements or other agreements or instruments relating to the
borrowing of money or extension of credit;
(x) any settlement agreement entered into within five (5) years prior to
the date of this Agreement; or
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(xi) any other agreement, contract or commitment that calls for the
payment or receipt by PickAx or any of its Subsidiaries of $250,000 or more.
PickAx Options. "PickAx Options" shall mean any and all options granted by
PickAx or PickAx Systems or any other Subsidiary of PickAx, or proposed to be
granted prior to or as of the Closing, to purchase shares of PickAx Stock or
other securities of PickAx, whether or not currently exercisable.
PickAx Subsidiary Options. "PickAx Subsidiary Options" shall mean any and
all options granted by PickAx or PickAx Systems or any other Subsidiary of
PickAx, or proposed to be granted prior to or as of the Closing, to purchase
shares of the stock or other securities of PickAx Systems or any other
Subsidiary of PickAx, whether or not currently exercisable.
PickAx Returns. "PickAx Returns" shall have the meaning specified in
Section 5.14(b).
PickAx Stock. "PickAx Stock" shall mean the PickAx Common Stock and any
and all other stock or convertible securities issued or to be issued by PickAx.
PickAx stockholders. "PickAx stockholders" shall refer to those
individuals and Entities listed on Schedule I hereto as the stockholders of
PickAx (or their transferees) and any and all other holders of issued and
outstanding capital stock of PickAx determined immediately before the Closing.
PickAx Subsidiary Warrants. "PickAx Subsidiary Warrants" shall mean any
and all warrants, subscriptions, calls or other rights of any kind (other than
PickAx Subsidiary Options) granted by PickAx or PickAx Systems or any other
Subsidiary of PickAx, or proposed to be granted prior to or as of the Closing,
to purchase shares of the stock or other securities of PickAx Systems or any
other Subsidiary of PickAx, whether or not currently exercisable.
PickAx Systems. "PickAx Systems" shall refer to PickAx Systems, Inc., a
California corporation, which is a wholly-owned subsidiary of PickAx.
PickAx Warrants. "PickAx Warrants" shall mean any and all warrants,
subscriptions, calls or other rights of any kind (other than PickAx Options)
granted by PickAx or PickAx Systems or any other Subsidiary of PickAx, or
proposed to be granted prior to or as of the Closing, to purchase shares of
PickAx Stock or other securities of PickAx, whether or not currently
exercisable.
Governmental Authorization. "Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, approval, consent,
permission, clearance, waiver, certification, designation,
registration, qualification or authorization issued, granted, given
or otherwise made available by or under the authority of any
Governmental Body or pursuant to any legal requirement; or
(b) right under any Contract with any Governmental Body.
Governmental Body. "Governmental Body" shall mean any:
(a) nation, principality, state, province, territory, county,
municipality, district or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government; or
(c) individual, Entity or body exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police,
military or taxing authority or power of any nature.
Hazardous Materials. "Hazardous Material" shall mean any substance,
chemical, waste or other material which is or may be listed, defined or
otherwise identified as hazardous, toxic or dangerous under any legal
requirement, as well as any asbestos, polychlorinated biphenyls ("PCBs"),
petroleum, petroleum product or by-product, crude oil, natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas useable for fuel, and
"source," "special nuclear," and "by-product" material as defined in the Atomic
Energy Act of 1954, 42 U.S.C. \s\s 2011 et seq.
Holdback Shares. "Holdback Shares" shall have the meaning specified in
Section 3.1(c).
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Holdback Warrant Shares. "Holdback Warrant Shares" shall have the meaning
specified in Section 3.1(e)(i).
Intellectual Property Rights. "Intellectual Property Rights" shall
collectively mean each and all Patents, Patent Applications, copyrights,
Trademarks, trade secrets and all other intellectual property rights of PickAx
or any Subsidiary or other Affiliate thereof in or with respect to any and all
of the Software or Proprietary Information or any part thereof and all
derivative works hereof under the laws of any jurisdiction; including without
limitation all federal, state, foreign, statutory and common law and other
rights in patents, copyrights, moral rights, trademarks, trade secrets, design
rights and all other intellectual property and proprietary rights therein; all
domestic and foreign copyright or other intellectual property applications and
registrations therefor (and any and all divisions, renewals, confirmations,
continuations in whole or in part, substitutions, conversions, reissues,
reexaminations, or extensions of such applications and registrations, and the
right to apply for any of the foregoing); all goodwill associated therewith;
all rights to causes of action and remedies related thereto (including but not
limited to the right to ▇▇▇ for past, present or future infringement,
misappropriation or violation of rights related to the foregoing); all
licenses, sublicenses and agreements related thereto; and any and all other
rights and interests arising out of, in connection with or in relation to any
of such assets under the laws of any jurisdiction.
Investment Representation Statement. "Investment Representation Statement"
shall refer to that certain written investment representation statement to be
executed by each of the PickAx stockholders other than the Named PickAx
Stockholder substantially in the form of Exhibit F attached hereto.
Key Employees. "Key Employees" shall refer to each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
Leased Premises. "Leased Premises" shall mean the premises and facilities
identified in Part 5.9(d) of the Disclosure Schedule.
Liability. "Liability" shall mean any debt, obligation, duty or liability
of any nature (including any unknown, undisclosed, unmatured, unaccrued,
unasserted, contingent, indirect, conditional, implied, vicarious, derivative,
joint, several or secondary liability), regardless of whether such debt,
obligation, duty or liability would be required to be disclosed on a balance
sheet prepared in accordance with generally accepted accounting principles and
regardless of whether such debt, obligation, duty or liability is immediately
due and payable.
Lien. "Lien" shall mean any lien, claim, security interest, charge,
Liability, right, restriction, license, sublicense or other encumbrance or
obligation of any kind.
Maximum Shares. "Maximum Shares" shall have the meaning specified in
Section 3.1(c).
Maximum Warrant Shares. "Maximum Warrant Shares" shall have the meaning
specified in Section 3.1(e)(i).
Member of the Controlled Group. "Member of the Controlled Group" shall
mean each trade or business, whether or not incorporated, which would be
treated as a single employer with PickAx or any Subsidiary under Section 4001
of ERISA or Section 414(b), (c), (m) or (o) of the Code.
Merger. "Merger" shall have the meaning specified in Recital A.
Merger Consideration. "Merger Consideration" shall mean the Omnis Stock
and options to purchase Omnis Stock issuable in connection with the
Transactions.
Merger Sub Common Stock. "Merger Sub Common Stock" shall have the meaning
specified in Section 3.1(b).
Merger Sub Person. "Merger Sub Person" shall mean Merger Sub and each and
all of its officers, directors, employees, agents, Affiliates, representatives,
stockholders, successors and assigns.
Minimum Earn Out. "Minimum Earn Out" shall have the meaning specified in
Section 3.1(c)(iii).
Multiemployer Plan. "Multiemployer Plan" shall mean a plan described in
Section 3(37) of ERISA.
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Named PickAx Stockholder. "Named PickAx Stockholder" shall refer to the
named individual listed on Schedule II hereto.
Named PickAx Stockholder Closing Certificate. "Named PickAx Stockholder
Closing Certificate" shall have the meaning specified in Section 4.1(c)(vi).
Object code. "Object code" means a form of software code resulting from
the translation or processing of source code by a computer into machine
language or intermediate code, which is in a form not convenient to human
understanding of the program logic, but which is appropriate for execution or
interpretation by a computer.
Option Plan. "Option Plan" shall have the meaning specified in Section
3.1(d)(i).
Option Pool. "Option Pool" shall mean the number of shares of Common Stock
reserved for the grant of options under the Option Plan.
Order. "Order" shall mean any:
(a) order, judgment, injunction, edict, decree, ruling, subpoena, writ
or award that is or has been issued, made, entered, rendered or otherwise put
into effect by or under the authority of any court, administrative agency or
other Governmental Body or any arbitrator or arbitration panel; or
(b) Contract with any Governmental Body that is or has been entered into
in connection with any Proceeding.
Ordinary Course of Business. An action taken by or on behalf of PickAx or
any of its Subsidiaries shall not be deemed to have been taken in the "Ordinary
Course of Business" unless:
(a) such action is recurring in nature, is consistent with past
practices and is taken in the ordinary course of normal day to day operations
of PickAx or such Subsidiary;
(b) such action is taken in accordance with sound and prudent business
practices;
(c) such action is not required to be authorized by the stockholders of
PickAx or the relevant Subsidiary or the Board of Directors or any Board
committee of PickAx or the relevant Subsidiary and does not require any other
separate or special authorization of any nature; and
(d) such action is similar in nature and magnitude to actions
customarily taken, without any separate or special authorization, in the
ordinary course of the normal day to day operations of other Entities that are
engaged in businesses similar to the business of PickAx or the relevant
Subsidiary.
Patent Applications. "Patent Applications" shall be defined as any and all
domestic and foreign patent applications or registrations therefor filed in any
country or jurisdiction and in any form (including but not limited to any and
all divisions, renewals, confirmations, continuations in whole or in part,
substitutions, conversions, reissues, reexaminations, or extensions of such
applications and registrations, and the right to apply for any of the
foregoing).
Patents. "Patents" shall be collectively defined as any and all domestic
or foreign patents issued in any country or jurisdiction, including without
limitation any and all divisions, renewals, confirmations, continuations in
whole or in part, substitutions, conversions, reissues, reexaminations, or
extensions thereof, and the right to apply for any of the foregoing, for the
full term of each such patent.
Person. "Person" shall mean any individual, Entity or Governmental Body.
Plans. "Plans" shall have the meaning specified in Section 5.23(a).
Pre-Closing Period. "Pre-Closing Period" shall mean the period from the
date of this Agreement until the Closing Date.
Proceeding. "Proceeding" shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding and any informal proceeding), hearing,
inquiry, audit or investigation that is or has been commenced, brought,
conducted or heard by or before, or that otherwise has involved or may involve,
any Governmental Body or any arbitrator or arbitration panel.
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Proprietary Assets. "Proprietary Assets" shall collectively mean any and
all Intellectual Property Rights, Proprietary Information and Software.
Proprietary Information. "Proprietary Information" collectively means any
and all technical or engineering information, know-how, Source Codes, Object
Codes, computer codes, data, designs, plans, trade secrets, inventions,
concepts, products, processes, formulas, specifications, works in process,
systems, maskworks, methods, technologies or applications, franchises,
intangible assets, and any and all other confidential or proprietary
information or assets of PickAx or any of its Subsidiaries or other Affiliates.
Related Party. Each of the following shall be deemed to be a "Related
Party":
(a) the PickAx Stockholders;
(b) each individual who is, or who has at any time been, an officer of
the PickAx Stockholders or PickAx;
(c) each member of the family of each of the individuals referred to in
clause (b) above; and
(d) any Entity (other than the PickAx Stockholders or PickAx) which is a
Subsidiary or other Affiliate of PickAx or in which any one of the Persons
referred to in clause (a), (b) or (c) above holds (or in which more than one of
such individuals collectively hold), beneficially or otherwise, a material
voting, proprietary or equity interest.
Rights Agreement. "Rights Agreement" shall refer to that certain
Registration Rights Agreement by and among Omnis and the PickAx Stockholders
substantially in the form of Exhibit B attached hereto.
SEC. "SEC" shall mean the United States Securities and Exchange
Commission.
Securities Act. "Securities Act" shall mean the federal Securities Act of
1933, as amended.
Software. "Software" means each and all of the PickAx or PickAx Systems or
other PickAx Affiliate software systems and applications and other software
code including but not limited to (a) all Source Code, object code, other
computer code, structures, files, libraries, algorithms, flow charts, diagrams,
coding sheets, developer's or programmer's notes, engineering notebooks,
specifications, technical information, designs, trade secrets, inventions,
ideas, know-how, products, prototypes, processes, technologies, systems, user
manuals, reference manuals, support manuals, work product, work papers, test
data, and all other components or materials related to or comprising any part
of any such software system or application or code, whether or not in a
commercial stage of development and whether now or hereafter in existence and
in any form; (b) each and all derivative works, upgrades, updates,
enhancements, modifications, improvements, revisions, fixes, new versions,
prior versions and localized or foreign language versions thereof in any form;
and (c) each and all other books, papers and records of any kind and in any
form owned or created or controlled by PickAx or any of its Subsidiaries or
other Affiliates relating to any such software system or application or code.
Source Code. "Source Code" means the human readable form of the computer
code of the Software and any available related source code documentation.
Subsidiaries. "Subsidiaries" shall have the meaning specified in Section
5.1(c).
Target Earn Out. "Target Earn Out" shall have the meaning specified in
Section 3.1(c)(ii).
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, estimated tax, gross receipts tax, value added tax, surtax,
excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
property tax, business tax, occupation tax, inventory tax, occupancy tax,
withholding tax or payroll tax), levy, assessment, tariff, impost, imposition,
toll, duty (including any customs duty), deficiency or fee, and any related
charge or amount (including any fine, penalty or interest), that is, has been
or in the future may be (a) imposed, assessed or collected by or under the
authority of any Governmental Body, or (b) payable pursuant to any tax sharing
agreement or similar Contract.
Tax Return. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information that
is, has been or in the future may be filed with or submitted to, or required to
be filed with
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or submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any legal
requirement relating to any Tax.
Trademarks. "Trademarks" collectively shall mean all of the trademarks,
trade names, product marks and logos of PickAx or any of its Subsidiaries or
Affiliates, including without limitation those set forth in Exhibit V hereof,
and all rights and goodwill associated therewith; including without limitation
any and all trademark applications, trade names, fictitious business names,
service marks (whether registered or unregistered), or service ▇▇▇▇
applications.
Transaction Expenses. "Transaction Expenses" shall mean all fees, costs
and expenses including, without limitation all attorneys' fees, that have been
incurred or that are in the future incurred by or on behalf of PickAx or the
PickAx Stockholders in connection with the sale of the Stock and the
preparation, execution and delivery of the Transactional Agreements.
Transactional Agreements. "Transactional Agreements" shall mean the
Agreement, the Rights Agreement, the Employment and Non-Competition Agreement,
the Mutual Non-Disclosure Agreement, the PickAx Stockholders and PickAx Closing
Certificates, Omnis Closing Certificate, and all other agreements, certificates
and instruments executed or contemplated to be executed by any of the parties
hereto in connection with the Transactions.
Transactions. "Transactions" shall mean (a) the execution and delivery of
this Agreement and the other Transactional Agreements and (b) all the
transactions contemplated by this Agreement and the other Transactional
Agreements.
Omnis and Merger Sub Closing Certificate. "Omnis Closing Certificate"
shall have the meaning specified in Section 4.2(c)(v).
Omnis Common Stock. "Omnis Common Stock" shall have the meaning specified
in Section 3.1(b).
Omnis Contract. "Omnis Contract" shall refer to those contracts listed
pursuant to Section 6.11(b).
Omnis Option Plan. "Omnis Option Plan" shall refer to the 1999 Stock
Incentive Plan of Omnis.
Omnis Person. "Omnis Person" shall mean Omnis and each and all of its
officers, directors, employees, agents, Affiliates, representatives,
stockholders, successors and assigns.
Omnis Stock. "Omnis Stock" shall mean the Omnis Common Stock and, in the
case of any exchange of any convertible securities provided by Section 3.1(f)
hereof, the equivalent convertible securities issued by Omnis thereunder.
Omnis SEC Reports. "Omnis SEC Reports" shall have the meaning specified in
Section 6.7(a).
Omnis Stock. "Omnis Stock" means Omnis Common Stock and Omnis Preferred
Stock.
Unaudited Interim Balance Sheet. "Unaudited Interim Balance Sheet" shall
have the meaning specified in Section 5.8(a)(ii).
Warrant Closing Shares. "Warrant Closing Shares" shall have the meaning
specified in Section 3.1(e).
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