ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made as of May 19, 2000,
by and among OMNIS Technology Corporation, a Delaware corporation ("Omnis") on
the one hand; and The Wainer Group, an Australian partnership, Dirk Wainer,
Shirley-Anne Wainer, Dennis Janossich and Joseph Bernard as to all matters, and
Paradigm Designs Software Pty Ltd., an Australian corporation as to certain
matters, on the other hand.
In consideration of the mutual promises contained herein, and for other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto mutually agree as follows:
Section 1. DEFINITIONS
1.1 "Affiliate" shall be defined as (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; (ii) any employee or agent of a party or an Affiliate; and (iii) any
other person acting in concert with a party or an Affiliate. Without limiting
the foregoing, Paradigm shall be considered an "Affiliate" of the Wainer Group
for all purposes hereof.
1.2 "Closing" and "Closing Date" are defined in Section 4.1 hereof.
1.3 "Confidential Information" is defined in Section 12.4 hereof.
1.4 "Developed Technologies" collectively means each and all components
or parts of the Software or any other inventions, concepts, products, functions,
structures, systems, processes, technologies or other materials which are made
or discovered or produced or result from the Development Project in whole or in
part, including but not limited to the Metamorph Web Version. The Developed
Technologies shall be deemed a part of the Software for all purposes hereof.
1.5 "Development Fee" means the weekly fee described in Section 3.5(g)
hereof payable in connection with the Development Project.
1.6 "Development Project" is defined in Section 3.5(a) hereof.
1.7 "End User" means the ultimate user of software who has obtained the
right to use such software pursuant and subject to an End User Agreement.
1.8 "End User Agreement" means a written agreement that provides for
the following in substance: (a) the software is being sublicensed for the use of
the End User only
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and cannot be copied except for backup purposes; (b) the software cannot be
sublicensed, sold or otherwise transferred by the End User to any third person;
(c) the software is being licensed or sublicensed only and remains the sole
property of the licensor or its supplier and shall not be reverse engineered,
disassembled or decompiled; (d) no product identification, copyright notices or
other notices shall be removed or modified; (e) the End User shall comply with
all export or technology transfer restrictions at all times under applicable law
in connection with the software; (f) to the fullest extent allowable by
applicable law, a limitation on consequential or indirect or special damages and
a disclaimer of all implied warranties; (g) no warranties or representations of
Omnis or any Affiliate; and (h) Omnis and its successors or assigns shall be
third party beneficiaries of the End User Agreement.
1.9 "Intellectual Property Rights" shall be collectively defined as
each and all Patents, Patent Applications, copyrights, trademarks, trade secrets
and all other intellectual property rights of any of the Wainer Group or any
Affiliate thereof in and to any and all of the Software or Purchased Contracts
or Proprietary Information or any part thereof and all derivative works hereof
under the laws of any jurisdiction, including but not limited to all
jurisdictions within the United States or Australia; 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 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 sue 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 the Purchased Assets. For these
purposes the term "copyright" shall include but not be limited to all rights in
respect of the Software, the Works and the Subject Matter other than Works
arising under the Copyright Act 1968 (Commonwealth, Australia); "Works" means
literary, dramatic, musical or artistic works (as defined in the Copyright Act
1968 (Commonwealth, Australia)), including compilations, tables and computer
programs (meaning both source codes and object codes), directly and/or
indirectly associated with the Software; and "Subject Matter other than Works"
means sound recordings, cinematograph films, and published editions of works (as
defined in the Copyright Act 1968 (Commonwealth, Australia)) directly and/or
indirectly associated with the Works.
1.10 "Liens" collectively mean any and all liens, claims, security
interests, charges, liabilities, rights, restrictions, licenses, sublicenses or
other encumbrances or obligations of any kind.
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1.11 "Metamorph Web Version" means the Web-enabled version of the
Metamorph software being developed by the Wainer Group hereunder in accordance
with the Specifications pursuant to the Development Project.
1.12 "Net Proceeds" is defined as the gross proceeds actually paid to
and received by Omnis or its Affiliate on a cash basis during each calendar
quarter during the Royalty Period from the sale, license or other distribution
by Omnis or its Affiliate of units of the Software net of and less (a) all
commissions, allowances and rebates, if any, attributable to such transactions,
(b) all royalties or other license fees payable to non-Affiliated third parties
with respect to the Software, (c) all costs and expenses of any infringement
action brought by or against Omnis or its Affiliate or successor or indemnitee
with respect to any of the Software or Intellectual Property Rights or
Proprietary Information or any use thereof, and any judgment or damages
resulting from such action, and (d) all refunds and credits properly charged
against such Net Proceeds for said calendar quarter. Any infringement costs and
expenses in excess of the gross proceeds for any calendar quarter shall be
carried over and applied to the succeeding calendar quarter or quarters.
1.13 "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.
1.14 "Omnis Common Stock" means the common stock, $0.10 US par value,
of Omnis Technology Corporation, a Delaware corporation.
1.15 "Paradigm" means Paradigm Designs Software Pty Ltd. (ACN 061 334
325), an Australian corporation.
1.16 "Patent Applications" shall be defined as any and all domestic and
foreign patent applications or registrations therefor on any part of the
Software or Intellectual Property Rights or Proprietary Information 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).
1.17 "Patents" shall be collectively defined as any and all domestic or
foreign patents issued on any part of the Software or Intellectual Property
Rights or Proprietary Information for 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.
1.18 "Proprietary Information" collectively means any and all technical
or engineering information, know-how, source codes, data, designs, plans, trade
secrets,
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inventions, concepts, products, processes, formulas, works in process, systems,
technologies or applications, and any other confidential or proprietary
information of any of the Wainer Group or any Affiliate thereof relating to the
Software or any part thereof, including but not limited to the Source Code and
all Patent Applications.
1.19 "Purchase Value" means an amount equal to One Hundred Fifty
Thousand (150,000) shares of Omnis Common Stock multiplied by the Purchase Per
Share Value.
1.20 "Purchase Shares" means One Hundred Fifty Thousand (150,000)
shares of Omnis Common Stock that Omnis must issue and deliver to the Wainer
Group pursuant to Section 3 hereof, comprising:
(a) One Hundred Twelve Thousand Five Hundred (112,500) shares
of Omnis Common Stock to be issued and delivered at the Closing; and
(b) Thirty-Seven Thousand Five Hundred (37,500) shares of
Omnis Common Stock to be issued and delivered when the Development Project is
completed and accepted by Omnis in accordance with the terms of Section 3.5
hereof.
1.21 "Purchase Per Share Value" means the average of the closing prices
of the Omnis Common Stock on the NASDAQ Bulletin Board or the NASDAQ SmallCap
Market (as the case may be) for the five (5) consecutive trading days ending
with the last trading day immediately prior to the Closing Date.
1.22 "Purchased Assets" collectively means the Software, the Purchased
Contracts, the Intellectual Property Rights, and the Proprietary Information,
including but not limited to the Metamorph Web Version and the Developed
Technologies.
1.23 "Purchased Contracts" means all rights of any of the Wainer Group
or any Affiliate thereof under any and all contracts pertaining to the ownership
or assignment or license of any of the Purchased Assets or any rights therein,
including but not limited to (a) any proprietary information agreements or
invention agreements with any employees or consultants; and (b) that certain
Letter of Engagement dated July 1, 1997 between the Wainer Group and Paradigm
(as further provided by Section 2.5(c) hereof).
1.24 "Royalties" and the "Royalty Period" are defined by Section 3.3
hereof.
1.25 "Securities Act" means the United States federal Securities Act of
1933, as amended.
1.26 "Software" means each and all of the Metamorph software systems
and applications (as described further in Exhibit A to this Agreement),
including but not limited to (a) all Source Code, object code, other computer
code, structures, files, libraries, 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,
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support manuals, work product, work papers, test data, and all other components
or materials related to or comprising any part of the Metamorph software,
whether or not in a commercial stage of development and whether now or hereafter
in existence and in any form, including but not limited to the Metamorph Web
Version and all other Developed Technologies; (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 the Wainer Group or any of
them or any Affiliate thereof relating to the Metamorph software.
1.27 "Source Code" means the human readable form of the computer code
of the Software and then available related source code documentation.
1.28 "Specifications" is defined in Exhibit B attached hereto and made
a part hereof.
1.29 "Technical Assistance" means technical services, consulting,
engineering or other professional services related to the Software as reasonably
requested by Omnis.
1.30 "Trademarks" collectively means the trademarks, trade names,
product marks and logos set forth in Exhibit C hereof and all rights and
goodwill associated therewith.
1.31 "Wainer Group" means The Wainer Group, an Australian general
partnership, and Dirk Wainer, Shirley-Anne Wainer, Dennis Janossich and Joseph
Bernard. References to the Wainer Group shall mean the partnership and the
partners collectively, jointly and severally, unless otherwise noted.
Section 2. PURCHASE AND TRANSFER OF ASSETS
2.1 Sale and Purchase. Subject to the terms and conditions set forth in
this Agreement, as of the Closing the Wainer Group and each of them agrees to
and does sell, assign and transfer to Omnis, and as of the Closing Omnis agrees
to and does purchase, all right, title and interest throughout the universe in
and to each and all of (a) the Software, (b) the Purchased Contracts, (c) the
Intellectual Property Rights, and (d) the Proprietary Information. The sale,
assignment and transfer of such Purchased Assets shall be made by the Wainer
Group on its own behalf and on behalf of any Affiliate or other related person
or entity. Without limiting the foregoing, Omnis shall have the sole and
exclusive right throughout the universe in perpetuity to develop, make, have
made, manufacture, use, sell, offer to sell, license, modify, improve,
distribute, copyright, copy, reproduce, display, perform, make and own all
derivative works and to otherwise transfer, assign and exploit each and all of
the Purchased 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 the Purchased Assets; and
to register and use the Trademark in any jurisdiction.
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2.2 Exclusive Rights. The sale, assignment and transfer of the
Purchased Assets shall be absolute, irrevocable and exclusive to Omnis. Without
limiting the foregoing, none of the Wainer Group nor any Affiliates nor
successors nor assigns thereof nor any other third person or entity shall have
or retain any right, title or interest at any time in or to any of the Purchased
Assets to any extent, including but not limited to any right or license at any
time to apply for or obtain or own any Patent on any Purchased Assets or to Use
any of the Purchased Assets or any product or process or technology which uses
or incorporates or infringes upon any part of the Purchased Assets; subject only
to the limited licenses set forth in Section 2.5 of this Agreement and only to
the extent of such licenses.
2.3 Further Instruments. Upon the reasonable request of Omnis, the
Wainer Group and each of them shall promptly take such actions, including
without limitation, the prompt execution and delivery of additional documents or
instruments in recordable form, as may be reasonably necessary to vest, secure,
perfect, protect or enforce the rights and interests of Omnis or its successors
or assigns in and to any of the Purchased Assets. Without limiting the
foregoing, the parties agree execute and have filed the confirmatory assignment
with respect to the Trademarks attached hereto as Exhibit C hereof.
2.4 Permits and Clearances. Prior to and effective as of the Closing,
the Wainer Group shall obtain and deliver to Omnis all permits, clearances or
other permissions or exemptions required from all applicable governmental
authorities to permit the full and unencumbered sale, assignment and transfer of
each and all of the Purchased Assets to Omnis and the unrestricted export of
each and all of the Purchased Assets for ownership and use by Omnis and its
licensees outside of Australia.
2.5 Limited Metamorph Licenses.
(a) Internal Use. Subject to the other terms and conditions of
this Agreement, as of the Closing Omnis grants to Paradigm a worldwide, fully
paid and nonexclusive license, to use the commercial release version of the
Metamorph software in object code format solely for its own internal development
of new application software proprietary to Paradigm, without the right to
sublicense or otherwise distribute or transfer any part of the software except
as provided by Section 2.5(b) hereof. This license shall not be assignable or
transferable except as provided by Section 14.2 of this Agreement.
(b) Bundled Distribution.
(i) Subject to the other terms and conditions of this
Agreement, as of the Closing Omnis also grants to Paradigm a worldwide, fully
paid and nonexclusive license ("Bundled License") to distribute and sublicense
to End Users the commercial release version of the Metamorph software in object
code format solely as a bundled product with the then current version of the
Paradigm Tradewinds Financials SQL Enterprise accounting system software, the
Paradigm PBS IV Facilities Maintenance Program software or the Paradigm
BuyerCentral software (singly "Paradigm Product" and collectively "Paradigm
Products"). Paradigm shall have no right or license to distribute or sublicense
any part of the Metamorph
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software separate from the Paradigm Products. This limited license also shall
not extend to any other software products released by or for Paradigm and shall
not include any support obligations by Omnis. Each sublicense to End Users
hereunder shall be pursuant and subject to an End User Agreement; and Paradigm
covenants that it will fully enforce all such agreements at its expense for the
benefit of Omnis. Any warranties or representations to the End User shall be
those of Paradigm only and Omnis shall make no express or implied warranty or
representation to the End User of any kind; and Paradigm shall fully indemnify,
defend and hold Omnis harmless from any claims or actions of any End Users of
any nature.
(ii) With respect to any particular Paradigm Product,
the Bundled License shall be transferable as an integrated part of the bonafide
sale or other transfer by Paradigm of exclusive worldwide ownership and all
other right, title and interest in and to such Paradigm Product to a third
person or entity ("Purchaser"); provided however that (1) Paradigm shall have no
right to transfer such Bundled License prior to the Closing under any
circumstances, (2) Paradigm represents and warrants that it has no commitments
or plans to make any such transfer, (3) such transfer shall be subject to the
prior written consent of Omnis, which subject to the other provisions hereof
shall not be unreasonably withheld, (4) such Purchaser shall not be a direct
competitor of Omnis or its successor in the field of computer software and shall
not be affiliated or related to any such direct competitor, (5) the Bundled
License shall not be further transferable by Purchaser or any other person or
entity, and (6) as an integrated part of such transfer, (A) Omnis or its
successor shall be granted by the Purchaser in writing the irrevocable right to
charge the current fair market license fee (as adjusted from time to time) for
the current commercial release version of the Metamorph software and such other
customary terms and conditions for the sole benefit of Omnis as licensor of such
software, and (B) each and all of the other restrictions and obligations
applicable to the Bundled License hereunder shall be expressly undertaken by the
Purchaser in writing as the successor to Paradigm and such restrictions and
obligations shall continue to be fully imposed upon the Metamorph software,
provided further that such transfer shall not release Paradigm from any
obligation or liability hereunder.
(iii) The Bundled License otherwise shall not be
assignable or transferable except as provided by Section 14.2 of this Agreement.
(c) Termination of Existing Agreement. As of the Closing the
parties agree that that any and all rights of Paradigm or any licensees or
transferees thereof under that certain Letter of Engagement between the Wainer
Group and Paradigm dated July 1, 1997 are fully and irrevocably terminated for
all purposes.
(d) Further Assignment. Without admitting that Paradigm owns
any interest in or to any of the Purchased Assets, but solely for the avoidance
of doubt, in consideration of the foregoing Paradigm hereby assigns and
transfers to Omnis as of the Closing any and all right, title and interest
throughout the universe that Paradigm or its Affiliates may have (if any) in or
to each and all of the Software, the Purchased Contracts, the Intellectual
Property Rights, and the Proprietary Information, free and clear of any and all
Liens. Paradigm shall execute and deliver such additional documents or
instruments as reasonably required to confirm such assignment and transfer.
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2.6 Object Code Only. None of the Wainer Group nor any Affiliate
thereof nor any other person other than Omnis shall have the right to possess or
use the Source Code or any related materials at any time after the Closing Date,
subject solely to the obligations of the Wainer Group to complete the
Development Project hereunder and further subject to the other rights of Omnis
hereunder. The Wainer Group and any Affiliate shall transfer to Omnis or shall
destroy any and all remaining copies of the Source Code in any media in their
possession or in the possession of any Affiliate thereof, no later than
immediately following the end of the Development Project.
2.7 Delivery of Purchased Assets; Status.
(a) Asset Transfers. At or before the Closing, the Wainer
Group shall deliver to Omnis (i) the complete Source Code and the object code
for the Software in its then present state of development; (ii) all other
documentation, records, information, designs, drawings, specifications and data
comprising part of or relating to the Purchased Assets, whether originals or
copies; (iii) all other media necessary for the complete transfer of the
Purchased Assets to Omnis; (iv) complete copies of each draft or final Patent
Applications or Patents for any of the Software or Intellectual Property Rights
or Proprietary Information and all other documents related thereto, if any, then
in existence; (v) a fully executed and notarized Assignment and Transfer of
Trademark, in the form attached hereto and made a part hereof as Exhibit C; (vi)
a fully executed and notarized Assignment and Transfer of Intellectual Property
Rights, Proprietary Information, Software and Purchased Contracts, in the form
attached hereto and made a part hereof as Exhibit D; and (vii) copies of any and
all documents, agreements and other written or electronic information related to
or pertaining to the Purchased Assets. To the extent reasonably practicable, all
documentary materials (other than executed originals) reasonably capable of
being faxed or electronically transmitted shall be delivered to Omnis by means
of telefacsimile or telecommunication using computer modems. The parties shall
also deliver such other documents or property as required hereunder.
(b) No Liens. Each and all of the Purchased Assets shall be
sold, assigned and transferred by the Wainer Group to Omnis hereunder free and
clear of any and all Liens. The Wainer Group acknowledges and agrees that it
shall be solely responsible for the satisfaction of its joint and several debts
and obligations and liabilities, whether or not such debt had been secured by
the Purchased Assets.
(c) No Transfer or Assumption of Liabilities. Omnis is solely
a purchaser for value and the Wainer Group is solely a seller of the Purchased
Assets, and Omnis is not purchasing any capital or other equity interest in any
legal entity hereunder. Omnis has not and shall not assume or be responsible or
obligated for any joint or several obligations or liabilities or debts of the
Wainer Group or any Affiliate thereof or other person of any kind, whether known
or unknown, contingent or otherwise, asserted or unasserted, with respect to any
of the Purchased Assets or otherwise, and the Wainer Group and its Affiliates
shall remain solely responsible for all of their joint or several liabilities,
debt or obligations.
2.8 Technology Mind Transfer. The Wainer Group and each of them agrees
to provide full access by Omnis to Dirk Wainer and any other partner, employee,
officer, director
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or consultant of the Wainer Group or Paradigm as reasonably requested by Omnis,
during normal business hours and on normal business days, for up to sixty (60)
days after the Closing Date, for the purpose of answering inquiries and
providing technical and consulting training, services and disclosures related to
the Purchased Assets. Such services shall include, but are not limited to,
training representatives designated by Omnis in the development and use of the
Purchased Assets, and disclosing and discussing key technical information and
other know-how related to the Purchased Assets and their structure and
development and use. These services shall be rendered at the main offices of
Paradigm in Australia or by remote telecommunications or a combination thereof
and the Wainer Group shall provide reasonable facilities for any required
conferences or meetings. Except for Dirk Wainer, Omnis shall pay the Wainer
Group One Hundred Twenty-Five Dollars (US $125) per hour per person for such
services as required by Omnis.
Section 3. CONSIDERATION
In consideration of the sale, assignment, transfer and delivery of the
Purchased Assets to Omnis and all of the agreements, covenants and warranties of
the Wainer Group provided herein, and subject to the other terms and conditions
of this Agreement:
3.1 Purchase Value. Omnis must pay the Purchase Value to the Wainer
Group as follows:
(a) An amount equal to One Hundred Twelve Thousand Five
Hundred (112,500) Purchase Shares multiplied by the Purchase Per Share Value is
to be paid at the Closing; and
(b) The balance of the Purchase Value, being an amount equal
to Thirty-Seven Thousand Five Hundred (37,500) Purchase Shares multiplied by the
Purchase Per Share Value is to be paid when the Development Project is completed
and accepted by Omnis in accordance with the terms of Section 3.5 hereof.
(c) No fractional shares shall be issued hereunder and all
shares shall be rounded down to the nearest whole share.
3.2 Issuance of Stock. The Wainer Group must:
(a) At the Closing, apply that part of the Purchase Value
referred to in Section 3.1(a) hereof as the full amount payable by the Wainer
Group for the issue of One Hundred Twelve Thousand Five Hundred (112,500) shares
of Omnis Common Stock; and
(b) If and when the Development Project is completed and
accepted by Omnis in accordance with the terms of Section 3.5 hereof, the Wainer
Group shall apply that part of the Purchase Value referred to in Section 3.1(b)
hereof as the full amount payable by the
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Wainer Group for the issue of Thirty-Seven Thousand Five Hundred (37,500) shares
of Omnis Common Stock;
and Omnis must at such times issue and deliver to the partners of the Wainer
Group jointly, all of such Purchase Shares subscribed for under this Section 3.2
and deliver to the Wainer Group a duly issued stock certificate evidencing
ownership of those Purchase Shares (which certificate must be registered in the
joint names of the partners of the Wainer Group).
3.3 Royalties. Omnis also shall pay the Wainer Group a royalty
("Royalty") equal to Five Percent (5%) of the Net Proceeds received during the
five (5) year period beginning on the Closing Date ("Royalty Period"). No
royalties shall be paid on any transaction after the Royalty Period. All Royalty
payments shall be computed and paid on a calendar quarterly basis in arrears
within forty-five (45) days after the end of each calendar quarter during the
Royalty Period, including any final short period; and all payments shall be made
to the Wainer Group jointly without any obligation by Omnis to allocate payments
among the Group. Omnis also shall submit to the Wainer Group a written report
which shall set forth the computation of the Royalties paid together with each
Royalty payment. The parties expressly acknowledge that Omnis intends to pursue
a support driven revenue structure in the future which may adversely effect its
sales and licensing revenues, and therefore may adversely effect the amount of
Royalties payable hereunder.
3.4 Right to Audit. Omnis agrees to keep at its principal place of
business customary and accurate records and books of account with respect to the
Net Proceeds for a period of three (3) years from the date of the relevant
calendar quarter. No more frequently than once per year, representatives of the
Wainer Group shall be entitled with reasonable notice and at reasonable times
and at their own expense to review the relevant books and records of Omnis at
such principal place of business to confirm the accuracy of the Omnis quarterly
statements submitted to the Wainer Group .
3.5 Metamorph Web Version Development.
(a) Development Project. The Wainer Group shall develop and
deliver to Omnis the Metamorph Web Version in accordance with the Specifications
and in accordance with the delivery schedules and other terms set forth in
Exhibit E (subject to modification by the mutual agreement of the parties in
writing) (collectively the "Development Project"). The Wainer Group shall
commence the Development Project immediately upon the Closing and shall exercise
its best efforts to complete and deliver the fully functional and completed
commercial version of the Metamorph Web Version to Omnis within three (3) months
of the Closing, and to otherwise dedicate such programming, management and other
resources necessary to meet all applicable schedules. All interim versions or
components of the Metamorph Web Version shall be submitted to Omnis every two
(2) weeks during the development period.
(b) Defects in Omnis Studio. In the event any defects in the
then current commercial release version of Omnis Studio are discovered by the
Wainer Group, the Wainer Group will document such defects in writing. Such
documentation shall include the nature and
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severity of such defects and the possible impact or delay caused by such defects
on the development and delivery of Metamorph Web which are outside the control
of the Wainer Group or Paradigm. Such documentation shall be promptly prepared
and forwarded in writing to the Chief Technical Officer of Omnis, and to legal
counsel for Omnis and legal counsel for the Wainer Group. In such event Omnis
and the Wainer Group each undertake to act in a reasonable and cooperative
manner and to exercise their respective best efforts to diligently resolve such
defects in the Omnis Studio code. Any dispute as to the cause of any nondelivery
of Metamorph Web under the delivery schedules required by Exhibit E hereof shall
be subject to alternative dispute resolution as provided more generally by
Section 20 of this Agreement.
(c) Reports. The Wainer Group shall provide Omnis with
periodic written reports at least fortnightly and otherwise at the reasonable
request of Omnis describing the status of the development efforts hereunder,
including but not limited to a description of the work performed to date, any
problems encountered or anticipated in development and the actual or proposed
resolution thereof, and the progress planned, including but not limited to the
expected date for the delivery of the Metamorph Web Version software. The Wainer
Group shall provide Omnis with immediate notice of any actual or anticipated
delays in delivering the Metamorph Web Version.
(d) Acceptance Procedures. Upon delivery of each component or
version of the Metamorph Web Version to Omnis, Omnis shall test such deliverable
to determine its conformance with the applicable Specifications and shall notify
the Wainer Group in writing of its acceptance or rejection of such deliverable.
The Wainer Group shall provide such Technical Assistance as reasonably required
to facilitate such testing. If Omnis rejects any delivered component or version,
Omnis shall provide reasons for its rejection with such notice, using its best
efforts to do so within ten (10) days, but in no event more than twenty (20)
days, after the delivery of the subject component. In such event, the Wainer
Group shall promptly correct and replace such rejected deliverable, using its
best efforts to do so within ten (10) days, but in no event more than twenty
(20) days, after the receipt of the rejection notice. If the Wainer Group fails
to deliver an acceptable corrected or replacement deliverable conforming with
the applicable Specifications within twenty (20) days after the receipt of the
rejection notice, Omnis shall have the right to terminate the Development
Project immediately by written notice to the Wainer Group, in addition to the
other rights and remedies of Omnis. Any dispute relating to nonperformance under
this Subsection (d) shall be subject to alternative dispute resolution as
provided more generally by Section 20 of this Agreement.
(e) Full Disclosure. The Wainer Group shall fully disclose and
deliver to Omnis each and all of the Developed Technologies, including but not
limited to all source code, object code, other computer code, structures, files,
libraries, 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 the Metamorph Web Version or other Developed
Technologies. Such disclosure and delivery shall be made by the Wainer Group no
later than the final delivery date of the
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Metamorph Web Version hereunder or the termination date of the Development
Project, whichever occurs first.
(f) Technical Assistance. Following the final acceptance of
the Metamorph Web Version by Omnis, if any, the Wainer Group shall provide
Technical Assistance to Omnis upon the reasonable request of Omnis. Such
Technical Assistance shall be provided at the rate of Two Hundred Dollars (US
$200) per person-hour. All Technical Assistance provided under this Agreement
shall be in a form that would permit a competent engineer to understand and use
such Technical Assistance. Omnis shall reimburse the Wainer Group for all
reasonable international travel expenses, if applicable, incurred in connection
with such Technical Assistance, subject to the prior written approval of Omnis;
provided however that Omnis shall not be obligated to pay the Wainer Group for
any travel time. Wainer Group employees and agents, while working at Omnis'
facilities, shall remain employees and agents of Wainer Group and shall not be
deemed to be employees or agents of Omnis, subject to the rights of Omnis as
sole owner of the Metamorph Web Version hereunder and as further provided by
subsection (j) hereof.
(g) Development Fee. In consideration for the work of the
Wainer Group and its employees and contractors on the Development Project, Omnis
shall pay to the Wainer Group a fee in the amount of Three Thousand Dollars (US
$3,000) per week during the period of the Development Project, up to a maximum
of Fifty Thousand Dollars (US $50,000) in all events. The Wainer Group shall be
responsible for all other fees and expenses incurred in connection with the
Development Project.
(h) Failure to Complete. In the event that the Wainer Group
for whatever reason fails to deliver an acceptable final commercial version of
Metamorph Web Version to Omnis within three (3) months of the Closing (or such
later delivery date as mutually agreed by the parties, if any), Omnis shall have
the unilateral right and option to terminate the Development Project and to
undertake completion of the Metamorph Web Version development. Upon such
termination, the Wainer Group will not be entitled to any other consideration or
payment with respect to the Development Project. If the Development Project is
successfully performed and completed as required hereunder, the balance of the
Purchase Value referred to in Section 3.1(b) hereof must be paid to the Wainer
Group not later than fifteen (15) days after the final acceptance by Omnis of
the Metamorph Web Version, further subject to Section 3.2(b) hereof. Any dispute
relating to nonperformance under this Subsection (h) shall be subject to
alternative dispute resolution as provided more generally by Section 20 of this
Agreement.
(i) Ownership. The parties agree that each and all of
Metamorph Web Version and all other Developed Technologies shall be developed as
"works for hire" and shall be owned solely by Omnis as part of the Software as
of the date of creation of each component or version thereof. For the avoidance
of doubt, the Wainer Group and each of them hereby sells, transfers and assigns,
and agrees to sell, transfer and assign, to Omnis all right, title and interest
throughout the universe in and to each and all of Metamorph Web Version and all
other Developed Technologies to the full extent provided in Section 2 hereof as
of the date of
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creation of each component or version thereof. In order to ensure its compliance
with the foregoing the Wainer Group further shall take all steps required to
obtain the full assignment and transfer of the rights of any third person or
entity (if any) in or to the Metamorph Web Version and all other Developed
Technologies. For the further avoidance of doubt, but without admitting any
ownership rights of Paradigm, in consideration of the foregoing Paradigm also
transfers and assigns to Omnis any and all right, title and interest throughout
the universe that Paradigm or its Affiliates may have (if any) in and to each
and all of Metamorph Web Version and all other Developed Technologies as of each
such date of creation.
(j) Work Product. Without limiting the foregoing, for purposes
hereof all work developed or produced by any employee or contractor or agent or
Affiliate of the Wainer Group (including but not limited to Paradigm) shall be
deemed developed or produced by the Wainer Group; and the Wainer Group shall
fully indemnify, defend and hold Omnis and its successors and assigns harmless
from and any adverse claims of such employee or contractor or agent or
Affiliate.
3.6 Sole Consideration. The Purchase Value, the Royalties and the
Development Fee are the sole consideration or compensation of any kind or nature
to be paid at any time by Omnis or any other person or entity to the Wainer
Group or any Affiliate or other person or entity for or in connection with the
Purchased Assets, further subject to the right of Omnis to retain the balance of
the Purchase Value referred to in Section 3.1(b) hereof pursuant to this
Agreement. Without limiting the foregoing, Paradigm shall not be entitled to any
compensation or payments for or in connection with the Purchased Assets.
3.7 Allocation of Purchase Value; Taxes. All consideration hereunder
shall be allocated among the Purchased Assets as determined solely by Omnis.
Each party agrees to report the transactions hereunder for federal, state, local
and foreign tax purposes in accordance with such allocations. Subject to the
foregoing, each party shall be responsible for all of its own tax liabilities
arising out the transactions hereunder.
Section 4. THE CLOSING.
4.1 The Closing. The consummation of the purchase and sale of the
Purchased Assets (the "Closing") shall be held at 2 p.m. Melbourne time on the
Closing Date at the law offices of Deacons Graham & James, Level 24, 385 Bourke
Street, Melbourne, Victoria 3000, Australia. As used in this Agreement, the term
"Closing Date" means the later of (a) May 19, 2000, or (b) such other date, if
any, as may be mutually agreeable to the parties.
4.2 Transactions at Closing. At the Closing the following transactions
will be conducted:
(a) The Wainer Group shall deliver to Omnis the following:
(i) All Software and other documentation, materials,
documents and instruments required by Section 2 of this Agreement;
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(ii) Certified resolutions of the Wainer Group and
all other corporate or partnership entities comprising part of the Wainer Group,
each approving this Agreement and the transactions contemplated herein;
(iii) Any other certifications of the Wainer Group
required hereunder; and
(iv) The written opinion of legal counsel required by
Section 10.4 hereof.
(b) Paradigm shall deliver certified resolutions of Paradigm
approving this Agreement and the transactions contemplated herein; and any other
certifications of Paradigm required hereunder.
(c) Omnis shall deliver to the Wainer Group a duly issued
stock certificate evidencing ownership of those Purchase Shares referred to in
Section 3.2(a) hereof, which must be issued in the joint names of the partners
of the Wainer Group; and the written opinion of the legal counsel required by
Section 11.4 hereof.
Section 5. REPRESENTATIONS AND WARRANTIES OF THE WAINER GROUP
The Wainer Group and each of them hereby represents and warrants
jointly and severally to Omnis as follows:
5.1 Organization, Good Standing and Qualification of The
Wainer Group. The Wainer Group is a general partnership duly organized, validly
existing and in good standing under the laws of Australia and any other
applicable jurisdiction and has all requisite legal power and authority to own,
operate and lease its properties and to carry on its business as now being
conducted. The Wainer Group has all necessary legal power to enter into this
Agreement and to perform its obligations hereunder; and all legal action
required to be taken on its part to approve the execution and delivery of this
Agreement and the performance of its obligations hereunder has been duly taken.
The Wainer Group is qualified to do business, and is in good standing, in each
jurisdiction in which the failure to be so qualified or to so be in good
standing could have a material adverse impact of any kind on (i) its financial
condition, business, business operations or properties, or (ii) its ability to
perform any of its obligations under this Agreement or under any related
agreement.
5.2 Authority. Prior to the Closing Date, each member of the
Wainer Group shall have all requisite power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The Wainer Group and each of them further has
the full right, power, legal capacity and authority to enter into, execute,
deliver and fully consummate this Agreement and all other required documents or
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instruments hereunder, both on its own behalf and on behalf of its employees,
partners, agents, contractors, Affiliates, related persons or entities,
successors and assigns. This Agreement and all other required documents or
instruments hereunder have been duly and validly authorized and executed and
delivered by the Wainer Group and each of them, and are valid and binding on the
Wainer Group and each of them and are enforceable in accordance with their
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights and except that the availability of equitable
remedies may be subject to the discretion of a court of competent jurisdiction.
5.3 Intellectual Property.
(a) The Wainer Group owns all right, title and interest
throughout the universe in or to each of the Purchased Assets.
(b) The Wainer Group further has good and marketable title to
each and all of the Purchased Assets; and such Assets are being sold, assigned
and transferred to Omnis free and clear of any and all Liens. The Wainer Group
is in possession of the Purchased Assets. 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 the Wainer Group or its
Affiliates as debtor which create or perfect or which purport to create or
perfect any Lien in or on any of the Purchased Assets.
(c) Without limiting the foregoing, as of the Closing none of
the Wainer Group nor any Affiliates nor any successors nor assigns thereof nor
any other third person or entity shall have or retain any right, title or
interest at any time in or to any of the Purchased Assets to any extent,
including but not limited to any right or license at any time to apply for or
obtain or own any Patent on any Purchased Assets or to Use any of the Purchased
Assets or any product or process or technology which uses or incorporates or
infringes upon any part of the Purchased Assets; subject only to the limited
licenses granted to Paradigm in Section 2.5 of this Agreement and only to the
extent of such licenses.
(d) Without limiting the representations or warranties of the
Wainer Group hereunder or the right of Omnis to rely upon such representations
or warranties:
(i) The Disclosure Schedule attached hereto as
Exhibit F ("Disclosure Schedule") lists all patents, works of authorship,
registered copyrights, registered and unregistered trademarks, trade names and
service marks, and any applications therefor related to the Purchased Assets,
and specifies, where applicable, the jurisdictions in which each such
application, issuance or registration has been filed, including the respective
registration or application numbers, together with a list of all software
products and an indication as to which, if any, of such software products have
been registered for copyright protection with the United States Copyright Office
and any foreign offices. The Disclosure Schedule also specifically lists all
licenses, sublicenses and material agreements as to which any of the Wainer
Group or its Affiliates is a party or pursuant to which any of the Wainer Group
or its Affiliates or any other
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person owns or is licensed or otherwise authorized or obligated with respect to
any of the Purchased Assets, and includes the identity of all parties thereto.
The Disclosure Schedule also lists any and all persons or entities who have
performed any services related to the creation or development of any of the
Purchased Assets, and identifies such person or entity's role with the Wainer
Group, whether as employee, consultant or otherwise. None of the Wainer Group or
any Affiliate is contractually obligated to pay any compensation to any third
party related to any of the Purchased Assets at any time.
(ii) None of the Wainer Group or any Affiliate is, or
as a result of the execution and delivery of this Agreement or the performance
of its obligations hereunder will be, in violation of any license, sublicense or
other agreement applicable to any member of the Wainer Group or any Affiliate,
nor will such actions entitle any other party to any such license, sublicense or
agreement to terminate or modify such license, sublicense or agreement.
(e) To the knowledge of each member of the Wainer Group or any
Affiliate, no part of the Software or the other Purchased Assets (i) violates or
infringes or will violate or infringe on any patent, copyright, or other
intellectual property or proprietary 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 the Wainer Group or the validity or effectiveness of any of the Purchased
Assets.
(f) To the knowledge of each member of the Wainer Group or any
Affiliate, there has been or is no material unauthorized use, infringement or
misappropriation of any of the Purchased Assets by any third party, including
but not limited to any employee or former employee of any of the Wainer Group or
any Affiliate.
(g) No part of the Purchased Assets is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting in any
manner the licensing or exploitation thereof by any of the Wainer Group or any
Affiliate. None of the Wainer Group nor any Affiliate has entered into any
agreement to indemnify any other person against any claim or action of
infringement or misappropriation relating to any of the Purchased Assets.
(h) No employee of any of the Wainer Group or any Affiliate 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 any of the Wainer Group or any
Affiliate. All consultants and employees of any of the Wainer Group or any
Affiliate have signed agreements containing proprietary information protective
provisions and, where applicable, agreements assigning all rights in any work
performed by them to the Wainer Group or such Affiliate. The Software (including
but not limited to Metamorph Web Version and the Developed Technologies) is and
will be the original work of the Wainer Group and has been either created by
employees of the Wainer
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Group on a work-for-hire basis or by consultants or contractors who have
assigned all rights in such Software to the Wainer Group.
(i) The Wainer Group and 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.
5.4 Metamorph Warranties. Each of the Wainer Group further represents,
warrants and covenants that:
(a) The Software shall be fully functional for the purposes
designed; and otherwise shall be substantially free from defects in workmanship,
design or reproducible programming errors as of the Closing and for a period of
ninety (90) days thereafter.
(b) The Metamorph Web Version and other Developed Technologies
shall be fully functional for the purposes designed; shall fully conform with
the Specifications; and shall be substantially free from defects in workmanship,
design or reproducible programming errors as of the date of final delivery to
Omnis and for a period of ninety (90) days thereafter.
(c) None of the Software (including but not limited to the
Metamorph Web Version and other Developed Technologies) shall contain any virus,
trojan horse, worm, malicious code or other feature that allows any such items
to be accessed, modified or disabled by unauthorized persons.
5.5 Material Adverse Effect. To the knowledge of each of the Wainer
Group, the Wainer Group jointly and severally has fully advised Omnis of all
material matters involving the financial condition, operations, properties or
industry of the Wainer Group and its Affiliates. Each of Dirk Wainer, Shirley
Wainer, Dennis Janossich and Joseph Bernard, being the principal officers and
senior management of the Wainer Group, further represent and warrant that to
their own knowledge they have provided Omnis with all information that they
believe could reasonably have a materially adverse effect on the Purchased
Assets or on any of the Wainer Group or Affiliates or on the right or capacity
of any of the Wainer Group or its Affiliates to perform all of its obligations
hereunder.
5.6 Other Contracts. None of the Wainer Group or its Affiliates is or
shall be prevented from entering into this Agreement with Omnis and from fully
performing all of their obligations hereunder as a result of any legal or
contractual restrictions or prohibitions. Without limiting the foregoing, none
of the Wainer Group or its Affiliates are jointly or severally a party to or
subject to:
(a) Any indenture, loan or credit agreement, note agreement,
deed of trust, mortgage, security agreement, promissory note or other agreement
or instrument relating to or evidencing indebtedness for borrowed money or the
extension of credit or subjecting any of the Purchased Assets to any Lien;
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(b) Any agreement of indemnification or guaranty of any
indebtedness;
(c) Subject to Subsection (d) hereof, any agreement, contract
or commitment relating to the disposition or acquisition of assets or any
interest in any business enterprise outside the ordinary course of the business
of any of the Wainer Group or its Affiliates, not specifically disclosed in
Exhibit F (Disclosure Schedule);
(d) Any agreement, contract or commitment relating to the
licensing or disposition or acquisition of the Purchased Assets or any part
thereof, not specifically disclosed in Exhibit F (Disclosure Schedule);
(e) Any distribution, joint marketing or development agreement
related to any of the Purchased Assets; or
(f) Any agreement pursuant to which any of the Wainer Group or
its Affiliates has granted or may grant in the future, to any person or entity
other than Omnis, a source code license or option or other right to use or
acquire the Source Code or any other source code included in the Purchased
Assets (including but not limited to the Metamorph Web Version or other
Developed Technologies).
5.7 Purchased Contracts. Each of the Purchased Contracts is valid and
binding on the Wainer Group or relevant member or Affiliate thereof and on each
of the other parties to such contracts (including but not limited to any
employer or contractor invention assignment agreements), and is in full force
and effect. Neither the Wainer Group nor any other party thereto has breached,
and the Wainer Group is not aware of any facts which would lead it to believe
that the Wainer Group or any other party has breached any provision of, or is in
default under the terms of, any such Purchased Contract. To the knowledge of
each of the Wainer Group or its Affiliates, no party to any such Purchased
Contract intends to cancel, withdraw, modify or amend such Purchased Contract;
provided however that that certain Letter of Engagement between the Wainer Group
and Paradigm dated July 1, 1997 shall be terminated and superseded by this
Agreement as of the Closing.
5.8 Compliance with Laws. The Wainer Group has complied with, and is
not in violation of, any applicable statutes, laws or regulations affecting its
properties or the operation of its business, the violation of which could have a
material adverse impact on its properties or assets, including but not limited
to the Purchased Assets.
5.9 No Litigation. There is no suit, action, arbitration, or legal,
administrative, or other proceeding, or governmental investigation threatened
or, to knowledge of each of the Wainer Group or its Affiliates, pending, against
or affecting any of the Wainer Group or its Affiliates, or any of their
respective business, assets, or financial condition, including but not limited
to the Purchased Assets.
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5.10 Tax Returns and Audits. Within the times and in the manner
prescribed by law, each of the Wainer Group and its Affiliates has filed all tax
returns, or valid extensions required by law and has paid all taxes,
assessments, and penalties due and payable. There are no present or threatened
disputes as to taxes of any nature payable by any of the Wainer Group or its
Affiliates.
5.11 Documents Delivered. Each copy of any agreement, contract or other
instrument which is identified in Exhibit F (Disclosure Schedule) or is
delivered by any of the Wainer Group or its Affiliates or its counsel to Omnis
(or to its counsel or representatives), whether before or after the execution of
this Agreement, is a true and correct copy of the original thereof and has not
been amended, canceled or otherwise modified, except as set forth in the
Disclosure Schedule.
5.12 Full Disclosure. No representation or warranty made by any of the
Wainer Group or its Affiliates in this Agreement, nor any materials or schedule
or exhibit prepared and furnished or to be prepared and furnished by any of the
Wainer Group or its Affiliates or their representatives pursuant hereto or in
connection with the transactions contemplated hereby, or any information
supplied in connection with any solicitation of approval of the transaction by
any of the Wainer Group or its Affiliates, when taken as a whole, contains or
will contain any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statements or facts contained herein
or therein not misleading in light of the circumstances under which they were
furnished.
5.13 No Claims. None of the Wainer Group or any Affiliate has any
knowledge of the existence of any claim or action or cause of action of any
nature by such person or entity against Omnis or any Affiliate of Omnis, other
than as materially disclosed in writing to Omnis prior to the Closing as part of
Exhibit F (Disclosure Schedule).
5.14 Brokers' and Finders' Fees. None of the Wainer Group or any
Affiliate has incurred, nor will any of the Wainer Group or Affiliate 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
transaction contemplated hereby; and the Wainer Group shall fully indemnify,
defend and hold Omnis harmless from any such liabilities or claims.
5.15 Effective Dates. The representations and warranties of the Wainer
Group or its Affiliates or any of them set forth in this Agreement and in any
written statement delivered by the Wainer Group or its Affiliates or any of them
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 Date as though made at that time; and as to the Metamorph Web Version
and other Developed Technologies shall further be true in all material respects
on and as of the date of final delivery of such software and technologies to
Omnis; further subject to the 90-day warranties provided by Section 5.4 hereof.
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Section 6. PARADIGM REPRESENTATIONS AND WARRANTIES
Paradigm hereby represents and warrants and covenants to Omnis as
follows:
6.1 Organization and Standing. Paradigm is a corporation duly
organized, validly existing and in good standing under the laws of Australia,
and has all requisite corporate power and authority to own, operate and lease
its properties and to carry on its business as now being conducted.
6.2 Authority; Other Contracts.
(a) On and as of the Closing Date, Paradigm shall have all
requisite corporate power and authority to enter into this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Paradigm and
constitutes its valid and legally binding agreement and obligation and is
enforceable in accordance with its terms, except as enforcement may be limited
by applicable bankruptcy, insolvency, reorganization or similar laws relating to
or affecting the enforcement of creditors' rights and except that the
availability of equitable remedies may be subject to the discretion of a court
of competent jurisdiction.
(b) Paradigm is not prevented from entering into this
Agreement and from fully performing all of its obligations hereunder as a result
of any legal or contractual restrictions or prohibitions.
6.3 No Ownership or Right to Compensation. Paradigm does not have and
will not have any right, title or interest in or to any of the Purchased Assets
to any extent at any time, subject only to the limited licenses granted to
Paradigm in Section 2.5 hereof and only to the extent of such licenses. Paradigm
does not have and will not have any right to receive any part of the Purchase
Shares or Royalties or Development Fee at any time; and Paradigm is not
contractually obligated to pay any compensation to any third party related to
any of the Purchased Assets at any time.
6.4 Purchased Assets. To the knowledge of Paradigm, no person or entity
other than the Wainer Group owns any right, title or interest in or to any of
the Purchased Assets to any extent.
6.5 Certain Agreements. No employee of Paradigm 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 Paradigm. All consultants and
employees of Paradigm have signed agreements containing proprietary information
protective provisions and, where applicable, agreements assigning all rights in
any work performed by them to Paradigm. Paradigm has taken reasonable security
measures to
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protect the secrecy, confidentiality and value of all trade secrets, know-how,
inventions, designs, processes and technical data required to conduct its
business.
6.6 Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental entity is required in
connection with the valid execution and delivery of this Agreement by Paradigm
or the consummation of the transactions contemplated hereby by Paradigm.
6.7 No Litigation. There is no suit, action, arbitration, or legal,
administrative, or other proceeding, or governmental investigation threatened
or, to the knowledge of Paradigm, pending, against or affecting Paradigm or its
business, assets, or financial condition.
6.8 Tax Returns and Audits. Within the times and in the manner
prescribed by law, Paradigm has filed all tax returns, or valid extensions
required by law and has paid all taxes, assessments, and penalties due and
payable. There are no present or threatened disputes as to taxes of any nature
payable by Paradigm.
6.9 Disclosure. No representation or warranty made by Paradigm in this
Agreement or any material provided to Omnis hereunder contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statements or facts contained herein or therein not misleading in light
of the circumstances under which they were furnished.
6.10 No Claims. Paradigm has no knowledge of the existence of any claim
or action or cause of action of any nature by such person or entity against
Omnis or any Affiliate thereof, other than as materially disclosed in writing to
Omnis prior to the Closing.
6.11 Brokers' and Finders' Fees. Paradigm has not and will not 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
transaction contemplated hereby.
6.12 Effective Dates. The representations and warranties of Paradigm
set forth in this Agreement and in any written statement delivered by Paradigm
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 Date as though made at that time.
Section 7. OMNIS REPRESENTATIONS AND WARRANTIES
Omnis represents and warrants to the Wainer Group as follows:
7.1 Organization and Standing. Omnis is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has all requisite corporate power and authority to own, operate and lease
its properties and to carry on its business as now being conducted.
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7.2 Authority; Other Contracts.
(a) On and as of the Closing Date, Omnis shall have all
requisite corporate power and authority to enter into this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Omnis and
constitutes its valid and legally binding agreement and obligation and is
enforceable in accordance with its terms, except as enforcement may be limited
by applicable bankruptcy, insolvency, reorganization or similar laws relating to
or affecting the enforcement of creditors' rights and except that the
availability of equitable remedies may be subject to the discretion of a court
of competent jurisdiction, and further subject to restrictions imposed by
applicable securities laws.
(b) Omnis is not prevented from entering into this Agreement
with the Wainer Group and Paradigm and from fully performing all of its
obligations hereunder as a result of any legal or contractual restrictions or
prohibitions, subject to restrictions imposed by applicable securities laws.
7.3 Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental entity is required in
connection with the valid execution and delivery of this Agreement by Omnis or
the consummation of the transactions contemplated hereby, except for such
consents, approvals, orders, authorizations, registrations, qualifications or
filings as may be required under applicable securities laws and the laws of any
foreign country.
7.4 Issuance of Shares. The issuance of the shares of Omnis Purchase
Shares, as provided in this Agreement, will have been duly authorized as of the
Closing Date. Such shares, upon the delivery of certificates representing the
same in accordance with the terms of this Agreement, will be duly authorized,
validly issued, fully paid and non-assessable, free of any liens or
encumbrances, other than the obligations of and restrictions imposed on the
Wainer Group under this Agreement and other than the restrictions imposed by
applicable securities laws.
7.5 Disclosure. No representation or warranty made by Omnis in this
Agreement contains any untrue statement of a material fact, or omits to state a
material fact necessary to make the statements or facts contained herein or
therein not misleading in light of the circumstances under which they were
furnished.
7.6 No Claims. Neither Omnis nor any Affiliate has any knowledge of the
existence of any claim or action or cause of action of any nature by such person
or entity against any of the Wainer Group or any Affiliate thereof, other than
as materially disclosed in writing to the Wainer Group prior to the Closing.
7.7 Brokers' and Finders' Fees. Omnis has not and will not 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
transaction contemplated hereby.
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7.8 Effective Dates. The representations and warranties of Omnis set
forth in this Agreement and in any written statement delivered by Omnis 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 Date as though made at that time.
Section 8. OBLIGATIONS BEFORE CLOSING
8.1 Conduct of Business of the Wainer Group and Affiliates. Except as
expressly contemplated by this Agreement, during the period from the date of
this Agreement and the Closing Date, the Wainer Group shall preserve intact and
not encumber the Purchased Assets. The Wainer Group shall promptly notify Omnis
of any event which could have a material adverse effect on the condition of the
Purchased Assets. Without limiting the foregoing, the Wainer Group or any
Affiliate or any of them shall not without the prior written consent of Omnis
(which consent may be withheld in its sole discretion):
(a) Sell, assign, dispose of, license, sublicense or otherwise
transfer to any person or entity any rights to the Purchased Assets;
(b) Disclose any part of the Proprietary Information with or
without consideration to the public, or to any third person or entity without
first entering into a legally enforceable nondisclosure and nonuse agreement
regarding such Information that preserves the confidential and proprietary
nature of such Information consistent with the intended rights and benefits
being purchased by Omnis hereunder;
(c) Violate, amend or otherwise modify the terms of any of the
Purchased Contracts;
(d) Commence a lawsuit other than for the normal collection of
accounts;
(e) Incur any indebtedness or guarantee any such indebtedness,
or issue or sell any debt securities or guarantee any debt securities of others;
(f) Engage in any activities or transactions that are outside
the ordinary course of its business consistent with past practice;
(g) Fail to pay or otherwise satisfy its obligations as they
become due, except such as are being contested in good faith;
(h) Take, or agree (in writing or otherwise) to take, any
action which would make any of the representations or warranties or covenants of
any of the Wainer Group or Paradigm contained in this Agreement untrue or
incorrect in any material respect.
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8.2 Access to Information. Each party ("Disclosing Party") shall
provide to the other party ("Requesting Party"), and to the accountants, legal
counsel and other representatives of such other party, reasonable access, during
normal business hours and upon reasonable prior notice during the period from
the date of this Agreement until the Closing Date, to (i) all of the properties,
books, contracts, commitments and records of the Disclosing Party, and (ii) all
other information concerning the business, properties and personnel of the
Disclosing Party as the Requesting Party may reasonably request. All such
information shall be deemed the confidential information of the Disclosing Party
and shall be subject to the nondisclosure and nonuse provisions of Section 12
hereof. No information or knowledge obtained in any investigation pursuant
hereto shall affect or be deemed to modify any representation or warranty or
covenant of the Disclosing Party contained herein or any condition to the
obligations of the parties to consummate the transactions contemplated by this
Agreement.
8.3 Approvals. Each of the partners of the Wainer Group hereby fully
consents to this Agreement and the terms hereof and the transactions
contemplated by this Agreement. Paradigm shall obtain approval of its Board of
Directors, and to the extent required by applicable law, if any, Paradigm shall
obtain shareholder approval to this Agreement and the transactions contemplated
hereby prior to the Closing.
8.4 Breach of Representations, Warranties or Covenants.
(a) None of the Wainer Group or any Affiliate shall take, or
fail to take, any action which from the date of this Agreement through the
Closing would cause or constitute a breach of any of its representations,
warranties or covenants set forth in this Agreement or which would from the date
of this Agreement through the Closing cause any of such representations or
warranties to be inaccurate. In the event of, and promptly after becoming aware
of, the occurrence of or the pending or threatened occurrence of any such event,
the Wainer Group or its Affiliate shall give detailed written notice thereof to
Omnis and shall use its best efforts to prevent or promptly remedy such breach
or inaccuracy.
(b) Omnis shall not take, or fail to take, any action which
from the date of this Agreement through the Closing would cause or constitute a
breach of any of its representations, warranties or covenants set forth in this
Agreement or which would from the date of this Agreement through the Closing
cause any of such representations or warranties to be inaccurate. In the event
of, and promptly after becoming aware of, the occurrence of or the pending or
threatened occurrence of any such event, Omnis shall give detailed written
notice thereof to Omnis and shall use its best efforts to prevent or promptly
remedy such breach or inaccuracy.
8.5 Consents. The Wainer Group shall use its best efforts to obtain all
necessary consents, waivers and approvals under any of the Wainer Group or
Affiliate agreements, contracts or licenses in connection with the transactions
contemplated by this Agreement.
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8.6 Best Efforts. Each of the parties to this Agreement shall use its
best efforts to effect the transactions contemplated hereby and to fulfill and
cause to be fulfilled the conditions to closing under this Agreement.
8.7 Public Announcements. Each party will consult in advance with the
other concerning the timing and content of any announcements, press releases and
public statements concerning the transactions contemplated by this Agreement,
and shall not make any such announcement, release or statement without the
consent of the other party.
8.8 Other Obligations. Each of the parties also shall fully perform and
discharge its other obligations required to be performed prior to or as of the
Closing pursuant to the other provisions of this Agreement.
Section 9. SECURITIES ACT COMPLIANCE;
REPRESENTATIONS; AND RESTRICTIONS ON TRANSFER.
9.1 Purchase Entirely for Own Account. Each of the Wainer Group further
represents and warrants that the Purchase Shares are being acquired by them for
their own accounts for investment and not with a view to, or for resale in
connection with, any distribution of such securities; and that no other person
will have any direct or indirect beneficial interest in or right to any of such
stock. Each of the Wainer Group further represents and warrants that it does not
have any agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of
such stock.
9.2 Disclosure of Information. The Wainer Group acknowledges it has
received all the information it considers necessary or appropriate for deciding
whether to be issued the Purchase Shares hereunder. The Wainer Group further
represents and warrants that it has had an opportunity to ask questions and
receive answers from Omnis regarding the terms and conditions of the offering of
the Purchase Shares and the business, properties, prospects and financial
condition of Omnis.
9.3 Investment Experience. The Wainer Group and each of them
acknowledges that it can bear the economic risk of its investment, and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Purchase Shares. The
Wainer Group also represents it has not been organized for the purpose of
acquiring the Purchase Shares. Each of the Wainer Group recognizes that an
investment in such stock is subject to material risk.
9.4 Restricted Securities. The Wainer Group understands that the
Purchase Shares being issued are considered "restricted securities" under the
United States federal securities laws since such stock is being acquired from
Omnis in a transaction not involving a public offering and that under such laws
and applicable regulations such securities may be resold
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without registration under the Securities Act, only in certain limited
circumstances. In this connection, the Wainer Group represents that it is
familiar with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed hereby and by the Securities Act. In addition, the Wainer
Group acknowledges and agrees that the Purchase Shares have not been registered
or qualified under the laws of any state and that issuance of such stock may be
conditioned on compliance with such laws. Omnis shall have no obligation to
register or qualify the Purchase Shares with the SEC or any state securities
agency at any time; provided however that the Wainer Group shall have the
specific "piggyback" registration rights set forth in Exhibit G attached hereto
and made a part hereof.
9.5 Further Limitations on Disposition. Without limiting the other
provisions of this Section 9, and subject at all times to applicable securities
laws, the Wainer Group further agrees not to make any disposition of any of the
Purchase Shares until six (6) months after the receipt thereof. In addition, the
Wainer Group further agrees not to make any disposition of all or any portion of
the Purchase Shares unless and until the transferee has agreed in writing for
the benefit of Omnis to be bound by this Section 9, provided and to the extent
this Section is then applicable, and either:
(a) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement, and the proposed disposition of
the Purchase Shares has been registered or qualified under applicable state
securities laws; or
(b) The Wainer Group (i) shall have notified Omnis of the
proposed disposition and shall have furnished Omnis with a detailed statement of
the circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by Omnis, the Wainer Group shall have furnished Omnis with an opinion
of counsel, reasonably satisfactory to Omnis that such disposition will not
require registration of such shares under the Securities Act and applicable
state securities laws. It is agreed that Omnis will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
9.6 Permitted Transfers. Notwithstanding the limitations of Section 9.5
hereof but subject at all times to applicable securities laws, this Agreement
shall not prohibit the Wainer Group from transferring up to an aggregate of
Eighteen Thousand Seven Hundred Fifty (18,750) shares of the Purchase Shares in
one or more transactions at any time after ninety (90) days from the Closing
Date. As a condition precedent to any such transfer, each transferee shall sign
and deliver to Omnis an undertaking by which it agrees to be directly bound by
all of the restrictions set forth in this Section 9.
9.7 Underwriter Lock-Up. In connection with any registration of shares
of Common Stock under the Securities Act for sale to the public, each of the
Wainer Group agrees that it will not sell, make any short sale of, grant any
option for the purchase of, or otherwise dispose of any Purchase Shares for a
period designated by Omnis and the Omnis' underwriter in writing to the Wainer
Group, which period shall not last more than 180 days after the effective date
of the relevant registration statement. Notwithstanding the foregoing, to the
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extent that the Wainer Group shall enter into an underwriting agreement that
contains provisions covering one or more issues subject to this Section, the
provisions contained in such underwriting agreement shall control as to the
party or parties so entering into such underwriting agreement.
9.8 Legends. It is understood that the certificates evidencing the
Purchase Shares or any substitute therefor may bear one or all of the following
legends or their substantial equivalent:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT".
(b) Any legend required by the laws of the State of
California, including any legend required by the California Department of
Corporations or the applicable provisions of the California Corporations Code.
9.9 Further Representations by Foreign Investors. The Wainer Group
hereby represents and warrants that it has satisfied itself as to the full
observance of the laws of Australia and any jurisdiction within Australia in
connection with any offer or right to subscribe for the Purchase Shares or the
issuance of such stock or other rights under or use of this Agreement, including
but not limited to (i) the legal requirements within such jurisdictions for the
purchase and issuance of the Purchase Shares; (ii) any foreign exchange
restrictions applicable to such purchase; (iii) any governmental or other
permits or consents that may need to be obtained; (iv) any and all income tax
and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale, or transfer of the Purchase Shares; and (v) whether
the Wainer Group subscription and payment for, and its continued beneficial
ownership of the Purchase Shares, will or will not violate any applicable
securities or other laws of such jurisdictions. Omnis shall have no obligation
to obtain any permit or consent or otherwise comply with the laws of such
jurisdictions in connection with the offer to subscribe for or any issuance or
ownership of the Purchase Shares, whether now or in the future.
9.10 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PARTIES OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY THE APPLICABLE PROVISION OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
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EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
EXEMPT UNDER SUCH LAWS.
9.11 No Insider Trading. The Wainer Group and Paradigm each agree that
they 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 the Wainer Group and Paradigm
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. The Wainer Group and Paradigm 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.
Section 10. CONDITIONS PRECEDENT TO PERFORMANCE BY OMNIS
The obligations of Omnis to be performed under this Agreement are
subject to the satisfaction at the Closing, of all of the following conditions.
Omnis may waive any or all of these conditions in writing; provided however that
no such waiver of a condition shall constitute a waiver by Omnis of any of its
other rights or remedies, at law or in equity, if the Wainer Group or Paradigm
shall be in default of any of their respective representations, warranties or
covenants under this Agreement or any related agreement or instrument.
10.1 Accuracy of the Wainer Representations and Warranties. All
respective representations and warranties by the Wainer Group and Paradigm in
this Agreement or in any written statement delivered by any of the Wainer Group
or Paradigm under this Agreement shall be true in all material respects on and
as of the Closing Date as though made at that time.
10.2 Approvals. This Agreement and each of the transactions
contemplated hereby and each of the obligations of the parties hereunder, shall
have been lawfully approved by (i) the partners of The Wainer Group; (ii) the
board of directors of Paradigm; and (iii) to the extent required by applicable
law, if any, by the shareholders of Paradigm.
10.3 Performance. Each and all of the Wainer Group and Paradigm shall
have performed, satisfied and complied with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by any of
the Wainer Group or Paradigm on or prior to the Closing Date; and such persons
shall not have breached or violated any of such provisions.
10.4 Opinion of the Wainer Group Counsel. Omnis shall have received
from Kenyons, counsel for the Wainer Group, an opinion dated as of the Closing
Date, in form and
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substance satisfactory to Omnis and its counsel, that under the laws of
Australia and any applicable jurisdiction:
(a) Paradigm is a corporation duly organized, validly existing
and in good standing under the laws of Australia and other applicable
jurisdiction and has all necessary corporate power to enter into this Agreement
and to perform its obligations hereunder; and all corporate action required to
be taken on its part to approve the execution and delivery of this Agreement and
the performance of its obligations hereunder has been duly taken.
(b) The Wainer Group is a general partnership duly organized,
validly existing and in good standing under the laws of Australia and other
applicable jurisdiction and has all necessary legal power to enter into this
Agreement and to perform its obligations hereunder; and all legal action
required to be taken on its part to approve the execution and delivery of this
Agreement and the performance of its obligations hereunder has been duly taken.
(c) The Wainer Group and Paradigm and each of them further has
the full right, power, legal capacity and authority to enter into, execute,
deliver and fully consummate this Agreement and all other required documents or
instruments hereunder.
(d) This Agreement and all other required documents or
instruments hereunder have been duly and validly authorized and executed and
delivered by the Wainer Group and Paradigm and each of them, and are valid and
binding on the Wainer Group and Paradigm and each of them and are enforceable in
accordance with their terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights and except that the availability of
equitable remedies may be subject to the discretion of a court of competent
jurisdiction.
(e) Except as set forth in Exhibit F (Disclosure Schedule),
such counsel has no actual knowledge of (i) any suit, action, arbitration, or
legal, administrative or other proceeding or investigation pending or threatened
in any jurisdiction against or affecting any of the Wainer Group or any
Affiliates or their respective businesses or properties or financial or other
condition, including but not limited to any of the Purchased Assets; or (ii) any
infringement or misappropriation by any of the Wainer Group or any Affiliate of
any intellectual property rights of any third person to the extent relevant to
any of the Purchased Assets; or (iii) any matter or condition that would render
any representation or warranty of any of the Wainer Group or Paradigm untrue as
of the relevant date in any material respect.
(f) Neither the execution nor delivery of this Agreement nor
the consummation of the transactions contemplated hereby will constitute (i) a
default, or an event that would with notice or lapse of time or both constitute
a default under, or (ii) a violation or breach of, the organizing or governing
instruments of any Wainer Group or any Affiliates, or any agreement, license,
franchise, mortgage, instrument or other undertaking to which any of the Wainer
Group or Affiliates is a party, or by which any of the Wainer Group or
Affiliates may be bound that is known to counsel, and not disclosed in Exhibit F
(Disclosure Schedule).
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10.5 Absence of Litigation. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
10.6 Consents. All necessary agreements and consents of any parties to
the consummation of the transactions contemplated by this Agreement and any
related agreement or instrument, or otherwise pertaining to such matters, shall
have been obtained by the Wainer Group and delivered to Omnis.
10.7 Approval of Documentation. The form and substance of all
certificates, instruments, opinions and other documents delivered to Omnis under
this Agreement shall be reasonably satisfactory to Omnis and its counsel.
10.8 Condition of Purchased Assets. The Purchased Assets shall not have
been materially or adversely affected in any manner.
10.9 Certification by the Wainer Group and Paradigm. Omnis shall have
received a certificate, dated as of the Closing Date and signed and verified by
an authorized officer of Paradigm and each of the partners of the Wainer Group,
certifying, in such detail as Omnis and its counsel may reasonably request, that
each and all of the foregoing conditions of Section 10.1 through Section 10.8
have been fulfilled.
10.10 Patentability of the Metamorph Software. The Software shall be
qualified for the issuance of a valid and enforceable Letters Patent by the
United States Patent and Trademark Office under United States law as to one or
more essential element of such Software, in the reasonable opinion of counsel
for Omnis.
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Section 11. CONDITIONS PRECEDENT TO THE WAINER GROUP PERFORMANCE
The obligations of the Wainer Group to sell and transfer the Purchased
Assets under this Agreement are subject to the satisfaction, at or before the
Closing, of all the following conditions. The Wainer Group may waive any or all
of these conditions in writing; provided however that no such waiver of a
condition shall constitute a waiver by the Wainer Group of any of its other
rights or remedies, at law or in equity, if Omnis shall be in default of any of
its representations, warranties or covenants under this Agreement or any related
agreement or instrument.
11.1 Accuracy of Omnis Representations And Warranties. All
representations and warranties by Omnis contained in this Agreement or in any
written statement delivered by Omnis under this Agreement shall be true on and
as of the Closing as though such representations and warranties were made on and
as of that date.
11.2 Omnis Performance. Omnis shall have performed and complied with
all covenants and agreements, and satisfied all conditions that Omnis is
required by this Agreement to perform, comply with or satisfy, before or at the
Closing.
11.3 Omnis Corporate Approval. Omnis shall have received corporate
authorization and approval for the execution and delivery of this Agreement and
all corporate action necessary or proper to fulfill the obligations of Omnis to
be performed under this Agreement on or before the Closing Date.
11.4 Opinion of Omnis Counsel. The Wainer Group shall have received
from Morrison & Foerster, LLP, counsel for Omnis, an opinion dated the Closing
Date, in form and substance satisfactory to Omnis and its counsel, that:
(a) Omnis is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
necessary corporate power to enter into this Agreement and to perform its
obligations hereunder; and all corporate action required to be taken on its part
to approve the execution and delivery of this Agreement and the performance of
its obligations hereunder has been duly taken.
(b) Under the laws of the State of California, this Agreement
has been duly and validly authorized and executed and delivered by Omnis, and is
valid and binding on Omnis and enforceable in accordance with its terms, except
as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement of
creditors' rights and except that the availability of equitable remedies may be
subject to the discretion of a court of competent jurisdiction, and further
subject to restrictions imposed by applicable securities laws.
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Section 12. OBLIGATIONS AFTER THE CLOSING
12.1 Access to Records. From and after the Closing, the Wainer Group
and Paradigm each shall allow Omnis and its counsel, accountants and other
representatives, such access to records which after the Closing are in the
custody or control of the Wainer Group or its Affiliates (as the case may be) as
Omnis reasonably requires in order to comply with its obligations under the law
or under any contracts assumed by Omnis pursuant to this Agreement. The Wainer
Group and Paradigm further agrees to deliver to Omnis all additional documents
that Omnis may reasonably request to evidence any ownership of the Purchased
Assets (including but not limited to non-disclosure agreements, employee
agreements, and agreements with the Wainer Group consultants by which such
consultants transferred their rights to the Wainer Group).
12.2 Further Assurances. The Wainer Group and Paradigm each agrees both
prior and after the Closing (a) to use all reasonable efforts to take, or cause
to be taken, all actions necessary or proper or advisable to consummate and make
effective the transactions contemplated by this Agreement; (b) to execute any
documents, instruments or conveyances of any kind which may be reasonably
necessary or advisable to carry out or perfect any of the transactions
contemplated hereunder; and (c) to reasonably cooperate with Omnis in connection
with the foregoing.
12.3 Exclusivity. In order for Omnis to obtain the full benefits of
exclusive ownership of the Software following the Closing, each of Paradigm and
the Wainer Group on their own behalf and on behalf of their respective
Affiliates, successors and assigns agrees to not manufacture or sell or license
or otherwise distribute or transfer any software similar to the Software or any
material component of the Software in any territory for a period of five (5)
years from the Closing, other than for Omnis or its successors or assigns. These
limitations shall not supersede and shall be in addition to all other rights and
remedies of Omnis hereunder.
12.4 Confidentiality.
(a) From and after the date of this Agreement, each of the
Wainer Group and Paradigm and their respective Affiliates shall maintain each
and all of the Confidential Information as confidential and secret; and shall
not disclose or cause the disclosure of any of the Confidential Information at
any time to any third person or entity for any purpose and shall undertake all
steps reasonably necessary to prevent such disclosure. Each of the Wainer Group
and Paradigm and their respective Affiliates further shall not use such
Confidential Information at any time for any purpose; and agrees that all of
their respective employees, contractors and agents shall be fully bound by these
restrictions and that said party shall liable for any breach by such person.
(b) These confidentiality and nondisclosure restrictions shall
not apply to information which is or becomes generally and readily known to the
public after the date of this Agreement other than as a result of a breach or
violation of the terms hereof by any of the Wainer Group or Paradigm or any
Affiliate thereof or any employee, contractor or agent
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thereof; or is required to be disclosed by involuntary process of law; or is
specifically approved for disclosure by the prior written consent of Omnis in
its sole discretion. The Wainer Group or Paradigm shall have the burden of
establishing the applicability of any of the foregoing exceptions.
(c) For these purposes "Confidential Information" collectively
means any and all technical or engineering information, source codes, know-how,
data, designs, plans, trade secrets, inventions, concepts, products, processes,
formulas, works in process, systems, technologies or applications and any other
confidential or proprietary information of Omnis, including but not limited to
the Proprietary Information as of and at all times following the Closing; and
the Proprietary Information prior to and through the Closing. Without limiting
the foregoing, no part of the Source Code or any essential structure of the
Software shall be disclosed by any of the Wainer Group or Paradigm or their
respective Affiliates to any third person or entity from and after the date of
this Agreement.
Section 13. COSTS AND EXPENSES
Except as provided herein, each of the parties shall pay all costs and
expenses incurred or to be incurred by such party in negotiating and preparing
this Agreement and in closing and carrying out the transactions contemplated by
this Agreement. Each Party shall bear its own income, sales, use, value added or
other taxes in connection with carrying out the transactions contemplated by
this Agreement; provided however that the Wainer Group shall be solely
responsible for all valued added or related taxes under the laws of Australia or
any jurisdiction within Australia.
Section 14. PARTIES; ASSIGNMENT
14.1 Parties in Interest. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is any provision in this Agreement intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over against any party to this Agreement.
14.2 Assignment. In addition to the other limitations set forth in this
Agreement, no party shall have the right to assign or transfer any of its rights
or obligations under this Agreement without the written consent of the other
party, which consent may be withheld in the sole discretion of such other party;
provided however that a party shall have the right to assign and transfer its
rights and obligations under this Agreement to a third person or entity
("Transferee") as part of the bonafide merger or consolidation or acquisition of
all or substantially all of the assets of such party with or by such Transferee,
provided further that (i) no party shall have any right of assignment and
transfer prior to the Closing under any circumstances, (ii) no assignment or
transfer shall release a party from any obligation or
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liability hereunder, and (iii) in the case of any proposed assignment or
transfer by Paradigm or any of the Wainer Group, the Transferee shall not be a
direct competitor of Omnis or its successor in the field of computer software
and shall not be affiliated or related to any such direct competitor.
14.3 Binding Effect. Subject to the foregoing restrictions on
assignment, this Agreement shall be binding on and shall inure to the benefit of
the parties and their respective parents, subsidiaries, affiliates, officers,
directors, employees, agents, representatives, owners, shareholders, partners,
heirs, devisees, spouses, legal representatives, successors and assigns, further
subject to the restrictions hereunder on transfer of the licenses granted to
Paradigm and transfer or encumbrance of any of the Purchased Assets by any of
the Wainer Group or any Affiliate at any time on or prior to the Closing.
Section 15. FORCE MAJEURE
No party shall be deemed in default in the performance of its
obligations under the Agreement to the extent such performance is temporarily
and materially prevented or delayed because of war, hostilities, riots, civil
commotion, epidemic, earthquake, accident, fire, wind, flood or any other act of
God, or by the order of any court or governmental authority of competent
jurisdiction pursuant to any proceeding not initiated by such party or any
Affiliate, provided that prompt notice of such force majeure shall given by such
party to each other party, followed within a reasonable period of time by
written confirmation. In such event the noticing party shall be temporarily
relieved of its obligations during the period of such event to the extent its
performance is prevented by such event; provided however that if any such period
of force majeure exceeds ninety (90) days, the affected party may then terminate
this Agreement immediately for cause by written notice in its sole discretion;
provided further that if such event of force majeure shall materially and
adversely affect the fundamental rights of Omnis intended by this Agreement,
Omnis also shall have the unilateral right to rescind this Agreement by written
notice in its sole discretion following said ninety-day period.
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Section 16. TERMINATION AND REMEDIES
16.1 Defaults Permitting Termination. Either Omnis on the one hand or
the Wainer Group acting jointly on the other hand ("Notice Party") may terminate
this Agreement for cause by written notice to the other party ("Defaulting
Party") in the event the Defaulting Party breaches or violates any material term
or condition or representation or warranty of this Agreement; provided that said
notice clearly identifies the alleged breach or violation and provided further
that the Defaulting Party shall have thirty (30) days from the date of said
notice from the Notice Party to fully cure any claimed breach or violation. If
the claimed breach or violation is fully cured by the Defaulting Party within
the 30-day cure period, no breach or violation of this Agreement shall be deemed
to have occurred. If any claimed breach or violation is not cured within the
30-day cure period, then upon expiration of said period this Agreement shall
terminate. Notwithstanding the foregoing, the right to cure shall not be
applicable to a series of related material breaches.
16.2 Survival of Covenants, Representations, Etc. All covenants,
representations or warranties of a party hereto, whether contained in this
Agreement or any Exhibit, and any and all claims or causes of action arising
hereunder, shall survive the Closing and the termination of this Agreement and
shall not terminate until the expiration of the relevant statute of limitations.
Without limiting the foregoing and in addition thereto, any termination of this
Agreement by Omnis as the result of the material breach (if any) of another
party to this Agreement shall not affect the exclusive ownership of the
Purchased Assets by Omnis pursuant to Section 2 hereof. No investigation made by
any party at any time shall limit the covenants, representations and warranties
of the parties to any extent.
16.3 Indemnification.
(a) Each party ("Indemnifying Party") shall fully indemnify,
hold harmless and defend each other party and its Affiliates, successors and
assigns from and against any and all claims, actions, causes of action,
liabilities, losses, damages, judgments and costs arising from or related to any
breach or violation of this Agreement by such Indemnifying Party, whether or not
caused in whole or in part by the negligence of the Indemnifying Party or
indemnified person or entity. The foregoing right of indemnity shall be in
addition to the other rights and remedies of the indemnified party hereunder.
(b) In the event that Omnis or any of its Affiliates,
licensees, successors or assigns (collectively "Omnis Parties") are held by the
final judgment of a court of competent jurisdiction in a contested proceeding to
be liable for any damages or liabilities or other obligations of any kind or are
materially prohibited or restricted from using or distributing any material part
of the Software or other Purchased Asset based on any claim that the Software or
any other Purchased Asset infringes on or misappropriates any patent, copyright,
trade secret, proprietary information or other legally enforceable intellectual
property right of any third party in any jurisdiction (collectively
"Infringement Obligations"), whether or not caused in whole or in part by the
negligence of the Wainer Group or any indemnified person or entity, then the
Wainer Group shall jointly and severally indemnify and hold harmless each of the
Omnis Parties from and against such Infringement Obligations; provided however
that such indemnity
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shall be limited to Fifty Percent (50%) of the aggregate fair market of all of
the Purchase Shares hereunder, with such fair market value of such Shares being
the lesser of the fair market value of such Shares as of the Closing or as of
the first date on which such Shares were freely tradeable under applicable
United States securities laws. The foregoing right of indemnity shall be in
addition to the other rights and remedies of Omnis or any Omnis Party hereunder.
(c) Paradigm also shall separately indemnify, hold harmless
and defend Omnis and its Affiliates, licensees, successors and assigns in full
from and against any and all claims, actions, causes of action, liabilities,
losses, damages, judgments and costs of any kind (including reasonable
attorneys' fees) to the extent based on any claim that any Paradigm Product
either alone or when used in conjunction with any version of the Metamorph
software infringes on or misappropriates any patent, copyright, trade secret,
proprietary information or other legally enforceable intellectual property right
of any third party in any jurisdiction ("Infringement Claim"), whether or not
caused in whole or in part by the negligence of Paradigm or any indemnified
person or entity; and to the extent not indemnified by the foregoing Section
16(b). The foregoing right of indemnity shall be in addition to the other rights
and remedies of Omnis or any Omnis Party hereunder.
Section 17. NOTICES
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date of service if served personally on the party to whom notice is to be given,
or seven (7) calendar day after mailing if mailed to the party to whom notice is
to be given, by first class mail registered or certified, postage prepaid, and
properly addressed as follows:
If to Omnis, to:
Omnis Technology Corporation
981 Industrial Road, Building B
San Carlos, California 94070 USA
Attn: James Dorst, Chief Operating Officer
Facsimile No: (650) 551-7540
Telephone No: (650) 632-7114
with a copy to:
Stafford Matthews, Esq.
Morrison & Foerster, LLP
425 Market Street
San Francisco, California 94105 USA
Facsimile No: (415) 268-7522
Telephone No: (415) 268-6465
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If to the Wainer Group or Paradigm, to:
Mr. Dirk Wainer
Mr. Stephen Miles
Suite 2 No. 1 Redland Drive
Mitcham 3132
Melbourne, Australia
Facsimile No: 61-3-9872-6135
Telephone No: 61-3-9872-3533
with a copy to:
Gary Allwood, Esq.
Kenyons Lawyers
Level 1, 69 Flemington Road
North Melbourne 3051
Australia
Facsimile No: 61-3-9329-8874
Telephone No: 61-3-9329-5151
Any party may change its address for purposes of this Section by giving
the other parties written notice of the new address in the manner set forth
above.
Section 18. GOVERNING LAW
This Agreement shall be construed in accordance with and governed by
the laws of the State of California, United States of America, as applied to
contracts made and performed within the State of California and without
reference to conflicts of laws principles. This Agreement will not be governed
by the United Nations Convention of Contracts for the International Sale of
Goods, the application of which is hereby expressly excluded.
Section 19. MISCELLANEOUS
19.1 Headings; Interpretation. The subject headings of the sections and
paragraphs of this Agreement are included for purposes of convenience only, and
shall not affect the construction or interpretation of any of its provisions.
When the context requires, the plural shall include the singular and the
singular the plural, and any gender shall include all other genders.
19.2 Entire Agreement; Modification; Waiver. This Agreement and all
Exhibits hereto constitutes the entire agreement among the parties relating to
the subject matter hereof and supersedes all prior and contemporaneous
agreements, representations, warranties and understandings of the parties,
provided however that any confidential information under any
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prior confidentiality agreement between the parties shall be part of the
Confidential Information hereunder. No amendment or modification or waiver of
any provision of this Agreement shall be effective unless in writing and signed
by authorized representatives of both parties with reference to this Agreement.
No waiver by any party of a breach or violation of this Agreement or any failure
to exercise any right hereunder shall operate or be construed as a waiver of any
subsequent breach or violation of the same or of a different kind.
19.3 Severability. In the event any part of this Agreement is held
invalid or unlawful by the final judgment of a court of competent jurisdiction,
the remainder of the Agreement shall remain in full force and effect; provided
however that if any material part of Section 2 of this Agreement is held invalid
or unenforceable, then Omnis shall have the unilateral right to rescind this
Agreement.
19.4 Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but together
shall constitute one and the same instrument.
Section 20. ALTERNATIVE DISPUTE RESOLUTION
If any dispute between the parties arises out of or relates to this
Agreement, or the breach or violation thereof, the parties agree to the
following binding alternative dispute resolution procedures in lieu of
litigation:
20.1 Informal Meeting. Within five (5) business days of receipt by one
party of a written claim or notice of dispute by the other party, the parties
shall commence good faith negotiations to settle the dispute.
20.2 Mediation. If the dispute cannot be settled through negotiation
after ten (10) days, the parties agree to attempt in good faith to settle the
dispute by prompt mediation administered by the American Arbitration Association
under its Commercial Mediation Rules before resorting to arbitration. All
mediation shall be conducted in Honolulu, Hawaii, United States of America. Each
party shall bear its own costs and one-half of any mediation fees and costs.
20.3 Arbitration. Any remaining controversy or claim following
mediation shall be settled and determined by arbitration administered by the
American Arbitration Association under its Commercial Arbitration Rules. All
arbitration shall be conducted in Honolulu, Hawaii, United States of America, by
a single neutral arbitrator.
20.4 Decision of Arbitrator. The final decision of the arbitrator shall
be final and binding and nonappealable on both parties and shall be enforceable
in any court of competent jurisdiction. The arbitrator also shall determine
which is the prevailing party and shall include in the award or relief the
reasonable attorney's fees and costs of such prevailing party in the
arbitration. The arbitrator shall make his or her decision based upon the
applicable principles
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under the governing law as herein provided, and upon the evidence presented by
the parties, and at the request of any party prior to conclusion of the hearing,
shall provide a written reasoned decision which shall include findings of fact
and conclusions of law supporting the decision.
20.5 Proceeding to Confirm, Correct or Vacate Award. No party shall be
precluded hereunder from petitioning a court of competent jurisdiction to
confirm, correct or vacate any award as provided by California Code of Civil
Procedure Section 1285 et seq. as then amended or superseded; and neither party
waives any right to do so under applicable law.
20.6 Emergency Relief. Any party may seek emergency or temporary
injunctive remedies in any court of competent jurisdiction in aid of its claims
for relief in the arbitration notwithstanding this agreement to arbitrate;
provided that such action shall not be deemed a waiver of the right to arbitrate
the merits of the dispute.
/
/
/
/
/
/
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IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
on the day and year first above written.
Omnis Technology corporation
Date: ________________________________
By: James Dorst
Its: Chief Operating Officer
Witness:________________________
PARADIGM DESIGNS SOFTWARE PTY LTD.
Date: ________________________________
By:_____________________________
Its:____________________________
Witness:________________________
THE WAINER GROUP
Date: ________________________________
By:_____________________________
Its:____________________________
Witness:________________________
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Date: ________________________________
DIRK WAINER
Witness: _____________________
Date: ________________________________
SHIRLEY-ANNE WAINER
Witness:________________________
Date: ________________________________
DENNIS JANOSSICH
Witness:________________________
Date: ________________________________
JOSEPH BERNARD
Witness:________________________
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CONSENT OF SPOUSE
I, ______________________________, the spouse of ____________________
________________________________________________________________ , have read and
approved the foregoing Asset Purchase Agreement between Omnis Technology
Corporation ("Omnis") and the Wainer Group and Paradigm Designs Software Pty
Ltd. (the "Agreement"). In consideration of granting of rights and benefits to
my spouse under the terms and conditions of the Agreement, including certain
rights in shares of the stock of Omnis, and acknowledging the material reliance
of Omnis on this Consent, I hereby irrevocably appoint my spouse as my
attorney-in-fact in respect to the exercise of any rights under the Agreement
and any shares of stock or other property issued or transferred thereunder, and
agree to be fully bound by all of the provisions of the Agreement insofar as I
may have any rights under such Agreement or in any shares of stock or other
property issued or transferred thereunder under any laws relating to marital
property or marital rights or otherwise then in effect in any applicable
jurisdiction. I further acknowledge that in the event of the issuance of any
shares of stock or other property, such shares of stock or other property may be
issued solely in the name of my spouse and that neither Omnis nor its successors
shall have any other obligations with respect thereto.
Dated: ___________________, 2000.
_____________________________________
Name: _______________________________
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EXHIBIT G
WAINER GROUP PIGGYBACK REGISTRATION RIGHTS
1. PIGGYBACK REGISTRATION RIGHTS.
1.1 Piggyback Rights. If (but without any obligation to do so) Omnis
proposes to register any of its capital stock under the United States Securities
Act of 1933 (the "Act") in connection with the public offering of such stock
(other than (i) a registration effected by Omnis for Astoria Capital Partners,
LP or its successors or assigns (regardless of whether Omnis also registers
stock for its own account in connection therewith), (ii) a registration relating
solely to the sale of securities to participants in an Omnis stock option or
stock rights or stock purchase plan, (iii) a registration relating to a
corporate reorganization or other transaction under Rule 145 of the Act, (iv) a
registration on any form that does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Purchase Shares, or (v) a registration in which the
only Common Stock being registered is Common Stock issuable upon conversion of
debt securities that are also being registered), Omnis shall, at such time,
promptly give the Wainer Group written notice of such registration. Upon the
written request of the Wainer Group given within thirty (30) days after mailing
of such notice by Omnis, Omnis shall, subject to the provisions of Section 1.4
hereof, use its commercially reasonable efforts to cause a registration
statement to become effective, which includes all of the Purchase Shares that
the Wainer Group requests to be registered by such notice and for which the
Wainer Group (or its individual members) is then the shareholder of record. Such
Shares subject to these piggyback registration rights shall not include any of
the Purchase Shares referred to in Section 3.2(b) of the Agreement at any time
prior to the issuance of such Shares to the Wainer Group following the
performance of all applicable obligations of the Wainer Group relating to the
Metamorph Web Version under the Agreement. The Wainer Group acknowledges that
registration of securities by Omnis may give rise to piggyback registration
rights of other stockholders, which may affect the Wainer Group's rights as
described hereunder.
1.2 Right to Terminate Registration. Omnis shall have the right to
terminate or withdraw any registration initiated by it under this Section prior
to the effectiveness of such registration whether or not the Wainer Group has
elected to include securities in such registration.
1.3 Expenses of Registration. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to this Section, including without limitation all
registration, filing and qualification fees (including Blue Sky fees), printers'
and accounting fees, and fees and disbursements of counsel for Omnis shall be
borne by Omnis. Any fees or disbursements of counsel for the Wainer Group shall
be borne by the Wainer Group.
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1.4 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the capital stock of Omnis, Omnis shall
not be required under this Section to include any of the Purchase Shares in such
underwriting unless the Wainer Group accepts the terms of the underwriting as
agreed upon between Omnis and the underwriters selected by it (or by other
persons entitled to select the underwriters) and enters into an underwriting
agreement in customary form with an underwriter or underwriters selected by
Omnis. If the total amount of securities, including Purchase Shares, requested
by stockholders or other securities holders to be included in such offering
exceeds the amount of securities sold other than by Omnis that the underwriters
determine in their sole discretion is compatible with the success of the
offering, then Omnis shall be required to include in the offering only that
number of such securities, including Purchase Shares, that the underwriters
determine in their sole discretion will not jeopardize the success of the
offering (the securities so included to be apportioned pro rata among the
selling stockholders according to the total amount of securities entitled to be
included therein owned by each selling stockholder or in such other proportions
as may be mutually agreed to by such selling stockholders).
1.5 Information from the Wainer Group. It shall be a condition
precedent to the obligations of Omnis to take any action pursuant to this
Section with respect to the Purchase Shares that the Wainer Group shall furnish
to Omnis such information regarding itself and its individual members, the
Purchase Shares held by such Group or its members, and the intended method of
disposition of such securities as shall be reasonably required to effect the
registration of the Purchase Shares.
1.6 No Delay of Registration. The Wainer Group shall not have any right
to obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section.
2. INDEMNIFICATION
In the event any Purchase Shares are included in a registration
statement under Section 1 hereof:
2.1 Omnis Indemnity. To the extent permitted by law, Omnis will
indemnify, defend and hold harmless the Wainer Group, the partners or officers,
directors, stockholders, legal counsel and accountants for the Wainer Group, any
underwriter (as defined in the Act) for the Wainer Group and each person, if
any, who controls the Wainer Group or underwriter, within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (each an "Indemnified Person"), against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or any state securities laws, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or
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supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by Omnis of
the Securities Act, the Exchange Act, any state securities laws or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities laws in connection with such registration; and Omnis will reimburse
each Indemnified Person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided however that the
indemnity agreement contained in this Section 2.1 shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of Omnis (which consent shall not be
unreasonably withheld), nor shall Omnis be liable in any such case for any such
loss, claim, damage, liability or action to the extent that it arises out of or
is based upon a Violation that occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any Indemnified Person; provided further, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Person from whom the person
asserting any such losses, claims, damages or liabilities purchased shares in
the offering, if a copy of the prospectus (as then amended or supplemented if
Omnis shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Indemnified Person to such person, if required
by law so to have been delivered, at or prior to the written confirmation of the
sale of the shares to such person, and if the prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.
2.2 Wainer Group Indemnity. To the extent permitted by law, the Wainer
Group and each of them will jointly and severally indemnify, defend and hold
harmless Omnis, each of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls Omnis within the
meaning of the Securities Act, legal counsel and accountants for Omnis, any
underwriter, any other stockholder selling securities in such registration
statement and any controlling person of any such underwriter or other
stockholder, against any losses, claims, damages or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
Securities Act, the Exchange Act or any state securities laws, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation (but excluding clause (iii) of the definition
thereof), in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by the Wainer Group expressly for use in connection with such
registration; and the Wainer Group will reimburse any person intended to be
indemnified pursuant to this Section 2.2 for any legal or other expenses
reasonably incurred by such person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided however that the
indemnity agreement contained in this Section 2.2 shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Wainer Group (which consent
shall not be unreasonably withheld).
2.3 Prompt Notice Required. Promptly after receipt by an indemnified
party under this Section 2 of actual knowledge of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be
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made against any indemnifying party under this Section 2, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided however that an indemnified party
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
2 to the extent of such prejudice, but the omission to so deliver written notice
to the indemnifying party will not relieve it of any liability that it may have
to any indemnified party otherwise than under this Section 2.3.
2.4 Alternative Relief. If the indemnification provided for in this
Section 2 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
and the relative benefits received by the indemnifying party on the one hand and
of the indemnified party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage or expense, as
well as any other relevant equitable considerations, provided that no person
guilty of fraud shall be entitled to contribution. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission. The relative benefits received by the
indemnifying party and the indemnified party shall be determined by reference to
the net proceeds and underwriting discounts and commissions from the offering
received by each such party.
2.5 Underwriting Agreement. Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions of this Section 2, the
provisions in the underwriting agreement shall control.
2.6 Survival. The obligations of Omnis and the Wainer Group under this
Section 2 shall survive the completion of any offering of the Purchase Shares in
a registration statement under Section 1 hereof, and otherwise.
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3. NO ASSIGNMENT
The rights to cause Omnis to register Purchase Shares hereunder may not
be assigned or transferred by the holder thereof at any time other than by Will
or the laws of descent and distribution upon the death of the holder (and only
then subject to all related obligations).
4. TERMINATION OF REGISTRATION RIGHTS
The Wainer Group shall not be entitled to exercise any right provided
for in Section 1 hereof after three (3) years following the Closing Date (as
defined in the Agreement), or such earlier time at which all Purchase Shares of
the relevant holder can be sold in any three (3) month period without
registration in compliance with Rule 144 of the Act.
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