AGREEMENT OF MERGER AND PLAN OF REORGANIZATION

AGREEMENT OF MERGER AND

PLAN OF REORGANIZATION

by and among

OMNIMMUNE HOLDINGS, INC.,

OMNIMMUNE ACQUISITION CORP.

and

OMNIMMUNE CORP.

AUGUST 7, 2008

 

 

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

RECITALS

AGREEMENT

1.1   Merger.  Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time (as defined below), Omni shall be merged with and into MergerSub, and the separate existence of Omni shall cease.  Following the Effective Time, MergerSub will continue as the Surviving Company and shall be a wholly-owned subsidiary of Holdings.  The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL and the TBCA.  Without limiting the generality of the foregoing, at the Effective Time, except as otherwise provided herein, all the property, rights, privileges, powers and franchises of Omni and MergerSub shall vest in the Surviving Company, and all debts, liabilities and duties of Omni and MergerSub shall become the debts, liabilities and duties of the Surviving Company.

1.2   Closing; Effective Time.  The consummation of the Merger (the “ Closing ”) shall take place at the offices of McDaniel & Henry, LLP, or some other location mutually agreed upon by the Parties, at 9:00 a.m. Eastern Time on or around August 7, 2008 (the “Closing Date ”). Contemporaneously with the Closing, a properly executed certificate of merger conforming to the requirements of the DGCL and TBCA (the “ Certificate of Merger ”) shall be filed with the office of the Secretary of State of the State of Texas and the Secretary of State of the State of Delaware.  The Merger shall become effective only upon the acceptance of the Certificate of Merger by the Secretary of State of Texas and the Secretary of State of the State of Delaware (the “ Effective Time ”).

1.3   Corporate Structure of the Surviving Company; Election of Officers and Directors.  Unless otherwise mutually determined by Holdings, MergerSub and Omni prior to the Effective Time: (i) the certificate of incorporation of MergerSub immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Company upon and after the Effective Time; provided, however the name of MergerSub after the Effective Time shall be changed to Omnimmune Corp., and (ii) the bylaws of MergerSub immediately prior to the Effective Time shall be the bylaws of the Surviving Company upon and after the Effective Time.  In addition, MergerSub, prior to the Effective Time, will nominate the individuals set forth on Exhibit B attached hereto as directors for the MergerSub’s board of directors.  Upon the Closing of the Merger the board of directors of MergerSub shall become the board of directors of the Surviving Company.

1.4   Merger Consideration; Conversion of Omni Common Stock; Exchange of Omni Warrants; Exchange of Omni Options; Exchange of Omni Convertible Debt. The following consideration shall be payable to the holders of Omni Securities as a result of the Merger: (i) 5,107,721 shares of Holdings Common Stock (the “ Stock Merger Consideration ”); (ii) Holdings Warrants to purchase an aggregate of 249,388 shares of Holdings Common Stock (the “ Warrant Merger Consideration ”); (iii) Holdings Options to purchase an aggregate of 2,250,000 shares of Holdings Common Stock (the “ Option Merger Consideration ”); and (iv) Holdings Convertible Debt convertible into 1,019,360 shares of Holdings Common Stock (the “ Debt Merger Consideration ”).  At the Effective Time and without any further action on the part of Holdings, MergerSub, Omni or any other Person:

(b)   Each Omni Warrant outstanding as of immediately prior to the Effective Time shall be exchanged for a Holdings Warrant to purchase one (1) share of Holdings Common Stock for each share of Omni Common Stock underlying such Omni Warrant at a per share exercise price equal to the exercise price applicable to each such Omni Warrant, and upon such other terms and conditions provided with respect to such Omni Warrant.

 

(c)   Each Omni Option outstanding as of immediately prior to the Effective Time shall be exchanged for a Holdings Option to purchase one (1) share of Holdings Common Stock for each share of Omni Common Stock underlying such Omni Option at a per share exercise price equal to the exercise price applicable to each such Omni Option, and upon such other terms and conditions provided with respect to such Omni Option.

 

(d)   Each Omni Convertible Note outstanding as of immediately prior to the Effective Time shall be exchanged for Holdings Convertible Debt convertible into one (1) share of Holdings Common Stock for each share of Omni Common Stock underlying such Omni Convertible Note at a per share conversion price equal to the conversion price applicable to each such Omni Convertible Note, and upon such other terms and conditions provided with respect to such Omni Convertible Note.

 

(e)   Notwithstanding the foregoing, Applicable Merger Consideration shall not be payable at or after the Effective Time with respect to any Dissenting Shares (as defined in Section 1.7  hereafter) or any shares of Omni Common Stock with respect to which dissenters’ rights have not terminated.  In the case of Dissenting Shares, payment shall be made in accordance with the TBCA.  In the case of any shares with respect to which dissenters’ rights have not terminated as of the Effective Time, if such shares of Omni Common Stock become Dissenting Shares, payment shall be made in accordance with TBCA, and if, instead, the dissenters’ rights with respect to such shares of  Omni Common Stock irrevocably terminate after the Effective Time, such shares shall be entitled only to receive the Applicable Merger Consideration upon delivery of the Certificate(s) representing the applicable shares of Omni Common Stock.

1.5   Closing of Omni’s Transfer Books.  At the Effective Time, each of the holders of capital stock of Omni shall cease to have any rights as a stockholder of Omni (except as set forth in this Agreement with respect to the Applicable Merger Consideration), and the stock transfer books of Omni shall be closed with respect to all shares of capital stock of Omni outstanding immediately prior to the Effective Time.  No further transfer of any such shares of capital stock of Omni shall be made on such stock transfer books after the Effective Time.  If, after the Effective Time, a valid certificate previously representing any shares of capital stock of Omni (each, a “ Omni Stock Certificate ”), or a valid instrument previously representing any Omni Convertible Debt (each, a “ Omni Convertible Debt Certificate ” ) , or Omni Option (an “ Omni Option ”), or Omni Warrant (an “ Omni Warrant ”)   presented to Holdings, such Omni Stock Certificate, Omni Convertible Debt Certificate, Omni Option or Omni Warrant shall be cancelled and exchanged as provided in Section 1.6 .

(a)   At the Closing or as soon as reasonably practicable thereafter: (i) the holders of Omni Securities will provide to Holdings (1) completed and executed letters of transmittal in customary form for use in effecting the surrender of all Omni Securities in exchange for the Applicable Merger Consideration, and (2) all Omni Stock Certificates, Omni Convertible Debt Certificates, Omni Options and Omni Warrants; and (ii) Holdings will provide to each holder of Omni Securities (A) a certificate representing that number of shares of Holdings Common Stock representing such holder’s portion of the Stock Merger Consideration (as determined in accordance with Section 1.4 ), (B) a Holdings Warrant to purchase that number of shares of Holdings Common Stock representing such holder’s portion of the Warrant Merger Consideration (as determined in accordance with Section 1.4 ), (C) a Holdings Option to purchase that number of shares of Holdings Common Stock representing such holder’s portion of the Option Merger Consideration (as determined in accordance with Section 1.4 ), and (D) Holdings Convertible Debt convertible into that number of shares of Holdings Common Stock representing such holder’s portion of the Debt Merger Consideration (as determined in accordance with Section 1.4 ).  No fractional shares of Holdings Common Stock shall be issued in, or as a result of, the Merger.  Any fractional share of Holdings Common Stock that a holder of record of Omni Securities would otherwise be entitled to receive as a result of the Merger shall be aggregated.  If a fractional share of Holdings Common Stock results from such aggregation, the number of shares required to be issued to such record holder shall be rounded up to the nearest whole number of shares of Holdings Common Stock.  All Omni Stock Certificates, Omni Convertible Debt Certificates, Omni Options and Omni Warrants shall be canceled after such delivery.  Until surrendered as contemplated by this Section 1.6 , each Omni Stock Certificate (other than any Omni Stock Certificate representing Dissenting Shares), Omni Convertible Debt Certificate, Omni Option and Omni Warrant shall be deemed, from and after the Effective Time, to represent only the right to receive the Applicable Merger Consideration in accordance with this Agreement.

(b)   Holdings shall be entitled to deduct and withhold from the Applicable Merger Consideration payable or otherwise deliverable to any holder of Omni Securities pursuant to this Agreement such amounts as Holdings is required to deduct or withhold therefrom under the Code or under any provision of state, local or foreign tax law.  To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the holder of Omni Securities to whom such amounts would otherwise have been paid.

(c)   The Holdings Common Stock, Holdings Options, Holdings Convertible Debt and Holdings Warrants to be issued pursuant to this Section 1 shall not have been registered and shall be characterized as “restricted securities” under the federal securities laws, and under such laws such shares may be resold without registration under the Securities Act only in certain limited circumstances.  Each certificate evidencing Holdings Common Stock, Holdings Options, Holdings Convertible Debt and Holdings Warrants to be issued pursuant to this Section 1 shall bear the following legend:

(d)   If any Omni Stock Certificate, Omni Convertible Debt Certificate, Omni Option or Omni Warrant shall have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the Person claiming such Omni Stock Certificate, Omni Convertible Debt Certificate, Omni Option or Omni Warrant to be lost, stolen, or destroyed and, if required by the Surviving Company, the posting by such Person of a bond in such reasonable amount as the Surviving Company may direct as indemnity by such Person against any claim that may be made against the Surviving Company in respect of such Omni Stock Certificate, Omni Convertible Debt Certificate, Omni Option or Omni Warrant, Holdings will deliver in exchange for such lost, stolen, or destroyed Omni Stock Certificates, Omni Convertible Debt Certificate, Omni Option and Omni Warrant the Applicable Merger Consideration in respect of Omni securities formerly represented thereby.

1.7   Dissenters’ Rights.  Notwithstanding anything in this Agreement to the contrary, shares of capital stock of Omni held by a holder who, pursuant to the TBCA or any successor provision, has the right to dissent to the Merger and demand payment for such shares, and who properly dissents and demands payment for the fair value of such shares of capital stock of Omni (“ Dissenting Shares ” ) in accordance with the TBCA, shall not be converted into the right to receive the Applicable Merger Consideration as set forth in Section 1.4 , unless such holder withdraws, fails to perfect or otherwise loses such holder’s right to such payment, if any.  If, after the Effective Time, such holder withdraws, fails to perfect or loses any such right to payment, such holder’s Dissenting Shares shall be treated as having been converted as of the Effective Time into the right to receive the Applicable Merger Consideration.  At the Effective Time, any holder of Dissenting Shares shall cease to have any rights with respect thereto, except the rights provided in the TBCA and as provided in the immediately preceding sentence.  Omni shall give prompt notice to Holdings of any demands received by Omni for appraisal of shares of capital stock of Omni and the opportunity to participate in all negotiations and proceedings with respect to any such demand.  Except to the extent otherwise required by the TBCA, Omni shall not make any payment or settlement offer prior to the Effective Time with respect to any such demand unless Holdings shall have consented in writing to such payment or settlement offer.

1.8   Tax Consequences.  For federal income tax purposes, the Merger is intended to constitute a reorganization within the meaning of Section 368 of the Code, and the Parties shall report the transactions contemplated by this Agreement consistent with such intent and shall take no position in any Tax filing or Legal Proceeding inconsistent therewith.  The Parties to this Agreement hereby adopt this Agreement as a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.  None of Holdings, MergerSub, the Surviving Company or Omni has taken or failed to take, and after the Effective Time, Holdings and the Surviving Company shall not take or fail to take, any action which reasonably could be expected to cause the Merger to fail to qualify as a reorganization within the meaning of Section 368(a) of the Code.

 

1.9   Further Action.  If, at any time after the Closing Date, any further action is determined by the Surviving Company to be necessary or desirable to carry out the transactions contemplated by this Agreement or to vest the Surviving Company with full right, title and possession of and to all rights and property of Omni, the officers and directors of the Surviving Company shall be fully authorized (in the name of Omni or otherwise) to take such action.

2.   REPRESENTATIONS AND WARRANTIES OF COMPANY.   Except as set forth on the Schedules hereto, Omni hereby represents, warrants and covenants as of the date hereof, to and for the benefit of Holdings, MergerSub and the Surviving Company, as follows:

2.1   Due Organization.   Omni is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas and has all necessary power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; (ii) to own and use its assets in the manner in which its assets are currently owned and used; and (iii) to perform its obligations under all Omni Contracts.  Omni is not and has not been qualified, authorized, registered or licensed to do business as a foreign corporation in any jurisdiction.  

2.2   Subsidiaries.  Omni has no Subsidiaries other than In Vitro Technologies, Inc. (“In Vitro”), a New York corporation, which has been dissolved by proclamation for failure to file state franchise tax returns and conducts no business operations and has no material assets.  Omni is, directly or indirectly, the record and beneficial owner of all of the outstanding shares of capital stock of In Vitro.  All of such shares so owned by Omni are validly issued, fully paid and non-assessable. !

(a)   The authorized capital stock of Omni consists of: (i) 300,000,000 shares of Omni Common Stock, of which 5,107,721 shares are issued and outstanding, and (ii) 10,000,000 shares of Omni Preferred Stock, of which no shares are outstanding.  All of the issued and outstanding shares of Omni capital stock have been duly authorized and validly issued and are fully paid and nonassessable. All of the outstanding shares of Omni capital stock are owned, beneficially and of record, by those stockholders set forth on the most recent stockholders list attached as part of Schedule 2.3(a) .  No shares of capital stock of Omni are subject to a repurchase option in favor of Omni.

 

(b)   Except as set forth on Schedule 2.3(b) , to Omni’s knowledge, there are no: (i) outstanding subscriptions, options, calls, warrants or rights (whether or not currently exercisable) to acquire any shares of capital stock of Omni or other securities of Omni; (ii) outstanding securities, notes, instruments or obligations that are or may become convertible into or exchangeable for any shares of capital stock of Omni or other securities of Omni; (iii) outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the capital stock of Omni; (iv) Omni Contracts (other than this Agreement) under which Omni is or may become obligated to sell, transfer, exchange or issue any shares of capital stock of Omni or any other securities of Omni; (v) agreements, voting trusts, proxies or understandings with respect to the voting, or registration under the Securities Act, or any shares of Omni; or (vi) conditions or circumstances that may give rise to or provide a basis for the assertion of a claim by any Person to the effect that such Person is entitled to acquire or receive any shares of capital stock or other securities.

 

2.4   Authority; Binding Nature of Agreement.  Omni has all necessary corporate power and authority to enter into and to perform its obligations under this Agreement, and the execution, delivery and performance by Omni of this Agreement have been duly authorized by all necessary action on the part of Omni.  The Agreement constitutes the valid and binding obligation of Omni, enforceable against Omni in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

 

2.5   Non-Contravention.  Neither the execution, delivery or performance of this Agreement, nor the consummation of any of the transactions contemplated hereby, will directly or indirectly (with or without notice or lapse of time): (i) result in a violation of any of the provisions of Omni’s Articles of Incorporation or Bylaws, each as currently in effect; (ii)  result in a violation of, or give any Governmental Body or other Person the right to challenge any of the transactions contemplated hereby or to exercise any remedy or obtain any relief under any, Legal Requirement or any Order to which Omni, or any of the assets owned, used or controlled by Omni, is subject; or (iii) result in a violation or breach of, or result in a default under, with or without notice or lapse of time, any provision of any material Omni Contract, except where the violation, right to challenge, exercise of any remedy, relief, breach or default would not result in a Material Adverse Effect.

2.7   Omni Financial Statements.  Omni has furnished to Holdings (or will furnish to it when available, but in any event prior to the Closing Date) a complete and correct copy of Omni’s audited financial statements for the years ended December 31, 2007, 2006 and 2005 and the unaudited financial statements for the three months ended March 31, 2008 (the “Most Recent Financial Statements”)(collectively, the “ Omni Financial Statements ”).  Omni Financial Statements (including the notes thereto, if any) are consistent with the books and records of Omni and present fairly the assets, liabilities, financial condition and results of operations of Omni, as at the dates and for the periods indicated, have been prepared in accordance with GAAP, provided, however, that the Most Recent Financial Statements are subject to normal year-end adjustments and lack footnotes and other presentation items, and have been prepared in good faith by Omni’s management from the books and records of Omni.  The books and records of Omni are true, accurate and complete in all material respects.

(b)   Schedule 2.9(b) identifies in all material respects: (i) all Intellectual Property Rights or Intellectual Property licensed to Omni (other than any non-customized software that is so licensed solely in executable or object code form pursuant to a non-exclusive, internal-use software license or is generally publicly available on standard terms for less than $1,000); and (ii) the corresponding Omni Contract pursuant to which such Intellectual Property Rights or Intellectual Property are licensed (the “ Omni IP ”).  Neither the Merger nor any of the other transactions contemplated by this Agreement will materially adversely alter or impair the Surviving Company’s Intellectual Property Rights or Intellectual Property licensed to Omni.

 

(c)   There are no Omni Contracts pursuant to which any Person has been granted any license under, or otherwise has received or acquired any right (whether or not currently exercisable) or interest in, any of the Omni IP.  

 

(d)   To Omni’s Knowledge, no Person has infringed, misappropriated or otherwise violated or is currently infringing, misappropriating or otherwise violating any Omni IP.

 

(e)   To Omni’s Knowledge, none of Omni IP licensed by Omni currently infringes, misappropriates or otherwise violates or has ever infringed (directly, contributorily, by inducement or otherwise), misappropriated or otherwise violated any Intellectual Property Right of any other Person.  Without limiting the generality of the foregoing, no infringement, misappropriation or similar claim or Legal Proceeding is pending against Omni or, to Omni’s Knowledge, has been threatened against Omni with respect to any Omni IP or the Omni business as currently conducted.

2.10   Contracts.   Schedule 2.10 identifies each Omni Contract and provides an accurate description of the terms of each Omni Contract that is not in written form.  Each material Omni Contract is valid, binding and enforceable by Omni in accordance with its terms subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.  Omni is not in default under, any material Omni Contract, and, to Omni’s Knowledge, no other Person has violated or breached, or committed any default under, any material Omni Contract.   Schedule 2.10 provides an accurate and complete list of all Consents required under any material Omni Contract to consummate the transactions contemplated hereby.

2.11   Finder’s Fee.  Except as set forth on Schedule 2.11 , no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Merger or any of the other transactions contemplated hereby based upon any arrangements or agreements made by or on behalf of Omni.

2.12   Compliance with Legal Requirements.  Except as otherwise disclosed in any schedule provided in connection with this Agreement, to the Knowledge of Omni, Omni is, and has at all times been, in compliance in all material respects with all applicable Legal Requirements, except to the extent that failure to comply would not be likely to have a Material Adverse Effect on Omni.  Other than tax liens, which have been terminated, released and cancelled in full,   Omni has never received any notice or other communication from any Person regarding any actual or possible violation of, or failure to comply with, any Legal Requirement with which Omni is obligated to comply.  Omni has obtained all material permits, certificates and licenses required by any Legal Requirement for the conduct of its business and the ownership of its assets.  Omni is not in violation of any such permit, certificate or license, and no Legal Proceedings are pending or, to the Knowledge of Omni, threatened to revoke or limit any such permit, certificate or license.

2.13   Legal Proceedings.  There is no pending Legal Proceeding, and to Omni’s Knowledge, no Person has threatened to commence any Legal Proceeding, that (i) involves or affects Omni or any of the assets owned or used by  Omni, or (ii) that challenges the Merger or any of the other transactions contemplated hereby.  No Legal Proceeding has ever been commenced that involves or affects Omni or the assets owned by Omni.  There is no Order in which Omni is named or to which any of the assets of Omni is subject.

2.14   No Undisclosed Liabilities.  Omni has no Liabilities, except for (i) Liabilities reflected on the Omni Financial Statements, including, without limitation, any footnote thereto, (ii) accounts payable incurred in the ordinary course of business since the date of the last balance sheet reflected in the Omni Financial Statements, none of which are material in nature or exceed $150,000, in the aggregate, (iii) Liabilities under Omni Contracts, (iv) Liabilities incurred in connection with the negotiation of this Agreement and the transactions contemplated hereby, and (v) Liabilities incurred in connection with the issuance of Omni Convertible Debt.

2.15   Absence of Certain Changes.   Since the date of the Omni Financial Statements, Omni has conducted its business as ordinarily conducted consistent with past practice and, other than its increase in the financial obligations otherwise described in this Agreement, there has not occurred any change, event or condition (whether or not covered by insurance) that has resulted in, or would reasonably be expected to result in any Material Adverse Effect on Omni.

2.16   Tax Matters.   Except as otherwise set forth on Schedule 2.16 , all Tax Returns required to be filed by or on behalf of Omni with any Governmental Body before the Closing Date (the “ Omni Returns ” ) : (i) have been or will be filed on or before the applicable due date (including any extensions of such due date); (ii) have been, or will be when filed, accurately and completely prepared in all material respects in compliance with all applicable Legal Requirements; and (iii) have been provided or made available to Holdings following written request therefor.  All Taxes owed by Omni have been paid when due, whether or not such amounts are shown on any Omni Returns. The Omni Financial Statements fully accrue all actual and contingent Liabilities for unpaid Taxes with respect to all periods through the date thereof and Omni has made adequate provision for unpaid Taxes after that date in its books and records.  No Omni Return has ever been examined or audited by any Governmental Body.  No claim or Legal Proceeding is pending or has been threatened against or with respect to Omni in respect of any Tax.  There are no unsatisfied Liabilities for Taxes, including Liabilities for interest, additions to tax and penalties thereon and related expenses, with respect to which any notice of deficiency or similar document has been received by Omni (other than Liabilities for Taxes asserted under any such notice of deficiency or similar document which are being contested in good faith by Omni and with respect to which adequate reserves for payment have been established).  Except as otherwise set forth on Schedule 2.16, there are no liens for Taxes upon any of the assets of Omni except liens for current Taxes not yet due and payable.

(a)   Omni has entered into employment agreements with Harris A. Lichtenstein, Omni’s Chief Executive Officer and President, and Alexander Krichevsky, Omni’s Executive Vice President and Director of Research & Development, for initial terms commencing, in each case, on May 1, 2008.  Copies of these agreements have been provided to Holdings and MergerSub.  Omni is not a party to any other employment agreements.

 

(b)   There are no Plans contributed to, maintained or sponsored by Omni, to which Omni is obligated to contribute or with respect to which Omni has any liability or potential liability, whether direct or indirect.  

2.18   Environmental Matters.  No substances that are defined by Legal Requirements concerning the environment as toxic materials, hazardous wastes or hazardous substances (including without limitation any asbestos, oils, petroleum-derived compound or pesticides) (collectively, “ Hazardous Materials ”) are or, to the Knowledge of Omni, have been located in, on or about Omni Leased Real Property.  To the Knowledge of Omni, Omni Leased Real Property has not been used for the storage, manufacture or disposal of Hazardous Materials, and Omni has not used, or provided permission to others to use, Omni Leased Real Property for the storage, manufacture or disposal of Hazardous Materials.  Specifically, but without limitation, to the Knowledge of Omni, there are and have been no storage tanks located on Omni Leased Real Property.  To the Knowledge of Omni, no Hazardous Materials have been transported off site from Omni Leased Real Property.

2.20   Related Party Transactions.  Except as set forth on Schedule 2.20 , Omni Contracts do not include any agreement with or any other commitment to (a) any officer or director of Omni; (b) any individual related by blood or marriage to any such officer or director; (c) any Entity in which Omni or any such officer, director or related person has an equity or participating interest or (d) any other Affiliate of Omni.

2.21   Disclosure.  Omni has not made any representation, warranty, covenant or statement in this Agreement, or in any of the schedules or exhibits attached to this Agreement, that contains any untrue statement of a material fact or, to the reasonable knowledge of Omni, omitted to state any material fact necessary in order to make the statements made herein and therein, in the light of the circumstances under which they were made, not misleading.

 

3.   REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND MERGERSUB.   Except as set forth on the Schedules hereto, each of Holdings and MergerSub, jointly and severally, hereby represents, warrants and covenants on and as of the date hereof, to and for the benefit of Omni and the Surviving Company, as follows:

3.1   Due Organization.   Holdings is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.    MergerSub is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  Each of Holdings and MergerSub has all necessary power and authority:  (i) to conduct its business in the manner in which its business is currently being conducted and proposed to be conducted after the Merger; (ii) to own and use its assets in the manner in which its assets are currently owned and used and as proposed after the Merger; and (iii) to perform its obligations under all Holdings Contracts.  Holdings, together with its predecessors, has not conducted any business under or otherwise used, for any purpose or in any jurisdiction, any fictitious name, assumed name, trade name or other name, other than the names “Omnimmune Holdings, Inc.,” or “Roughneck Supplies, Inc.”  Neither Holdings nor MergerSub is and has not been required to be qualified, authorized, registered or licensed to do business as a foreign corporation in any jurisdiction.  Neither Holdings nor any of the stockholders of Holdings has ever approved, or commenced any Legal Proceeding or made any election contemplating, the dissolution or liquidation of Holdings or MergerSub’s business or affairs.

 

3.2   Subsidiaries.   Except for MergerSub, Holdings has no Subsidiaries, does not own any controlling interest in any Entity and has never owned, beneficially or otherwise, any shares or other securities of, or any direct or indirect equity or other financial interest in, any Entity.  Neither Holdings nor MergerSub has agreed and is not obligated to make any future investment in or capital contribution to any Entity.  

(a)   The authorized capital stock of Holdings consists of 50,000,000 shares of Holdings Common Stock, of which 3,000,000 shares are issued outstanding immediately prior to the Closing Date (after giving effect to the cancellation immediately after the Effective Time of the 7,500,000 shares of Holdings Common Stock owned by Travis McPhee).  All of the issued and outstanding shares of capital stock of MergerSub are wholly owned by Holdings.  All of the outstanding shares of Holdings capital stock and MergerSub capital stock have been duly authorized and validly issued and are fully paid and nonassessable.  All of the outstanding shares of Holdings capital stock and MergerSub capital stock have been issued in compliance with all applicable federal and state securities laws and other applicable Legal Requirements, and, after giving effect to the cancellation immediately after the Effective Time of the 7,500,000 shares of Holdings Common Stock owned by Travis McPhee, are owned, beneficially and of record, by those stockholders set forth on the most recent stockholders list held by Holdings’ transfer agent and as set forth on Schedule 3.3.  No shares of Holdings capital stock and MergerSub capital stock are subject to a repurchase option in favor of Holdings and MergerSub, respectively.  Neither Holdings nor MergerSub has ever repurchased, redeemed or otherwise reacquired any of its shares of capital stock or other securities.

(b)   For each of Holdings and MergerSub, there are no: (i) outstanding subscriptions, options, calls, warrants or rights (whether or not currently exercisable) to acquire any shares of capital stock or other securities; (ii) outstanding securities, notes, instruments or obligations that are or may become convertible into or exchangeable for any shares of capital stock or other securities; (iii) outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the capital stock of Holdings; (iv) Contracts (other than this Agreement) under which Holdings or MergerSub is or may become obligated to sell, transfer, exchange or issue any shares of capital stock or any other securities; (v) agreements, voting trusts, proxies or understandings with respect to the voting, or registration under the Securities Act, of any shares of capital stock; or (vi) conditions or circumstances that may give rise to or provide a basis for the assertion of a claim by any Person to the effect that such Person is entitled to acquire or receive any shares of capital stock or other securities.

3.4   Authority; Binding Nature of Agreement.   Each of Holdings and MergerSub has all necessary corporate power and authority to enter into and to perform its obligations hereunder, and the execution, delivery and performance by Holdings and MergerSub of this Agreement have been duly authorized by all necessary action on the part of Holdings, Holdings’ board of directors, MergerSub and MergerSub’s sole shareholder, Holdings.  For each of Holdings and MergerSub, this Agreement constitutes the legal, valid and binding obligation of it, enforceable against it in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

 

3.5   Non-Contravention.  Neither the execution, delivery or performance of this Agreement, nor the consummation of any of the transactions contemplated hereby, will directly or indirectly (with or without notice or lapse of time): (i) result in a violation of any of the provisions of the articles of incorporation or bylaws