SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): September 19, 1996
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SYNERGISTIC HOLDINGS CORP.
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(Exact name of registrant as specified in its charter)
DELAWARE 33-75162 42-1358036
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
50 Laser Court, Hauppauge, New York 11788
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 436-5000
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405 Sixth Avenue, Suite 200, Des Moines, Iowa 50309
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Former name or former address, if changed since last report
I. Items 1, 2 and 5
On September 19, 1996 (the "Closing"), Registrant's
wholly-owned subsidiary, Salex Industries, Inc., a Delaware corporation
("Subsidiary"), consummated the merger contemplated by the Merger Agreement,
dated June 27, 1996, as amended and restated on September 18, 1996 (the "Merger
Agreement), by and among Registrant, Subsidiary, Salex Holding Corporation, a
Delaware corporation ("Salex"), Salex Fleet Specialist Corp., a New York
corporation, Salex Fleet Management Corp., a New York corporation, Salex
National Account Corp., a New York corporation, Salex Salvage Disposal Corp., a
New York corporation, Salex Financial Services Corp., a New York corporation
(collectively, the "Salex Subsidiaries"), Salvatore Crimi ("Crimi"), the
Salvatore Crimi Family Limited Partnership, Pershing Sun, Michael Sun, Jennifer
Sun, Susan Tauss-Giovinco, Francis Fitzpatrick and Harrison Fitzpatrick
(collectively, the "Salex Stockholders") and T. Marshall Swartwood and Thomas M.
Swartwood.
Pursuant to the Merger Agreement, Subsidiary was merged with
and into Salex and (i) all of the shares of common stock of Salex (the "Salex
Common Stock") held by Registrant were cancelled and extinguished and (ii) all
of the 4,503,000 issued and outstanding shares of Salex Common Stock owned by
the Salex Stockholders were converted into (a) 4,003,165 shares of common stock,
par value $.01 per share, of the Registrant ("Synergistic Common Stock") and
(ii)
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1,000 shares of Series B Convertible Preferred Stock ("Synergistic Preferred
Stock"). Upon the filing by the Registrant of a Certificate of Amendment to its
Certificate of Incorporation increasing the authorized capital stock of the
Registrant, each share of Synergistic Preferred Stock shall be converted into
2,059.106 shares of Synergistic Common Stock. The shares of Synergistic Common
Stock delivered at the closing, together with the shares of Synergistic Common
Stock into which the shares of Synergistic Preferred Stock are convertible,
represent, in the aggregate, 51% of the fully-diluted, issued and outstanding
shares of the Synergistic Common Stock.
The amount of consideration paid by Registrant for the shares of Salex
Common Stock was determined by negotiations among the representatives of the
Registrant and Salex.
Salex, through the Salex Subsidiaries, provides automobile
asset management services and manages, on a nationwide basis, the maintenance
and repair of fleets of automobiles and small trucks which are owned, leased and
operated by corporate customers (the "Business"). Following the Merger, the
Registrant changed its principal place of business from 405 Sixth Avenue, Des
Moines, Iowa to 50 Laser Court, Hauppauge, New York.
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II. Action Taken Immediately Prior to the Closing.
Crimi sold to the Registrant 1,453,600 shares of Salex Common
Stock owned by him for the purchase price of $2,000,000 which was paid by the
issuance of the Registrant of two promissory notes - one for $1,055,562.19 and
one for $944,437.81. Both Promissory Notes were amended by a Letter Agreement
dated September 18, 1996.
III. Action Immediately After the Closing.
The Registrant and Dickinson Holding Corporation
("Dickinson"), a Delaware corporation, entered into (i) a Stock and Asset
Purchase Agreement pursuant to which the Registrant sold (the "Divestiture") (x)
all of the outstanding shares of its subsidiary, Dickinson & Co., Inc., a
registered broker/dealer and (y) its investment in Electronic Designs, Inc.
("EDIX"); (ii) an Indemnification Agreement whereby Dickinson is obligated to
indemnify and hold the Registrant harmless from and against any and all
liabilities (including any alleged or threatened claims) relating to or arising
out of, or in any matter related to (a) the ownership, operation or conduct of
Dickinson & Co., Inc. and/or the EDIX Assets (as defined in the Indemnification
Agreement) and any liability under the EDIX Notes (as defined in the
Indemnification Agreement), (b) the profit participation agreements between the
Registrant and the holders of the EDIX Notes, and (c) any other obligation or
liability arising in connection with the solicitation and issuance of the EDIX
Notes,
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in each case, whether occurring prior to or after the Divestiture (the
"Divestiture Liabilities") and for all losses or damages incurred by the
Registrant with respect to the Divestiture Liabilities and (iii) a Tax Indemnity
Agreement pursuant to which Dickinson has agreed to reimburse the Registrant for
50% of any Additional Income Taxes (as defined in the Tax Indemnity Agreement)
paid as a result of the Divestiture. As consideration for the stock and assets
that were transferred pursuant to the Divestiture, Dickinson transferred to the
registrant 750,000 shares of its Synergistic Common Stock and a $500,000
promissory note (the "Divestiture Promissory Note") secured by 250,000 shares of
its Synergistic Common Stock pursuant to a Pledge Agreement between Dickinson
and the Registrant. Dickinson is owned by T. Marshall Swartwood and Thomas M.
Swartwood who were both directors and officers of Synergistic.
III. Actions Taken Simultaneously with the Closing.
1. All of the officers of the Registrant resigned, effective
as of the Closing. The following persons were appointed to the positions set
forth opposite their names:
Salvatore Crimi - Chief Executive Officer and
Chairman of the Board
Jeffrey Dickson - Chief Operating Officer and
President
Pershing Sun - Senior Vice President and
Chief Information Officer
Chris Cucuzza - Chief Accounting Officer
Angelo Crimi - Secretary
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2. Registrant increased the authorized number of directors
constituting the Board of Directors to seven (7) members and the following were
elected as directors: Richard Belz, Crimi, Jeffrey Dickson, Angelo Crimi,
Pershing Sun, Thomas Swartwood and Francis Fitzpatrick. Crimi was nominated and
appointed Chairman of the Board.
3. Each issued and outstanding share of 8.5% Series A
Preferred Convertible Stock of Salex, liquidation value $100 per share ("Salex
Preferred"), and each warrant of Salex, exercisable for one share of Salex
Common Stock ("Salex Warrants") was converted into an identical share of
preferred stock of the Registrant, in the case of the Salex Preferred, and into
a warrant of the Registrant bearing identical terms and conditions as the Salex
Warrants.
4. The Registrant granted Crimi an option to purchase 500,000
shares of Synergistic Common Stock at an exercise price of $1.50 per share, with
a three-year term and exercisable in the event that the net income of the
Registrant (before taxes) equals or exceeds $2.7 million for the year ended
April 30, 1997. Crimi's option (and the underlying common stock) has piggy-back
registration rights.
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5. The Registrant granted options to the Salex Stockholders to
purchase 179,333 shares of Synergistic Common Stock at an exercise price of
$2.125 per share. The options are exercisable 20% per year over the next five
years. The options granted thereunder (and the underlying common stock) have
piggy-back registration rights.
6. The Salex Stockholders entered into a Registration Rights
Agreement with the Registrant, granting them registration rights with respect to
the shares of Synergistic Common Stock they received pursuant to the Merger.
7. The Registrant assumed the mortgage of Salex and released
Crimi from any obligation he may have with respect to such mortgage.
8. The Registrant also assumed from Salex (i) its employment
agreement with Crimi and (ii) its employment agreement with Pershing Sun.
The descriptions of the Merger Agreement and the other
agreements described herein are qualified in their entirety by reference to the
copy of the Merger Agreement and the other agreements which are filed exhibits
to this Report and which are incorporated herein by reference.
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Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
A. Financial Statements of Salex.
It is impractical to provide the required financial
information at this time. The required financial information for the business
acquired will be filed under cover of Form 8-K within 60 days of the date this
Form 8-K was required to be filed.
B. Pro-Forma Financial Information and Exhibits.
It is impractical to provide the required pro forma financial
information at this time. The required pro forma financial information for the
business acquired will be filed under cover of Form 8-K within 60 days of the
date this Form 8-K was required to be filed.
C. Exhibit 10.1 - Amended and Restated Merger Agreement,
dated as of September 18, 1996, by and among
Registrant, the Subsidiary, Salex, the Salex
Subsidiaries, the Salex Stockholders, Thomas M.
Swartwood and T. Marshall Swartwood.
D. Exhibit 10.2 - List of Omitted Schedules/Exhibits to
Merger Agreement.
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E. Exhibit 10.3 - Promissory Note issued by Registrant to Crimi
for $1,055,562.19 dated September 18, 1996.
F. Exhibit 10.4 - Promissory Note issued by Registrant to Crimi
for $944,437.81 dated September 18, 1996.
G. Exhibit 10.5 - Amendment to the Promissory Notes dated
September 18, 1996.
H. Exhibit 10.6 - Stock and Asset Purchase Agreement
between the Registrant and Dickinson dated September
18, 1996.
I. Exhibit 10.7. - Indemnification Agreement between the
Registrant and Dickinson dated September 18, 1996.
J. Exhibit 10.8 - Tax Indemnity Agreement among the
Registrant, Dickinson and Dickinson & Co., Inc. dated
September 18, 1996.
K. Exhibit 10.9 - The Divestiture Promissory Note issued
by Dickinson to the Registrant dated September 18,
1996.
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L. Exhibit 10.10 - Stock Pledge and Security Agreement
between the Registrant and Dickinson dated September
18, 1996.
M. Exhibit 10.11 - Stock Option Agreement between Crimi
and the Registrant dated September 18, 1996.
N. Exhibit 10.12 - Stock Option Agreement among the Salex
Stockholders and the Registrant dated September 18,
1996.
O. Exhibit 10.13. - Form of Registration Rights Agreement
among each of the Salex Stockholders and the Registrant
dated September 18, 1996.
P. Exhibit 10.14 - Assumption by Registrant of Salex's
Mortgage dated September 18, 1996.
Q. Exhibit 10.15 - Assumption by Registrant of Salex's
Employment Agreement with Crimi.
R. Exhibit 10.16 - Assumption by Registrant of Salex's
Employment Agreement with Pershing Sun.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SYNERGISTIC HOLDINGS CORP
By:/s/ Salvatore Crimi
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Salvatore Crimi, Chief
Executive Officer
Date: October 4, 1996
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INDEX TO EXHIBITS
Exhibit 10.1 - Amended and Restated Merger Agreement, dated
as of September 18, 1996, by and among
Registrant, the Subsidiary, Salex, the Salex
Subsidiaries, the Salex Stockholders, Thomas
M. Swartwood and T. Marshall Swartwood.
Exhibit 10.2 - List of Omitted Schedules/Exhibits to Merger
Agreement.
Exhibit 10.3 - Promissory Note issued by Registrant to
Crimi for $1,055,562.19 dated September 18,
1996.
Exhibit 10.4 - Promissory Note issued by Registrant to
Crimi for $944,437.81 dated September 18,
1996.
Exhibit 10.5 - Amendment to the Promissory Notes dated
September 18, 1996.
Exhibit 10.6 - Stock and Asset Purchase Agreement between
the Registrant and Dickinson dated September
18, 1996.
Exhibit 10.7. - Indemnification Agreement between the
Registrant and Dickinson dated September 18,
1996.
Exhibit 10.8 - Tax Indemnity Agreement among the
Registrant, Dickinson and Dickinson & Co.,
Inc. dated September 18, 1996.
Exhibit 10.9 - The Divestiture Promissory Note issued by
Dickinson to the Registrant dated September
18, 1996.
Exhibit 10.10 - Stock Pledge and Security Agreement between
the Registrant and Dickinson dated September
18, 1996.
Exhibit 10.11 - Stock Option Agreement between Crimi and the
Registrant dated September 18, 1996.
Exhibit 10.12 - Stock Option Agreement among the Salex
Stockholders and the Registrant dated
September 18, 1996.
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Exhibit 10.13. - Form of Registration Rights Agreement among
each of the Salex Stockholders and the
Registrant dated September 18, 1996.
Exhibit 10.14 - Assumption by Registrant of Salex's Mortgage
dated September 18, 1996.
Exhibit 10.15 - Assumption by Registrant of Salex's
Employment Agreement with Crimi.
Exhibit 10.16 - Assumption by Registrant of Salex's
Employment Agreement with Pershing Sun.
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