Exhibit 10.1
AGREEMENT AND PLAN OF STOCK FOR STOCK EXCHANGE
THIS AGREEMENT is made as of the 1st day of June 1998, by and among
Synaptx Worldwide, Inc., a Utah corporation ("SYNAPTX") and Primus Marketing
Associates, Inc., a Minnesota corporation ("Primus" or "PRIMUS") and John Primus
and Jannine Primus collectively (the "SELLING SHAREHOLDERS" or individually the
"SELLING SHAREHOLDER"), Minnesota residents.
BACKGROUND
The SELLING SHAREHOLDERS own all the outstanding capital stock of
Primus, doing business at 6133 Blue Circle Drive, #180, Minnetonka, Minnesota
55343. SYNAPTX wishes to acquire all of the capital stock of Primus, and the
SELLING SHAREHOLDERS wish to own common stock in SYNAPTX, with the expectation
that Primus will thereafter continue to conduct its business as a subsidiary of
SYNAPTX.
Accordingly, in consideration of the mutual agreements set forth
herein, the parties agree as follows:
ARTICLE 1
STOCK FOR STOCK EXCHANGE
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1.1 Exchange of Primus STOCK for SYNAPTX STOCK. Subject to the terms
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and conditions of this Agreement, SYNAPTX agrees to issue to the SELLING
SHAREHOLDERS a total of two hundred fourteen thousand, two hundred and
eighty-six (214,286) shares of SYNAPTX common stock (the "SYNAPTX Common Stock"
or "SYNAPTX stock"). Each SELLING SHAREHOLDER shall transfer to SYNAPTX at the
Closing (as hereinafter defined) the number of shares of Primus stock (the
"Primus Stock") shown opposite such person's name on Exhibit 1.1 and shall
receive in exchange therefore the number of shares of SYNAPTX Stock shown
opposite such person's name on Exhibit 1.1.
The parties hereto intend for this exchange of stock to be treated as a
tax free reorganization, as defined in Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
1.2 Common Stock. Subject to the terms and conditions of this Agreement,
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SYNAPTX agrees to issue shares of SYNAPTX Common Stock as an incentive to
achieve the mutually exclusive Level One, Level Two or Level Three Results (and
as hereinafter defined) as reflected on Exhibit 1.2 ("Earn-out Bonus"), with
actual results to be measured over the twelve (12) month period beginning with
the first full month subsequent to the closing (as hereinafter defined) ("First
Annual Measurement Period") and the second twelve (12) month period after the
First Annual Measurement Period ends (the "Second Annual Measurement Period"),
(individually, the "Earn-out Period" or collectively the "Earn-out Periods"), to
the SELLING SHAREHOLDERS as of a date after the Earn-Out Period ends ("Payout
Date" for each Earn-Out Period or collectively the "Payout Dates"). The Level
One, Level Two and Level Three Results represent mutually exclusive threshold
levels of amounts to be realized after the Closing covering the total of
Commission Revenues and the total Earnings before Taxes of Primus, both of which
must be achieved, as recorded on the books and records of Primus for each
Earn-out Period in accordance with generally accepted accounting principles
("Level One Results" and "Level Two Results" and "Level Three Results",
respectively). The Earn-out Bonus as reflected on Exhibit 1.2 represents the
absolute monetary value of the bonus payable by SYNAPTX in the event the
respective Level One Results, Level Two Results or Level Three Results specified
on Exhibit 1.2 are achieved ("Earn-out Bonus Realized"). Earn-out Bonus Realized
is payable in shares of Synaptx Common Stock based on the number of shares that
results from dividing (x) the of Earn-out Bonus Realized by (y) the greater of
(a) the average closing price of SYNAPTX Common Stock for every trading day in
the month of May preceding the respective Payout Date as published for the stock
exchange on which the SYNAPTX Common Stock is traded or as quoted on the
electronic bulletin board if the SYNAPTX Common Stock is not so traded, or, (b)
two dollars ($2.00) per share of Synaptx Common Stock, as adjusted for any
subdivision, combination, stock splits or stock dividends, with the
corresponding price per share shall be decreased or increased proportionately to
reflect such subdivision, combination, stock splits or stock dividends, rounded
up to the next whole share of SYNAPTX Common Stock. One-half of the total
aggregate amount of shares of SYNAPTX stock issuable in accordance with the
foregoing formula shall be issued to each of the SELLING SHAREHOLDERS on the
ninety-first (91) day following the respective applicable Payout Date. SYNAPTX
and SELLING SHAREHOLDERS agree that this Section 1.2 shall survive the Closing
(as defined below).
1.3 Closing. The exchange of SYNAPTX Stock for Primus Stock shall take
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place over the phone and through the mail, fax, and e-mail (the "Closing") on or
before May 1, 1998. The date on which the Closing takes place is referred to as
the "Closing Date."
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLING SHAREHOLDERS
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Except as set forth in the disclosure schedule (Exhibit 2.0)
accompanying this Agreement, the SELLING SHAREHOLDERS , jointly (except where
otherwise expressly indicated to the contrary) and severally, represent and
warrant as follows:
2.1 Organization. To the best of their knowledge, Primus is duly
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incorporated, validly existing and in good standing under the laws of the State
of Minnesota is qualified to do business as a foreign corporation in each other
jurisdiction wherein the nature of its activities or of its properties owned or
leased makes such qualification necessary and in which the failure to be so
qualified would have a material adverse effect on the business, financial
condition or results of operation of Primus, taken as a whole, and has full
corporate power and authority to conduct its business as presently conducted and
to enter into and perform this Agreement.
2.2 Authorization. He or she has full power, capacity and authority to
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execute, deliver and perform this Agreement. This Agreement has been duly
executed and delivered by such SELLING SHAREHOLDER and (assuming the due
execution and delivery by the other parties hereto) constitutes the legal, valid
and binding agreement of such SELLING SHAREHOLDER enforceable against such
person in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency or other laws affecting the enforcement of creditors'
rights and remedies generally and by general principles of equity, and will not
cause a breach under any agreement to which he or she is a party or may be
bound.
2.3 No Consents, Conflicts. That (a), except for any filings under federal
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and/or state securities laws required to be made by SYNAPTX to consummate the
transactions contemplated by this Agreement, no consent, approval or other
action by any governmental authority or third party is required in connection
with the execution, delivery and performance of this Agreement by such Primus
Shareholder; and (b) neither the execution, delivery or performance of this
Agreement by such SELLING SHAREHOLDER will (i) violate, conflict with or result
in a breach of any provision of or constitute a default or an event which with
or without notice or lapse of time or both, would constitute a default under
Primus articles of incorporation or by-laws or any agreement or obligation to
which Primus or such SELLING SHAREHOLDER are a party or by which either of such
persons may be bound or affected where such violation, conflict, breach or
default would have a material adverse effect on the business, financial
condition or results of operations of Primus, taken as a whole, or (ii) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
Primus or such SELLING SHAREHOLDER where such violation would have a material
adverse effect on the business, financial condition or results of operations of
Primus, taken as a whole.
2.4 Customers, Customer Relationships. Exhibit 2.4 sets forth a
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complete and correct list of customer relationships and customer commission
income for calendar year 1997 for Primus Marketing Associates, Inc., not
including income for Primus Datacom.
Selling Shareholders are not aware of any condition that would have a material
adverse effect upon the projected commission revenues. ACPC has suspended
operations, eliminating commission income. The 1997 income in Exhibit 2.4 is
typical based on past experience with the customer and current Primus customer
relationships subject to mergers, acquisitions and other unforeseen
circumstances.
2.5 Financial Statements. The SELLING SHAREHOLDERS have previously
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delivered to SYNAPTX the unaudited balance sheets and related unaudited
statements of income, shareholders' equity and cash flows for Primus as of and
for the calendar year period ended December 31, 1997 and for the two (2) months
ended February 28, 1998 reflecting the existing assets, liabilities, stockholder
equity, revenues and expenses of Primus exclusive of the Datacom business sold
as of March 17, 1998, as further described below. (the "Financial Statements").
The Financial Statements have been prepared in accordance with Primus books and
records, and present fairly in all material respects the financial position,
results of operations, shareholders' equity and cash flows as of or for the
periods then ended; provided, however, SYNAPTX acknowledges that the SELLING
SHAREHOLDERS do not represent that the Financial Statements have been prepared
in accordance with generally accepted accounting principles. There has been no
material adverse change in the business, financial condition, results of
operations or prospects of Primus since December 31, 1997. Except as referred to
in the Financial Statements, the SELLING SHAREHOLDERS have no actual knowledge
of any liabilities, commitments or obligations (whether accrued, absolute,
contingent or otherwise) of Primus, other than obligations incurred since the
date of the Financial Statements in the ordinary course of business and
consistent with past practice and none of which has or will have a material
adverse effect, on the business, financial condition, results of operations or
prospects of Primus, taken as a whole. On March 17, 1998, Primus completed the
sale of certain of its assets to Primus Datacom, Inc., a sales representative
organization providing services in the data wiring business ("Datacom Sale").
Any subsequent liabilities that may apply to the activities associated with such
sold assets are and shall be the responsibility of Primus Datacom, Inc. or the
Selling Shareholders, without regard to the indemnification limitation
provisions in Section 6.2.
2.6 Compliance, No Litigation. To the best of their knowledge, Primus
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is in material compliance with all applicable federal, state, local and foreign
laws, ordinances, orders, rules and regulations and with all agreements,
commitments or obligations to which it is a party or by which it or any of its
assets may be bound. To the best of their knowledge, there is no proceeding,
investigation or inquiry pending or threatened against Primus, its business or
any of its assets, nor is there any basis for any such proceeding, investigation
or inquiry. Neither Primus nor, to the best of their knowledge, its business or
any of its assets is subject to any judgment, order, writ or injunction of any
court, arbitrator or governmental agents or instrumentality.
2.7 Authorized Capital Stock. The authorized capital stock of Primus
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consists of 100,000 shares of common stock, of which 200 shares are issued and
outstanding, all of which are owned by the SELLING SHAREHOLDERS . All the
outstanding shares of Primus Stock have been validly issued and are fully paid
and non assessable. There are no outstanding options, warrants, rights or other
commitments obligating Primus to issue any of its capital stock. The capital
stock held beneficially and of record by, the SELLING SHAREHOLDERS are not
pledged to any bank or to other lenders to support loans and debt provided to
either Primus or personally to any individual or multiple SELLING SHAREHOLDER.
2.8 Title to Primus Stock. Each of the SELLING SHAREHOLDERS owns the
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Primus Stock to be transferred to SYNAPTX at the Closing, free and clear of all
liens, claims and encumbrances, and at the Closing, SYNAPTX will acquire good
and valid title to such Primus Stock, free and clear of all liens, claims and
encumbrances.
2.9 Investment Representations. He or she has such knowledge and
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experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the SYNAPTX STOCK in exchange for the
Primus Stock owned by such SELLING SHAREHOLDER, and has been given the
opportunity to examine all documents and ask questions of, and receive answers
from representatives of SYNAPTX concerning the terms and conditions of such
exchange and the financial condition, business and prospects of SYNAPTX, and to
obtain such additional information as he or she deemed necessary in connection
with the transaction contemplated by this agreement. The SYNAPTX STOCK
(including any shares pursuant to Earn-Out Bonus) to be acquired by such SELLING
SHAREHOLDERS pursuant to this agreement is being acquired for such person's own
account for investment and not with a view to the public distribution thereof,
and such SELLING SHAREHOLDERS will not effect any transfer of such SYNAPTX STOCK
(including any shares pursuant to Earn-Out Bonus) except pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
or exemptions from registration thereunder and in compliance with all applicable
state securities laws. Each SELLING SHAREHOLDER understands that the SYNAPTX
STOCK (including any shares pursuant to Earn-Out Bonus) to be received by such
person at the Closing will bear appropriate restrictive legends referring to the
foregoing transfer restrictions.
2.10 Reliance on Own Tax Advisors. The SELLING SHAREHOLDERS are relying
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on their own tax advisors in connection with determining the tax consequences to
them of the transactions contemplated by this Agreement and the impact of its
sale of assets to Primus Datacom, Inc. and are not relying on SYNAPTX or
SYNAPTX's attorneys, accountants officers or advisors for any such advice.
2.11 Brokers and Finders. Neither the SELLING SHAREHOLDERS nor, to the
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knowledge of the SELLING SHAREHOLDERS, Primus has engaged any broker, finder or
other financial intermediary in connection with this Agreement and the
transactions contemplated hereby.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SYNAPTX
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SYNAPTX represents and warrants as follows:
3.1 Organization. SYNAPTX is duly incorporated, validly existing and in
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good standing under the laws of the State of Utah, is qualified to do business
as a foreign corporation in each other jurisdiction wherein the nature of its
activities or of its properties owned or leased makes such qualification
necessary and in which the failure to be so qualified would have a material
adverse effect on the business, financial condition or results of operations of
SYNAPTX, taken as a whole, and has full corporate power and authority to conduct
its business as presently conducted and to enter into and perform this
Agreement.
3.2 Authorization. SYNAPTX has full power, capacity and authority to
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execute, deliver and perform this Agreement. This Agreement has been duly
executed and delivered by SYNAPTX and (assuming the due execution and delivery
by the other parties hereto) constitutes the legal, valid and binding agreement
of SYNAPTX enforceable against SYNAPTX in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency or other laws affecting the
enforcement of creditors' rights and remedies generally and by general
principles of equity
3.3 No Consents, Conflicts. Except for any filing under federal and/or
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state securities laws required to be made by SYNAPTX to consummate the
transactions contemplated by the Agreement, no consent, approval or other action
by any governmental authority or third party is required in connection with the
execution, delivery and performance of this Agreement by SYNAPTX and neither the
execution, delivery or performance of this Agreement by SYNAPTX will (i)
violate, conflict with or result in a breach of any provision of, or constitute
a default or an event which with or without notice or lapse of time or both,
would constitute a default under SYNAPTX's articles of incorporation or by-laws
or any agreement or obligation to which SYNAPTX is a party or by which it may be
bound or affected where such violation, conflict, breach or default would have a
material adverse effect on the business, financial condition or results of
operations of SYNAPTX, taken as a whole, or (ii) violate any order, writ,
injunctions, decree, statue, rule or regulation applicable to SYNAPTX where such
violation would have a material adverse effect on the business, financial
condition or results of operations of SYNAPTX, taken as a whole.
3.4 Business of SYNAPTX. SYNAPTX has previously delivered to the
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SELLING SHAREHOLDERS the balance sheets and related statements of income,
shareholders' equity and cash flows for SYNAPTX as of and for the fiscal year
period ended August 31, 1997 and the condensed financial statement information
included for the six (6) months ended February 28, 1998 as filed with the
Securities and Exchange Commission on form 10-QSB. (the "Financial Statements").
The Financial Statements have been prepared in accordance with the SYNAPTX books
and records, and in accordance with generally accepted accounting principles
consistently applied, as set forth herein, and present fairly in all material
respects the financial position, results of operations, shareholders' equity and
cash flows for the periods then ended. There has been no material adverse change
in the business, financial condition, results of operations or prospects of
SYNAPTX since November 30, 1997. Except as referred to in the Financial
Statements, SYNAPTX does not have any liabilities, commitments or obligations
(whether accrued, absolute, contingent or otherwise), other than obligations
incurred since the date of the Financial Statements in the ordinary course of
business and consistent with past practice and none of which has or will have a
material adverse effect, on the business, financial conditions, results of
operations, or prospects of SYNAPTX, taken as a whole. On January 1, 1998,
SYNAPTX closed an acquisition of WG Controls, Inc. ("WG"), a sales
representative organization of whom SELLING SHAREHOLDERS are familiar, with the
plan that WG will operate in and provide sales representative services for
product and service companies in the upper Midwest.
3.5 Compliance, No Litigation. SYNAPTX is in material compliance with
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all applicable federal, state, local and foreign laws, ordinances, orders, rules
and regulations and with all agreements, commitments or obligations to which it
is a party or by which it or any of its assets may be bound. There is no
proceeding, investigation or inquiry pending or threatened against SYNAPTX, its
business or any of its assets, nor is there any basis for any such proceeding,
investigation or inquiry. Neither SYNAPTX nor its business or any of its assets
is subject to any judgment, order, writ or injunction of any court, arbitrator
or governmental agency or instrumentality.
3.6 Authorized Capital Stock. The authorized capital stock of the
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Company is 35,000,000 shares, consisting of 10,000,000 shares of Preferred
Stock, $.001 par value per share, of which 137,143 of Series, A Convertible
Preferred Stock are issued or outstanding and 25,000,000 shares of Common Stock,
$.001 par value per share, of which 5,537,375 shares have been validly issued
and are outstanding, as of April 1, 1998. Additionally, the SYNAPTX Board of
Directors and a majority of the then Synaptx shareholders have approved a stock
option plan providing for the issuance of 1,450,000 shares of SYNAPTX Common
Stock of which options representing the right to purchase 877,867 shares of
SYNAPTX Common Stock are issued with exercise prices ranging from $0.091 to
$3.700 per share. Also, there are outstanding stock warrants representing the
right to purchase 230,006 shares of SYNAPTX Common Stock with exercise prices
from $0.454 to $2.30 per share.(moved from 3.7)
The Company has entered into an agreement with an equity
placement advisor who is assisting management to explore financing alternatives,
developing strategic plans with respect to future acquisitions, and putting in
place additional means of enhancing shareholder value. This agreement calls for
a monthly retainer of $3,000 plus the issuance of stock warrants exercisable
upon the completion of certain accomplishments, as follows:
Vesting of Warrants at
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$2.00 per share of
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Accomplishments Common Stock
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() Supporting the raising of $1.75 million of new 100,000 shares
equity
() Common stock trading at $3.00 per share for 30
consecutive days 50,000 shares
() Common stock trading at $4.00 per share for 30
consecutive days 50,000 shares
() Common stock trading at $5.00 per share for 30
consecutive days 50,000 shares
() Common stock trading at $6.00 per share for 30
consecutive days 50,000 shares
Total 300,000 shares
All warrants vest immediately if there is a change in control or if Ronald L.
Weindruch is no longer CEO.
3.7 Title to SYNAPTX Stock. The SYNAPTX STOCK to be issued to each
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SELLING SHAREHOLDER will be duly and validly issued, fully paid and non
assessable, and each SELLING SHAREHOLDER will acquire title to the SYNAPTX
STOCK to be issued to such person hereunder free and clear of all liens,
claims and encumbrances, and no shareholder will have any preemptive right
of subscription or purchase in respect thereof.
3.8 Investment Representations. SYNAPTX represents and warrants that it
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has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the Primus Stock
in exchange for the SYNAPTX STOCK, and has been given the opportunity to examine
all documents and ask questions of and receive answers from representatives of
Primus concerning the terms and conditions of such exchange and the financial
condition, business and prospects of Primus, and to obtain such additional
information as it deems necessary in connection with the transactions
contemplated by this Agreement the Primus Stock to be acquired by SYNAPTX
pursuant to this Agreement is being acquired for SYNAPTX's own account for
investment and not with a view to the public distribution thereof, and SYNAPTX
will not effect any transfer of such Primus Stock except pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
or exemptions from registration thereunder and in compliance with all applicable
state securities laws. SYNAPTX understands that the Primus Stock to be received
by SYNAPTX at the Closing will bear appropriate restrictive legends referring to
the foregoing transfer restrictions. SYNAPTX agrees to comply with the state
securities or "Blue Sky" laws of the State of Minnesota.
3.9 Reliance on Own Tax Advisers. SYNAPTX is relying on its own tax
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advisors in connection with determining the tax consequences to it of the
transactions contemplated by this Agreement and is not relying on Primus or
Primus' attorneys, accountants, officers or advisors for any such advice.
3.10 Brokers and Finders. SYNAPTX has not engaged any broker, finder or
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other financial intermediary in connection with this Agreement and the
transactions contemplated hereby.
3.11 Actions, Suits, Proceedings. Since June 1997, SYNAPTX has filed
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all reports, statements and made all other filings (the "SYNAPTX Reports")
required to be made by it under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The SYNAPTX Reports accurately disclose as of the date
hereof all actions, claims, suits, proceedings and governmental investigations
pending or, to the knowledge of SYNAPTX, threatened, that are required to be
disclosed therein by the Exchange Act.
ARTICLE 4
Certain Actions to be Taken at Closing
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At the Closing, the following actions shall be taken (each of which
shall be deemed to occur simultaneously and each of which shall be dependent
upon the occurrence of each other action):
4.1 Each SELLING SHAREHOLDER shall deliver to SYNAPTX stock
certificates representing the Primus Stock owned by such SELLING SHAREHOLDER,
duly endorsed for transfer or with duly executed stock powers attached.
4.2 SYNAPTX shall deliver to each SELLING SHAREHOLDER a stock
certificate representing the SYNAPTX STOCK issued to such SELLING SHAREHOLDER
in exchange for his or her Primus Stock. (Moved from 1.4)
4.3 Employment Agreements. Primus shall enter into an employment
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agreement with each of the following Primus key employees in substantially the
forms set forth for each in Exhibit 4.3: John E. Primus, Greg Stavn, Sam Nelson,
Larry Donnelly, and Steve Brooks.
4.4 Non-Competition Agreements. Primus shall enter into a
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non-competition agreement with each Primus key employee set forth in Section 4.3
above in substantially the form set forth for each in Exhibit 4.4.
4.5 Board Resolution. SYNAPTX shall, at the Closing, provide a fully
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executed resolution of the SYNAPTX Board of Directors indicating that there
are no existing conditions that preclude the transaction as defined in
Section 1.1 and authorizing such exchange
4.6 Registration Rights Agreement. SYNAPTX and the SELLING SHAREHOLDERS
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shall enter into the Registration Rights Agreement attached hereto as Exhibit
4.6.
ARTICLE 5
POST-CLOSING COVENANTS
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5.1 Post-Closing Covenants of SYNAPTX. SYNAPTX covenants from and after
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the Closing as follows:
5.1.1 Stock Plans. SYNAPTX shall define and implement within one
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hundred twenty (120) days after the Closing Date a stock purchase program for
the executives of Primus.
5.2 Operation of Primus' Business Following the Closing. The parties
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agree as follows with respect to the operation of Primus' business following the
Closing:
5.2.1 Location. Primus shall continue to conduct its business at its
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present facilities in Minnetonka, Minnesota until such time as the Primus Board
of Directors and the SYNAPTX Board of Directors mutually agree that a change
would be beneficial to the business of SYNAPTX and its subsidiaries taken as a
whole.
5.2.2 Operations. SYNAPTX, in conjunction with the Primus Board of
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Directors, can use its business judgment relative to the operation of Primus
during the Earn-Out Period.
5.3 Covenant of Further Assurances. From and after the Closing, the
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SELLING SHAREHOLDERS shall, from time to time, at the request of SYNAPTX and
without further consideration (but at SYNAPTX's expense) do, execute,
acknowledge and deliver all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances as may be reasonably required to
confirm the conveyance and transfer of the Primus Stock to SYNAPTX.
ARTICLE 6
Survival of Representations, Warranties and Covenants; Indemnification.
6.1 Survival of Representations, Warranties and Covenants. The
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representations and warranties set forth in Articles 2 and 3 hereof and the
Covenants set forth in Article 5 hereof shall survive the execution of this
Agreement and the consummation of the transactions contemplated hereby for a
period of six (6) months following such execution, except obligations of Selling
Shareholders associated with the Datacom Sale as described in Section 2.5
hereof, which has no time limit.
6.2 Indemnification. Each SELLING SHAREHOLDER hereby agrees to
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indemnify and hold SYNAPTX harmless from and after the date of this Agreement
against and with respect to (i) any and all loss, injury, damage or deficiency
resulting from any misrepresentation, breach of warranty or breach of covenant
on the part of such SELLING SHAREHOLDER under this Agreement; and (ii) any and
all demands, claims, actions, suits or proceedings, assessments, judgments,
costs and legal and other expenses incident to the foregoing. SYNAPTX hereby
agrees to indemnify and hold each SELLING SHAREHOLDER harmless from and after
the date of this Agreement against and with respect to (i) any and all loss,
injury, damage or deficiency resulting from any misrepresentation, breach of
warranty or breach of covenant on the part of SYNAPTX under this Agreement; and
(ii) any and all demands, claims, actions, suits or proceeds, assessments,
judgments, costs and legal and other expenses incident to the foregoing.
However, the obligations of the SELLING SHAREHOLDERS and SYNAPTX to indemnify
the other hereunder are subject to the following limitations:
(a) Limits. Except as provided below, the obligation to
indemnify will expire six (6) months after Closing, except obligations
of Selling Shareholders associated with the Datacom Sale as described
in Section 2.5 hereof, which has no time limit.. The six-month limit
shall not apply to indemnification claims theretofore asserted in
writing that remain unresolved, for which the obligation to indemnify
shall continue. Notwithstanding anything stated herein to the contrary,
each SELLING SHAREHOLDER'S total cumulative obligation to indemnify
under this Section 6.2 shall not exceed $160,715.
(b) Insurance. There will be no obligation to indemnify with
respect to any matter that is covered by any insurance.
(c) Notice and Defense. If any matter should arise that would
result in an obligation to indemnify a party, the indemnitee shall give
prompt notice thereof to the indemnitor, and shall give the indemnitor
the opportunity to defend against any claim, suit or action that would
result in liability to a third party that would give rise to an
indemnification right. Whether or not the indemnitor chooses to defend
such a claim, the indemnitee will not settle, compromise or otherwise
resolve the claim without the prior consent of the indemnitor.
(d) Dollar Threshold for Indemnification Claims by SYNAPTX. No
claims for indemnification shall be made by SYNAPTX unless and until
the aggregate amount of all claims for indemnification by SYNAPTX
exceeds $25,000, except obligations of Selling Shareholders associated
with the Datacom Sale as described in Section 2.5 hereof, which shall
be fully indemnified by Selling Shareholder. If the claims for
indemnification by SYNAPTX do exceed $25,000, the SELLING SHAREHOLDERS
shall be liable for all such amounts up to the aggregate total
limitation provided for in Clause (a) of this Section 6.2.
(c) Exclusive Remedy.
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(i) SYNAPTX acknowledges and agrees that its sole and
exclusive remedy with respect to any and all claims relating
to the subject matter of this Agreement shall be pursuant to
the indemnification provisions set forth in this Section 6.2.
In furtherance of the foregoing, SYNAPTX waives, to the
fullest extent permitted under applicable law, any and all
rights, claims and causes of action that it may have against
the SELLING SHAREHOLDERS arising under or based upon any
federal, state or local statute, law, ordinance, rule or
regulation, or arising under or based upon common law or
otherwise, except to the extent provided in this section 6.2
(ii) The SELLING SHAREHOLDERS acknowledge and agree
that, except with respect to claims under Section 1.2, their
sole and exclusive remedy with respect to any and all claims
relating to the subject matter of this Agreement shall be
pursuant to the indemnification provisions set forth in this
Section 6.2. In furtherance of the foregoing, the SELLING
SHAREHOLDERS waive, except with respect to claims under
Section 1.2, to the fullest extent permitted under applicable
law, any and all rights, claims and causes of action that they
may have against SYNAPTX arising under or based upon any
federal, state or local statute, law, ordinance, rule or
regulation, or arising under or based upon common law or
otherwise, except to the extent provided in this Section 6.2.
ARTICLE 7
7.1 Miscellaneous. This Agreement may be amended only in writing signed
-------------
by the party against whom enforcement is sought. This Agreement may not be
assigned by any party hereto without the prior written consent of the other
parties. This Agreement shall be governed and construed in accordance with the
laws of the State of Illinois, without regard to principles of conflicts of law.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original. The headings contained in this Agreement are only for
convenience and shall not affect the meaning or interpretation of this
Agreement. The invalidity or unenforceability of any provision of this Agreement
shall not affect any other provisions of this Agreement, which shall remain in
full force and effect. Each party agrees that the others would be irreparably
harmed in the event of any breach of this Agreement. Accordingly, the parties
agree that each shall be entitled to specific performance of this Agreement and
to injunctive relief to prevent any breach of this Agreement. In the event of
any litigation arising out of or relating to this Agreement, the prevailing
party shall be entitled to reasonable attorney's and expenses from the losing
party.
Company Signature Name and Title
------- --------- --------------
Synaptx Worldwide, Inc.
- ----------------------
Ronald L. Weindruch,
----------------------- Chairman, CEO
(Corporate Seal)
John E. Primus,
------------------------ Shareholder
Jannine G. Primus,
------------------------ Shareholder
Exhibit 1.1
-----------
Exchange of Primus Marketing Associates, Inc. Stock
---------------------------------------------------
for Synaptx Worldwide Inc. Stock
--------------------------------
- ------------------------------------------------------------------------
SELLING SHAREHOLDERS Primus Common Stock SYNAPTX
-------------------- ------------------- -------
Common Stock*
------------
- ------------------------------------------------------------------------
John E. Primus, Shareholder
100 107,143
- ------------------------------------------------------------------------
Jannine G. Primus, Shareholder
100 107,143
- ------------------------------------------------------------------------
Totals
200 214,286
- ------------------------------------------------------------------------
* Does not include amounts to be issued pursuant to Section 1.2 for the Earn-out
---
Bonus.
Exhibit 1.2
-----------
Contingent Issuance of Synaptx Worldwide Inc. Stock
---------------------------------------------------
EARN--OUT PERIOD PRIMUS PRIMUS EARN-OUT
---------------- ------ ------ --------
COMMISSION EARNINGS BEFORE BONUS
---------- --------------- -----
REVENUES TAXES AMOUNT
-------- ----- ------
FIRST ANNUAL MEASUREMENT PERIOD
- -------------------------------
Period starting with the
first full month subsequent to
the Closing Date and Ending
twelve (12) months thereafter:
Level One Results $1,000,000 $200,000 $100,000
Level Two Results $1,200,000 $250,000 $125,000
Level Three Results $1,650,000 $350,000 $175,000
SECOND ANNUAL MEASUREMENT PERIOD:
- --------------------------------
Twelve month period ending after
the First Annual Measurement
Period ends:
Level One Results $1,200,000 $250,000 $100,000
Level Two Results $1,650,000 $350,000 $150,000
Level Three Results $2,000,000 $450,000 $200,000
Exhibit 2.0
-----------
DISCLOSURE SCHEDULE
-------------------
None
Exhibit 2.4
-----------
Primus Marketing Associates, Inc.
CUSTOMER 1997 INCOME
--------- ------------
ABB $ 290,296
ADC $ 21,261
AFL $ 357,358
Alpha $ 2,112
AMP $ 36,202
Arnco $ 21,857
Bogen $ 12,359
Byron Labs $ 11
Chance $ 29,211
Cons. Products $ 1,299
Coretelco $ 14,047
CSP $ 712
Custom House $ 164
Devtek $ 2,691
EXFO $ 34,874
GS Metals $ 7,094
Halls Safety Equipment $ 4,293
Ideal $ 111
McCrea $ 400
Newell Porcelain $ 19,206
Panamax $ 1,018
Quickset $ 3,011
Rapid Power Transit $ 4,334
RELTEC $ 49,321
Shallbettor $ 2,371
Telenetics $ 2,383
-----------
TOTAL $ 917,996
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