-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DRgD6LYYD+MOqB/dQmhVq1VEoa+AR++mpQctpB2S2ZJhEq2B90xgo++ebqqwjacN RwhBi+Eytl3yF6Ism/g65Q== 0000950120-98-000316.txt : 19980819 0000950120-98-000316.hdr.sgml : 19980819 ACCESSION NUMBER: 0000950120-98-000316 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980601 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980818 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNAPTX WORLDWIDE INC CENTRAL INDEX KEY: 0001043933 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 870375342 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-22969 FILM NUMBER: 98693355 BUSINESS ADDRESS: STREET 1: 168 E HIGHLAND AVENUE STREET 2: SUITE 300 CITY: ELGIN STATE: IL ZIP: 60120 BUSINESS PHONE: 8476220200 MAIL ADDRESS: STREET 1: 168 EAST HIGHLAND AVENUE STREET 2: SUITE 300 CITY: ELGIN STATE: IL ZIP: 60120 8-K 1 FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 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): June 1, 1998 SYNAPTX WORLDWIDE, INC. (Exact name of Registrant as Specified in its Charter) UTAH 0-22969 87-0375342 (State or Other (Commission (IRS Employer Jurisdiction) File Number) Identification Number) 168 East Highland Avenue, Suite 300, Elgin, IL 60120-5507 Registrant's Telephone Number, Including Area Code:(847) 622-0200 FORM 8-K ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On June 1, 1998, Synaptx Worldwide, Inc. (the "Company") entered into an Agreement and Plan of Merger ("Agreement") with the Shareholders of Primus Marketing Associates, Inc., a Minnesota Corporation ("Primus"), related to the acquisition by the Company of one hundred percent (100%) of the issued and outstanding shares of capital stock of Primus in exchange for 214,286 shares of the Company's common stock, $.001 par value (the "Common Stock"). Additionally, the former shareholders of Primus may earn additional Common Stock of the Company upon the attainment by Primus of specified annual "commission revenues" and "earnings" for the two subsequent twelve month periods. If Primus meets the specified "commission revenues" and "earnings" amounts for both twelve month periods, the additional consideration could amount to $375,000 divided by the market price at the time of issuance. The additional consideration, if any, would be added to the costs in excess of net assets acquired and will be amortized on the straight-line method over the remaining life of the 10 year amortization period associated with these costs. Primus is a sales representative firm based in Minnetonka, Minnesota that provides field sales and business development support for specified product lines and/or territories for clients under contract which include telecommunications (both voice and data networking), electric utility, and cable TV original equipment manufacturers, commonly referred to as OEMs, located primarily in the north central section of the United States. Primus has been active for the past eleven years. Primus's operations consist of sales representatives who sell to the private network, public telephone network, cable operating companies and alternate access provider communication markets. Primus currently represents RELTEC, Alcoa Fujikara, Amp and Raytheon in addition to approximately 20 other clients. Primus currently has nine employees. Commissions earned by Primus range from 3% up to 8%, depending on the sophistication of the customers' products and services represented. Currently, Primus is generating average monthly commission revenues of approximately $75,000 - $85,000. Management of the Company believes that contractual relations by Primus with its existing clients, which allow for termination by either party with minimal notification periods (standard in the industry), are in good standing. Furthermore, management believes that the opportunity of providing a national client sales representation focus will allow for increased geographic service scope with existing Clients and an opportunity of adding additional Clients. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial statements of business acquired. 1. Financial statements of Primus Marketing Associates, Inc. as of and for the twelve months ended May 31, 1998 (audited) (b) Pro forma financial information 1. Pro forma condensed consolidated statement of operations of Synaptx Worldwide, Inc. for the year ended August 31, 1997 2. Pro forma condensed consolidated balance sheet as of May 31, 1998 and the proforma condensed consolidated statement of operations of Synaptx Worldwide, Inc. for the nine months ended May 31, 1998 3. (c) Exhibits included herewith: 10.1 Agreement and Plan of Stock for Stock Exchange, dated June 1, 1998, between Synaptx Worldwide, Inc. (the "Company") and John Primus and Jannine Primus. 10.2 Employment Agreement, dated June 1, 1998, between Primus Marketing Associates, Inc. and John E. Primus. 10.3 Non-compete Agreement, dated June 1, 1998, between the Company and John E. Primus. 10.4 Non-compete Agreement, dated June 1, 1998, between the Company and Jannine Primus. INDEPENDENT AUDITORS' REPORT PRIMUS MARKETING ASSOCIATES, INC. MINNETONKA, MINNESOTA We have audited the accompanying balance sheet of Primus Marketing Associates, Inc. as of May 31, 1998 and the related statements of operations and retained earnings and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Primus Marketing Associates, Inc. as of May 31, 1998, and the results of their operations and cash flows for the year then ended, in conformity with generally accepted accounting principles. /s/ BDO Seidman, LLP Chicago, Illinois August 10, 1998 PRIMUS MARKETING ASSOCIATES, INC. BALANCE SHEET AS OF MAY 31, 1998 ASSETS CURRENT ASSETS: Cash $ 625 Accounts receivable 118,386 --------- Total current assets 119,011 EQUIPMENT 141,055 Less accumulated depreciation (78,562) --------- Net equipment 62,493 TOTAL ASSETS $ 181,504 ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 13,216 Current portion of long term debt 3,180 Accrued expenses and taxes 33,533 --------- Total current liabilities 49,929 Long-term debt 6,126 --------- TOTAL LIABILITIES 56,055 COMMITMENTS - STOCKHOLDERS' EQUITY Common stock; $.01 par value; 100,000 shares authorized, 200 issued and outstanding 2 Additional paid in capital 39,842 Retained earnings 85,605 --------- Total stockholders' equity 125,448 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 181,504 ========= See accompanying summary of accounting policies and notes to financial statements. PRIMUS MARKETING ASSOCIATES, INC STATEMENT OF OPERATIONS AND RETAINED EARNINGS FOR THE YEAR ENDED MAY 31, 1998 Commissions earned $ 1,066,161 Cost of services 837,116 ----------- Gross Profit 229,045 Selling, general and administrative expenses 238,176 Depreciation 27,435 ----------- Net loss (36,566) Retained earnings, at beginning of year 239,275 Distributions (117,104) Retained earnings, at end of year $ 85,605 =========== See accompanying summary of accounting policies and notes to financial statements. PRIMUS MARKETING ASSOCIATES, INC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MAY 31, 1998 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (36,566) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 27,435 Loss on disposal of fixed assets 8,418 Changes in assets and liabilities net of assets acquired: Decrease in accounts receivable 53,906 Decrease in other current assets 5,891 Decrease in accounts payable (2,786) Decrease in accrued expenses and taxes (14,536) --------- Net cash provided by operating activities 41,762 CASH FLOWS FROM INVESTING ACTIVITIES Fixed asset additions (46,163) Proceeds from sale of fixed assets 56,420 --------- Net cash from investing activities 10,257 CASH FLOWS FROM FINANCING ACTIVITIES Distributions to shareholders (117,104) Reductions in short-term debt (11,425) Reductions in long-term debt (15,401) --------- Net cash used in financing activities (143,930) --------- NET DECREASE IN CASH (91,911) Cash at beginning of year 92,536 --------- CASH AT END OF YEAR $ 625 ========= See accompanying summary of accounting policies and notes to financial statements. PRIMUS MARKETING ASSOCIATES, INC. SUMMARY OF ACCOUNTING POLICIES NATURE OF OPERATIONS Primus Marketing Associates, Inc. (the "Company"), founded in April, 1987, is a sales representative firm based in Minnetonka, Minnesota. The Company also maintains a sales office in Bismarck, North Dakota. The Company provides field sales and business development support for specified product lines and/or territories for clients under contract. Clients include telecommunications (both voice and data networking), cable TV, and electric utility original equipment manufacturers, commonly referred to as OEM's, located primarily in the upper north central United States. These clients pay a negotiated commission on all sales associated with the contracted coverage. REVENUE RECOGNITION Revenues consist of commissions earned on the sales of manufacturers' goods to end use customers or distributors. Commissions are earned as a percentage of sales made and generally range from 3.0% up to 8%, depending on the sophistication of the customers' products and services represented. Revenue is recognized when sales take place which precedes the actual collection of the commission by approximately sixty days. Therefore, approximately two months of estimated commissions earned but not collected are recorded as accounts receivable. FIXED ASSETS Fixed assets, consisting of office equipment and automobiles, are stated at cost. Depreciation is computed over the estimated useful lives of the assets, ranging from five to seven years, using the straight line method. INCOME TAXES The Company, with the consent of its shareholders, elected to be taxed as an "S" corporation in compliance with elections under the Internal Revenue Code. In lieu of corporation income taxes, the shareholders of an "S" corporation are taxed on their proportionate share of the company's taxable income. Accordingly, no liability or provision for federal income taxes is included in the accompanying financial statements nor are any deferred taxes provided for temporary differences between the tax bases of assets and liabilities and their financial reporting amounts at year-end. Since the acquisition date, the Company's results are included with Synaptx Worldwide, Inc.'s results and will be reflected in a consolidated federal income tax return. (See Note 1). ESTIMATES The accompanying financial statements include estimated amounts and disclosures based on management's assumptions about future events. Actual results may differ from those estimates. FINANCIAL INSTRUMENTS Financial instruments which potentially subject the Company to concentrations of risk consist principally of accounts receivable. The carrying values reflected in the balance sheet reasonably approximate the fair values for accounts receivable and payable. PRIMUS MARKETING ASSOCIATES, INC. NOTES TO FINANCIAL STATEMENTS NOTE 1. ACQUISITION On June 1, 1998 the shareholders of the Company consummated an exchange of all the outstanding common stock of the Company for 214,286 shares of common stock of Synaptx Worldwide, Inc. ("Synaptx"). In addition, Synaptx agreed to issue to the shareholders of the Company a maximum of $375,000 of Synaptx common stock over two years if certain pre-defined revenue and income targets are met for the subsequent two years. In conjunction with the acquisition, Synaptx entered into a thirty-five month employment agreement with the Company's president. The agreement shall be automatically renewed for two successive one year terms unless canceled by either party at least thirty days prior to the then current term's expiration. The agreement calls for an annual salary of $120,000. The agreement also calls for additional commission based on revenues and profitability. NOTE 2. SIGNIFICANT CUSTOMERS For the year ended May 31, 1998, two customers accounted for 33.3%, and 29.2% respectively of total commissions earned. These customers represent approximately 28.5% and 27.6% respectively, of total accounts receivable at May 31, 1998. NOTE 3. OPERATING LEASE COMMITMENTS The Company occupies its main office space under a lease expiring February 28, 2001. Rentals are subject to annual escalation charges based upon increases in operating expenses and real estate taxes. The Company also leases automobiles under operating leases for the use of its salespersons. The leases range from thirty-six to forty-eight months at which time the Company has a purchase option. As of May 31, 1998, the Company's future minimum lease payments under operating leases are as follows: Year ended May 31, 1999 $ 47,980 Year ended May 31, 2000 43,116 Year ended May 31, 2001 25,759 Year ended May 31, 2002 318 --------- Total future minimum lease payments $ 117,173 ========= Office rent expense amounted to approximately $ 20,442 for the year ended May 31, 1998, and auto lease expense amounted to approximately $18,475 for the year ended May 31, 1998. NOTE 4. SUPPLEMENTAL CASH FLOW DISCLOSURE Cash paid during the year for interest was $ 1,600 for the year ended May 31, 1998. SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES Pro Forma Condensed Consolidated Financial Statement Year Ended August 31, 1997 The following unaudited pro forma condensed consolidated statement of operations for the year ended August 31, 1997 give effect to the acquisition of Primus Marketing Associates, Inc. which was made as of June 1, 1998. The acquisition was accounted for using the purchase method of accounting. Accordingly, the results of operations of the acquired entity have not been reflected in the Company's statement of operations since the acquisition date was subsequent to the Company's fiscal year end. The pro forma information has been prepared as if the acquisition occurred on September 1, 1996 and is based on historic financial statements of Synaptx Worldwide, Inc. from September 1, 1996 to August 31, 1997 and Primus Marketing Associates, Inc. from September 1, 1996 to August 31, 1997. The unaudited pro forma statement of operations has been prepared by management based upon the financial statements of Synaptx Worldwide, Inc. and the acquired entity. These pro forma results may not be indicative of the results that actually would have occurred if the combination had been in effect since inception or which may be obtained in the future. SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES Consolidated Condensed Pro Forma Statement of Operations Year Ended August 31, 1997 (Unaudited)
Synaptx Primus Pro forma Worldwide Marketing Adjustments Pro forma Inc. Associates Increase Consoli- Inc. (Decrease) dation REVENUES $ 3,601,124 $ 1,190,496 $ -- $ 4,791,620 COST OF REVENUES 2,571,467 913,817 25,500 3,510,784 ----------- ----------- ----------- ----------- GROSS PROFIT 1,029,657 276,679 25,500 1,280,836 ----------- ----------- ----------- ----------- EXPENSES Selling, general & administrative 1,384,481 228,050 1,612,531 Depreciation 67,915 24,083 91,998 Amortization 129,372 -- 27,329 156,701 Interest expense, net 50,444 -- 50,444 ----------- ----------- ----------- ----------- Total expenses 1,632,212 252,133 27,329 1,911,674 ----------- ----------- ----------- ----------- NET (LOSS) INCOME $ (602,555) $ 24,546 $ (52,829) $ (630,838) =========== =========== =========== =========== Weighted Average Shares Outstanding 4,339,640 214,286 4,553,926 =========== =========== =========== NET LOSS PER SHARE OF COMMON STOCK $ (0.14) $ (0.14) =========== ===========
SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES Note to Condensed Pro Forma Financial Statement ----------------------------------------------- On June 1, 1998, Synaptx Worldwide, Inc. (the "Company") entered into an Agreement and Plan of Merger ("Agreement") with Shareholders of Primus Marketing Associates, Inc., Inc., a Minnesota Corporation, ("Primus") related to the acquisition by the Company of one hundred percent (100%) of the issued and outstanding shares of capital stock of Primus. In reliance upon and pursuant to the basic terms of the Agreement, the Company and John Primus and Janine Primus, the shareholders of Primus (collectively the "Primus Shareholders" and individually the "Primus Shareholder") executed the Agreement whereby Primus Shareholders exchanged all of their right, title and interest and obligations in their Primus Common Stock to the Company. The Agreement provided for the purchase by Synaptx Worldwide, Inc. of all the issued and outstanding capital stock of Primus Common Stock for 214,286 shares of the Company's $ .001 par value common stock. The transaction was recorded under the purchase method of accounting. The total cost of the acquisition was approximately $ 375,000, which exceeded the fair value of assets acquired by approximately $ 273,000. This amount is being amortized over ten years. Pro forma adjustments related to the acquisition of the Acquiree include (1) the increase in cost of revenues related to employee commissions and salaries to reflect amounts contractually obligated under an employment agreement with the President, and (2) amortization of the cost in excess of fair value of assets acquired of $27,329. SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES Pro Forma Condensed Consolidated Financial Statements Nine Months Ended May 31, 1998 The following unaudited pro forma condensed consolidated balance sheet as of May 31, 1998 and statement of operations for the nine months ended May 31, 1998 give effect to the acquisition of Primus Marketing Associates, Inc. which was made as of June 1, 1998. The acquisition was accounted for using the purchase method of accounting. Accordingly, the results of operations of the acquired entity have not been reflected in the Company's financial statements since the acquisition date was subsequent to the Company's quarter end results. The pro forma balance sheet information represents Synaptx Worldwide, Inc. and subsidiaries as of May 31, 1998 and Primus Marketing Associates, Inc. as of the acquisition date balance sheet, June 1, 1998. The pro forma operating results have been prepared as if the acquisition occurred on September 1, 1997 and is based on historic financial statements of Synaptx Worldwide, Inc. from September 1, 1997 to May 31, 1998 and, Primus Marketing Associates, Inc. from September 1, 1997 to May 31, 1998. The unaudited pro forma consolidated balance sheets and statements of operations, have been prepared by management based upon the financial statements of Synaptx Worldwide, Inc. and the acquired entity. These pro forma results may not be indicative of the results that actually would have occurred if the combination had been in effect since inception or which may be obtained in the future. SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES Consolidated Condensed Pro Forma Balance Sheets As of May 31, 1998 (Unaudited)
Synaptx Primus Pro forma Worldwide Marketing Adjustments Pro forma Inc. Associates Increase Consoli- Inc. (Decrease) dation ASSETS Cash $ 122,478 $ 625 $ -- $ 123,103 Accounts receivable 814,173 118,386 932,559 Prepaid expenses and deposits 94,088 -- 94,088 ----------- ----------- ----------- ----------- Total current assets 1,030,739 119,011 -- 1,149,750 ----------- ----------- ----------- ----------- Property and equipment 380,828 141,055 (102,331) 419,552 Less accumulated depreciation (138,897) (102,331) 102,331 (138,897) ----------- ----------- ----------- ----------- Net property and equipment 241,931 38,724 -- 280,655 ----------- ----------- ----------- ----------- Costs in excess of net assets acquired 2,409,601 -- 273,281 2,682,882 Other assets 246,729 -- -- 246,729 ----------- ----------- ----------- ----------- Total assets $ 3,929,000 $ 157,735 $ 273,281 $ 4,360,016 =========== =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 914,458 $ 13,216 $ 927,674 Accrued expenses and taxes 224,975 33,533 258,508 Notes payable 293,680 293,680 Current portion of long-term debt 206,000 3,180 209,180 Deferred revenue 148,427 -- -- 148,427 ----------- ----------- ----------- ----------- Total current liabilities 1,787,540 49,929 -- 1,837,469 Long-term debt, net of current portion 268,474 6,086 -- 274,560 Commitments -- -- -- -- Preferred stock 137 -- 137 Common stock 5,738 2 212 5,952 Additional paid-in capital 3,320,819 39,842 334,945 3,695,606 Retained earnings (1,453,708) 61,876 (61,876) (1,453,708) ----------- ----------- ----------- ----------- Total stockholders' equity 1,872,986 101,720 273,281 2,247,987 ----------- ----------- ----------- ----------- Total liabilities and equity $ 3,929,000 $ 157,735 $ 273,281 $ 4,360,016 =========== =========== =========== ===========
SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES Consolidated Condensed Pro Forma Statements of Operations Nine Months Ended May 31, 1998 (Unaudited)
Primus Pro forma Synaptx Marketing Adjustments Pro forma Worldwide Associates, Increase Consoli- Inc. Inc. (Decrease) dation REVENUES $ 4,451,882 $ 751,563 $ -- $ 5,203,445 COST OF REVENUES 3,546,102 625,039 (27,500) 4,143,641 ----------- ----------- ----------- ----------- GROSS PROFIT 905,780 126,524 27,500 1,059,804 ----------- ----------- ----------- ----------- EXPENSES: Selling, general & administrative 1,412,805 186,647 (17,500) 1,581,952 Depreciation 65,984 25,900 -- 91,884 Amortization 150,531 -- 20,500 171,031 Interest expense, net 36,558 1,116 -- 37,674 ----------- ----------- ----------- ----------- Total Expenses 1,665,878 213,663 3,000 1,882,541 ----------- ----------- ----------- ----------- NET LOSS $ (760,098) $ (87,139) $ 24,500 $ (822,737) Cumulative convertible preferred stock dividend requirements 17,000 17,000 ----------- ----------- Net loss applicable to common shareholders $ (777,098) $ (839,737) =========== =========== Weighted Average Shares Outstanding 5,398,846 214,286 5,613,132 =========== =========== =========== NET (LOSS) PER SHARE OF COMMON STOCK $ (0.14) $ (0.15) =========== ===========
SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES Note to Condensed Pro Forma Financial Statements ------------------------------------------------ On June 1, 1998, Synaptx Worldwide, Inc. (the "Company") entered into an Agreement and Plan of Merger ("Agreement") with Shareholders of Primus Marketing Associates, Inc., a Minnesota Corporation, ("Primus") related to the acquisition by the Company of one hundred percent (100%) of the issued and outstanding shares of capital stock of Primus. In reliance upon and pursuant to the basic terms of the Agreement, the Company and John Primus and Janine Primus, the shareholders of Primus (collectively the "Primus Shareholders" and individually the "Primus Shareholder") executed the Agreement whereby Primus Shareholders exchanged all of their right, title and interest and obligations in their Primus Common Stock to the Company. The Agreement provided for the purchase by Synaptx Worldwide, Inc. of all the issued and outstanding capital stock of Primus Common Stock for 214,286 shares of the Company's $ .001 par value common stock. The transaction was recorded under the purchase method of accounting. The total cost of the acquisition was approximately $ 375,000, which exceeded the fair value of assets acquired by approximately $ 273,000. This amount is being amortized over ten years. Pro forma adjustments related to the acquisition of Primus recorded in the consolidated condensed pro forma balance sheets include (1) the restatement of fixed assets to estimated fair market value (2) the recording of costs in excess of net assets acquired of $273,281 (3) the recording of entries to reflect the acquisition of the stockholders' equity including the issuance of the common stock at par value with the excess over par going to additional paid-in capital net of the elimination of Primus common stock and retained earnings to reflect the purchase accounting treatment of the acquisition. Pro forma adjustments related to the acquisition of Primus as recorded in the consolidated condensed pro forma statement of operations include (1) the reduction of cost of revenues related to employee commissions and salaries to reflect amounts contractually obligated under employment agreements with key employees of $27,500, (2) amortization of costs in excess of fair value of assets acquired of $20,500, and (3) the reduction of non-recurring selling, general, and administrative expenses related to professional fees incurred by Primus as a result of the Synaptx transaction of $17,500. As of May 31, 1998, Synaptx Worldwide, Inc. had 5,737,661 shares of common stock outstanding. The acquisition of Primus resulted in the issuance of 214,286 shares for a total of 5,951,947 shares outstanding on a pro-forma basis. SIGNATURE In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SYNAPTX WORLDWIDE, INC. Date: August 14, 1998 /s/ Richard E. Hanik ----------------------------------------------- RICHARD E. HANIK, Chief Financial Officer EXHIBIT INDEX Exhibit Description ------- ----------- 10.1 Agreement and Plan of Stock for Stock Exchange, dated June 1, 1998, between Synaptx Worldwide, Inc. (the "Company") and John Primus and Jannine Primus. 10.2 Employment Agreement, dated June 1, 1998, between Primus Marketing Associates, Inc. and John E. Primus. 10.3 Non-compete Agreement, dated June 1, 1998, between the Company and John E. Primus. 10.4 Non-compete Agreement, dated June 1, 1998, between the Company and Jannine Primus. EX-10 2 EXHIBIT 10.1 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 - ------------------------ 1.1 Exchange of Primus STOCK for SYNAPTX STOCK. Subject to the terms ------------------------------------------ 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, ------------ 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 ------- 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 - ------------------------------------------------------ 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 ------------ 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 ------------- 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 ---------------------- 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 --------------------------------- 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 -------------------- 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 ------------------------- 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 ------------------------ 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 --------------------- 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 -------------------------- 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 ---------------------------- 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 ------------------- 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 - ----------------------------------------- SYNAPTX represents and warrants as follows: 3.1 Organization. SYNAPTX is duly incorporated, validly existing and in ------------ 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 ------------- 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 ---------------------- 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 ------------------- 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 ------------------------- 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 ------------------------ 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 ---------------------- $2.00 per share of ----------------- Accomplishments Common Stock --------------- ------------ () 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 ---------------------- 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 -------------------------- 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 ---------------------------- 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 ------------------- other financial intermediary in connection with this Agreement and the transactions contemplated hereby. 3.11 Actions, Suits, Proceedings. Since June 1997, SYNAPTX has filed --------------------------- 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 - -------------------------------------- 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 --------------------- 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 -------------------------- 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 ---------------- 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 ----------------------------- shall enter into the Registration Rights Agreement attached hereto as Exhibit 4.6. ARTICLE 5 POST-CLOSING COVENANTS - ---------------------- 5.1 Post-Closing Covenants of SYNAPTX. SYNAPTX covenants from and after --------------------------------- the Closing as follows: 5.1.1 Stock Plans. SYNAPTX shall define and implement within one ----------- 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 --------------------------------------------------- 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 -------- 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 ---------- 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 ------------------------------ 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 ----------------------------------------------------- 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 --------------- 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. ---------------- (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 ========= EX-10 3 EXHIBIT 10.2 EXHIBIT 10.2 PRIMUS MARKETING ASSOCIATES, INC.. EMPLOYMENT AGREEMENT -------------------- BY THIS AGREEMENT, made this 1st day of June, 1998, Primus Marketing Associates, Inc., a Minnesota corporation ("Company") and John E. Primus ("Employee"), in consideration of mutual benefits set forth herein, hereby agree as follows: 1. Employment. The Company hereby employs the Employee ---------- and the Employee hereby accepts employment upon the terms and conditions hereinafter set forth. 2. Term. Subject to the provisions for the termination as ---- hereafter provided, the term of this Agreement shall begin on the date hereof and shall terminate on May 1, 2001. Thereafter, this Agreement shall be automatically renewed for two (2) successive one-year terms unless either party notifies the other of non-renewal at least 30 days prior to the expiration of the then current term. The compensation and other benefits provided for herein shall be subject to annual review by the Company's Board of Directors. 3. Compensation. For all services rendered by the ------------ Employee under this Agreement, the Company shall compensate the Employee by paying the Employee the sum of the following (subject to any applicable withholding): (i) $120,000 per year payable in equal installments in accordance with the Company's normal payroll policies (called "Regular Compensation"); (ii) A bonus (the "Override Bonus") in each calendar month during which Employee's employment continues. The amount of the Override Bonus payable each month shall be the total amount of the Company's Commission Receipts (as defined below) multiplied by 5%, but only to the extent of fifty (50) percent of the GAAP defined net profit earned by Company for such month. "Commission Receipts" shall be (i) the total revenue (net of any adjustments by customers) received by the Company in such month (whether received with respect to such month, a previous month or as a prepayment for a future month) from the Company's customers located in Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wyoming, Upper Michigan and North Western Wisconsin (Southern Wisconsin for Electrical Utility only) and (ii) the total revenue received by the Company (net of any adjustments by customers) from power utility only in Oregon, Idaho, Washington and Wyoming and South Eastern Wisconsin. The Override Bonus shall be paid to Employee by the subsequent month's end. In the event of certain early terminations of this Agreement as provided, compensation payable to the Employee shall (unless otherwise stated in Section 9) be limited to amounts Fully Accrued. The term "Fully Accrued" means (a) as to Regular Compensation, the percentage of a year's Regular Compensation as shall equal the percentage of the year which has expired on the termination date, and (b) as to Override Bonus, only that Override Bonus which has been earned as of the month end previous to the termination date. 4. Duties. The Employee is engaged as President. As such ------ officer, Employee shall have the function of the chief executive officer of the Company and shall have the general active management of the business of the Company, subject to the direction of the Board of Directors. The Employee also shall perform such corporate development services for the Company's parent corporation and affiliates as the Company's Board of Directors may specify from time to time, without additional compensation. 5. Extent of Services. The Employee shall devote the ------------------ Employee's entire time, attention and energy to the business of the Company, and shall not, during the term of this Agreement, engage in any other business activity whether or not such business activity is pursued for gain, profit or other pecuniary advantage; but this shall not be construed as preventing the Employee from investing Employee's assets in such form or manner as will not require services on the part of Employee in the operation or the affairs of, or control of the entity in which investments are made. The Company acknowledges that Employee has entered into a Consulting Agreement with Primus Datacom, Inc. under which Employee provides consulting services to Primus Datacom, Inc. 6. Expenses. The Employee is authorized to incur -------- reasonable expenses for promoting the business of the Company, including expenses for travel and similar items. The Company will reimburse the Employee for all such expenses upon presentation by the Employee, from time to time, of an itemized account of such expenditures in accordance with the Company's expense reimbursement policies. 7. Fringe Benefits. The Employee shall enjoy to the --------------- extent eligible the same fringe benefits as provided generally to other senior executives of the Company and which shall not be more than the fringe benefits offered by Synaptx Access to its senior executives, including health and life insurance. The Company will maintain such health and life insurance with benefits at a minimum consistent with the existing Company health and life insurance. Furthermore, the Company will develop a plan offering the benefit of a deferred compensation arrangement, commonly referred to as a "401(K) Plan" whose contributions and benefits structure will at a minimum be consistent with the existing Synaptx Impulse, Inc. (F/K/A Maxwell Partners, Inc.) Retirement Savings Plan by June 15, 1998. 8. Vacation. The Employee shall be entitled, in -------- accordance with policy, each year to 10 holidays, 10 vacation days and 10 personal days, during which time the Employee's compensation shall be paid in full. There are no carry-over vacation or personal days from prior calendar years. 9. Termination. ----------- (i) Without Cause. Without cause, the Company may ------------- terminate this Agreement at any time upon 30 days' written notice to the Employee. In such event, the Employee shall receive six(6) months of Regular Compensation unless such termination occurs during the original term of this Agreement (i.e. occurs prior to March 1, 2001), in which case Employee shall receive one (1) year of such Regular Compensation, but the Employee shall be entitled to Override Bonus only to the extent Fully Accrued as of the prior month's end on the date of termination. (ii) With Cause. The Company may terminate the ---------- employment of the Employee hereunder immediately upon written notice thereof in the event of (a) material fraud or material dishonesty or (b) willful neglect of duties (unless cured within 30 days of notice by the Company), or (c) committing acts detrimental to the Company or (d) breach of his obligations under this Agreement by the Employee in connection with his employment, or if the Employee is convicted of a felony. In such event, the Company shall pay the Employee only such compensation as shall have Fully Accrued on the date of termination, less reserves for damages by reason of Employee's actions. (iii) Termination by Employee. The Employee may ----------------------- terminate this Agreement at any time upon 30 days' prior written notice to the Company. In such event, the Employee shall be entitled to receive his or her compensation only to the extent Fully Accrued on the date of termination. 10. Death or Disability During Employment. ------------------------------------- (i) Death. If the Employee dies during the term of ----- this Employment Agreement, the Company shall pay to the estate of the Employee the compensation which would be Fully Accrued as of the end of the calendar month in which his death occurs. (ii) Disability. If the Employee becomes disabled ---------- during the term of this Employment Agreement, the Company shall continue to pay to the Employee regular compensation for three (3) months, at which point the Company may terminate the employment of the Employee. 11. Non-Disclosure. Employee hereby agrees with Company -------------- that Employee will keep confidential any and all confidential information of the Company, any future parent and such parent's related subsidiaries ("Company and Affiliates"), including Company and Affiliates know-how, trade secrets, customer lists, and other information, data and proprietary information relating to Company and Affiliates business (herein called "Proprietary Information") and will not at any time, without prior written consent of Company, disclose or make known or allow to be disclosed or made known such Proprietary Information to any person, firm, corporation, or other business entity other than Company and Affiliates and persons or entities designed by Company and Affiliates provided, however, that this Section 11 shall be inoperative as to information which (i) is or becomes generally available to the public other than as a result of a disclosure by Employee; (ii) becomes available to Employee on a non-confidential basis from another source that has represented that it is entitled to disclose it; (iii) was known to Employee on a non-confidential basis prior to its disclosure; or (iv) which Employee is required to disclose by law or regulatory or judicial order. This provision shall survive the termination of this Agreement. 12. Notices. Any notice required or permitted to be given ------- under this Agreement shall be sufficient if in writing, and sent by certified mail or hand delivery to the Employee's residence in the case of the Employee, or to the principal office in case of the Company. 13. Waiver of Breach. The waiving by the Company of a ---------------- breach of any provision in this Agreement by the Employee shall not operate or be construed as a waiver of any subsequent breach by the Employee. 14. Assignment. The rights and obligations of the Company ---------- under this Agreement shall inure to and be binding upon the successors, assigns and corporate owners of the Company. 15. Entire Agreement. This instrument contains the entire ---------------- agreement of the parties. It may not be changed or altered except by an Agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. 16. Attorney's Fees. In the event of any litigation or --------------- arbitration proceeding arising out of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees and expenses from the losing party, whether incurred before suit is brought, before or at trial or the arbitration proceeding, on appeal or in insolvency proceedings. 17. Governing Law. This Agreement shall be governed by and ------------- construed and enforced in accordance with the laws of the State of Minnesota, exclusive of conflicts of law. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. Primus Marketing Associates, Inc. Employee -------------------------------- -------- ("Company") ----------- ---------------------------------------- -------------------- , Director John Primus --------------- EX-10 4 EXHIBIT 10.3 EXHIBIT 10.3 SYNAPTX WORLDWIDE, INC. NON-COMPETE AGREEMENT --------------------- This agreement made and entered into this 1st day of June, 1998 between Synaptx Worldwide, Inc. corporation ("Purchaser") and John E. Primus ("Seller"). WITNESSETH THAT: WHEREAS, pursuant to an Agreement and Plan of Stock for Stock Exchange (the "Purchase Agreement") among Purchaser and Seller, a Minnesota resident, the Purchaser wishes to acquire all the outstanding stock of Primus Marketing Associates, Inc. ("Primus"); WHEREAS, Seller is one of the founders of and has been a principal of Primus and due to the nature of his employment and his relationship with Primus, has had access to, and has acquired and assisted in developing confidential and proprietary information relating to the business and operations of Primus, including information with respect to the present and prospective plans, products, systems, processes, customers, suppliers and the sales and marketing methods of Primus; WHEREAS, Primus has an Employment Agreement ("Employment Agreement") with Seller; WHEREAS, Seller acknowledges that such information and methods have been, and will continue to be, of central importance to the business of Primus and that the use of such information by, or its disclosure to, competitors of Primus or others could cause substantial harm to Primus and Purchaser; and WHEREAS, the obligation of Purchaser to consummate the Closing is expressly conditioned on the execution and delivery of this Non-Compete Agreement by Seller; NOW, THEREFORE, the parties hereby agree as follows: 1. For two (2) years after the date that Seller's employment with Primus is terminated, Seller agrees that he will not, directly or indirectly (whether as an officer, director, employee, agent, representative, consultant, proprietor, partner, joint venturer, stockholder or otherwise), own, manage, operate, join, control or participate in the ownership, management, operation or control of, or be connected with, any business enterprise which is engaged, directly or through a parent, subsidiary or affiliate, anywhere in (i) Minnesota, North Dakota, South Dakota, Iowa, Wisconsin, Upper Michigan or Nebraska; (ii) Montana, Wyoming, Idaho, Washington or Oregon; and (iii) in any other area of the United States in any line of business in which Purchaser and its subsidiaries are engaged during the period from the Closing Date through the day that Seller's employment with Purchaser is terminated, provided that nothing herein contained shall be construed as preventing Seller from investing his personal assets in such form or manner as will not require any services on his part in the operation of, or control of, the business of the companies in which such investments are made. Purchaser acknowledges that Seller has entered into a Consulting Agreement with Primus Datacom, Inc. under which Seller provides services to Primus Datacom, Inc. Purchaser acknowledges and agrees that this Non-Compete Agreement shall not be construed to prevent or apply in any way to Seller's provision of such services to Primus Datacom, Inc. 2. If the Purchaser elects to terminate the employment arrangement with Seller under the terms of Section 9 (i) of the Employment Agreement, then Section 1 of this Non-Competition Agreement shall be null and void. 3. Seller hereby agrees with Purchaser and Purchaser's subsidiaries and affiliates (the "Company") that Seller will keep confidential any and all confidential information of the Company, including Company's know-how, trade secrets, customer lists, and other information, data and proprietary information relating to Company's business (herein called "Proprietary Information") and will not at any time, without prior written consent of Company, disclose or make known or allow to be disclosed or made known such Proprietary Information to any person, firm, corporation, or other business entity other than Company and persons or entities designated by Company provided, however, that this Section 3 shall be inoperative as to information which (i) is or becomes generally available to the public other than as a result of a disclosure by Seller; (ii) becomes available to Seller on a non-confidential basis from another source that has represented that it is entitled to disclose it; (iii) was known to Seller on a non-confidential basis prior to its disclosure; or (iv) which Seller is required to disclose by law or regulatory or judicial order. This provision shall survive the termination of this Agreement. 4. The waiver by the Purchaser of a breach by Seller of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by him. 5. The rights of the Purchaser under this Agreement shall inure to the benefit of the Purchaser and the successors and assigns of the Purchaser and of Primus. The obligations of the Purchaser under this Agreement shall be binding upon the successors and assigns of the Purchaser. 6. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois. 7. The Seller agrees that any breach or threatened breach by him of any provision of this Agreement shall entitle the Purchaser, in addition to any other legal remedy available to it, to apply to any court of competent jurisdiction to enjoin such breach or threatened breach. 8. To the extent that any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and this Agreement shall be unaffected and continue in full force and effect. In furtherance and not in limitation of the foregoing, should the duration, geographical extent or business activities covering by the provisions of this Agreement be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities which may be valid and enforceable. The Seller acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. SYNAPTX WORLDWIDE, INC. (PURCHASER) JOHN PRIMUS (SELLER) ----------------------------------- -------------------- ---------------------------------- --------------------- By: Ronald L. Weindruch, By: John Primus Chairman, CEO EX-10 5 EXHIBIT 10.4 EXHIBIT 10.4 SYNAPTX WORLDWIDE, INC. NON-COMPETE AGREEMENT --------------------- This agreement made and entered into this 1st day of June, 1998 between Synaptx Worldwide, Inc. corporation ("Purchaser") and Jannine Primus ("Seller"). WITNESSETH THAT: WHEREAS, pursuant to an Agreement and Plan of Stock for Stock Exchange (the "Purchase Agreement") among Purchaser and Seller, a Minnesota resident, the Purchaser wishes to acquire all the outstanding stock of Primus Marketing Associates, Inc. ("Primus"); WHEREAS, Seller is one of the founders of and has been a principal of Primus and due to the nature of and her relationship with Primus, has had access to, and has acquired and assisted in developing confidential and proprietary information relating to the business and operations of Primus, including information with respect to the present and prospective plans, products, systems, processes, customers, suppliers and the sales and marketing methods of Primus; WHEREAS, Seller acknowledges that such information and methods have been, and will continue to be, of central importance to the business of Primus and that the use of such information by, or its disclosure to, competitors of Primus or others could cause substantial harm to Primus and Purchaser; and WHEREAS, the obligation of Purchaser to consummate the Closing is expressly conditioned on the execution and delivery of this Non-Compete Agreement by Seller; NOW, THEREFORE, the parties hereby agree as follows: 1. For five (5) years after the Closing date, Seller agrees that she will not, directly or indirectly (whether as an officer, director, employee, agent, representative, consultant, proprietor, partner, joint venturer, stockholder or otherwise), own, manage, operate, join, control or participate in the ownership, management, operation or control of, or be connected with, any business enterprise which is engaged, directly or through a parent, subsidiary or affiliate, anywhere in (i) Minnesota, North Dakota, South Dakota, Iowa, Wisconsin, Upper Michigan or Nebraska; (ii) Montana, Wyoming, Idaho, Washington or Oregon; and (iii) in any other area of the United States in any line of business in which Purchaser and its subsidiaries are engaged during the period five (5) years after the Closing that nothing herein contained shall be construed as preventing Seller from investing his personal assets in such form or manner as will not require any services on her part in the operation of, or control of, the business of the companies in which such investments are made. 2. If the Purchaser elects to terminate the employment arrangement with John E. Primus under the terms of Section 9 (i) of his Employment Agreement, then Section 1 of this Non-Competition Agreement shall be null and void. 3. Seller hereby agrees with Purchaser and Purchaser's subsidiaries and affiliates (the "Company") that Seller will keep confidential any and all confidential information of the Company, including Company's know-how, trade secrets, customer lists, and other information, data and proprietary information relating to Company's business (herein called "Proprietary Information") and will not at any time, without prior written consent of Company, disclose or make known or allow to be disclosed or made known such Proprietary Information to any person, firm, corporation, or other business entity other than Company and persons or entities designated by Company provided, however, that this Section 3 shall be inoperative as to information which (i) is or becomes generally available to the public other than as a result of a disclosure by Seller; (ii) becomes available to Seller on a non-confidential basis from another source that has represented that it is entitled to disclose it; (iii) was known to Seller on a non-confidential basis prior to its disclosure; or (iv) which Seller is required to disclose by law or regulatory or judicial order. This provision shall survive the termination of this Agreement. 4. The waiver by the Purchaser of a breach by Seller of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by him. 5. The rights of the Purchaser under this Agreement shall inure to the benefit of the Purchaser and the successors and assigns of the Purchaser and of Primus. The obligations of the Purchaser under this Agreement shall be binding upon the successors and assigns of the Purchaser. 6. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois. 7. The Seller agrees that any breach or threatened breach by her of any provision of this Agreement shall entitle the Purchaser, in addition to any other legal remedy available to it, to apply to any court of competent jurisdiction to enjoin such breach or threatened breach. 8. To the extent that any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and this Agreement shall be unaffected and continue in full force and effect. In furtherance and not in limitation of the foregoing, should the duration, geographical extent or business activities covering by the provisions of this Agreement be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities which may be valid and enforceable. The Seller acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. SYNAPTX WORLDWIDE, INC. (PURCHASER) JANNINE PRIMUS (SELLER) ---------------------------------- ----------------------- ----------------------------------- ------------------------- By: Ronald L. Weindruch, By: Jannine Primus Chairman, CEO -----END PRIVACY-ENHANCED MESSAGE-----