TERMINATION AND EXCHANGE AGREEMENT
Exhibit
10.11
THIS
TERMINATION AND EXCHANGE AGREEMENT (the “Agreement”)
is
made as of February 19, 2008 (the “Effective
Date”),
by
and among PRIMORIS CORPORATION, a Nevada corporation (the “Company”),
BORN
HEATERS CANADA ULC, an Alberta corporation and subsidiary of the Company
(“Subsidiary”),
BORN
HEATERS CANADA LTD., an Alberta corporation (“Born”),
and
RHAPSODY ACQUISITION CORP., a Delaware Corporation (“Rhapsody”).
RECITALS
A. The
Company and Born are parties to that certain Put and Call Agreement dated
October 3, 2005 (the “Put
and Call Agreement”).
B. Born
owns
sixty (60) shares of Class B Non-Voting Common Stock of Subsidiary (the
“Born
Shares”).
The
Company owns all of the remaining capital stock of Subsidiary.
C. The
Company intends to merge (the “Merger”)
with
and into Rhapsody with Rhapsody as the surviving corporation pursuant to that
certain Agreement and Plan of Merger by and among Rhapsody, the Company and
certain shareholders of the Company (the “Merger
Agreement”).
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to them in the Merger Agreement.
D. The
Company, Subsidiary, Born and Rhapsody desire to, contingent upon consummation
of the Merger, terminate the Put and Call Agreement and cancel the Born Shares.
In consideration of the termination of the Put and Call Agreement and
cancellation of the Born Shares, (i) Rhapsody desires to issue to Born Four
Hundred Thirty-Seven Thousand Four Hundred (437,400) shares of common stock
of
Rhapsody (the “Rhapsody
Shares”)
In
addition, at the Closing, Subsidiary desires to pay to Born Nine Hundred
Eighty-Nine Thousand Three Hundred Fifty-Four Dollars ($989,354) (the
“Payment”).
AGREEMENT
NOW,
THEREFORE, the parties do hereby agree as follows:
1. Termination;
Exchange.
Effective upon consummation of the Merger, the parties hereto agree
that:
(a) Termination.
The Put
and Call Agreement shall be terminated, by mutual agreement and without
liability to the Company or Born, and shall have no further force and
effect.
(b) Exchange
of Shares.
Born
shall surrender the Born Shares to Subsidiary, and Subsidiary will cancel the
Born Shares. In consideration of surrender of the Born Shares and termination
of
the Put and Call Agreement, (i) the Company shall pay to Born the Payment
in cash and (ii) Rhapsody shall issue to Born the Rhapsody Shares, of which
Four Hundred Four Thousand Five Hundred Ninety-Five (404,595) shall be issued
at
Closing, and Thirty-Two Thousand Eight Hundred Five (32,805) shall be Escrow
Shares (as defined in Section 1.11 of the Merger Agreement).
Notwithstanding the issuance of the Rhapsody Shares, Born shall be entitled
to
its proportionate number of EBITDA Shares to be issued pursuant to Section
1.18
of the Merger Agreement. .
(c) Born
Acknowledgement.
In
consideration of the Payment and issuance of the Rhapsody Shares, Born hereby
acknowledges that (i) it is bound by the Merger Agreement, including the
Escrow Agreement, and (ii) it shall not be entitled to participate in any
cash distribution or tax-related distribution by the Company to its stockholders
in connection with the Merger; provided, however, that Born will be entitled
to
participate in payment of the EBITDA Shares pursuant to the Merger
Agreement.
2. Representations
and Warranties.
(a) Born
represents and warrants to the Company, Subsidiary and Rhapsody that Born owns
the Born Shares free and clear of any security interests, options, warrants,
purchase rights, contracts, commitments, equities, claims, encumbrances and
demands. Born is not a party to any option, warrant, purchase right or other
contract or commitment that could require Born to sell, transfer or otherwise
dispose of any of the Born Shares (other than the Put and Call Agreement and
this Agreement).
(b) Each
of
the parties hereto represents to the other parties hereto that it has the full
power and authority to enter into, sign and deliver this Agreement and to
perform all of the obligations set forth herein.
(c) Each
of
the parties hereto represents to the other parties hereto that this Agreement
and all other documents, instruments and agreements executed by each of the
parties hereto in connection herewith have been validly executed and delivered
by such party and constitute such party’s valid and legally binding agreements,
enforceable against such party in accordance with their terms, except to the
extent that enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the
enforceability of creditors’ rights generally, or by general equitable
principles.
3. Miscellaneous.
(a) Survival
of Representations and Warranties.
All
representations, warranties and covenants under this Agreement shall survive
the
closing and delivery of this Agreement.
(b) Captions.
The
section headings contained herein are for reference purposes only and shall
not
in any way affect the meaning or interpretation of this Agreement.
(c) Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding of the Parties
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, between the Parties. No
representation, promise or inducement has been made by any Party that is not
embodied in this Agreement or in the other documents and agreements delivered
in
accordance herewith, and no Party shall be bound by or be liable for any alleged
representation, promise or inducement not so set forth.
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(d) Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, and it shall not be necessary in making proof of this
Agreement, to produce or account for more than one such
counterpart.
(e) Further
Assurances.
The
Parties agree that they will execute any additional documents which may be
necessary to carry out the terms and intentions of the Parties.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above indicated.
| THE COMPANY: |
PRIMORIS
CORPORATION,
a
Nevada corporation
|
|
| |
|
|
| By: | /s/ Xxxxx Xxxxx | |
| Xxxxx Xxxxx, Chief Executive Officer | ||
| SUBSIDIARY: |
BORN
HEATERS CANADA ULC,
an
Alberta corporation
|
|
| |
|
|
| By: | /s/ Xxxxxx Xxxxxxxx | |
| Name: | Xxxxxx Xxxxxxxx | |
| Its: | CFO | |
| BORN: |
BORN
HEATERS CANADA LTD.,
an
Alberta corporation
|
|
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxxx | |
| Xxxxx X. Xxxxxxx, President | ||
| RHAPSODY: |
a
Delaware corporation
|
|
| |
|
|
| By: | /s/ Xxxx Xxxxxxxxx | |
|
Xxxx
Xxxxxxxxx, Chairman, CEO and President
|
||
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