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ASSET PURCHASE AGREEMENT
BETWEEN
PRIMUS MARKETING ASSOCIATES, INC.
("SELLER")
PALADYNE CORP.
("PALADYNE")
AND
PRIMUS MARKETING, LLC
("BUYER")
DATED AS OF JUNE __, 1999
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TABLE OF CONTENTS
1. PURCHASE AND SALE OF ASSETS............................................1
1.1 Generally...........................................................1
1.2 Excluded Assets.....................................................2
2. PURCHASE PRICE.........................................................2
2.1 Generally...........................................................2
2.2 Payment of Purchase Price...........................................3
3. ASSUMPTION OF LIABILITIES..............................................3
4. CLOSING................................................................3
5. LABOR AND EMPLOYMENT MATTERS...........................................4
5.1 Generally...........................................................4
5.2 Employment Transition Provisions....................................4
6. PRORATIONS, ETC........................................................4
7. OTHER MATTERS..........................................................4
8. REPRESENTATIONS AND WARRANTIES OF SELLER AND PALADYNE..................4
8.1 Corporate Organization..............................................4
8.2 Qualification to do Business........................................5
8.3 Conflicting Agreements, Governmental Consents.......................5
8.4 Corporate Authority.................................................5
8.5 Actions, Suits, Proceedings.........................................5
8.6 No Material Violations..............................................5
8.7 Title to Assets.....................................................5
8.8 Contracts...........................................................6
8.9 Taxes...............................................................6
8.10 Powers of Attorney...............................................6
8.11 Brokers and Finders..............................................6
8.12 Full Disclosure..................................................6
9. REPRESENTATIONS AND WARRANTIES OF BUYER................................6
9.1 Organization........................................................6
9.2 Conflicting Agreements, Governmental Consents.......................6
9.3 Authority...........................................................7
9.4 Brokers and Finders.................................................7
9.5 Full Disclosure.....................................................7
10. CONDITIONS TO OBLIGATION OF BUYER TO CLOSE.............................7
10.1 Representations and Warranties...................................7
10.2 Observance and Performance.......................................7
10.3 Officer's Certificate............................................7
10.4 Searches.........................................................7
10.5 Consents of Third Parties........................................8
10.6 No Legal Actions.................................................8
10.7 Noncompetition Agreement.........................................8
10.8 Closing Documents................................................8
11. CONDITIONS TO OBLIGATION OF SELLER TO CLOSE............................8
11.1 Representations and Warranties...................................8
11.2 Observance and Performance.......................................8
11.3 Officer's Certificate............................................8
11.4 No Legal Actions.................................................8
12. OPERATION OF BUSINESS PRIOR TO CLOSING.................................8
13. TAXES, FEES AND OTHER EXPENSES.........................................9
13.1 Taxes and Fees...................................................9
13.2 Expenses.........................................................9
14. INDEMNIFICATION BY SELLER AND PALADYNE.................................9
14.1 Generally........................................................9
14.2 Procedures.......................................................9
14.3 Settlement and Compromise.......................................10
15. INDEMNIFICATION BY BUYER..............................................10
15.1 Generally.......................................................10
15.2 Procedures......................................................10
15.3 Settlement and Compromise.......................................11
16. ASSIGNMENT............................................................11
17. COVENANT OF FURTHER ASSURANCES; NAME CHANGE...........................11
18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES............................11
19. TERMINATION OF NON-COMPETE AND EMPLOYMENT AGREEMENTS..................11
20. ENTIRE AGREEMENT......................................................12
21. AMENDMENT AND WAIVER..................................................12
22. CHOICE OF LAW.........................................................12
23. ARBITRATION...........................................................12
24. SEVERABILITY..........................................................12
25. COUNTERPARTS..........................................................13
26. NOTICES...............................................................13
EXHIBIT A --......Equipment
EXHIBIT B --......Contracts
EXHIBIT C --......Employees
EXHIBIT D --......Non-Competition Agreement
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is dated as of June __, 1999, by and
between PRIMUS MARKETING, LLC, a Minnesota limited liability company ("Buyer"),
PRIMUS MARKETING ASSOCIATES, INC., a Minnesota corporation ("Seller"), and
PALADYNE CORP., a Delaware corporation ("Paladyne").
RECITALS
WHEREAS, Seller desires to sell and Buyer desires to purchase
substantially all of the assets of Seller on the terms and subject to the
conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual covenants and conditions contained herein, the parties hereby agree as
follows:
1. PURCHASE AND SALE OF ASSETS
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1.1 Generally. On the terms and subject to the conditions of this
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Agreement, Seller agrees to sell, transfer, convey and deliver to Buyer, and
Buyer agrees to purchase from Seller, on and as of the Closing Date (as defined
in Section 4 hereof), all property and assets of Seller, wherever located and
whether or not reflected in its books and records, other than the Excluded
Assets (as defined in Section 1.2 hereof). The property and assets to be
transferred to Buyer (the "Assets") shall include without limitation the
following:
(a) All right, title and interest of Seller under that certain Office
Lease Agreement dated March 1, 1998 (the "Lease") between Seller and Xxxxxx
Xxxxxxx & Associates relating to the premises located at 0000 Xxxx Xxxxxx Xxxxx
#000, Xxxxxxxxxx, Xxxxxxxxx 00000 (the "Leased Premises").
(b) All machinery, equipment, office equipment, tools, motor vehicles,
spare parts, accessories, furniture, and other miscellaneous tangible personal
property owned by Seller as of the date of this Agreement, including without
limitation the items listed on Exhibit A hereto (collectively, exclusive of
those items of personal property described in clause (e), herein referred to as
the "Equipment");
(c) All rights of Seller under any warranty or guarantee by any
manufacturer, supplier or other transferor of any of the Assets;
(d) All accounts, notes and other receivables in favor of Seller
existing on the Closing Date, together with all collateral security therefor
(the "Accounts Receivable");
(e) All cash receipts received after May 31, 1999;
(f) All inventory (including raw materials, work in process and
finished goods), packaging materials and supplies of Seller (the "Inventory");
(g) All rights of Seller under any contracts, indentures, guarantees,
leases, commitments, or other agreements, including without limitation those
identified in Exhibit B hereto (the "Contracts");
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(h) All interests of Seller in any copyrights, patents, trademarks,
trade names, logos, trade secrets, inventions, know how, other confidential
information and other intellectual property, together with pending applications
for any of the foregoing, including without limitation the name Primus Marketing
Associates;
(i) All telephone numbers and telephone listings;
(j) All sales records, purchase records, customer lists, supplier
lists, advertising and promotional materials, production records and other
records; and all personnel records; provided, however, that Seller may make and
retain copies of any records transferred to Buyer; and
(k) All goodwill and other general intangibles of Seller.
Except as hereinafter specifically provided, the Assets will be transferred by
Seller to Buyer in accordance with this Agreement free and clear of all liens,
security interests or encumbrances.
1.2 Excluded Assets. The following property and assets of Seller
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are excluded from sale to Buyer (the "Excluded Assets"):
(a) Cash and cash equivalents on hand prior to June 1, 1999;
(b) The corporate charter, qualifications to conduct business as a
foreign corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, general ledgers, tax
returns, seals, minute books, stock transfer books and similar documents of
Seller relating to the organization, maintenance and existence of Seller as a
corporation (provided that Buyer shall have access thereto to the extent
reasonably necessary for the operation of the Business and the preparation of
tax returns and financial statements of Buyer following the Closing Date); and
(c) Any of the rights of Seller under this Agreement or any other
agreement between Seller and Buyer entered into on or after the date of this
Agreement in accordance with the terms hereof.
2. PURCHASE PRICE
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2.1 Generally. The total purchase price to be paid to Seller for the
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Assets (hereinafter referred to as the "Purchase Price") shall be equal to the
sum of $52,678.
2.2 Payment of Purchase Price. The Purchase Price shall be payable as
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follows:
(a) At the Closing, Buyer shall pay to Seller $12,500 by delivery of
Buyer's check,
(b) At the Closing, deliver to Seller a certificate(s) representing
107,143 shares of Paladyne (formerly known as Synaptx) Common Stock.
(c) Additional Consideration. Buyer shall pay to Seller an amount
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equal to 1% of Buyer's gross commission receipts for the period commencing
June 1, 1999 and ending on May 31, 2001. Such amounts shall be payable monthly
on the 15th day of each month for the prior months' activity.
3. ASSUMPTION OF LIABILITIES. Except as hereinafter specifically
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provided, Buyer shall not assume any liabilities or obligations of Seller and
Seller shall be solely liable for all liabilities and obligations arising from
or in connection with ownership of the Assets or operation of the Seller's
business prior to the Closing Date, whether or not reflected in its books and
records. Subject to the conditions of this Agreement, on the Closing Date Buyer
shall assume the following liabilities and obligations of Seller (collectively,
the "Assumed Liabilities"):
(a) Obligations of Seller arising from and after May 31, 1999 under
the Contracts listed on Exhibit B;
(b) Obligations of Seller arising from and after May 31, 1999 under
the Lease;
(c) Obligations for salaries and vacations of the employees listed on
Exhibit C accrued after May 31, 1999; and
(d) Outstanding loans with respect to the motor vehicles listed on
Exhibit A.
4. CLOSING. The closing of the transactions contemplated by this
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Agreement (the "Closing") shall take place at the offices of Buyer, Minneapolis,
Minnesota, at 10:00 a.m. on June , 1999, or such other date as Buyer and
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Seller may mutually agree (the "Closing Date"). At the closing (a) Buyer shall
(i) pay to Seller the Purchase Price as specified in Section 2.2(a) hereof,
(ii) deliver to Seller the stock certificates as specified in Section 2.2(b)
hereof, and (iii) deliver to Seller the various certificates as specified in
Section 11 hereof, and (b) Seller shall (i) deliver to Buyer such bills of sale,
assignments and other documents of transfer reasonably required to transfer to
Buyer the interest of Seller in the Assets, and (ii) deliver to Buyer the
various certificates, instruments and documents referred to in Section 10
hereof.
5. LABOR AND EMPLOYMENT MATTERS
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5.1 Generally. Except as specifically set forth in Section 3 hereof,
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Buyer shall not assume any employment or employee benefit obligation, or any
wage or salary payment obligation, including without limitation those arising
under any pension, profit sharing, deferred compensation, bonus, stock option,
severance, welfare, sick leave, vacation, wage or other employee benefit or
compensation plan, procedure, policy or practice of Seller regardless of whether
such plan, procedure, policy or practice is disclosed to Buyer. Buyer shall
offer employment to the persons listed on Exhibit C, on terms and conditions
established by Buyer.
5.2 Employment Transition Provisions. Seller shall terminate the
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employment of each person listed on Exhibit C, effective immediately prior to
the Closing. On the Closing Date, or as soon as practicable thereafter, but in
any event no later than the earlier of the date required by applicable law or
the date that would otherwise have been the next regularly scheduled payday for
each such person, Seller shall pay each such person all accrued wages, salary,
vacation, commission, bonus and other employee compensation payments for all
periods prior to the Closing Date; provided, that Buyer shall be responsible for
and pay salaries (but no other benefits) accrued after May 31, 1999. In
addition, Seller shall pay or provide for all other employee benefits maintained
by Seller for all periods prior to the Closing Date, all in accordance with
applicable law.
6. PRORATIONS, ETC. Utility charges, rents under assumed leases,
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property taxes and other similar obligations to third parties shall be prorated
between Seller and Buyer as of May 31, 1999. Buyer shall be entitled to all
revenue and cash receipts received after May 31, 1999.
7. OTHER MATTERS. On the terms and subject to the conditions of this
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Agreement, on the Closing Date, Buyer, Seller and Paladyne will execute and
deliver a Noncompetition Agreement in the form attached hereto as Exhibit D (the
"Non-Competition Agreement).
8. REPRESENTATIONS AND WARRANTIES OF SELLER AND PALADYNE. Seller and
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Paladyne hereby jointly and severally represent and warrant to Buyer that:
8.1 Corporate Organization. Seller is a corporation duly organized
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and validly existing, is in good standing under the laws of the State of
Minnesota, and has the corporate power and authority to own its properties and
carry on its business as now being conducted and to execute and deliver this
Agreement and consummate the transactions contemplated hereby. Paladyne is a
corporation duly organized and validly existing, is in good standing under the
laws of the State of Delaware, and has the corporate power and authority to
execute and deliver this Agreement and consummate the transactions contemplated
hereby. Paladyne owns all of the issued and outstanding capital stock of Seller.
Seller does not own, directly or indirectly, any capital stock of any class of
or any equity interest in any other corporation, partnership, joint venture or
other entity.
8.2 Qualification to do Business. Seller is duly qualified to do
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business and is in good standing under the laws of the States of North Dakota.
Seller is not required to be qualified to do business in any other jurisdiction.
8.3 Conflicting Agreements, Governmental Consents. The execution and
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delivery by Seller and Paladyne of this Agreement, the Non-Competition
Agreement, and the other agreements, documents and instruments contemplated
hereby, the consummation of the transactions contemplated hereby or thereby, and
the performance or observance by the Seller and Paladyne of any of the terms or
conditions hereof or thereof, will not (a) conflict with, or result in a breach
or violation of the terms or conditions of, or constitute a default under, or
result in the creation of any lien on any of the Assets pursuant to, the
Articles of Incorporation or By-Laws of Seller or Paladyne, any award of any
arbitrator, or any indenture, contract or agreement (including any agreement
with stockholders), instrument, order, judgment, decree, statute, law, rule or
regulation to which Seller, Paladyne or the Assets is subject, or (b) require
any filing or registration by Seller with, or any consent or approval to be
obtained by Seller from, any federal, state or local governmental agency or
authority.
8.4 Corporate Authority. The execution and delivery by Seller and
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Paladyne of this Agreement, the Non-Competition Agreement, and the other
agreements, documents and instruments contemplated hereby, and the consummation
of the transactions contemplated hereby or thereby, have been duly authorized by
all necessary corporate action on the part of Seller and Paladyne. This
Agreement and all other instruments required hereby to be executed and delivered
by Seller are, or when delivered will be, legal, valid and binding obligations
of Seller, enforceable in accordance with their respective terms.
8.5 Actions, Suits, Proceedings. There are no suits, claims or other
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proceedings in law or equity pending, or to the Seller's knowledge threatened,
against the Seller or the business to be transferred, and there are no
judgements outstanding against the Seller or the business to be transferred.
8.6 No Material Violations. The Seller has not been notified by any
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governmental agency of any defects in the business premises that would interfere
with the lawful operation of the business by the Buyer, and the Seller will
advise the Buyer in writing of any such defects that come to the Seller's
attention prior to the completion of the sale. All of the Assets are now and
will be at the time of closing in a condition satisfactory for the use intended
in the operation of the business.
8.7 Title to Assets. Seller has good title to all the Assets, free of
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any liens or encumbrances, and that the Seller shall obtain any governmental
approvals and give any notices required by law or otherwise necessary to avoid
liens upon the Assets.
8.8 Contracts. Exhibit B hereto sets forth correctly all contracts,
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indentures, guarantees, leases, commitments or other agreements to which Seller
is a party or by which it is bound. Seller and, to the knowledge of Seller, each
other party thereto, have substantially performed all obligations required to be
performed by them to date, and are not in default in any material respect, under
any of the instruments or agreements described above. The instruments and
agreements described above which are to be assigned to Buyer hereunder are each
in full force and effect and are assignable to Buyer without the consent of
third parties, and Seller has not waived or assigned to any other person any of
its rights thereunder. Seller has delivered to Buyer true and correct copies of
all such contracts, indentures, guaranties, leases, commitments and other
agreements.
8.9 Taxes. Seller has filed all federal, state and local tax returns
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required to be filed by it, and has paid all federal, state and local income,
profits, franchise, sales, use, property, excise, payroll, and other taxes and
assessments (including interest and penalties) to the extent that such have
become due. No claims for additional taxes have been asserted against Seller and
no audits are pending with respect to any tax liabilities of Seller.
8.10 Powers of Attorney. The Seller does not have a power of attorney
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outstanding with respect to the business.
8.11 Brokers and Finders. Seller has not retained or engaged any
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broker, finder or other financial intermediary in connection with the
transaction contemplated by this Agreement.
8.12 Full Disclosure. No representation or warranty by Seller
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contained in this Section 8 contains any untrue statement of a material fact, or
omits any material fact necessary to make the representations and warranties
contained herein not misleading.
9. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents
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and warrants to Seller as follows:
9.1 Organization. Buyer is a limited liability company duly organized
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and validly existing, is in good standing under the laws of the State of
Minnesota and has the power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby.
9.2 Conflicting Agreements, Governmental Consents. The execution and
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delivery by Buyer of this Agreement, the Noncompetition Agreement and the other
agreements, documents and instruments contemplated hereby, the consummation of
the transactions contemplated hereby or thereby, and the performance or
observance by Buyer of any of the terms or conditions hereof or thereof, will
not (a) conflict with, or result in a breach or violation of the terms or
conditions of, or constitute a default under, the Articles of Organization or
Operating Agreement of Buyer, any award of any arbitrator, or any indenture,
contract or agreement (including any agreement with stockholders), instrument,
order, judgment, decree, statute, law, rule or regulation to which Buyer is
subject, or (b) require any filing or registration by Buyer with, or any consent
or approval to be obtained by Buyer from, any federal, state or local
governmental agency or authority.
9.3 Authority. The execution and delivery by Buyer of this Agreement,
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the Noncompetition Agreement and the other agreements, documents and instruments
contemplated hereby, and the consummation of transactions contemplated hereby or
thereby, have been duly authorized by all necessary action on the part of Buyer.
This Agreement and all other documents and instruments required hereby to be
executed and delivered by Buyer are, or when delivered will be, legal, valid and
binding obligations of Buyer, enforceable in accordance with their respective
terms.
9.4 Brokers and Finders. Buyer has not retained any broker, finder or
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other financial intermediary in connection with the transactions contemplated by
this Agreement.
9.5 Full Disclosure. No representation or warranty by Buyer contained
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in this Section 9 contains any untrue statement of a material fact, or omits any
material fact necessary to make the representations and warranties contained
herein not misleading.
10. CONDITIONS TO OBLIGATION OF BUYER TO CLOSE. The obligation of
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Buyer to effect the closing of the transactions contemplated by this Agreement
is subject to the satisfaction prior to or at the Closing of the following
conditions:
10.1 Representations and Warranties. The representations and
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warranties of Seller contained in this Agreement shall be true and correct on
the Closing Date, as if made on the Closing Date.
10.2 Observance and Performance. Seller shall have observed and
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performed all covenants and agreements required by this Agreement to be observed
or performed by Seller on or prior to the Closing Date.
10.3 Officer's Certificate. Seller and Paladyne shall have delivered
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to Buyer a certificate, dated the Closing Date, as to the matters set forth in
Sections 10.1 and 10.2.
10.4 Searches. Buyer shall have received, as of a date no more than
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5 days prior to the Closing Date, Uniform Commercial Code Searches against
Seller from the Secretary of State of Minnesota and from such other states
and/or counties as Buyer shall reasonably request, together with tax lien and
judgment searches, in each case certified by a reporting service satisfactory to
Buyer, and disclosing no liens or security interests against the Assets.
10.5 Consents of Third Parties. Seller shall have provided Buyer with
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duly executed copies of any material consents necessary to permit the assignment
of the contracts, leases, commitments and agreements described in Exhibit B
hereto without breach thereof.
10.6 No Legal Actions. No court or governmental authority of competent
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jurisdiction shall have issued an order restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this Agreement,
and no person, firm, corporation or governmental agency shall have instituted an
action or proceeding which shall not have been previously dismissed seeking to
restrain, enjoin or prohibit the consummation of the transactions contemplated
by this Agreement.
10.7 Noncompetition Agreement. Seller and Paladyne shall have executed
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the Noncompetition Agreement.
10.8 Closing Documents. Buyer shall have received such, bills of sale,
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assignments and other documents of transfer reasonably required to transfer to
Buyer the interests of Seller in the Assets consistent with the terms of this
Agreement.
11. CONDITIONS TO OBLIGATION OF SELLER TO CLOSE. The obligation of
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Seller to effect the transactions contemplated by this Agreement is subject to
the satisfaction prior to or at the Closing of the following conditions:
11.1 Representations and Warranties. The representations and
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warranties of Buyer contained in this Agreement shall be true and correct on the
Closing Date, as if made on the Closing Date.
11.2 Observance and Performance. Buyer shall have observed and
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performed all covenants and agreements required by this Agreement to be observed
or performed by Buyer on or prior to or at the Closing Date.
11.3 Officer's Certificate. Buyer shall have delivered to Seller a
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certificate, dated the Closing Date, as to the matters set forth in
Sections 11.1 and 11.2.
11.4 No Legal Actions. No court or governmental authority of competent
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jurisdiction shall have issued an order restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this Agreement,
and no person, firm, corporation or governmental agency shall have instituted an
action or proceeding which shall not have been previously dismissed seeking to
restrain, enjoin or prohibit the consummation of the transactions contemplated
by this Agreement.
12. OPERATION OF BUSINESS PRIOR TO CLOSING. Seller will use
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reasonable efforts to preserve intact its business organization, keep available
the services of key employees on terms no less favorable to Seller than those on
which such employees are presently employed, and preserve for Buyer the good
will of suppliers, customers and others having business relationships with the
business. Seller will maintain its books and records during such period in a
manner consistent with past practice. Seller will in all respects operate its
business in the ordinary course.
13. TAXES, FEES AND OTHER EXPENSES
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13.1 Taxes and Fees. Seller shall be responsible for and shall pay all
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sales, transfer or similar taxes or governmental charges, if any, and all deed
taxes and recording fees with respect to the sale and purchase of the Assets,
whether levied against the Assets, Seller or Buyer.
13.2 Expenses. Each party shall pay all of the costs and expenses
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incurred by it in negotiating and preparing this Agreement (and all other
agreements, certificates, instruments and documents executed in connection
herewith), in performing its obligations under this Agreement, and in otherwise
consummating the transactions contemplated by this Agreement, including without
limitation its attorneys' fees and accountants' fees.
14. INDEMNIFICATION BY SELLER AND PALADYNE
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14.1 Generally. Seller and Paladyne hereby jointly and severally agree
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to defend, indemnify and hold harmless Buyer against and with respect to:
(a) Any and all liabilities and obligations of Seller except to the
extent assumed and agreed to be paid by Buyer pursuant to Section 3 hereof, and
any and all liabilities and obligations arising from or in connection with
ownership of the Assets or operation of the Business on or prior to the Closing
Date, whether or not reflected in Seller's books and records and whether or not
readily apparent on or prior to the Closing Date;
(b) Any and all loss, injury, damage or deficiency resulting from any
misrepresentation, omission or breach of warranty on the part of Seller or
Paladyne under this Agreement;
(c) Any and all loss, injury, damage or deficiency resulting from any
non-fulfillment of any covenant or agreement on the part of Seller or Paladyne
under this Agreement; and
(d) Any and all demands, claims, actions, suits, proceedings,
assessments, judgments, costs and legal and other expenses incident to any of
the foregoing.
14.2 Procedures. In the event any demands or claims are asserted
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against Buyer or any actions, suits or proceedings are commenced against Buyer
for which Seller is obligated to indemnify Buyer under this Section 14, then
Buyer shall give timely notice thereof to Seller in order to permit Seller the
necessary time to evaluate the merits of such demand, claim, action, suit or
proceeding and defend, settle or compromise the same so that Seller's interests
are not materially prejudiced; and, in the event Buyer fails to provide such
timely notice, Seller shall have no liability whatsoever to indemnify and defend
Buyer from such demand, claim, action, suit or proceeding pursuant to this
Section 14 and Buyer shall be solely responsible for the defense thereof and any
and all liability of Buyer arising therefrom. Within 10 business days after such
notice, Seller shall assume the defense thereof with counsel chosen by Seller or
its insurer and reasonably acceptable to Buyer. Seller shall not be liable for
any costs or expenses incurred by Buyer in connection with any demand, claim,
action, suit or proceeding for which Seller is obligated to indemnify Buyer
under this Section 14, provided that Seller shall have assumed the defense
thereof in accordance with this Section 14.
14.3 Settlement and Compromise. Seller shall not settle or compromise
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any demands, claims, actions, suits or proceedings for which Buyer has sought
indemnification from Seller unless it shall have given Buyer not less than 15
days prior written notice of the proposed settlement or compromise and afforded
Buyer an opportunity to consult with Seller regarding the proposed settlement or
compromise.
15. INDEMNIFICATION BY BUYER
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15.1 Generally. Buyer hereby agrees to defend, indemnify and hold
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harmless Seller against and with respect to:
(a) Any and all liabilities and obligations of Seller assumed by Buyer
pursuant to this Agreement and any and all liabilities and obligations arising
from or in connection with ownership of the Assets or operation of the Business
after the Closing Date, except to the extent Seller is required to indemnify
Buyer in respect thereof pursuant to Section 14.1;
(b) Any and all loss, injury, damage or deficiency resulting from any
misrepresentation, omission or breach of warranty on the part of Buyer under
this Agreement;
(c) Any and all loss, injury, damage or deficiency resulting from any
non-fulfillment of any covenant or agreement on the part of Buyer under this
Agreement; and
(d) Any and all demands, claims, actions, suits or proceedings,
assessments, judgments, costs and legal and other expenses incident to any of
the foregoing.
15.2 Procedures. In the event any demands or claims are asserted
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against Seller or any actions, suits or proceedings are commenced against Seller
for which Buyer is obligated to indemnify Seller under this Section 15, then
Seller shall give timely notice thereof to Buyer in order to permit Buyer the
necessary time to evaluate the merits of such demand, claim, action, suit or
proceeding and defend, settle or compromise the same so that Buyer's interest is
not materially prejudiced; and, in the event Seller fails to provide such timely
notice, Buyer shall have no liability whatsoever to indemnify and defend Seller
from such demand, claim, action, suit or proceeding pursuant to this Section 15
and Seller shall be solely responsible for the defense thereof and any and all
liability of Seller arising therefrom. Within 10 business days after such
notice, Buyer shall assume the defense thereof with counsel chosen by Buyer and
reasonably acceptable to Seller. Buyer shall not be liable for any costs or
expenses incurred by Seller in connection with any demand, claim, action, suit
or proceeding for which Buyer is obligated to indemnify Seller under this
Section 15, provided that Buyer shall have assumed the defense hereof in
accordance with this Section 15.
15.3 Settlement and Compromise. Buyer shall not settle or compromise
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any demands, claims, actions, suits or proceedings for which Seller has sought
indemnification from Buyer unless it shall have given Seller not less than 15
days prior written notice of the proposed settlement or compromise and afforded
Seller an opportunity to consult with Buyer regarding the proposed settlement or
compromise.
16. ASSIGNMENT. This Agreement may not be assigned by either party
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hereto without the prior written consent of the other. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their
successors and permitted assigns, and no person, firm or corporation other than
the parties, their successors and permitted assigns, shall acquire or have any
rights under or by virtue of this Agreement.
17. COVENANT OF FURTHER ASSURANCES; NAME CHANGE.
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(a) Further Assurances. From time to time after the Closing, at the
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request of Buyer and without further consideration, Seller will execute and
deliver such other instruments of transfer and take such other actions as Buyer
may reasonably require to transfer the Assets to, and vest title of the Assets
in, Buyer, and to put Buyer in possession of the Assets. In the event that it
shall be necessary for Seller to qualify to do business as a foreign corporation
in any state after the Closing in order for Buyer to enforce any material claim,
Seller shall so qualify promptly upon written request of Buyer.
(b) Name Change. Within one day after the Closing Date the Seller
-----------
shall amend its Articles of Incorporation to change its name to a name that does
not include "Primus".
18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
------------------------------------------
and warranties contained herein, and all other written representations and
warranties of Buyer and Seller contained in the instruments executed in
connection with the consummation of the transactions provided for herein, shall
survive the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
19. TERMINATION OF NONCOMPETE AND EMPLOYMENT AGREEMENTS. Paladyne and
---------------------------------------------------
Seller agree that, effective as of the Closing Date, (i) Xxxx X. Xxxxxx and
Xxxxxxx Xxxxxx shall be released from the restrictions contained in those
certain Non-Compete Agreements dated May 1, 1998 between Synaptx Worldwide, Inc.
(the predecessor in interest to Paladyne) and each of Xxxx X. Xxxxxx and Xxxxxxx
Xxxxxx, (ii) Xxxx X. Xxxxxx shall be released from any restrictions contained in
that certain Employment Agreement dated May 1, 1998 between Seller and Xxxx X.
Xxxxxx, and (iii) each of the other employees listed on Exhibit C hereto shall
be released from any restrictions in any non-competition or similar agreement
between any such employee and Paladyne.
20. ENTIRE AGREEMENT. This Agreement, including the exhibits and
----------------
schedules attached to this Agreement, constitutes the entire agreement and
understanding between Seller and Buyer with respect to the sale and purchase of
the Assets and the other transactions contemplated by this Agreement. All prior
representations, understandings and agreements between the parties with respect
to the purchase and sale of the Assets and the other transactions contemplated
by this Agreement are superseded by the terms of this Agreement.
21. AMENDMENT AND WAIVER. Any provision of this Agreement may be
--------------------
amended or waived only by a writing signed by the party against which
enforcement of the amendment or waiver is sought.
22. CHOICE OF LAW. This Agreement shall be construed and interpreted
-------------
in accordance with the laws of the State of Minnesota, as though all acts and
omissions related to this Agreement occurred in the State of Minnesota.
23. ARBITRATION. Except as provided below, any controversy or claim
-----------
arising out of or relating to this Agreement, including disputes relating to its
formation, or the breach thereof, shall be settled by arbitration in
Minneapolis, Minnesota, at a time and location designated by the arbitrator, but
not exceeding 90 days after a demand for arbitration has been made. Arbitration
shall be conducted by the American Arbitration Association in accordance with
its Rules of Commercial Arbitration, and judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall be a retired state or federal judge or any attorney who has
practiced business litigation for at least 10 years. Arbitration will be
conducted pursuant to the provisions of this Agreement, and the Commercial
Arbitration Rules of the American Arbitration Association. Limited civil
discovery shall be permitted for the production of documents and taking of
depositions. Unresolved discovery disputes may be brought to the attention of,
and may be decided by, the arbitrator. The arbitrator shall assess the costs and
expenses of the arbitration against the parties in such proportion as may be
fair and equitable. Nothing herein contained shall bar either party from seeking
equitable remedies in a court of appropriate jurisdiction.
24. SEVERABILITY. The provisions of this Agreement shall, where
------------
possible, be interpreted so as to sustain their legality and enforceability, and
for that purpose the provisions of this Agreement shall be read as if they cover
only the specific situation to which they are being applied. The invalidity or
unenforceability of any provision of this Agreement in a specific situation
shall not affect the validity or enforceability of that provision in other
situations or of other provisions of this Agreement.
25. COUNTERPARTS. This Agreement may be executed in counterparts,
------------
each of which shall be considered an original.
26. NOTICES. All notices given pursuant to this Agreement shall be in
-------
writing and shall be delivered by hand or sent by United States registered mail,
postage prepaid, addressed as follows (or to another address or person as a
party may specify on notice to the other):
(i) If to Seller or Paladyne:
Paladyne Corp.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx
(ii) If to Buyer:
Primus Marketing, LLC
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date and year
first above written.
BUYER: PRIMUS MARKETING, LLC
By
-----------------------------------
Its
---------------------------------
SELLER: PRIMUS MARKETING ASSOCIATES, INC.
By
-----------------------------------
Its
---------------------------------
PALADYNE: PALADYNE CORP.
By
-----------------------------------
Its
---------------------------------
[Asset Purchase Agreement]
EXHIBIT A
EQUIPMENT
1994 Jeep Grand Cherokee
1994 Mazda 626
1995 Chevy Blazer S10
EXHIBIT B
CONTRACTS
ABB
ADC
AFL
AMERICON
AMP
ARNCO
ASSOCIATED PLASTICS
CHANCE
CORTELCO
COPPERWELD
CME WIRE
DEVTEK
EXFO
GS METALS
FIBERTEK
HALLS
3I
XXXX ELECTRONICS
XXXXXX
PREMAX
RELTEK
EXHIBIT C
EMPLOYEES
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
