1
EXHIBIT 10.5
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
COMPASS KNOWLEDGE HOLDINGS, INC.,
a Nevada corporation,
AND
UNIVERSITY OF FLORIDA FOUNDATION, INC.,
a Florida corporation
2
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is entered into this
______ day of December, 1999 by and between COMPASS KNOWLEDGE HOLDINGS, INC., a
Nevada corporation ("Compass") and UNIVERSITY OF FLORIDA FOUNDATION, INC.,
("UFF").
RECITALS:
In consideration of the mutual covenants and agreements contained in
this Agreement, and intending to be legally bound hereby, Compass and UFF agree
as follows:
ARTICLE I.
PURCHASE AND SALE OF UFF INTEREST
1.1. Purchase and Sale of Shares. Subject to the terms and conditions
of this Agreement, on the Closing Date (as hereinafter defined) UFF shall sell
to Compass and Compass shall purchase from UFF the percentage of ownership
interest, (i.e., 35 percent) which UFF owns in Intelicus, L.C., a Florida
limited liability company (the "Membership Interest").
ARTICLE II.
PURCHASE PRICE - PAYMENT
2.1. PURCHASE PRICE. The purchase price (the "Purchase Price") to be
paid by Compass for the Membership Interest shall be:
(a) Stock. Four hundred and sixty five thousand (465,000)
shares of voting common stock in Compass (the "Acquisition Shares"). Rights to
obtain any additional equity interest in Intelicus by UFFI (i.e., options,
warrants, convertible debentures, etc.) immediately prior to the Acquisition
shall be terminated and thereafter they shall be null and void, AD INITIO.
2.2. DELIVERY AND PRICE OF MEMBERSHIP INTEREST.
(a) On the Closing Date and subject to the terms and
conditions of this Agreement, Compass will deliver the Purchase Price in the
form described in Section 2.1 above and UFF will deliver to Compass, with an
appropriate instrument of conveyance, a certificate representing the Membership
Interest. If the certificate evidencing the Membership Interest has been lost,
stolen or destroyed, UFF will deliver to Compass an indemnity agreement and an
affidavit providing such certificate is lost, stolen or destroyed.
2.5 CLOSING. Consummation of the contemplated transaction (the
"Closing") shall take place in the offices of Compass in Ocoee, Florida on
December____, 1999 or on such other date or at such other time or place as may
be mutually agreed upon in writing by the parties hereto (the "Closing Date").
Notwithstanding the foregoing Closing Date, the parties hereby agree that unless
otherwise agreed in writing the Closing shall be effective on December 1, 1999
(the "Effective Date").
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
OF UFF
UFF makes the following representations and warranties to Compass, each
of which is true and correct on the date hereof, shall remain true and correct
to and including the Closing Date, shall be unaffected by any investigation
heretofore or hereafter made by Compass, or any knowledge of Compass
1
3
other than as specifically disclosed in the disclosure schedules delivered to
Compass, and shall survive the Closing of the transactions provided for herein
for a period of twelve (12) months. Notwithstanding anything herein to the
contrary, if Compass, by written notice prior to the expiration of the said
twelve (12) month period, advises UFF of its question, dispute, debate, variance
or contention relative to any specific representation or warranty of UFF such
survival period shall be extended until such time as the matter in question is
resolved.
3.1. MEMBERSHIP INTEREST. UFF is the owner of the Membership Interest.
The Membership Interest is validly issued to UFF, fully paid and nonassessable.
Upon delivery of the Membership Interest, Compass will receive good and
unencumbered title free and clear of all liens, restrictions, charges,
encumbrances, and other security interests of any kind or nature whatsoever.
3.2. CONSENTS. The execution, delivery and performance by UFF with
respect to this Agreement and the consummation by UFF of the transactions
contemplated hereby do not require any consent that has not been received prior
to the date hereof.
3.3. BROKERS. UFF does not have any liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Compass or Intelicus could
become liable or obligated.
3.4. DISCLOSURE. To the best information, knowledge and reasonable
belief of UFF, no representation or warranty by UFF in this Agreement, nor any
statement, certificate, schedule, document or exhibit hereto furnished or to be
furnished by or on behalf of UFF pursuant to this Agreement or in connection
with transactions contemplated hereby, contains or shall contain any untrue
statement of material fact or omits or shall omit a material fact necessary to
make the statements contained therein not materially misleading.
3.5. POWER AND AUTHORITY; DUE AUTHORIZATION. UFF has full capacity,
ability, power and authority to execute and deliver this Agreement and each of
the Closing Documents to which it is or will be a party and to consummate the
Transactions. No corporate proceeding which has not already been taken is
necessary to approve the Transactions. Assuming that this Agreement and each of
the Closing Documents to which Compass is a party constitutes a valid and
binding agreement of Compass, this Agreement and each of the Closing Documents
to which UFF is a party constitutes, or will constitute when executed and
delivered, a valid and binding agreement of UFF in each case enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency or other similar laws relating to the
enforcement of creditors' rights generally and by the applicable of general
principles of equity.
3.6 NO VIOLATION. Neither the execution and delivery of this Agreement
or the other documents and instruments to be executed and delivered by UFF in
connection with this Agreement, nor the consummation by UFF of the contemplated
transactions will (i) violate any statute, law or regulation, or any order,
injunction or decree of any court or governmental authority; (ii) require any
authorization, consent, approval, or other action by any court or governmental
agency; or (iii) violate or conflict with, or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
any contract, understanding or arrangement, to which UFF may be bound, or which
may result in the creation of any lien, charge or encumbrance upon the
Membership Interest.
3.7 LICENSES AND PERMITS. Except as set forth in Schedule 3.11, to the
actual knowledge of UFF (without any investigation on the part of UFF), neither
UFF or Intelicus has received notice of any violations in respect of any
licenses, permits, concessions, grants, franchises, approvals or authorizations
2
4
necessary or required for the use or (without having made any investigation)
ownership of Intelicus' assets and the operation of its business of which
Compass is not aware. To the actual knowledge of UFF (without having made any
investigation) no proceeding is pending or, to the actual knowledge of UFF,
threatened, which seeks revocation or limitation of any such licenses, permits,
concessions, grants, contracts, franchises, approvals or authorizations.
3.8 LITIGATION. Except as set forth in Schedule 3.12 to the actual
knowledge and reasonable belief of UFF (without having made any investigation),
(i) there are no pending (served) actions, proceedings or regulatory agency
investigations against Intelicus or threatened against Intelicus of which
Compass is not aware, and (ii) no such action, proceeding, or regulatory agency
investigation has been pending (served) during the three-year period preceding
the date of this Agreement for which Compass, its subsidiaries or any of its
officers, directors or employees has or will have any responsibility or will
incur any costs or expenses. No assertion has ever been made to UFF, of which
Compass is not aware, to the effect that Compass, any of its subsidiaries or any
of its officers, directors or employees has or will have any liability as to a
third party claim, and UFF has no knowledge of any basis for such an assertion.
3.10 SECURITIES REPRESENTATIONS. UFF hereby represents and warrants to
Compass as follows, recognizing that the information contained herein is being
furnished to Compass in order to induce Compass to enter into the Transactions.
UFF understands that (a) Compass will rely on the information contained herein,
(b) the Acquisition Shares will not be registered under the Act in reliance upon
exemptions from registration afforded under the Act, which may include
Regulation D promulgated thereunder ("Regulation D"), and (c) except as
otherwise provided in the Registration Rights Agreement (as set forth in Section
6.8), the Acquisition Shares will not be registered and/or otherwise qualified
under any state securities laws.
A. UFF is willing and able to bear the economic risk of an
investment in the Acquisition Shares. UFF has adequate means of providing for
current needs and contingencies, has no need for liquidity in the investment,
and is able to bear the economic risk of an investment in Compass of the size
contemplated. In making this statement, UFF considered whether UFF could afford
to hold the Acquisition Shares for an indefinite period and whether, at this
time, UFF could afford a complete loss of an investment in the Acquisition
Shares.
B. UFF's purchase of the Acquisition Shares will be solely for
UFF's own account and not for the account of any other person.
C. The Acquisition Shares are being acquired by UFF in good
faith for investment and not without a view to distributing such Acquisition
Shares to others or otherwise reselling said Acquisition Shares or any portion
thereof. UFF understands that the substance of the above representations is (i)
that UFF does not presently intend to sell or otherwise dispose of all or any
part of the Acquisition Shares; (ii) that UFF does not now have in mind the sale
or other disposition of all or any part of the Acquisition Shares on the
occurrence or nonoccurrence of any predetermined event; and (iii) that Compass
is relying upon the truth and accuracy of the representations.
D. UFF understands that the purchase of the Acquisition Shares
is subject to risks as stated in the Due Diligence Materials (as hereinafter
defined) or as otherwise may be applicable to similar investments.
E. UFF has reviewed the Due Diligence Materials and has
engaged in an independent investigation of Compass, and no oral or written
representations beyond those representations set forth herein or in the Due
Diligence Materials have been made to or been relied upon by UFF.
3
5
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF COMPASS
Compass hereby makes the following representations and warranties to
UFF, each of which Compass represents to be true and correct on the date hereof,
shall remain true and correct to and including the Effective Date, shall be
unaffected by any investigation heretofore or hereafter made by UFF, or any
knowledge of UFF other than as specifically disclosed in the disclosure
schedules delivered to UFF, and shall survive the Closing of the transactions
provided for herein for a period of twelve (12) months. Notwithstanding anything
herein to the contrary, if UFF, by written notice prior to the expiration of the
said twelve (12) month period, advises Compass of any question, dispute, debate,
variance or contention relative to any specific representation or warranty of
Compass such survival period shall be extended until such time as the matter in
question is resolved.
4.1. ORGANIZATION. Compass is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and is not
required to be qualified or licensed as a foreign corporation in any other
jurisdiction in which it has not done so already. Compass has the full power and
authority to own all its assets and to conduct its business as and where its
business is presently conducted.
4.2. AUTHORITY AND APPROVAL OF AGREEMENT.
(a) The execution and delivery of this Agreement by Compass
and the performance of all Compass's obligations hereunder have been duly
authorized and approved by all requisite corporate action on the part of Compass
pursuant to applicable law. Compass has the power and authority to execute and
deliver this Agreement and to perform all its obligations hereunder.
(b) This Agreement and each of the other documents,
instruments and agreements executed by Compass in connection herewith constitute
the valid and legally binding agreements of Compass, enforceable against Compass
in accordance with their terms, except that: (i) enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application affecting the enforcement of the rights and remedies of
creditors; and (ii) the availability of equitable remedies as may be limited by
equitable principles.
4.3. NO VIOLATIONS. Neither the execution, delivery or performance of
this Agreement or any other documents, instruments or agreements executed by the
Compass in connection herewith, nor the consummation of the transactions
contemplated hereby: (a) constitutes a violation of or default under (either
immediately, upon notice or upon lapse of time) the Articles of Incorporation or
Bylaws of Compass, any provision of any contract to which Compass or its assets
may be bound, any judgment to which Compass is bound or any law applicable to
Compass; or (b) results in the creation or imposition of any encumbrance upon,
or give any third person any interest in or right to, any or all of the
Acquisition Shares or any of the assets of Compass; or (c) results in the loss
or adverse modification of, or the imposition of any fine or penalty with
respect to, any license, permit or franchise granted or issued to, or otherwise
held by or for the use of, Compass. Compass and its shareholders have received
all necessary consents from Pioneer Venture Associates Limited Partnership and
its affiliates to the issuance and transfer to UFF of the Acquisition Shares.
4.4. CONSENTS. The execution, delivery and performance by Compass of
this Agreement and the consummation by Compass of the transactions contemplated
hereby do not require any consent that has not been received prior to the date
hereof.
4
6
4.5. BROKERS. Compass has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the UFF or the Company could become
liable or obligated.
4.6 OTHER REPRESENTATIONS AND WARRANTIES. (a) Compass has delivered to
UFF a true and complete copy of its (i) audited financial statements for the
fiscal years ended December 31, 1998 and 1997, and unaudited interim financial
statements for the period ended October 31, 1999 (the "Compass Financial
Statements"). The Compass Financial Statements are complete, accurate and fairly
present the financial condition of Compass as of the dates thereof and the
results of its operations for the periods then ended. There are no material
liabilities or obligations either fixed or contingent not reflected therein. The
Compass Financial Statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes thereto) and fairly present the financial
position of Compass as of the dates thereof and the results of its operations
and changes in financial position for the periods then ended.
(b) Since October 31, 1999, there have not been any material
adverse changes in the financial condition of Compass.
(c) Neither Compass nor any Compass subsidiary (hereinafter a
"Compass Sub") is a party to or the subject of any pending litigation, claims,
or governmental investigation or proceeding not reflected in the Compass
Financial Statements or otherwise disclosed herein, and there are no lawsuits,
claims, assessments, investigations, or similar matters, to the best knowledge
of Compass, threatened or contemplated against or affecting a Compass Sub,
Compass, its management or its properties.
(d) Compass and each Compass Sub have filed all federal,
state, county and local income, excise, property and other tax, governmental
and/or related returns, forms, or reports, which are due or required to be filed
by it prior to the date hereof and have paid or made adequate provision in the
Compass Financial Statements for the payment of all taxes, fees, or assessments
which have or may become due pursuant to such returns or pursuant to any
assessments received. Neither Compass nor any Compass Sub is delinquent or
obligated for any tax, penalty, interest, delinquency or charge.
(e) Compass's authorized capital stock presently consists of:
(i) 50,000,000 shares of Common Stock, $.001 par value, of which 14,750,000
(500,000 of which have been reserved for UFF) shares are presently issued and
outstanding and 5,000 shares of Series A preferred stock, $.001 par value, of
which 2,000 shares are issued and outstanding. All outstanding shares of capital
stock of Compass and Compass Sub are, or shall be at Closing, validly issued,
fully paid and nonassessable. Other than as set forth in the Certificate of
Designation for the Series A Preferred Stock and described in Schedule 4.6(e),
there are no existing options, calls, warrants, preemptive rights, registration
rights or commitments of any character relating to the issued or unissued
capital stock or other securities of either Compass or Compass Sub.
(f) Compass has (and at the Closing will have) disclosed in
writing all events, conditions and facts materially affecting the business,
financial conditions or results of operations of either Compass or a Compass
Sub.
(g) The corporate financial records, minute books, an
Information Statement dated November 1, 1999, a Private Placement Memorandum
dated November 1, 1999, the Investment Agreement together with all exhibits
entered into with Pioneer Venture Associates Limited Partnership dated November
5, 1999, the Agreement and Plan of Merger by and between Compass and Compass
Knowledge Group, Inc. dated November 18, 1999 together with all exhibits and
schedules and other documents and records of
5
7
Compass and Compass Sub (the "Due Diligence Materials") have been made available
to UFF prior to the Closing and to the best knowledge of Compass, all
information contained therein is accurate.
(h) Neither Compass nor a Compass Sub has breached, nor is
there any pending, or to the knowledge of management, any threatened claim that
Compass has breached, any of the terms or conditions of any agreements,
contracts or commitments to which it is a party or by which it or its properties
is bound. The execution and performance hereof will not violate any provisions
of applicable law or any agreement to which Compass is subject. Compass hereby
represents that it is not a party to any material contract or commitment other
than as described herein, disclosed in the Due Diligence Materials or reflected
in the appointment documents with its transfer agent, and that it has disclosed
to UFF all material relationships or dealings with related parties or
affiliates.
(i) To the best of its knowledge, Compass has complied with
applicable provisions of the Securities Act of 1933 and all applicable blue sky
laws. There are no outstanding, pending or threatened stop orders or other
actions or investigations relating thereto.
(j) To the best knowledge of Compass, all information
regarding Compass which has been provided to UFF by Compass or set forth in any
document disseminated to the public or filed with the NASD or the Securities and
Exchange Commission is true, complete and accurate in all material respects.
4.7. FULL DISCLOSURE. To the best knowledge of Compass, no
representation or warranty by Compass in this Agreement or in any of the Due
Diligence Materials, nor any statement, certificate, schedule, document or
exhibit hereto furnished or to be furnished by or on behalf of Compass pursuant
to this Agreement or in connection with transactions contemplated hereby,
contains or shall contain any untrue statement of material fact or omits or
shall omit a material fact necessary to make the statements contained therein
not materially misleading. It is further acknowledged that Compass has available
to it information with respect to Intelicus and except as otherwise set forth
herein, Compass has not relied on any representations by UFF regarding
Intelicus.
4.8. BOARD SEAT. Prior to or concurrently with the Closing, one (1)
nominee of UFF, which shall initially be Xxxxxx Xxxxx, Xxxx of the College of
Health Professionals, shall be elected a director of Compass for a one (1) -year
term. So long as UFF shall own at least 1% of Compass's issued and outstanding
stock, as calculated on a fully diluted basis, Compass shall nominate and
include in the list of candidates for directors recommended by the Board of
Directors, and use its reasonable best efforts to have elected one nominee of
UFF. In furtherance of the foregoing, Xxxxxx X. Xxxxxx, Xx. and Xxxxxx Xxxxxx,
or any trusts, or other entities or affiliates (collectively "Principal
Shareholders") holding the voting rights to their shares, shall vote their
shares in a manner to satisfy the provisions of this Section. Should a UFF
nominee decline to be nominated as elected, any UFF designee shall have the
right to attend any and all meetings of the board of directors of Compass, and
Compass shall be required to deliver notice of any such meetings to UFF and such
designee as if such designee were a director.
4.9. ACCESS. Subject to the execution of an appropriate confidentiality
agreement, for so long as UFF owns one (1%) percent or more of Compass's common
stock on a fully diluted basis, Compass shall afford to the officers, attorneys,
accountants and other authorized representatives of UFF and/or its assigns free
and full access, during regular business hours and upon prior reasonable written
notice, to the books, records, personnel, accountants, attorneys, and properties
of Compass so that UFF may have full opportunity to make such review,
examination and investigation as it may desire of the business and affairs of
Compass. Compass will cause its employees, accountants, and attorneys to
cooperate fully with said review, examination and investigation and subject to
the execution of an appropriate confidentiality agreement, shall make full
disclosure to UFF of all material facts affecting its financial condition and
6
8
business operation. Nothing herein shall limit the rights of UFF and/or its
assigns which are available under or granted by applicable statutes with respect
to access, review, examination and investigations.
4.10 BOOKS OF RECORD AND ACCOUNT. (a) Compass shall maintain at all
times proper books of record and account in accordance with generally accepted
accounting principles ("GAAP"), consistently applied. For so long as UFF owns
one (1%) percent or more of Compass' common stock, as calculated on a fully
diluted basis, Compass will permit, subject to the execution of an appropriate
confidentiality agreement, any of UFF's officers or any of their authorized
representatives or accountants to visit, upon prior reasonable written notice,
and inspect offices and properties, examine its books of account and other
records, and discuss its affairs, finances and accounts with its appropriate
officers, accountants and auditors, all at such reasonable times and reasonable
frequency as UFF may request. (b) In addition, UFF shall be provided with copies
of quarterly and annual financial statements no later than 45 days after the end
of each fiscal quarter and 120 days after the end of each fiscal year. The
financial statements shall consist of balance sheets, statements of operations,
statements of cash flows, statements of changes in stockholders equity and notes
thereto all prepared in accordance with GAAP. The annual financial statements
shall be audited in accordance with GAAP by an accounting firm.
ARTICLE V.
INTERPRETATION; SURVIVAL OF
REPRESENTATIONS AND WARRANTIES; AND INDEMNIFICATION
5.1. INTERPRETATION. Except where indicated otherwise, each warranty
and representation made by a party in this Agreement or pursuant hereto is
independent of all other warranties and representations made by the same party
in this Agreement or pursuant hereto (whether or not covering identical, related
or similar matters) and must be independently and separately satisfied. Except
where indicated otherwise, exceptions or qualifications to any such warranty or
representation shall not be construed as exceptions or qualification to any
other warranty or representation.
5.2. SURVIVAL. All representations and warranties made in this
Agreement or pursuant hereto shall survive the date hereof and the Closing for a
period of twelve (12) months as set forth herein. Notwithstanding anything
herein to the contrary, if an indemnitee under this Agreement, by written notice
prior to the expiration of the said twelve (12) month period, advises an
indemnitor of its question, dispute, debate, variance or contention relative to
any specific representation warranty or other matter which is subject to the
indemnity provisions of this Section, such survival period shall be extended
until such time as the matter in question is resolved.
5.3. INDEMNIFICATION.
(a) By UFF. UFF hereby agrees to indemnify, defend and hold
harmless Compass, and its directors, officers, employees and controlled and
controlling persons (hereinafter "Compass's affiliates"), from and against all
Claims (as hereinafter defined) asserted against, resulting to, imposed upon, or
incurred by Compass, Compass's affiliates, their businesses or their assets,
directly or indirectly, by reason of, arising out of or resulting from (x) the
inaccuracy or breach of any representation or warranty of UFF contained in or
made pursuant to this Agreement; and (y) the breach of any covenant of UFF
contained in this Agreement. As used in this section, the term "Claim" shall
include (i) all liabilities; (ii) all losses, damages, judgments, awards,
settlements, reasonable costs and expenses (including, without limitation,
interest including prejudgment interest in any litigated matter), penalties,
court costs and reasonable attorneys fees and expenses); and (iii) all demands,
claims, actions, costs of investigation, causes of action, proceedings and
assessments ultimately determined to be valid.
7
9
(b) By Compass. Compass hereby agrees to indemnify, defend and
hold harmless UFF and its directors, officers, employees and controlled and
controlling persons (hereinafter "UFF's affiliates") from and against all Claims
asserted against, resulting to, imposed upon or incurred by any such person,
directly or indirectly, by reason of or resulting from (x) the inaccuracy or
breach of any representation or warranty of Compass contained in or made
pursuant to this Agreement; and (y) the breach of any covenant of Compass
contained in this Agreement.
(c) Materiality. The parties recognize that many of the
representations, warranties and covenants set forth in this Agreement are
qualified by the term "material". For purposes of this Agreement, the parties
hereby agree that a "material" event(s) has occurred if the impact of such
event(s) has resulted or is reasonably likely to result in costs, expenses
and/or damages for any event(s) singularly or in the aggregate in excess of
Fifty Thousand Dollars ($50,000.00)
5.4. LIMITATION. The parties agree that the indemnification provisions
set forth in this Article shall be limited to all Claims in excess of Fifty
Thousand Dollars ($50,000.00) (the "Threshold"). Once a Claim exceeds the
Threshold, if a party is entitled to indemnification under Section 5.3, such
party shall recover all appropriate funds, as provided in Section 5.3, with no
reduction for the Threshold amount. Further, the indemnitors shall not be liable
for any liabilities resulting from Claims that are covered by any insurance
policy or other indemnity or contribution agreement unless, and only to the
extent that, the full limit of such insurance policy, indemnity or contribution
agreement has been exceeded.
ARTICLE VI.
OTHER COVENANTS
6.1. OTHER ACTION. Compass and UFF shall use all reasonable efforts to
cause the fulfillment at the earliest practicable date of all of the conditions
to the parties' obligations to consummate the transactions contemplated in this
Agreement.
6.2 DISCLOSURE SCHEDULE. Compass and UFF shall have a continuing
obligation up and until Closing to promptly notify each other in writing with
respect to any matter hereafter arising or discovered which, if existing or
known at the date of this Agreement, would have been required to be set forth or
described in the disclosure schedules, but no such disclosure shall cure any
breach of any representation or warranty which is inaccurate.
6.3 CONDUCT OF BUSINESS PENDING ACQUISITION. Compass and UFF covenant
and agree that, except as otherwise set forth in this Agreement, between the
date of this Agreement and the Closing, the business of Intelicus shall be
conducted only in, and neither party shall take any action except in the
ordinary course of business and in a manner consistent with past practice; and
Compass and UFF will use their best efforts to preserve intact Intelicus'
business organization, to keep available the services of its present officers,
employees and consultants and to preserve its present relationships with
customers, suppliers and other persons with which they have significant business
relations.
6.4 EXPENSES. All of the expenses incurred by UFF in connection with
authorization, preparation, execution and performance of this Agreement and
other agreements referred to in this Agreement, including, without limitation,
all fees and expenses of agents, representatives, brokers, counsel and
accountants for UFF, shall be paid by UFF, and all of the expenses incurred by
Compass in connection with the authorization, preparation, execution and
performance of this Agreement and other agreements referred to in this
Agreement, including without limitation, all reasonable fees and expenses of
advisors, agents, representatives, brokers, counsel and accountants, shall be
paid by Compass.
8
10
6.5 NOTIFICATION OF CERTAIN MATTERS.
(a) Compass shall give prompt written notice to UFF of the
following:
(i) the occurrence or nonoccurrence of any event
whose occurrence or nonoccurrence would be reasonably likely to cause either (A)
any representation or warranty of Compass contained in this Agreement to be
untrue or inaccurate in any material respect at any time from the date hereof to
the Closing (assuming that each representation and warranty was re-affirmed as
of each day between the date hereof and the Closing Date, inclusive), or (B)
directly or indirectly, any Material Adverse Effect (as defined below); or
(ii) any material failure of Compass or any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder.
(b) UFF shall give prompt written notice to Compass of the
following:
(i) the occurrence or nonoccurrence of any event
whose occurrence or nonoccurrence would be reasonably likely to cause either (A)
any representation or warranty of UFF contained in this Agreement to be untrue
or inaccurate in any material respect at any time from the date hereof to the
Closing (assuming that each representation and warranty was re-affirmed as of
each day between the date hereof and the Closing Date, inclusive); or (B)
directly or indirectly, any Material Adverse Effect;
(ii) any material failure of UFF or any employee or
agent thereof to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder.
(c) In the event that either Compass or UFF is required to
deliver a written notice pursuant to subsection (a) or (b) above, respectively,
such party shall, immediately after delivery of such notice, deliver to the
other party a revised Schedule updating such representation or warranty. The
receiving party shall review the Schedule and within twenty-four (24) hours
after its receipt elect to either (i) approve the Schedule for attachment to
this Agreement and treat such Schedule as if it had been delivered and attached
to this Agreement as of the Schedule Delivery Date, or (ii) treat such Schedule
and the events giving rise to such Schedule as a breach of such related
representation or warranty in accordance with the terms of this Agreement;
provided, however, that any events which are permitted to occur between the date
hereof and the Closing, pursuant to the terms of this Agreement, shall in no
event be treated as a breach of a representation or warranty hereunder.
(d) Notwithstanding the foregoing, the delivery of any notice
pursuant to this Section shall not waive or release Compass or UFF, as the case
may be, from its representations, warranties, covenants or agreements under this
Agreement, except as they may be modified and approved in accordance with this
Agreement.
(e) Material Adverse Effect" shall mean a material adverse
effect on the financial condition, business, earnings, results of operations,
assets, liabilities of, Intelicus, Compass and/or UFF, as the case may be, or
the transactions contemplated by this Agreement.
9
11
6.6 PUBLIC ANNOUNCEMENTS.
(a) Except for and to the extent of any public announcement or
disclosures relating to the Transactions as may be required by law, as permitted
by Compass or UFF pursuant to Section 11.12 hereof or as provided in this
Section 6.6, Compass and UFF agree that until the consummation of the
Transactions or the termination of this Agreement, as the case may be, each
party will not, and will direct its directors, officers, employees,
representatives and agents who have knowledge of the Transaction not to,
disclose to any Person who is not a participant in discussions concerning the
Transactions (other than Persons whose consent is required to be obtained
hereunder), any of the terms, conditions or other facts with respect to the
Transactions, except as may be required by law or court order.
(b) This Section 6.6 shall not restrict either Compass or UFF
in any actions by such parties which are necessary or appropriate to enforce
their respective rights under this Agreement.
6.7 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. Subject to compliance
with applicable law, UFF and Compass will (a) cooperate with one another (i) in
promptly determining whether any filings are required to be made or consents,
approvals, permits or authorizations are required to be obtained under any
federal, state or foreign law or regulation and (ii) in promptly making any such
filings, furnishing information required in connection therewith and seeking
timely to obtain any such consents, approvals, permits or authorization and (b)
provide one another with copies of all filings made by such party with any
governmental authority in connection with this Agreement.
6.8 REGISTRATION RIGHTS. At the Closing the parties will enter into a
Registration Rights Agreement in the form attached hereto as Schedule 6.8 with
respect to the registration on Form S-3 or other appropriate form (the
"Registration Statement") of 425,000 of the Acquisition Shares issued and
delivered to UFF in connection with this Agreement.
ARTICLE VII.
CONDITIONS PRECEDENT TO UFF'S OBLIGATIONS
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, UFF's obligations to consummate the transaction
contemplated by this Agreement shall be subject to the satisfaction of each of
the conditions set forth in this Article VII, except to the extent that such
satisfaction is waived in writing by UFF.
7.1. REPRESENTATIONS AND WARRANTIES OF COMPASS. All representations and
warranties made by Compass in this Agreement and the Schedules hereto shall be
true and correct in all material respects on the date hereof, and shall be true
and correct in all material respects at the time of the Effective Date as though
such representations were again made, without exception or deviation, at the
time of the Effective Date.
7.2. PERFORMANCE OF THIS AGREEMENT. Compass shall have duly performed
or complied with all the obligations under this Agreement to be performed or
complied with by Compass on or prior to the Closing Date.
ARTICLE VIII.
CONDITIONS PRECEDENT TO COMPASS OBLIGATIONS
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, Compass's obligations to consummate the
transaction contemplated by this Agreement shall be
10
12
subject to the satisfaction of each of the conditions set forth in this Article
VIII, except to the extent that such satisfaction is waived by Compass in
writing.
8.1. REPRESENTATIONS AND WARRANTIES OF UFF. All representations and
warranties made by UFF contained in this Agreement and the disclosure schedules
hereto shall be true and correct in all material respects on the date hereof,
and shall be true and correct in all material respects at the time of the
Effective Date as though such representations were again made, without exception
or deviation, at the time of the Effective Date.
8.2. PERFORMANCE OF THIS AGREEMENT. UFF shall have duly performed or
complied with all the obligations under this Agreement to be performed or
complied with by UFF on or prior to the Closing Date.
8.3 CONTRACT EXTENSIONS. The amendment of those certain contracts with
the University of Florida, College of Pharmacy as set forth in Schedule 8.3
extending the terms of said contracts to rolling five (5) year terms shall be
consummated and closed prior to or contemporaneous with the closing of the
transactions contemplated by this Agreement.
ARTICLE IX.
OBLIGATIONS AT CLOSING
9.1. OBLIGATIONS OF COMPASS TO UFF AT CLOSING. Compass hereby covenants
and agrees to deliver or cause to be delivered to UFF, on the Closing Date or,
if agreed, as soon thereafter as is reasonably possible the following:
(a) The fully paid, non-assessable stock certificates
evidencing the Acquisition Shares as provided in Section 2.1;
(b) A certification by Compass's president that Compass is
authorized to execute, deliver and perform this Agreement and consummate the
transactions contemplated hereby;
(c) The Registration Rights Agreement; and
(d) Such other documents and instruments as UFF may reasonably
request in order to effectuate the terms of this Agreement.
9.2. OBLIGATIONS OF UFF TO COMPASS AT CLOSING. UFF hereby covenant and
agree to deliver or cause to be delivered to Compass on or before the Closing
Date or, if agreed, as soon thereafter as is reasonably possible the following:
(a) Duly executed certificates representing the Membership
Interest, free and clear of all encumbrances together with any documentary
stamps required in connection with such transfer and such other appropriate
documents and instruments of transfer as Compass may reasonably request;
(b) A certification by an officer of UFF that UFF is
authorized to execute, deliver and perform this Agreement and consummate the
transactions contemplated hereby;
(c) The Registration Rights Agreement; and
11
13
(d) Such other documents and instruments as Compass may
reasonably request in order to effectuate the terms of this Agreement.
ARTICLE X.
TERMINATION
10.1. TERMINATION PRIOR TO CLOSING DATE. If, prior to the Closing Date:
(a) A party hereto shall materially breach or default in the
full and timely performance and satisfaction of any of its representations and
warranties or obligations under this Agreement, and such breach or default is
not cured on or before the fifth (5th) day (or such reasonably longer period if
five (5) days is an unreasonable period to cure such breach or default) after
the date notice is given by the non-defaulting party to the defaulting party
specifying the nature of such breach or default, then the non-defaulting party
may terminate this Agreement at anytime following the period for curing such
breach or default. The Closing Date will be extended for such reasonable period
necessary to allow the defaulting party to cure the breach or default.
(b) If any of the conditions set forth in Article VII and
Article VIII hereof are not satisfied on or before December_____, 1999 then
Compass or UFF may terminate this Agreement by notifying all parties in writing
of its/his election to terminate this Agreement. The Closing Date will be
extended for such reasonable period necessary to allow for the satisfaction of
such conditions.
ARTICLE XI.
MISCELLANEOUS
11.1. NOTICES. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if the same shall be in
writing and shall be delivered personally or sent by registered or certified
mail, postage prepaid, or by overnight mail, and addressed as set forth below:
If to UFF: University of Florida Foundation, Inc.
The University of Xxxxxxx
Xxxx Xxxxxx Xxx 000000
Xxxxxxxxxxx, Xxxxxxx 00000
With a copy to: M. Xxxxxxx Xxxxx, Jr., Esq.
Xxxxx Xxxxxx & Xxxxx
1800 First Union Bank Tower
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
If to Compass: Compass Knowledge Holdings, Inc.
0000 Xxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
11.2. ENTIRE AGREEMENT. This Agreement, including the disclosure
schedules attached hereto and the documents delivered pursuant hereto, sets
forth all the promises, covenants, agreements,
12
14
conditions and understandings among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements or conditions, expressed or implied, oral or
written, except as herein contained. No changes of or modifications or additions
to this Agreement shall be valid unless same shall be in writing and signed by
the parties hereto.
11.3. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
the parties hereto, their beneficiaries, heirs and administrators. No party may
assign or transfer its interests herein, or delegate its duties hereunder,
without the written consent of the other parties.
11.4. AMENDMENT. The parties hereby irrevocably agree that no attempted
amendment, modification or change (collectively, "Amendment") of this Agreement
shall be valid and effective, unless the parties shall unanimously agree in
writing to such Amendment.
11.5. NO WAIVER. No waiver of any provision of this Agreement shall be
effective unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
11.6. GENDER AND USE OF SINGULAR AND PLURAL. All pronouns shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the party or parties or their personal representatives, successors
and assigns may require.
11.7. COUNTERPARTS. This Agreement and any amendments may be executed
in one or more counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.
11.8. HEADINGS. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Agreement.
11.9. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Florida, and any litigation pertaining or related
to this Agreement shall, to the extent permitted by law, be held in Alachua
County, Florida.
11.10. FURTHER ASSURANCES. The parties hereto shall execute and deliver
such further instruments and do such further acts and things as may be
reasonably required to carry out the intent and purposes of this Agreement.
11.11. LITIGATION. If any party hereto is required to engage in
litigation or arbitration against any other party hereto, either as plaintiff or
as defendant, in order to enforce or defend any of its or his rights under this
Agreement, and such litigation results in a final judgment in favor of such
party (the "Prevailing Party"), then the party or parties against whom said
final judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred by the Prevailing Party in so enforcing
or defending its or his rights hereunder, including, but not limited to, all
attorneys' fees, paralegal' fees, court costs and other expenses incurred
throughout all negotiations, trials or appeals undertaken in order to enforce
the Prevailing Party's rights hereunder.
11.12. CONFIDENTIALITY. Except for discussions of the transactions
contemplated by this Agreement among the parties hereto and their
representatives and counsel participating in this transaction, and except as may
required of Compass or UFF pursuant to federal securities laws or applicable
state Public Records or Sunshine Laws, each party hereto shall, unless all other
parties hereto shall otherwise
13
15
agree, keep confidential and not, directly or indirectly, disclose to any person
the existence of this Agreement, the transaction contemplated by this Agreement
or any of the terms thereof, and each party hereto shall use its good faith
efforts to cause its employees, agents, officers, directors and representatives
to abide by the foregoing restrictions on disclosure.
ARTICLE XII.
PROTECTION OF MARKS
As additional consideration for the Membership Interest, Compass
hereby agrees that it shall not use the name, symbols, logos, trademarks or
other representations of the University of Florida (the "University") or its
athletic teams on advertisements, promotional materials, correspondence, or
other written documents or materials distributed or made available to the public
without the express written consent of the University. All such materials shall
be presented to a designated representative of the University for approval in
advance of publication. In the case of promotional materials for Intelicus
certificate programs, the following standards shall be followed by the
University in reviewing such materials for approval:
1. The UF logo shall not compromise more than 25 percent of the
page on which it appears:
2. The name INTELICUS will be prominently displayed to indicate
its sponsorship of the program; and
3. The Intelicus/University of Florida Foundation relationship
will be described as an affiliation rather than a partnership
in the Intelicus logo and xxxx.
14
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year set forth above.
WITNESSES: COMPASS KNOWLEDGE HOLDINGS, INC.
By:
-----------------------------------
Print name: Xxxxxx X. Xxxxxx, Xx., CEO
UNIVERSITY OF FLORIDA FOUNDATION, INC.
By:
----------------------------------- -----------------------------------
Print name:
The undersigned hereby execute this Agreement for the sole purpose of
agreeing to be bound by the provisions of Section 4.8 of this Agreement.
----------------------------------- -----------------------------------
Print name: Xxxxxx X. Xxxxxx, Xx.
----------------------------------- -----------------------------------
Print name: Xxxxxx Xxxxxx
15
