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EXHIBIT 10.1
CONFIDENTIAL
AMENDED AND RESTATED
STOCK EXCHANGE AGREEMENT
By and Among
COMPASS KNOWLEDGE GROUP, INC.,
REHABILITATION TRAINING INSTITUTE, INC.
AND
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AMENDED AND RESTATED
STOCK EXCHANGE AGREEMENT
This AMENDED AND RETSTATED STOCK EXCHANGE AGREEMENT, effective
______________, 1999, is by and between Compass Knowledge Group, Inc., a Florida
corporation ("Compass"), Rehabilitation Training Institute, Inc. ("RTI") and
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(hereinafter collectively called "Shareholder").
In consideration of the mutual covenants and agreements contained in
this Agreement, and other good and valuable considerations, the receipt and
adequacy of which are hereby acknowledged, intending to be legally bound hereby,
Compass and Shareholder hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement:
"Acquisition" shall mean the acquisition of Shareholder's shares of
common stock in Rehabilitation Training Institute, Inc. (which accounts for 100%
of Shareholder's holdings in RTI) all upon the terms and subject to the
conditions set forth in this Agreement.
"Acquisition Shares" shall have the meaning ascribed to it in Section
3.1 hereof.
"Agreement" means this Stock Exchange Agreement, and all Schedules and
Exhibits hereto.
"Assets" means all of the assets of Compass and its subsidiaries, or
Rehabilitation Training Institute, Inc. or its subsidiaries, as the case may be,
of every kind and nature. Any representations and warranties made by a party
hereto with respect to the Assets shall pertain only to those Assets that are
owned, leased or otherwise controlled by such party.
"Automatic Termination Date" shall have the meaning ascribed to it in
Section 9.1(e) hereof.
"Board Approval" shall mean Compass Board Approval.
"Business Day" shall mean any weekday, excluding any legal holiday
observed pursuant to the United States federal law or the laws of the State of
Florida.
"Certificate(s)" shall have the meaning ascribed to it in section 3.4
hereof.
"Closing" and "Closing Date" shall have the meanings ascribed to such
terms in Section 3.5 hereof.
"Closing Documents" means this Agreement and all other documents to be
executed and delivered either simultaneously herewith or at Closing in
connection with the Transactions.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Compass" shall mean Compass Knowledge Group, Inc., a Florida
corporation.
"Compass Board Approval" shall mean that the Board of Directors of
Compass, at a meeting duly called and held, has (i) determined that the
Acquisition is advisable and in the best interest of Compass and approved it,
(ii) duly approved, authorized and ratified the Acquisition and the consummation
of the Transactions and (iii) duly approved, authorized and ratified the
execution and delivery of this Agreement and each of the Closing Documents to
which it is or will be a party.
"Effective Time" shall have the meaning ascribed to it in Section 2.2
hereof.
"Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended, and all regulations promulgated pursuant thereto.
"Exchange Ratio" shall have the meaning ascribed to it in Section 3.1
hereof.
"Florida Act" shall mean the Florida Business Corporation Act.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time, and applied consistently with those used in the
preparation of financial statements.
"Governmental Authority" shall include any and all governmental or
quasi-governmental bodies, agencies, bureaus, departments, boards, commissions,
instrumentalities or other entities having or asserting jurisdiction over RTI,
Compass, or any Subsidiary of either, as applicable.
"IRS" shall mean the Internal Revenue Service.
"Material Adverse Effect" means a material adverse effect upon, or in,
or circumstances reasonably likely to result in, a material adverse change in
(i) the business, assets, liabilities, operations, results of operations,
properties (including intangible properties), regulatory status or condition
(financial or otherwise) of Compass, Shareholder or RTI, as the case may be,
(ii) the legality, validity, binding effect or enforceability of this Agreement,
or (iii) the ability of Compass or Shareholder to perform their respective
obligations under this Agreement.
"Out-Of-Pocket Costs" shall mean, with respect to Compass, RTI or
Shareholder, as the case may be, all fees, expenses, and other costs that are
directly related to the Transactions contemplated by this Agreement.
"Person" means an individual, corporation, limited liability company,
limited liability partnership, limited partnership, trust, joint venture,
association or unincorporated organization or a Governmental Authority.
"Rehabilitation Training Institute" or "RTI" shall mean Rehabilitation
Training Institute, Inc., a Florida corporation.
"RTI Shares" shall mean all shares of capital stock Shareholder
presently owns or has the right to acquire in RTI.
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"Schedule Delivery Date" shall mean the date upon which each of Compass
and Shareholder has delivered each and all of their respective Schedules and
Exhibits to each other, and, in the exercise of their respective sole
discretion, each has acknowledged in writing their satisfaction with the results
of their respective due diligence investigations and their mutual consent as to
the contents of the Schedules and Exhibits to be attached hereto and the
incorporation of such Schedules and Exhibits into this Agreement, which date in
no event shall be later than 24 hours prior to the Closing, unless otherwise
agreed to in writing by Shareholder and Compass.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
all regulations promulgated thereunder.
"Shareholder" shall have the meaning ascribed to it in the introductory
paragraph of this Agreement.
"Transactions" means the transactions contemplated by this Agreement,
including but not limited to the Acquisition.
"Winthrop Industries" shall mean Winthrop Industries, Inc., a Nevada
corporation.
ARTICLE 2
THE ACQUISITION
2.1 THE ACQUISITION. At the Effective Time and subject to and upon the
terms and conditions of this Agreement, Compass shall acquire from Shareholder
his RTI Shares.
2.2 EFFECTIVE TIME. Notwithstanding the Closing Date, the Transactions
contemplated by this Agreement shall be effective as _________, 1999 (the
"Effective Time").
ARTICLE 3
ACQUISITION CONSIDERATION
3.1 EXCHANGE OF STOCK. The manner and basis of Shareholder exchanging his RTI
Shares shall be as follows: for each RTI Share owned by Shareholder which are
outstanding immediately prior to the Effective Time shall at the Effective Time,
by virtue of the Acquisition, and without any action on the part of Shareholder,
be exchanged into only the right to receive one share of Compass common stock,
$.001 par value (the "Exchange Ratio"). The Compass common shares to be
delivered by Compass in exchange for the RTI Shares owned by Shareholder are
collectively hereinafter referred to as the "Acquisition Shares". After the
Effective Time, the ownership interest of Shareholder in RTI shall be recognized
or deemed to be issued only to Compass and it shall have all rights in respect
thereof and Shareholder shall not have any rights other than as set forth
herein.
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3.2 FRACTIONAL SHARES. No scrip or fractional shares of the capital
stock of Compass shall be issued in the Acquisition.
3.3 OPTIONS AND WARRANTS.
(a) All options, warrants and other securities owned by
Shareholder or his affiliates that might otherwise be converted for a capital or
other interest in RTI which is outstanding at the Effective Time shall, by
virtue of the Acquisition and without any further action on the part of
Shareholder or the holder of any such option, warrant or securities be
terminated and shall become null and void, AB INITIO.
3.4 DELIVERY OF SHARES.
(a) On or as soon as practicable after the Effective Time,
Shareholder will surrender for cancellation certificate(s), if any, representing
the RTI Shares, against delivery of certificates representing the Acquisition
Shares. Until surrendered and exchanged as herein provided, each outstanding
certificate owned by Shareholder or his affiliates which, prior to the Effective
Time, represented as an RTI ownership certificate shall be deemed for all
corporate purposes to evidence ownership of the Acquisition Shares.
(b) If delivery of all or part of the Acquisition Shares is to
be made to a person other than Shareholder, it shall be a condition of such
delivery or exchange that the certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the person
requesting such delivery or exchange shall have paid any transfer and other
taxes required by reason of such delivery or exchange in a name other than
Shareholder.
(c) Until surrendered and exchanged in accordance with this
Section 3.4 each such certificate shall, after the Effective Time, represent
solely the right to receive the Acquisition Shares, in an amount and of the type
determined in accordance with Section 3.1 hereof, and Shareholder or its
affiliates shall have no ownership or other rights. No interest shall accrue or
be payable on any Acquisition Shares.
3.5 CLOSING. The closing of the Transactions (the "Closing") shall take
place on such date as mutually determined by the parties hereto, subject to
compliance or waiver of the terms, conditions and contingencies contained in
this Agreement and all required documents have been delivered. Each of the
parties will take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Acquisition as promptly as possible
subject to the satisfaction of the closing conditions set forth in Articles 8
and 9. Upon Closing, Compass will issue and deliver in the manner provided in
Articles 2 and 3 hereof the certificates evidencing the Acquisition Shares to be
issued in the Acquisition.
ARTICLE 4
ADDITIONAL COVENANTS
4.1 CONDUCT OF BUSINESS BY RTI PENDING ACQUISITION. Compass and
Shareholder covenant and agree that, except as otherwise set forth in this
Agreement, between the date of this Agreement and the Closing, the business of
RTI 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 Shareholder will use their best efforts to
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preserve intact RTI's 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.
4.2 EXPENSES. All of the expenses incurred by Shareholder 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 Shareholder, shall be paid by Shareholder, and except as
otherwise provided herein all of the expenses incurred by Compass and RTI 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.
4.3 NOTIFICATION OF CERTAIN MATTERS.
(a) Compass shall give prompt written notice to Shareholder 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; or
(ii) any material failure of Compass, 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) Shareholder 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 Shareholder 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 Shareholder 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) Notwithstanding the foregoing, the delivery of any notice pursuant
to this Section shall not waive or release Compass or Shareholder, as the case
may be, from their representations, warranties, covenants or agreements under
this Agreement, except as they may be modified and approved in accordance with
this Agreement.
4.4 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, or as
provided in this Section 4.4,
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Compass and Shareholder 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.
(b) This Section 4.4 shall not restrict either Compass or
Shareholder in any actions by such parties which are necessary or appropriate to
enforce their respective rights under this Agreement.
4.5 CONFIDENTIALITY. In connection with this Agreement, the parties may
have access to information which is nonpublic, confidential or proprietary in
nature. All of such information, in whole or in part, together with any
analyses, compilations, studies or other documents prepared by any party, which
contain or otherwise reflect any such information is hereinafter referred to as
the "Information". Each party hereby agrees that the Information will be kept
confidential and shall not, without the prior mutual written consent of the
parties, be disclosed, in any manner whatsoever, in whole or in part, and shall
not be used by any party following the termination of this Agreement. Each party
agrees to transmit the Information only to its respective employees and
representatives who need to know the Information for the purposes of evaluating
the transactions contemplated by this Agreement, and who shall agree to be bound
by the terms and conditions of this Agreement with respect to this provision. In
any event, each party shall be responsible for any breach of this Agreement by
its respective employees or representatives. If the transactions contemplated
hereunder are not consummated, (a) the parties shall return the Information to
the other promptly upon request and no party shall retain any copies, and (b)
for a period of two years after the execution hereof (i) neither party shall
solicit or hire any employee of the other party provided such employee is
employed at the time of such solicitation or hiring, and (ii) neither party
shall solicit or lease the premised operated by the other party. In the event
any party becomes legally compelled to disclose any of the Information, such
party will provide to the other party prompt notice so that each other party may
seek a protective order or other appropriate remedy and/or waive compliance with
the provisions of this Agreement. In the event that such protective order or
other remedy is not obtained, or compliance with the provisions of this
Agreement is waived, a party will furnish only that portion of the Information
which is legally required, and to the extent requested by the other party, will
exercise its best efforts to obtain a protective order or other reliable
assurance that confidential treatment will be accorded the Information. The term
"Information" does not include information which (i) was known to any party
about another party prior to its disclosure, provided that such information was
lawfully obtained or developed without violation of a confidentiality agreement,
(ii) becomes generally available to the public other than as a result of a
disclosure by a party in violation of this Agreement, or (iii) becomes available
from a source other than a party to this Agreement, if the source is not bound
by a confidentiality agreement and such source lawfully obtained such
information.
4.6 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. Subject to compliance
with applicable law, Shareholder 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.
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4.7 GENERAL RELEASES. At the Closing, Shareholder shall deliver a
general release to Compass, in form and substance satisfactory to Compass and
its counsel, releasing Compass and the directors, officers, agents and employees
of Compass from all claims, except as may be described in written contracts
disclosed in the disclosure schedules and expressly described and excepted from
such releases and as to any obligations of Compass pursuant to this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF COMPASS
In order to induce Shareholder to enter into this Agreement and
consummate the Transactions, Compass hereby represents and warrants the
following to Shareholder as of the Schedule Delivery Date, each of which
representations and warranties shall be material to and relied upon by
Shareholder and shall be deemed remade on and as of the date of the Closing:
5.1. ORGANIZATION AND AUTHORITY. Compass is a corporation duly
organized and validly existing under the laws of the State of Florida. Compass
has all necessary corporate power and authority to own, lease and operate its
properties and conduct its business as it is currently being conducted.
5.2. CORPORATE POWER AND AUTHORITY; DUE AUTHORIZATION. The Board of
Directors of Compass has, on or prior to the date of this Agreement at a meeting
duly called and held and not subsequently rescinded or modified in any way, (i)
unanimously adopted this Agreement in accordance with the Florida Act, and (ii)
taken all actions necessary to consummate the Agreement and the transactions
contemplated hereby.
Compass has all requisite corporate power and authority to enter into
this Agreement and, subject to the Transactions contemplated hereby and the
issuance of the Acquisition Shares in connection with the Acquisition, to
consummate the Transactions contemplated hereby. The execution and delivery of
this Agreement by Compass and the consummation by Compass of the Transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Compass and the filing of appropriate Acquisition documents, if
any, as required by the Florida Act. This Agreement constitutes the valid and
binding obligation of Compass enforceable against it in accordance with its
terms except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency of other similar laws relating to the enforcement of
creditors' rights generally and the application of general rules of equity. The
Acquisition and the delivery of the Acquisition Shares by Compass have been duly
authorized by the Board of Directors of Compass and Winthrop Industries.
5.3. NO CONFLICT; REQUIRED CONSENTS. Exclusive of Compass Board
Approval which has been obtained and assuming the appropriate filings and
mailings are made by Compass to effectuate the Acquisition, the execution and
delivery by Compass of this Agreement and the Closing Documents and the
consummation by Compass of the Transactions do not and will not, (a) require the
consent, approval or action of, or any filing or notice to, any corporation,
firm, Person or other entity or any public, governmental or judicial authority
(except for such consents, approvals, actions, filing or notices the failure of
which to make or obtain will not in the aggregate have a Material Adverse
Effect); (b) violate in any material respect the terms of any material
instrument, document or agreement to which Compass is a party, or by which
Compass is bound, or be in conflict in any material respect with, result in a
material breach of or constitute
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(upon the giving of notice or lapse of time or both) a material default under
any such instrument, document or agreement; (c) violate in any respect the terms
of any instrument, document or agreement to which Compass is a party, or by
which Compass is bound, or be in conflict in any respect with, result in a
breach of or constitute (upon the giving of notice or lapse of time or both) a
default under any such instrument, document or agreement, (c) violate Compass's
Articles of Incorporation or Bylaws; or (d) violate any order, writ, injunction,
decree, judgment, ruling, law, rule or regulation of any federal, state, county,
municipal, or foreign court or governmental authority applicable to Compass.
5.4. ADVISORS FEES. Neither Compass nor any of its subsidiaries or any
affiliate thereof has retained or utilized the services of any advisor, broker,
finder or intermediary, or paid or agreed to pay any fee or commission to any
other Person or entity for or on account of the Transactions, or had any
communications with any Person or entity which would obligate Shareholder to pay
any such fees or commission.
5.5. SHARES TO BE DELIVERED. The Acquisition Shares to be issued to
Shareholder shall be reserved for issuance upon the execution of this Agreement
and when issued and delivered to Shareholder pursuant to this Agreement will be
duly authorized, validly issued, fully paid and nonassessable shares of voting
common stock of Compass, and of the same class as the common stock of Compass
which the other shareholders of Compass have received. Upon delivery of the
Acquisition Shares, Shareholder will receive good and unencumbered title to the
Acquisition Shares, free and clear of all liens, restrictions, charges,
encumbrances, and other security interests of any kind or nature whatsoever,
except for claims arising out of acts of or claims against such Shareholder,
restrictions existing under applicable securities laws and the restrictions
imposed hereby.
5.6. DISCLOSURE AND ALL DOCUMENTATION. No representation or warranty by
Compass contained in this Agreement and no statement contained in any
certificate or schedule furnished to Shareholder pursuant to the provisions
hereof contains or shall contain any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements therein
not misleading. There is no current event or condition of any kind or character
pertaining to Compass that may reasonably be expected to have a Material Adverse
Effect, except as disclosed in this Agreement and except for those events and
conditions which are national or industry-wide in nature. Except as specifically
indicated elsewhere in this Agreement, all documents delivered by Compass to
Shareholder in connection herewith have been and will be complete originals, or
exact copies thereof.
5.7 WINTHROP INDUSTRIES. Notwithstanding anything herein to the
contrary, Compass makes no representation or warranty of any kind, other than as
specifically set forth herein, with respect to Winthrop Industries, the Merger
or the transactions contemplated by the Merger Agreement. Compass and its
principal shareholders have entered, or anticipate entering, into the Merger
Agreement with Winthrop Industries, a copy of which has be provided to
Shareholder. In connection with the Merger, Winthrop Industries has provided
certain due diligence material to Compass which includes, copies of its
Certificate of Incorporation, Bylaws, Minutes of Shareholders and Directors,
Material Contracts, an Information Statement dated November 1, 1999 and its
Private Placement Memorandum dated November 1, 1999 and/or any other Merger
documents (the "Due Diligence Materials"). Copies of the Due Diligence Materials
have been delivered to Shareholder. In accordance with the Merger Agreement and
provided the Merger and the transactions contemplated by this Agreement are
consummated, Shareholder will receive one share of Winthrop Industries' common
stock for each share of common stock he owns in Compass.
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5.8. SURVIVAL. The representations and warranties contained in this
Article 5 shall not survive the Closing.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
In order to induce Compass to enter into this Agreement and consummate
the Transactions, Shareholder hereby represents and warrants the following to
Compass as of the Schedule Delivery Date, each of which representations and
warranties shall be material to and relied upon by Compass and shall be deemed
remade on and as of the date of the Closing:
6.1. NO CONFLICT; REQUIRED CONSENTS. Schedule 6.1 lists all material
third-party consents or approvals required with respect to Shareholder for
consummation of the Transactions, which consents Shareholder agrees to use its
best reasonable efforts to obtain. Assuming all such consents and approvals have
been obtained and assuming the appropriate filings and mailings are made by
Shareholder to effectuate the Acquisition under the Florida Act, the execution
and delivery by Shareholder of this Agreement and the Closing Documents and the
consummation by Shareholder of the Transactions do not and will not, (a) require
the consent, approval or action of, or any filing or notice to, any corporation,
firm, Person or other entity or any public, governmental or judicial authority
(except for such consents, approvals, actions, filing or notices the failure of
which to make or obtain will not in the aggregate have a Material Adverse
Effect); (b) in a Material Adverse Effect; or (c) violate any order, writ,
injunction, decree, judgment, ruling, law, rule or regulation of any federal,
state, county, municipal, or foreign court or governmental authority applicable
to Shareholder which would prevent or hinder the Transactions contemplated
hereby or the continued operation of the business of RTI after the Closing on
substantially the same basis as theretofore operated.
6.2 ADVISORS FEES. Shareholder has not retained or utilized the
services of any advisor, broker, finder or intermediary, or paid or agreed to
pay any fee or commission to any other Person or entity for or on account of the
Transactions, or had any communications with any Person or entity which would
obligate Compass or RTI to pay any such fees or commission.
6.3 SECURITIES REPRESENTATIONS. Shareholder 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. Shareholder 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) the Acquisition Shares, at the time of sale described herein, will not be
registered and/or qualified under any state securities laws.
A. Shareholder is willing and able to bear the economic risk
of an investment in the Acquisition Shares. Shareholder has adequate means of
providing for current needs and personal 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,
Shareholder considered whether Shareholder could afford to hold the Acquisition
Shares for an indefinite period and whether, at this time, Shareholder could
afford a complete loss of an investment in the Acquisition Shares.
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B. Shareholder's purchase of the Acquisition Shares will be
solely for Shareholder's own account and not for the account of any other
person.
C. The Acquisition Shares are being acquired by Shareholder 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. Shareholder understands that the substance of the above
representations is (i) that Shareholder does not presently intend to sell or
otherwise dispose of all or any part of the Acquisition Shares; (ii) that
Shareholder 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. Shareholder understands that the purchase of the
Acquisition Shares is subject to risks as stated in the Due Diligence Materials
or as may be otherwise applicable to similar investments.
E. Shareholder has reviewed all Due Diligence Materials and
has engaged in an independent investigation of Compass, Winthrop Industries,
Inc. and the merger with Winthrop, and no oral or written representations beyond
the Due Diligence Materials have been made to or been relied upon by
Shareholder.
F. Shareholder understands and acknowledges that Compass makes
no recommendation with respect to the purchase of Acquisition Shares.
G. Shareholder is an "accredited investor" as defined under
Rule 501 of Regulation D and has substantial experience in investing in similar
transactions.
6.4. DISCLOSURE AND ALL DOCUMENTATION. No representation or warranty by
Shareholder contained in this Agreement and no statement contained in any
certificate or schedule furnished to Compass pursuant to the provisions hereof
contains or shall contain any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein not
misleading. There is no current event or condition of any kind or character
pertaining to Shareholder or RTI that may reasonably be expected to have a
Material Adverse Effect, except as disclosed in this Agreement and except for
those events and conditions which are national or industry-wide in nature.
Except as specifically indicated elsewhere in this Agreement, all documents
delivered by Shareholder to Compass in connection herewith have been and will be
complete originals, or exact copies thereof.
6.5 LITIGATION. Shareholder is not a party to, the subject of, or
threatened with any litigation which would have a Material Adverse Effect on the
Transactions nor to the best of his knowledge is there any basis for any such
litigation.
6.6 OTHER LIABILITIES. To the best of Shareholder's knowledge no claim
of breach of contract, tort, product liability or other claim, contingent or
otherwise, has been asserted or threatened against Shareholder or RTI nor is
capable of being asserted by any employee, creditor, claimant or person against
Shareholder or RTI which, if asserted, would have a Material Adverse Effect.
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6.7 JUDGMENTS. There are no outstanding judgments against Shareholder
or to his knowledge RTI that would have a Material Adverse Effect on the
Transactions.
6.8 SURVIVAL. The representations and warranties contained in this
Article 6 shall not survive the Closing.
ARTICLE 7
CONDITIONS TO OBLIGATION OF SHAREHOLDER TO CLOSE
Each and every obligation of Shareholder under this Agreement to be performed on
or prior to the Closing shall be subject to the fulfillment, on or prior to the
Closing, of each of the following conditions, which conditions Compass agrees to
use its reasonable best efforts to satisfy:
7.1 REPRESENTATIONS AND WARRANTIES AT CLOSING. The representations and
warranties made by Compass in or pursuant to this Agreement or given on its
behalf hereunder shall be true and correct on and as of the Closing Date, in
each case with the same effect as though such representations and warranties had
been made or given on and as of the Closing Date except for such representations
and warranties which if not true and correct on and as of the Closing Date, do
not result in damages suffered by Shareholder in excess of $10,000 in the
aggregate.
7.2 OBLIGATIONS PERFORMED. Compass shall have performed and complied
with all material agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing.
7.3 CONSENTS AND APPROVALS. Compass shall have obtained and delivered
to Shareholder the written consents or approvals specified, or to be specified,
if any, (except for such consents or approvals as to which, in the aggregate,
the failure to obtain them shall not have a Material Adverse Effect) and all of
such consents shall remain in full force and effect at and as of the Closing.
7.4 CLOSING DELIVERIES. Compass shall have delivered to Shareholder
each of the following, together with any additional items which Shareholder may
reasonably request to effect the Transaction:
(a) a certificate evidencing Shareholder's ownership of the
RTI Shares; and
(b) any other documents or agreements contemplated hereby
and/or necessary or appropriate to consummate the Transactions.
7.5. NO INVESTIGATIONS OF COMPASS AND ITS SUBSIDIARIES OR THEIR
BUSINESS. As of the Closing Date, there shall be no, and neither Compass nor any
of its subsidiaries shall have any knowledge of any material pending or
threatened investigation by any municipal, state or federal government agency or
regulatory body with respect to Compass, Winthrop Industries or their
subsidiaries, the Assets or the business of Compass, Winthrop Industries and
their subsidiaries, other than such as have been disclosed to Shareholder prior
to the date hereof.
7.6 NO MATERIAL ADVERSE EFFECT. . Other than changes relating to, or
resulting from, the existence of, or the terms of, this Agreement and the
Transactions contemplated hereby,
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neither Compass or Winthrop Industries shall have suffered since the date hereof
any change that constitutes a Material Adverse Effect.
7.7 SECURITIES LAWS. The parties shall have complied in all material
respects with all federal and state securities laws applicable to the
Transactions.
7.8 MINUTES. Shareholder shall have received at Closing copies of
minutes of the Board of Directors of Compass, certified by the corporate
secretary of Compass approving and authorizing the Acquisition and the
Transactions.
7.9 LEGALITY. No federal or state statute, rule, regulation, executive
order, decree or injunction shall have been enacted, entered, promulgated or
enforced by any court or governmental authority which is in effect and has the
effect of making the Acquisition illegal or otherwise prohibiting the
consummation of the Acquisition.
7.10 REGULATORY MATTERS. All filings shall have been made and all
approvals shall have been obtained as may be legally required pursuant to
federal and state laws prior to the consummation of the Transactions and all
actions by or in respect of, or filings with, any governmental body, agency or
official or any other Person required to permit the consummation of the
Acquisition.
7.11 ADDITIONAL CLOSING CONDITIONS. Each and every one of the
additional closing conditions, if any, required of Compass set forth in Schedule
7.11 attached hereto shall have been completed or fulfilled, as the case may be.
ARTICLE 8
CONDITIONS TO OBLIGATIONS OF COMPASS TO CLOSE
Each and every obligation of Compass under this Agreement to be performed on or
prior to the Closing shall be subject to the fulfillment, on or prior to the
Closing, of each of the following conditions, which conditions Shareholder
agrees to use its best efforts to satisfy:
8.1 REPRESENTATIONS AND WARRANTIES AT CLOSING. The representations and
warranties made by Shareholder in or pursuant to this Agreement or given on its
behalf hereunder shall be true and correct on and as of the Closing Date, in
each case with the same effect as though such representations and warranties had
been made or given on and as of the Closing Date except for such representation
and warranties which if not true and correct on and as of the Closing Date, do
not result in damages suffered by Compass in excess of $10,000 in the aggregate.
8.2 OBLIGATIONS PERFORMED. Shareholder shall have performed and
complied with all material agreements and conditions required by this Agreement
to be performed or complied with by it prior to or at the Closing.
8.3 CONSENTS AND APPROVALS. Shareholder shall have obtained and
delivered to Compass the written consents or approvals specified, or to be
specified, if any, (except for such consents or approvals as to which, in the
aggregate, the failure to obtain them shall not have a
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Material Adverse Effect) and all of such consents shall remain in full force and
effect at and as of the Closing.
8.4 CLOSING DELIVERIES. Shareholder shall have delivered to Compass
each of the following, together with any additional items which Compass may
reasonably request to effect the Transaction:
(a) certificate(s) evidencing the ownership of the RTI shares;
(b) the release as provided for in Section 4.7; and
(c) any other documents or agreements contemplated hereby
and/or necessary or appropriate to consummate the Transactions.
8.5 NO INVESTIGATIONS OF RTI AND ITS BUSINESS. As of the Closing Date,
there shall be no, and Shareholder shall have any knowledge of any material
pending or threatened investigation by any municipal, state or federal
government agency or regulatory body with respect to Shareholder, RTI or their
Assets or the business of RTI, other than such as have been disclosed to Compass
prior to the date hereof.
8.6 NO MATERIAL ADVERSE EFFECT. RTI shall not have suffered any change
that constitutes a Material Adverse Effect on RTI.
8.7 SECURITIES LAWS. The parties shall have complied with all federal
and state securities laws applicable to the Transactions.
8.8 LEGALITY. No federal or state statute, rule, regulation, executive
order, decree or injunction shall have been enacted, entered, promulgated or
enforced by any court or governmental authority which is in effect and has the
effect of making the Acquisition illegal or otherwise prohibiting the
consummation of the Acquisition.
8.10 REGULATORY MATTERS. All filings shall have been made and all
approvals shall have been obtained as may be legally required pursuant to
federal and state laws prior to the consummation of the Transactions and all
actions by or in respect of, or filings with, any governmental body, agency or
official or any other Person required to permit the consummation of the
Acquisition so that Compass shall be able to continue to carry on the business
of RTI substantially in the manner now conducted by RTI shall have been taken or
made.
8.11 ADDITIONAL CLOSING CONDITIONS. Each and every one of the
additional closing conditions, if any, required of Shareholder set forth in
Schedule 8.10 attached hereto shall have been completed or fulfilled, as the
case may be.
ARTICLE 9
TERMINATION
9.1. TERMINATION. This Agreement may be terminated by mutual written
consent of Shareholder and Compass at any time before the Closing Date.
9.2. EFFECT OF TERMINATION. In the event this Agreement is terminated
pursuant to Sections 9.1, no party shall have any obligations to the other
hereunder except for those
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obligations set forth in Section 4.2 (Expenses) and those with respect to
confidentiality and the return of any confidential information shall remain in
effect.
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 SEVERABILITY. If any provision of this Agreement is prohibited by
the laws of any jurisdiction as those laws apply to this Agreement, that
provision shall be ineffective to the extent of such prohibition and/or shall be
modified to conform with such laws, without invalidating the remaining
provisions hereto.
10.2. MODIFICATION. This Agreement may not be changed or modified
except in writing specifically referring to this Agreement and signed by each of
the parties hereto.
10.3 ASSIGNMENT, SURVIVAL AND BINDING AGREEMENT. This Agreement and the
Closing Documents may not be assigned by Shareholder, without prior written
consent of Compass, and may not be assigned by Compass, without prior written
consent of Shareholder. The terms and conditions hereof shall survive the
Closing as provided in this Agreement and shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns.
10.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.5 NOTICES. All notices, requests, demands, claims and other
communication hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
Business Days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid and addressed to the intended recipient as set forth
below:
If to Compass Compass Knowledge Group, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., CEO
If to Shareholder See Schedule 10.5 Attached
If to RTI Rehab Training Institute, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
or at such other address as any party hereto notifies the other parties hereof
in writing.
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10.6 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement,
together with the Exhibits and Schedules attached hereto, constitutes the entire
agreement and supersedes any and all other prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof and, except as otherwise expressly provided in this
Agreement, is not intended to confer upon any Person other than RTI, Shareholder
and Compass, any rights or remedies hereunder. No provision of this Agreement
shall be construed against any party on the ground that such party drafted the
provision or caused it to be drafted or the provision contains a covenant of
such party.
10.7 GOVERNING LAW; JURISDICTION AND VENUE. This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Florida, excluding those relating to conflicts of laws. The parties
hereto expressly agree that the exclusive jurisdiction and venue for legal
proceedings under this Agreement shall be the state or applicable federal court
having jurisdiction over the defendant's domicile (or in the case of Shareholder
and Compass, the location of its principal corporate office).
10.8. ATTORNEY'S FEES. In any action between the parties to enforce any
of the terms of this Agreement, the prevailing party shall be entitled to
recover reasonable expenses, including reasonable attorney's fees.
10.9. HEADINGS. The section headings contained in this Agreement and
the Schedules and Exhibits attached hereto are inserted for convenience only and
shall not affect in any way the meaning or interpretation of this Agreement.
10.10. INCORPORATION OF EXHIBIT AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated in this Agreement by
reference and made a part hereof.
10.11. CONSTRUCTION. Within this Agreement, the singular shall include
the plural and the plural shall include the singular and any gender shall
include all other genders, all as the meaning and context of this Agreement
shall require. The parties hereto have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party hereto by virtue of the authorship of any of
the provisions of this Agreement.
10.12 ARBITRATION. All disputes arising in connection with or out of
this Agreement shall be finally settled by binding arbitration by three (3)
arbitrators in Orange County, Florida, pursuant to the rules then pertaining of
the American Arbitration Association.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
COMPASS KNOWLEDGE GROUP, INC.
By:
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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REHABILITATION TRAINING INSTITUTE, INC.
By:
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