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Exhibit 2.1
ASSET SALE AND PURCHASE AGREEMENT
THIS ASSET SALE AND PURCHASE AGREEMENT (the "Agreement") is made
this 23rd day of February 2007 (the "Effective Date"), by and among
ALS, LLC ("ALS"), a Florida limited liability company,
Advantage Services Group II, LLC ("ASG II"), a Florida
limited liability company, ALSC, LLC ("ALSC"), a Florida
limited liability company, ALSC II, LLC ("ALSC II"), a
Florida limited liability company, ALSC III, LLC ("ALSC
III"), a Florida limited liability company, ALSC IV, LLC
("ALSC IV"), a Florida limited liability company, ASG, LLC ,
a Florida limited liability company ("ASG" and with ALS, ALSC, ALSC
II, ALSC III and ALSC IV, collectively, the "Sellers" and
individually each a "Seller"), Joseph Raymond ("JR"), Michael J.
O’Donnell ("MO"), Kevin O’Donnell ("KO") and Michael W.
O’Donnell ("MJO" and together with JR, MO and KO, the
"Shareholders" and individually, each a "Shareholder") and
ClearPoint Business Resources, Inc ., a Delaware Corporation
("Buyer" or the "Company"). Buyer, Sellers and Shareholders shall
be collectively referred to as the "Parties".
EXPLANATORY STATEMENT
A. Sellers operate a services business that provides workforce
management services (including without limitation workforce
consulting, project management, managed staffing, long term
staffing, temporary staffing, human resources outsourcing and
permanent placement) (the "Business"). in California, Texas and the
southeastern region of the United States.
B. Seller desires to sell, assign, transfer and deliver to
Buyer, and Buyer desires to purchase from Seller, certain of the
assets of Seller upon the terms and subject to the conditions set
forth in this Agreement. The specific assets to be purchased by
Buyer are set forth in detail in attached Schedule "1(a)"
and Schedule "1(b)" .
NOW, THEREFORE, in consideration of the Explanatory Statement,
which shall be deemed a substantive part of this Agreement, and the
mutual covenants, promises, agreements, representations and
warranties contained in this Agreement, the parties hereto do
hereby covenant, promise and agree as follows:
DEFINITIONS
As used in this Agreement, and unless defined elsewhere herein,
the following terms shall have the following meanings:
" Adverse Claim " means a lien, security interest,
pledge, or charge or other encumbrance of any kind, other than
those created in favor of Buyer under this Agreement or the other
documents contemplated hereby.
" Affiliate " shall mean, with respect to any Person, any
other Person that directly or indirectly controls, is controlled by
or is under common control with such Person.
" Applicable Laws " means all applicable laws, statutes,
ordinances, rules, regulations, guidelines and orders of all
Governmental Entities.
" Code " means the Internal Revenue Code of 1986, as
amended.
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" GAAP " means United States generally
accepted accounting principles (as expounded by the Financial
Accounting Standards Board), consistently applied in relation to
Seller’s past practices.
" Governmental Entity " shall mean any court,
administrative agency or commission or other foreign, federal,
state or local governmental authority or instrumentality.
" Knowledge " means, with respect to the Sellers, actual
knowledge of each Shareholder and the knowledge that each
Shareholder would be reasonably expected to know in the course of
operating and conducting the Business.
" Material Adverse Effect " means a change in the
operations, affairs, condition (financial or otherwise), results of
operations, assets, Obligations, reserves or any other aspect of
the Business that results in a material adverse change in the
Business or Purchased Assets.
" Obligation " means any debt, liability or obligation of
any nature, whether secured, unsecured, recourse, nonrecourse,
liquidated, unliquidated, accrued, absolute, fixed, contingent,
ascertained, unascertained, known, unknown or otherwise.
" Ordinary Course " means in the ordinary course of the
Business consistent with past practices.
" Permits " shall mean all licenses, permits,
certificates, registrations, authorizations and approvals of any
Governmental Entity.
" Person " means a natural person, corporation,
partnership, sole proprietorship, joint venture, association,
joint-stock company, trust, estate, unincorporated organization,
government (and any branch or subdivision thereof), Governmental
Entity, cooperative or other entity.
" Taxes " shall mean all taxes, charges, fees, levies,
penalties or other assessments imposed by any United States
federal, state, local or foreign taxing authority, including, but
not limited to, income, gross receipts, license, stamp, occupation,
premium, windfall profits, environmental (including taxes under
Code Sect. 59A), excise, property, sales, use, transfer, franchise,
payroll, employment, withholding, severance, social security or
other tax of any kind whatsoever, including any interest, penalties
or additions attributable thereto, whether disputed or not.
" Tax Return " shall mean any return, declaration,
report, claim for refund, information return or other document
(including any related or supporting information) required to be
filed with respect to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
1. Agreement to Sell and Purchase Assets . Upon the terms
of this Agreement, Seller hereby agrees to sell, deliver, transfer
and convey to Buyer and Buyer agrees to purchase and pay for the
following assets related to the Business: video equipment, office
equipment, including file cabinets, fax machines, printers,
computers, and supplies; all furniture and fixtures; marketing
materials; and all other assets described on Schedule "1(a)"
hereto attached; and client contracts and intellectual property as
described on Schedule "1(b)" hereto attached.
(a) The assets described in detail on Schedule "1(a)" and
Schedule "1(b)" shall be referred to collectively as the
"Purchased Assets". For the avoidance of doubt, the Purchased
Assets
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includes: (i) all work in process of the
Business which is initiated and/or performed from and after
February 19, 2007 and all accounts receivables related to such
work in process, (ii) all furniture, fixtures, equipment and
personal property of the Business, (iii) all leasehold
interests in personal property of the Business, (iv) all
right, title and interest in and to all contracts and agreements of
each Seller, (v) all intellectual property of the Business
including, without limitation, corporate names, telephone numbers,
domain names, patents, trademarks, service marks, trade names,
inventions, proprietary rights, copyright registrations, patent
applications, computer programs and databases, (including source
and object code), information technology systems and information
trade secrets, general intangibles and know-how, (vi) all
customer lists and information, all personnel records and all other
business records related to the operation of the Business, provided
however, that Seller shall maintain the records for a period of
time as may be necessary for the Seller to fulfill any requirements
under the law related to the records and (vii) all goodwill of
the Business.
(b) "Excluded Assets" shall be defined as any and all assets of
the Seller that are not included in Purchased Assets. The following
assets of any Seller (collectively, the "Excluded Assets") are not
part of the sale and purchase contemplated hereunder, are excluded
from the Purchased Assets and shall remain the property of Seller
after the Closing:
(i) all cash, cash equivalents and short-term investments;
(ii) all minute books and membership interest records;
(iii) all insurance policies and rights thereunder;
(iv) all contracts not listed in Schedule "1(b)" or
Schedule "4(a)(i)" ;
(v) all personnel records and other records required by law to
retain in its possession but provided Buyer shall be provided
copies of all such records at Buyer’s expense;
(vi) all claims for refund of taxes and other governmental
charges of whatever nature;
(vii) all rights in connection with and assets of any Benefit
Plans;
(viii) all rights of a Seller under this Agreement including but
not limited to the Bill of Sale, the Assignment and Assumption
Agreement, and the Promissory Note; and
(ix) Seller’s accounts receivable prior to the Effective
Date, provided that the Purchased Assets specified in
Section 1(a)(i) above shall not constitute Excluded Assets
("Accounts Receivable").
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2. Purchase Price . The purchase price to
be paid by Buyer for the Purchased Assets and the Assumed
Obligations shall be Twenty Four Million Dollars ($24,000,000)
payable in full at Closing (the "Purchase Price") as set forth in
Section 3.
3. Payment of Purchase Price .
(a) At Closing, Buyer shall pay via wire transfer a cash amount
of Nineteen Million Dollars ($19,000,000.00) to ALS (on behalf of
the Sellers). At Closing, Buyer shall issue a promissory note in
the amount of Two Million Five Hundred Thousand Dollars
($2,500,000.00) ("Note") to ALS (on behalf of the Sellers). Such
Note shall accrue interest at a rate of seven percent per annum
(7.0%) and be fully due and payable within twenty
(20) months following the Closing Date. The principal and
interest for the Note shall be made in equal quarterly payments due
and payable on the 1 st
calendar day of the quarter. The full terms and
conditions of the Note shall be set forth in Exhibit "A" .
Buyer shall issue to ALS (on behalf of the Sellers) on the Closing
Date, the number of shares of Buyer common stock (the "Common
Stock"), equal to Two Million Five Hundred Thousand Dollars
($2,500,000) divided by the arithmetic average of the closing sales
price per share of Common Stock as reported on the NASDAQ market
(or the over the counter bulletin board, as the case may be) for
the forty five (45) trading days immediately preceding the
Closing Date.
(b) Adjustments. At Closing, any sums owed by any Seller
to Buyer shall be deducted from the Purchase Price. Any sums owed
by Buyer to Sellers shall be payable to Sellers at Closing in the
form of a certified or cashier’s check or wire transfer at
Closing.
(c) Performance Payments . Seller shall receive
additional compensation based on the financial performance of the
Company in calendar years 2007 and 2008, hereafter referred to as
"Performance Payments". Set forth in Schedule "3(c)" shall
be the integration and financial targets that must be achieved to
receive the Performance Payments. The Performance Payment for 2007
shall be equal to One Million Dollars ($1,000,000.00) worth of
Common Stock which shall be payable within forty five
(45) days from December 31, 2007, if earned. The
Performance Payment for 2008 shall be equal to One Million Dollars
($1,000,000.00) worth of Common Stock which shall be payable within
forty five days from December 31, 2008. The amount of Common
Stock shall be determined by dividing by the arithmetic average of
the closing sales price per share of Common Stock as reported on
the NASDAQ market for the forty five (45) trading days
immediately preceding the payment date.
(d) Acceleration. Upon the happening of i) an assignment
of this Agreement by the Buyer to any Person not Affiliated with
the Buyer (except for a financing source as security for Buyer
financing), or ii) a Change in Control of the Buyer, as hereinafter
defined, any monies due with regards to the Performance Payments or
the Note shall be immediately due and payable without regards to
any financial targets or metrics referred to herein. A "Change in
Control" of the Company shall be deemed to have occurred if any of
the following occur:
(i) a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended, as in effect on the date of this Agreement, or
if Item 6(c) is no longer in effect, any regulations issued by
the United States Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, which serve
similar purposes;
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(ii) any Person or "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), becomes the beneficial owner,
directly or indirectly, of thirty-three percent (33%) or more
of the combined voting power of Company’s outstanding voting
securities;
(iii) any merger, consolidation, reorganization or similar event
involving Company or any of its subsidiaries, as a result of which
the holders of the voting securities of Company immediately prior
to such merger, consolidation, reorganization or similar event do
not directly or indirectly hold at least fifty-one percent
(51%) of the aggregate voting power of the voting securities
of the surviving entity; or
(iv) the individuals who, as of the Effective Date, constitute
the Board (as of the date hereof the "Incumbent Board") cease for
any reason to constitute at least two-thirds (2/3) of the
Board, or in the case of a merger or consolidation of Company, do
not constitute at least two-thirds (2/3) of the board of
directors of the surviving company (or in a case where the
surviving corporation is controlled, directly or indirectly by
another corporation or entity, do not constitute at least
two-thirds (2/3) of the board of such controlling corporation
or do not have at least two-thirds (2/3) of the voting seats
on any body comparable to a board of directors of such controlling
entity, or if there is no body comparable to a board of directors,
at least two-thirds (2/3) voting control of such controlling
entity); provided that any Person becoming a director (or, in the
case of a controlling non-corporate entity, obtaining a position
comparable to a director) subsequent to the Effective Date hereof
whose election, or nomination for election, was approved by a vote
of the Persons comprising at least two-thirds (2/3) of the
Incumbent Board, shall be, for purposes of this Agreement,
considered as though such Person were a member of the Incumbent
Board; or
(v) there is a liquidation or dissolution of Company or sale or
other transfer of all or substantially all of the assets of
Company.
(e) Registration Rights. Buyer and ALS (on behalf of the
Sellers) shall execute a Registration Rights Agreement
substantially in the form of Exhibit "B" with respect to the
shares to be issued pursuant to this Section 3. Such Agreement
shall contain a provision restricting the Seller’s sale of
the shares for a period not to exceed one year, beginning on the
first day following the year for which the Performance Payment is
awarded.
(f) Allocation. The Purchase Price shall be allocated in
accordance with Exhibit "C" . After the Closing, the parties
shall make consistent use of the allocation, fair market value and
useful lives specified in Exhibit "C" for all tax purposes
and in all filings, declarations and reports with the Internal
Revenue Service ("IRS") in respect thereof, including the reports
required to be filed under Section 1060 of the Code, if
applicable. Within 60 days of the Closing, Buyer shall prepare and
deliver IRS Form 8594 to Seller at Closing to be filed with the
IRS. In any proceeding related to the determination of any tax,
neither Buyer nor Seller or Shareholders shall contend or represent
that such allocation is not a correct allocation.
4. Assumed Contracts, Assumed Obligations and Non-Assumed
Obligations .
(a) Except for those specifically listed on Schedule "1(b)",
Schedule "4(a)(i)" and Schedule "4(a)(ii)" ( the
"Assumed Obligations") which shall include only the liabilities of
the Sellers arising in the Ordinary Course on and after the Closing
Date and an amount of liabilities set forth on
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Schedule 4(a)(ii) not to exceed $350,000 in the
aggregate , Buyer does not hereby and shall not at Closing
or at any time thereafter assume any debts, liabilities or
Obligations of any Seller, contingent or absolute, direct or
indirect, known or unknown, matured or unmatured including, without
limitation, notes, bonds, contract claims, judgments or
obligations, taxes of any kind to any governmental body, other
loans and expenses, all of which shall remain the debts,
liabilities, or obligations of any Seller. Sellers shall retain,
and shall timely and faithfully pay, perform and discharge all of
their Obligations other than the Assumed Obligations.
(b) Buyer hereby agrees to assume the Assumed Obligations from
the Sellers. Buyer hereby limits the assumption of liabilities to
the Assumed Obligations and Buyer shall not directly or indirectly
assume any other liabilities or Obligations of any Seller. Buyer
shall execute, for each of the Assumed Obligations, an Assignment
and Assumption Agreement substantially in the form of Exhibit
"D".
(c) Should any of the Assumed Obligations or Purchased Assets
require the consent of a third party to the assignment and
assumption thereof, Buyer, Sellers and Shareholders will use
commercially reasonable efforts prior to the Closing Date, and
Buyer, Sellers and Shareholders will use best efforts subsequent to
the Closing Date, to obtain such consent. Should such consent not
be obtained prior to the Closing Date, Buyer further agrees to
indemnify and hold harmless the Sellers from any amounts due from
Seller to any party arising from the Assumed Obligations, including
costs and attorneys fees expended in defending any claim related to
the Assumed Obligations incurred after the Closing Date, in
accordance with the procedures set forth in Section 11 and the
Sellers and Shareholders will provide the benefits of such
Purchased Assets to Buyer in a manner that would as nearly as
possible reflect the purpose and intent of this Agreement.
5. Sale and Transfer of Assets .
(a) Except as otherwise provided herein, the purchase and sale
of the Purchased Assets shall occur at a closing ("Closing") to be
held at a mutually agreeable time and location on or before
February 23, 2007 (the "Closing Date"), subject to extension
upon the mutual written agreement of the parties.
(b) At Closing and subject to the terms and conditions herein
contained, Sellers shall deliver to Buyer the following items:
(i) the original client contracts that are listed on
Schedule "1(b)" and all files related to such Clients;
(ii) Promissory Note to be executed by the Buyer and ALS in
substantially the form attached hereto and incorporated by
reference herein as Exhibit "A" , (iii) Registration
Rights Agreement to be executed by the Buyer and ALS in
substantially the form attached hereto and incorporated by
reference herein as Exhibit "B" , (iv) Assignment and
Assumption Agreement for each of the Assumed Obligations, to be
mutually executed, in substantially the form attached hereto and
incorporated by reference herein as Exhibit "D" ,
(v) Bill of Sale in substantially the form attached hereto and
incorporated by reference herein as Exhibit "E" ,
(vi) Certified resolutions of each Seller authorizing this
Agreement and the transactions contemplated hereunder as Exhibit
"F", (vii) certificate of incumbency of each Seller and a
good standing certificate of each Seller, (viii) Employment
agreement or consulting agreement, reasonably satisfactory to
Buyer, executed by each Shareholder, (ix) an opinion of
counsel for the Sellers and Shareholders, reasonably satisfactory
to Buyer, (xi) UCC-3 termination statements authorized to be
filed with respect to any Adverse Claims on the Purchased
Assets.
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(c) At Closing and subject to the terms and
conditions herein contained, Buyer shall deliver to Seller the
following items: i) the Purchase Price as set forth in
Section 3 and ii) an opinion of counsel for the Buyer,
reasonably satisfactory to Sellers.
(d) At all times, Sellers shall furnish or cause to be furnished
to Buyer all information concerning the Purchased Assets including
all financial and operating data concerning the Purchased
Assets.
6. Conditions Precedent to Closing . Closing is subject
to satisfaction of the following conditions precedent:
(a) Purchased Assets . Sellers shall have maintained the
Purchased Assets in good order and repair from the Effective Date
until Closing.
(b) Payment of Purchase Price . Buyer shall deliver to
ALS (on behalf of the Sellers) payment of the Purchase Price in the
manner set forth in Section 3 of this Agreement.
(c) Tax Clearances . Sellers shall provide Buyer with
reasonable assurance that each Seller’s accounts with the IRS
and the State of Florida Department of Revenue, if applicable, are
current.
7. Representations and Warranties of Seller . As an
inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, each Seller, jointly and
severally, hereby represents and warrants to Buyer, as of the
Effective Date, as follows:
(a) Organization and Qualification; Due Authorization .
Each Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of
Florida. Each Seller is duly qualified and in good standing to do
business in Florida and all other jurisdictions in which the
location of the Purchased Assets or the operation of the Business
makes such qualification necessary, except where the failure to be
in good standing or qualified, whether singly or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
Each Seller has the power (limited liability company power or
otherwise) and authority to execute and deliver this Agreement and
the other documents contemplated hereby to which it is a party and
to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the other documents
contemplated hereby to which each Seller is a party and the
performance and consummation of the transactions contemplated
hereby and thereby by each Seller have been duly authorized by all
necessary company actions on the part of each Seller. Such actions
are attached hereto as Exhibit "F" . Upon execution and
delivery by each Seller and each Shareholder of this Agreement and
the other documents contemplated hereby to which each Seller and
each Shareholder is a party and, subject to the due authorization,
execution and delivery of such agreements by the other parties
thereto, each of this Agreement and the other documents
contemplated hereby will constitute valid and binding obligations
of each Seller and each Shareholder enforceable against each Seller
and each Shareholder in accordance with each document’s
respective terms. Except for the trade names identified on Schedule
"7(a)(i)", no Seller has conducted business under any name other
than its company name. The authorized and issued equity interests
of each Seller is set forth in Schedule "7(a)(ii)" .
(b) No Violation; Consents and Approvals . Neither the
execution and delivery by a Seller of this Agreement or the other
documents contemplated hereby to which it is a party nor the
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consummation of the transactions contemplated
hereby or thereby nor compliance by it with any of the provisions
hereof or thereof: (a) conflict with or result in a violation
of (i) the organizational documents of a Seller or
(ii) any judgment, order, writ, injunction, decree, statute,
law, ordinance, rule or regulation binding upon a Seller in
connection with the Business in any material respect, or
(b) except as set forth in Schedule 7(b) hereto,
(A) require consent under, violate, conflict with, or result
in a breach of any of the terms of, or constitute a default under,
or give rise to any right of termination, modification,
cancellation or acceleration, or result in the creation or
imposition of any Adverse Claim on the Purchased Assets under, any
note, bond, mortgage, indenture, deed of trust, contract (including
without limitation, the contracts constituting Purchased Assets)
other than customer contracts, commitment, arrangement, license,
agreement, lease or other instrument or obligation to which a
Seller is a party or by which a Seller may be bound or to which any
of the Purchased Assets may be subject or affected, other than
which would not constitute Material Adverse Effect,
(B) require any Permit with any Governmental Entity, other
than which would not constitute a Material Adverse Effect or
(C) to the Sellers’ Knowledge, require consent under,
violate, conflict with, or result in a breach of any of the terms
of, or constitute a default under, or give rise to any right of
termination, modification, cancellation or acceleration, or result
in the creation or imposition of any Adverse Claim on the Purchased
Assets under any customer contract to which a Seller is a party or
by which a Seller may be bound or to which any of the Purchased
Assets may be subject or affected, other than which would not
constitute Material Adverse Effect.
(c) Financial Statements; Undisclosed Liabilities .
(i) Sellers have delivered to Buyer consolidated financial
statements of the Sellers as follows: (i) audited financial
statements (including balance sheet, statements of income, changes
in members’ equity, statement of cash flows and notes
thereto) for the fiscal years ended December 31, 2004 and
December 31, 2005, (ii) the unaudited financial
statements (including balance sheet, statements of income, changes
in members’ equity and statement of cash flows) for the
fiscal year ended December 31, 2006 and (iii) an
unaudited balance sheet as at January 31, 2007 (All items in
(i), (ii) and (iii) collectively, are referred to as the
"Financial Statements").
(ii) Except as set forth on Schedule "7(c)(ii)" the
Financial Statements were prepared in accordance with the
historical accounting practices of Sellers consistently applied in
accordance with GAAP and fairly present in all material respects
the financial condition, sales and operating income of the Business
as of and for the periods indicated, subject to normal and
recurring year-end audit adjustments which would not, individually
or in the aggregate, be material to the Sellers and the absence of
GAAP footnotes in the unaudited Financial Statements.
(iii) As of the Closing Date, except as set forth in Schedule
"7(c)(iii)", the Seller does not have any Obligation that would
be required to be set forth on a balance sheet of the Sellers under
GAAP, except: (i) Obligations reflected or reserved for in the
Financial Sta
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