1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made as of February
1, 1999, by and among Business Resource Group, a California corporation with its
principal place of business at 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx,
Xxxxxxxxxx 00000 ("BRG"), RN Acquisition Corp., a California corporation and
wholly owned subsidiary of BRG with its principal place of business at 0000
Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxxxxxxxxx 00000 ("RN Acquisition
Corp."), Re'Nu Office Systems, Inc., a California corporation with its principal
place of business at 00000 Xxxxxx Xxxxxx, Xxxxx Xx Xxxxxxx, Xxxxxxxxxx 00000
("Re'Nu Office Systems"), Re'Nu South, Inc., a California corporation with its
principal place of business at 0000 Xxxx Xxxxxxx, Xxxxx Xxx, Xxxxxxxxxx and a
wholly owned subsidiary of Re'Nu Office Systems ("Re'Nu South"), Re'Nu Office
Systems, Inc., a Nevada corporation with its principal place of business at 3340
Sirius, Las Vegas, Nevada and a wholly owned subsidiary of Re'Nu Office Systems
("Re'Nu Nevada"), and Xxxx Xxxx, an individual residing at 00 Xxxxxxxxxx Xxxx,
Xxxx xx Xxxx, Xxxxxxxxxx 00000 and the sole shareholder of Re'Nu Office Systems
(the "Shareholder"). Re'Nu Office Systems, Re'Nu South and Re'Nu Nevada are each
sometimes referred to in this Agreement as a "Re'Nu Entity" and collectively as
the "Re'Nu Entities."
RECITALS
On the terms and conditions set forth below, BRG desires to purchase the
assets of Re'Nu Office Systems, Re'Nu South and Re'Nu Nevada identified on
Exhibits X-0, X-0 and A-3, respectively, attached hereto (the "Purchased
Assets") and assume certain scheduled liabilities of the Re'Nu Entities. BRG
currently intends to deploy the Purchased Assets through RN Acquisition Corp.
In consideration of the mutual agreements, representations and
warranties contained in this Agreement, the parties agree as follows:
1. PURCHASE AND SALE.
(a) PURCHASED ASSETS. Subject to the terms and conditions
contained in this Agreement, at the Closing (as defined below), each Re'Nu
Entity shall sell, assign, transfer and convey to RN Acquisition Corp., free and
clear of all liens and encumbrances, and RN Acquisition Corp. shall purchase
from Re'Nu Office Systems, Re'Nu South and Re'Nu Nevada, the Purchased Assets
identified on Exhibits X-0, X-0 and A-3, respectively. Each Re'Nu Entity and the
Shareholder agree to take all steps reasonably requested by BRG to transfer
title to the Purchased Assets to RN Acquisition Corp. at or as soon as possible
after the Closing.
(b) ASSUMED LIABILITIES. Neither BRG nor RN Acquisition Corp.
assumes hereby or in connection with this Agreement any liabilities of Re'Nu
Office Systems, Re'Nu South or Re'Nu Nevada whatsoever, except for the
obligations under those contracts and other arrangements specifically described
on Exhibits B-1, B-2 and B-3, respectively, which arise or become due after the
Closing (as defined below). The contracts and other arrangements listed on
Exhibits X-0, X-0 and B-3 are sometimes referred to in this Agreement as the
"Assumed Contracts" or the "Assumed Liabilities." All of the obligations
retained by the Re'Nu Entities
-1-
2
shall be referred to in this Agreement as the "Non-Assumed Liabilities" and
shall include all debts, liabilities, payables and expenses not specifically set
forth on such Exhibits X-0, X-0 and B-3, including, but not limited to, those
obligations under the Assumed Contracts which arise or become due prior to the
Closing (as defined below) and any and all matters set forth on the Re'Nu
Schedule of Exceptions (as defined below).
2. PURCHASE PRICE; TERMS OF PAYMENT.
(a) CLOSING. The consummation of the purchase and sale of the
Purchased Assets shall take place at a closing (the "Closing") to be held at
BRG's San Xxxx offices on February 1, 1999 concurrently with the execution and
delivery of this Agreement. The time and date of the Closing are referred to in
this Agreement as the "Closing Date."
(b) PRELIMINARY PURCHASE PRICE. The preliminary purchase price to
be paid for the Purchased Assets (the "Preliminary Purchase Price") shall
consist of the following:
(i) BRG shall issue to Re'Nu Office Systems 100,000 shares
of the Common Stock of BRG (the "Shares"), which shares shall not be registered
under the Securities Act of 1933, as amended; and
(ii) BRG shall deliver to Re'Nu Office Systems, Re'Nu
South and Re'Nu Nevada $1,794,996, $200,723 and $4,281, respectively, in
immediately available funds (in the aggregate, the "Cash Payment").
(c) ADDITIONAL PURCHASE PRICE.
(i) Each Re'Nu Entity and the Shareholder agree with BRG
that neither the Re'Nu Entities nor the Shareholder have any expectation that
further consideration for the sale of the Purchased Assets (beyond the
Preliminary Purchase Price) shall be payable to any Re'Nu Entity unless and
until the operating income of RN Acquisition Corp. shall have met certain
thresholds as contemplated in the calculation of the Additional Purchase Price
defined in Section 2(c)(ii) below. As a material inducement for BRG and RN
Acquisition Corp. to enter into this Agreement, each Re'Nu Entity and the
Shareholder agree that they will assume the risks associated with RN Acquisition
Corp. achieving the operating income results necessary for the Re'Nu Entities to
earn the payments of the Additional Purchase Price provided for in this Section
2 (c).
(ii) Subject to the terms and conditions herein, on the
45th day following the end of each 12 month period (each, an "Applicable
Period") set forth on Exhibit C hereto (each, an "Additional Payment Date") (or
on the immediately following business day if an Additional Payment Date is not a
business day), and in addition to the Preliminary Purchase Price, BRG shall
deliver to Re'Nu Office Systems the amount set forth on Exhibit C (in each case
"Additional Purchase Price") for such Applicable Period calculated as set forth
in such Exhibit C. Each Additional Purchase Price payment, if any, shall be
allocated entirely to Re'Nu Office Systems as set forth on Exhibit E-1.
-2-
3
(d) DELIVERY. At the Closing, the Re'Nu Entities shall deliver to
RN Acquisition Corp. an executed Xxxx of Sale in the form attached hereto as
Exhibit D and any other appropriate instruments of transfer of title to the
Purchased Assets evidencing the purchase and sale of the Purchased Assets, as
well as all title documents relating to the Purchased Assets, duly executed or
endorsed for transfer to RN Acquisition Corp. At the Closing, BRG shall deliver
to the Re'Nu Entities the Cash Payment as set forth in Section 2(b)(i) above and
shall issue instructions to the transfer agent for its stock to issue
certificates representing the Shares to the Re'Nu Entities as set forth in
Section 2(b)(ii) above.
(d) ALLOCATION OF PURCHASE PRICE. The Preliminary Purchase Price
and the Additional Purchase Price, if any, shall be allocated among Re'Nu Office
Systems, Re'Nu South and Re'Nu Nevada as provided in Exhibits E-1, E-2 and E-3,
respectively, attached hereto (the "Allocation") for purposes of complying with
the requirements of Section 1060 of the Internal Revenue Code of 1986, as
amended. Each party hereto agrees to prepare its federal and state income tax
returns for all current and future tax reporting periods and file Form 8594 (and
corresponding state forms) with respect to this transaction in a manner
consistent with the Allocation. If any state or federal taxing authority
challenges such allocation, the party receiving notice of such challenge shall
give the other parties hereto prompt written notice of such challenge, and the
parties shall cooperate in good faith in responding to it in order to preserve
the effectiveness of such Allocation.
(e) TAXES. BRG shall pay all sales, use, transfer, excise or
other similar taxes, if any, arising out of the transfer of the Purchased Assets
or otherwise as a consequence of the transactions contemplated by this
Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE RE'NU ENTITIES AND THE
SHAREHOLDER. Subject to and except for information contained in the Schedule of
Exceptions delivered to BRG and RN Acquisition Corp. prior to the signing of
this Agreement and attached hereto as Exhibit F (the "Re'Nu Entities Disclosure
Schedule"), each Re'Nu Entity and the Shareholder jointly and severally
represent and warrant to BRG and RN Acquisition Corp. as follows:
(a) ORGANIZATION.
(i) Re'Nu Office Systems is a corporation duly
incorporated, validly existing and in good standing under the laws of
California, has the corporate power and authority to own or lease its properties
and to carry on its business as now being conducted, and possesses all licenses,
franchises, rights and privileges necessary to the conduct of its business.
Re'Nu Office Systems is not qualified or licensed to do business as a foreign
company in any other jurisdiction, and neither the character of the properties
owned or leased by Re'Nu Office Systems nor the nature of the business
transacted by Re'Nu Office Systems requires Re'Nu Office Systems to be qualified
in any other jurisdiction, except where failure to so qualify would not have a
material adverse effect on the business of Re'Nu Office Systems.
(ii) Re'Nu South is a corporation duly incorporated,
validly existing and in good standing under the laws of California, has the
corporate power and authority to own or lease its properties and to carry on its
business as now being conducted, and possesses all
-3-
4
licenses, franchises, rights and privileges necessary to the conduct of its
business. Re'Nu South is not qualified or licensed to do business as a foreign
company in any other jurisdiction, and neither the character of the properties
owned or leased by Re'Nu South nor the nature of the business transacted by
Re'Nu South requires Re'Nu South to be qualified in any other jurisdiction,
except where failure to so qualify would not have a material adverse effect on
the business of Re'Nu South.
(iii) Re'Nu Nevada is a corporation duly incorporated,
validly existing and in good standing under the laws of Nevada, has the
corporate power and authority to own or lease its properties and to carry on its
business as now being conducted, and possesses all licenses, franchises, rights
and privileges necessary to the conduct of its business. Re'Nu Nevada is not
qualified or licensed to do business as a foreign company in any other
jurisdiction, and neither the character of the properties owned or leased by
Re'Nu Nevada nor the nature of the business transacted by Re'Nu Nevada requires
Re'Nu Nevada to be qualified in any other jurisdiction, except where failure to
so qualify would not have a material adverse effect on the business of Re'Nu
Nevada.
(b) FINANCIAL STATEMENTS. Each Re'Nu Entity has furnished to BRG
its unaudited balance sheet as at December 31, 1998 and the related unaudited
statement of operations for the period then ended (together, the "Financial
Statements"). All such Financial Statements, together with any notes thereto,
(i) are in accordance with each Re'Nu Entity's books and records, (ii) present
fairly the financial position of each Re'Nu Entity as of such date, and (iii)
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis. In the opinion of management of each Re'Nu
Entity, the ongoing financial results of each Re'Nu Entity, including revenue,
margins and net income, shall remain consistent with the Financial Statements
from January 1, 1999 until the Closing Date.
(c) AUTHORIZATION. Each Re'Nu Entity has, or will have at the
Closing Date, the corporate power to enter into this Agreement and the
execution, delivery and performance of this Agreement has been, or will be at
the Closing Date, duly authorized by all requisite corporate action; and this
Agreement has been, or will be at the Closing Date, duly executed and delivered
and constitutes the valid and binding obligation of each respective Re'Nu
Entity.
(d) EFFECT OF AGREEMENT. The execution, delivery and performance
by each Re'Nu Entity of this Agreement and the consummation of the transactions
herein contemplated, will not conflict with, or result in a breach of the terms
of, or constitute a default under or violation of, any law or regulation of any
governmental authority, domestic or foreign applicable to such Re'Nu Entity, or
the Articles of Incorporation (or other charter document) or Bylaws of such
Re'Nu Entity or any agreement or instrument to which such Re'Nu Entity is a
party or by which it is bound or to which it is subject, other than any
conflicts, breaches, defaults or violations which individually or in the
aggregate would not have a material adverse effect on such Re'Nu Entity; nor
will the execution, delivery and performance by each Re'Nu Entity of this
Agreement nor the consummation of the transactions herein contemplated give to
any third party any interests or rights, including rights of termination,
acceleration or cancellation in or with respect to any of the properties,
assets, agreements, contracts or business of such Re'Nu
-4-
5
Entity. No consent of any person not a party to this Agreement and no consent of
any governmental authorities are required to be obtained on the part of any
Re'Nu Entity to permit the continuation by RN Acquisition Corp. after the
Closing Date of the business activities of any Re'Nu Entity in the manner such
business is now carried on by such Re'Nu Entity.
(e) INVENTORIES. The inventories of each Re'Nu Entity, whether
finished goods, work in process or raw materials, are all items of a quality
usable or salable in the ordinary and usual course of such Re'Nu Entity's
business, except for inventory items which are obsolete or not usable or salable
in the ordinary course of business which have been written down to an amount not
in excess of realizable market value or for which adequate reserves or
allowances have been provided. The values at which inventories are carried
reflect the inventory valuation policy of each Re'Nu Entity, which is in
accordance with generally accepted accounting principles applied on a consistent
basis. In the opinion of management of each Re'Nu Entity, the inventories of
each Re'Nu Entity are saleable at margins consistent with (i) the margins each
Re'Nu Entity has received in the past and (ii) the Financial Statements.
(f) ACCOUNTS RECEIVABLE. Exhibits X-0, X-0 xxx X-0 include a
complete list of the accounts and notes receivable of Re'Nu Office Systems,
Re'Nu South and Re'Nu Nevada, respectively, as of the date shown, aged by
customer or debtor, as the case may be. The accounts and notes receivable of
each Re'Nu Entity as of the date shown or thereafter acquired arose from valid
transactions and are collectible (net of the allowance for doubtful accounts) in
the ordinary and usual course of business and are not subject to any assertable
defense or set-off. The reserve for doubtful accounts is adequate and the values
at which accounts and notes receivable are carried reflect the policies of each
Re'Nu Entity consistent with past practices of such Re'Nu Entity and are in
accordance with generally accepted accounting principles applied on a consistent
basis.
(g) INSURANCE. The Re'Nu Entities Disclosure Schedule contains a
true and complete list and description of all policies of insurance maintained
by the Re'Nu Entities. Such insurance or comparable insurance will be maintained
in full force and effect to and including the Closing Date.
(h) ABSENCE OF CERTAIN CHANGES. Since December 31, 1998, neither
Re'Nu Office Systems, Re'Nu South nor Re'Nu Nevada has (i) issued or delivered
to any person any shares of stock, bonds or other corporate securities, (ii)
incurred any obligation or liability (absolute or contingent) in excess of
$10,000 individually or in the aggregate, (iii) discharged or satisfied any lien
or encumbrance, or paid any obligation or liability (absolute or contingent),
other than current liabilities reflected on the Financial Statements and current
liabilities incurred since the date of the Financial Statements in the ordinary
course of business, (iv) declared or made any payment or distribution to
shareholders (other than the payment of employment-related compensation
consistent with past practice to shareholders who are employees), or purchased
or redeemed any shares of stock, (v) increased the wage or salary of any
employee, (vi) mortgaged, pledged or subjected to lien or any other encumbrance
any assets (tangible or intangible, other than assets which are subject to
purchase money security interests and which were acquired in the ordinary course
of business) and do not exceed $10,000 individually or in the aggregate, (vii)
-5-
6
sold or transferred any tangible assets or canceled any debts or claims, except
in the ordinary course of business or in an aggregate amount which does not
exceed $10,000, (viii) sold, assigned, licensed or transferred any patents,
trademarks, trade names, copyrights, licenses, computer software programs or
other intangible assets other than in the ordinary course of business, (ix)
suffered any extraordinary loss or waived any right of substantial value, (x)
entered into any transactions other than in the ordinary course of business, or
(xi) agreed to any of the foregoing. Since December 31, 1998, there has been no
material adverse change in the business, financial condition, results of
operations or prospects of any Re'Nu Entity.
(i) COMPLIANCE WITH LAWS. Except as set forth in the Re'Nu
Entities Disclosure Schedule, each Re'Nu Entity has complied with, and is not in
violation of any statute, law, rule or regulation with respect to the conduct of
its respective business, the ownership or operation of its respective
properties, or the sale or purchase of its respective securities or disclosure
to shareholders which violation might have a material adverse effect on the
business, financial condition or prospects of such Re'Nu Entity.
(j) BROKERS OR FINDERS. Except as set forth on the Re'Nu Entities
Disclosure Schedule, no Re'Nu Entity is obligated, directly or indirectly, to
any person for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.
(k) TITLE TO PURCHASED ASSETS. The Re'Nu Entities collectively
have and will convey on the Closing Date full, absolute, good and marketable
title to the Purchased Assets, free and clear of all security interests,
mortgages, liens (including, but not limited to, liens with respect to taxes),
attachments, orders of court, rights of redemption, debts, claims, charges or
other encumbrances of any kind whatsoever and not subject to any continuing
commission, profit or revenue sharing or other compensation contract or
obligation that could apply to BRG, RN Acquisition Corp. or the Purchased
Assets.
(l) LITIGATION, ETC. There are no suits, actions or
administrative, arbitration, unfair labor practice, worker's compensation or
other proceedings or governmental investigations, pending or threatened against
or relating, directly or indirectly, to the Purchased Assets or the business of
any Re'Nu Entity, and there are no judgments, orders, injunctions, decrees,
stipulations or awards (whether rendered by a court, administrative agency or by
arbitration, pursuant to a grievance or other procedure) against or relating to
any Re'Nu Entity or the Purchased Assets which could result in a material
adverse effect, or any lien or other encumbrance, on the Purchased Assets.
(m) ASSIGNABILITY OF CONTRACTS; NO DEFAULT. All assignments or
other transfers of the Assumed Contracts have been obtained for transfer to RN
Acquisition Corp. in accordance with the terms of this Agreement, without
default, penalty or other similar restriction. No default or condition
permitting declaration of default exists with respect to the Assumed Contracts.
No Re'Nu Entity is aware of any payments (other than those required in
connection with the Assumed Liabilities) that will be required in the future to
be made under the Assumed Contracts.
-6-
7
(n) TAXES. All sales and use taxes, real and personal property
taxes, gross receipts taxes, documentary transfer taxes, income taxes,
employment taxes, withholding taxes, unemployment insurance contributions and
other taxes or governmental charges of any kind, however denominated, for which
BRG or RN Acquisition Corp. could become liable with respect to the Purchased
Assets or which could result in a lien on or charge against the Purchased Assets
(collectively, "Taxes") have been or will be paid with respect to all periods
prior to and including the Closing Date. Each Re'Nu Entity and any other person
required to file returns or reports of Taxes relating to any Re'Nu Entity or the
Purchased Assets has duly and timely filed all returns and reports of Taxes
required to be filed, and all such returns and reports are true, correct and
complete. There are not any liens for Taxes on any of the Purchased Assets
(other than liens for Taxes not yet due and payable). Each Re'Nu Entity has
complied with all record keeping and tax reporting obligations relating to
income and employment taxes due with respect to compensation paid to employees.
No Re'Nu Entity is a "foreign person" within the meaning of Section 1445(f)(3)
of the Internal Revenue Code of 1986, as amended (the "Code"). There are no
pending or threatened proceedings with respect to Taxes. No agreement or
arrangement regarding compensation which will be assumed by BRG or RN
Acquisition Corp. provides for any payments which could result in a
nondeductible expense to BRG or RN Acquisition Corp. pursuant to Section 280G of
the Code or an excise tax to the recipient of such payment pursuant to Section
4999 of the Code. Each Re'Nu Entity has provided to BRG copies of all tax
returns filed by such Re'Nu Entity during the previous three (3) years and all
such tax returns are accurate in all respects.
(o) SOLE SHAREHOLDER. The Shareholder is the sole shareholder of
each Re'Nu Entity and no other person has any right, warrant or option to
acquire any shares of capital stock of any Re'Nu Entity.
(p) EMPLOYEES. All employees of Re'Nu Office Systems, Re'Nu South
and Re'Nu Nevada, and each such employee's respective compensation arrangement,
are set forth on Exhibits G-1, G-2 and G-3, respectively, hereto.
(q) ENVIRONMENTAL AND SAFETY LAWS. No Re'Nu Entity is in
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and, to the best knowledge of
each Re'Nu Entity, no material expenditures are or will be required in order to
comply with any such existing statute, law or regulation. No Hazardous Materials
(as defined below) are used or have been used, stored or disposed of by any
Re'Nu Entity or, to the best knowledge of each Re'Nu Entity after reasonable
investigation, by any other person or entity on any property owned, leased or
used by any Re'Nu Entity. For the purposes of the preceding sentence, "Hazardous
Materials" shall mean (a) materials which are listed or otherwise defined as
"hazardous" or "toxic" under any applicable local, state, federal and/or foreign
laws and regulations that govern the existence and/or remedy of contamination on
property, the protection of the environment from contamination, the control of
hazardous wastes, or other activities involving hazardous substances, including
building materials or (b) any petroleum products.
-7-
8
(r) INTELLECTUAL PROPERTY. To the best knowledge of each Re'Nu
Entity after reasonable investigation, each Re'Nu Entity owns or possesses
sufficient legal rights to all patents, trademarks, service marks, tradenames,
copyrights, trade secrets, licenses, information and proprietary rights and
processes necessary for its business without any conflict with, or infringement
of, the rights of others. No Re'Nu Entity has received any communications
alleging that any Re'Nu Entity has violated or, by conducting its business,
would violate any of the patents, trademarks, service marks, tradenames,
copyrights, trade secrets or other proprietary rights or processes of any other
person or entity. No Re'Nu Entity is aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of such
employee's best efforts to promote the interest of such Re'Nu Entity or that
would conflict with such Re'Nu Entity's business. Neither the execution or
delivery of this Agreement, nor the carrying on of any Re'Nu Entity's business
by the employees of such Re'Nu Entity, will, to the knowledge of each Re'Nu
Entity, conflict with or result in a breach of the terms, conditions, or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any such employee is now obligated. The Company does not
believe it is or will be necessary to use any inventions of any of its employees
(or persons it currently intends to hire) made prior to their employment by the
Company. Set forth in the Re'Nu Entities Disclosure Schedule is a listing of all
patents, trademarks and licenses of the Company.
(s) EMPLOYEE RELATIONS. Each Re'Nu Entity considers its relations
with its employees to be good and is not aware of any key employee that
presently intends to terminate his or her employment relationship with any Re'Nu
Entity. No employee of any Re'Nu Entity is represented by a labor union and no
Re'Nu Entity has experienced any work stoppages.
(t) EMPLOYEE BENEFIT PLANS. No Re'Nu Entity has any Employee
Benefit Plan as defined in the Employee Retirement Income Security Act of 1974
("ERISA").
(u) MATERIAL MISREPRESENTATIONS AND OMISSIONS. No representation
or warranty made by the Re'Nu Entities or the Shareholder in this Agreement, or
in any certificate furnished or to be furnished by any Re'Nu Entity individually
or the Re'Nu Entities collectively or the Shareholder hereunder or pursuant to
or in connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4. REPRESENTATIONS AND WARRANTIES OF RE'NU OFFICE SYSTEMS AND THE
SHAREHOLDER REGARDING THE SHARES.
(a) Re'Nu Office Systems and the Shareholder, severally and not
jointly, represent and warrant to BRG as follows with respect to the Shares:
(i) Re'Nu Office Systems and the Shareholder are aware of
BRG's business affairs and financial condition and has acquired sufficient
information about BRG to reach an informed and knowledgeable decision to acquire
the Shares. Re'Nu Office Systems and
-8-
9
the Shareholder are acquiring the Shares for investment for its own account only
and not with a view to, or for resale in connection with, any "distribution"
thereof within the meaning of the Securities Act of 1933, as amended (the
"Securities Act").
(ii) Re'Nu Office Systems and the Shareholder understand
that the Shares constitute "restricted securities" and have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of the
investment intent of Re'Nu Office Systems and the Shareholder as expressed
herein. Re'Nu Office Systems and the Shareholder further acknowledge and
understand that BRG is under no obligation to register the Shares. Re'Nu Office
Systems and the Shareholder understand that the certificates evidencing the
Shares will each be imprinted with a legend which prohibits the transfer of the
Shares unless they are registered or such registration is not required in the
opinion of counsel for BRG.
(iii) Re'Nu Office Systems and the Shareholder are aware
of the provisions of Rule 144 promulgated under the Securities Act, which in
substance, permit limited public resale of "restricted securities" acquired,
directly or indirectly from the issuer thereof (or from an affiliate of such
issuer), in a non-public offering subject to the satisfaction of certain of the
conditions specified by Rule 144, including, among other things: (1) the resale
occurring not less than one year after the party has purchased, and made full
payment for, within the meaning of Rule 144, the securities to be sold; and, in
the case of an affiliate of BRG, or of a non-affiliate who has held the
securities less than two years, (2) the availability of certain public
information about BRG, (3) the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as such term is defined under the Securities Exchange Act of 1934, as
amended), and (4) the amount of securities being sold during any three-month
period not exceeding the specified limitations stated therein, if applicable.
(iv) Re'Nu Office Systems and the Shareholder further
understand that at the time Re'Nu Office Systems wishes to sell the securities
there may be no public market upon which to make such a sale, and that, even if
such a public market then exists, BRG may not be satisfying the current public
information requirements of Rule 144, and that, in such event, Re'Nu Office
Systems would be precluded from selling the securities under Rule 144 even if
the applicable holding period had been satisfied.
(v) Re'Nu Office Systems and the Shareholder further
understand that in the event all of the applicable requirements of Rule 144 are
not satisfied, registration under the Securities Act, compliance with Regulation
A or some other registration exemption will be required; and that,
notwithstanding the fact that Rule 144 is not exclusive, the staff of the
Securities and Exchange Commission has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 will have a substantial burden
of proof establishing that an exemption from registration is available for such
offers or sales and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
-9-
10
(b) Re'Nu Office Systems and the Shareholder acknowledge and
understand that the certificates representing the Shares shall bear the
following legends (as well as any legends required by applicable state and
federal corporate and securities laws):
(i) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933."
(ii) Any legend required to be placed thereon by the
California Commissioner of Corporations.
5. REPRESENTATIONS AND WARRANTIES OF BRG AND RN ACQUISITION CORP.
Subject to and except for the information contained in the Schedule of
Exceptions delivered to the Re'Nu Entities prior to the signing of this
Agreement and attached hereto as Exhibit H (the "BRG Disclosure Schedule"), BRG
and RN Acquisition Corp. jointly and severally represent and warrant to each
Re'Nu Entity as follows:
(a) ORGANIZATION. BRG is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of California and has
all necessary corporate power and authority to own or lease its properties and
to carry on its business as now being conducted, and possesses all licenses,
franchises, rights and privileges material to the conduct of its business. RN
Acquisition Corp. is a wholly-owned subsidiary of BRG and a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of California having all necessary corporate power and authority to own or lease
its properties and to carry on its business as now being conducted, and
possesses all licenses, franchises, rights and privileges material to the
conduct of its business.
(b) AUTHORIZATION. BRG and RN Acquisition Corp. each have the
corporate power to enter into this Agreement, and the execution, delivery and
performance of this Agreement has been duly authorized by all requisite
corporate action, and the Agreement has been, or will be at the Closing Date,
duly executed and delivered and constitute the valid and binding obligations of
BRG and RN Acquisition Corp.
(c) EFFECT OF AGREEMENT. The execution, delivery and performance
of this Agreement, and the consummation of the transactions herein contemplated,
will not conflict with, or result in a breach of the terms of, or constitute a
default under or violation of, any law or regulation of any governmental
authority, domestic or foreign, the Articles of Incorporation or Bylaws of BRG
or RN Acquisition Corp., or any material agreement to which either BRG or RN
Acquisition Corp. is a party or by which either is bound or to which either is
subject. Except for approval of the Agreement and the transactions contemplated
thereby pursuant to BRG's line of credit agreements, no consent of any person
not a party to this Agreement, nor consent of any governmental authority, except
as may be required by applicable state blue sky regulatory agen-
-10-
11
cies, is required to be obtained on the part of BRG or RN Acquisition Corp. to
consummate the transactions contemplated by this Agreement.
(d) FULL DISCLOSURE. Any information furnished by or on behalf of
BRG or RN Acquisition Corp. to the Re'Nu Entities in writing pursuant to this
Agreement and any information contained in the BRG Disclosure Schedule referred
to in this Agreement, at any time prior to the Closing Date, do not and will not
contain any untrue statement of a material fact and do not and will not omit to
state any material fact necessary to make any statement, in light of the
circumstances under which each statement is made, not misleading.
6. CONDITIONS TO OBLIGATIONS OF BRG AND RN ACQUISITION CORP.
(a) CLOSING CONDITIONS. Absent a waiver in writing, all
obligations of BRG and RN Acquisition Corp. under this Agreement are subject to
the satisfaction of the following conditions, to BRG's reasonable satisfaction,
on or before the completion of the Closing on the Closing Date:
(i) REPRESENTATIONS, WARRANTIES AND PERFORMANCE. The
representations and warranties of the Re'Nu Entities and the Shareholder
contained in this Agreement shall be deemed to have been made again at and as of
the Closing Date and shall then be true and correct with the same force and
effect as if such representations and warranties have been made at and as of the
Closing Date, and the Re'Nu Entities and the Shareholder shall have performed
and complied with all agreements, conditions and covenants required by this
Agreement to be performed or complied with by them prior to or at the Closing
Date.
(ii) LITIGATION. There shall not be pending any litigation
before any court or governmental agency (A) the outcome of which could
reasonably be expected to have a material adverse affect on the Purchased Assets
or their value to BRG or RN Acquisition Corp., or (B) to restrain or prohibit or
to obtain damages or other relief in connection with, or which is related to or
arises out of, this Agreement or the transactions contemplated hereby.
(iii) CERTAIN ASSIGNMENTS. Assignments of the Assumed
Contracts shall have been received to BRG's reasonable satisfaction.
(iv) ABSENCE OF MATERIAL CHANGES. There shall not have
been any adverse change in or to the Purchased Assets or revenues obtained or
anticipated to be obtained therefrom.
(v) APPROVALS. All consents, approvals and filings
required under any applicable law, rule or regulation, or under any applicable
contract, to be completed or obtained prior to the transactions contemplated by
this Agreement shall have been so completed or obtained, as the case may be, to
BRG's reasonable satisfaction.
(vi) CORPORATE APPROVAL. The Board of Directors and the
Shareholders of each Re'Nu Entity shall have approved this Agreement and the
transactions
-11-
12
contemplated by this Agreement in a manner consistent with applicable law and
the Articles of Incorporation (or other charter document) and Bylaws of each
Re'Nu Entity.
(b) COMPLIANCE CERTIFICATE. The President of each Re'Nu Entity
shall deliver to BRG at the Closing an officer's certificate certifying that the
conditions specified in Section 6(a)(i), (ii), (iii), (iv), (v) and (vi) herein
have been fulfilled.
7. CONDITIONS TO OBLIGATIONS OF RE'NU ENTITIES.
(a) CLOSING CONDITIONS. Absent a waiver in writing, all
obligations of the Re'Nu Entities under this Agreement are subject to the
satisfaction of the following conditions, to Re'Nu Entities' reasonable
satisfaction, on or before the completion of the Closing on the Closing Date:
(i) REPRESENTATIONS, WARRANTIES AND PERFORMANCE. The
representations and warranties of BRG and RN Acquisition Corp. contained in this
Agreement shall be deemed to have been made again at and as of the Closing Date
and shall then be true and correct with the same force and effect as if such
representations and warranties had been made at and as of the Closing Date, and
BRG and RN Acquisition Corp. shall have performed and complied with all
agreements, conditions and covenants required by this Agreement to be performed
or complied with by each respective entity prior to or at the Closing Date.
(ii) LITIGATION. There shall not be pending any litigation
before any court or governmental agency to restrain or prohibit or to obtain
damages or other relief in connection with, or which is related to or arises out
of, this Agreement or the transactions contemplated hereby, or which could
reasonably be expected to have a material adverse effect upon the ability of BRG
or RN Acquisition Corp. to perform its respective obligations under this
Agreement.
(iii) APPROVALS. All consents, approvals and filings
required under any applicable law, rule or regulation, or under any applicable
contract, to be completed or obtained prior to the transactions contemplated by
this Agreement shall have been so completed or obtained, as the case may be, to
Re'Nu Entities' reasonable satisfaction.
(iv) CORPORATE APPROVAL. Each of the Board of Directors of
BRG and RN Acquisition Corp. shall have approved this Agreement and the
transactions contemplated by this Agreement in a manner consistent with
applicable law and the Articles of Incorporation and Bylaws of BRG and RN
Acquisition Corp.
(b) COMPLIANCE CERTIFICATE. The President of BRG and RN
Acquisition Corp. shall deliver to each Re'Nu Entity at the Closing an officer's
certificate certifying that the conditions specified in Section 7(a)(i), (ii),
(iii), (iv), (v) and (vi) have been fulfilled.
-12-
13
8. COVENANTS FOLLOWING CLOSING.
(a) OPERATIONS FOLLOWING THE CLOSING.
(i) RN ACQUISITION CORP. Notwithstanding any other
provision in this Agreement to the contrary, BRG, RN Acquisition Corp., each
Re'Nu Entity and the Shareholder each understand and agree that after the
Closing, RN Acquisition Corp. shall own the Purchased Assets free and clear of
all liens and encumbrances, and that nothing in this Agreement shall be
construed to limit either BRG's or RN Acquisition Corp.'s respective rights to
manage and operate RN Acquisition Corp., the Purchased Assets and the Assumed
Liabilities in any manner, or to sell, liquidate or otherwise dispose of RN
Acquisition Corp., the Purchased Assets or the Assumed Liabilities in BRG's sole
discretion.
(ii) EMPLOYEES. At or as soon as practicable following the
Closing, RN Acquisition Corp. will make employment offers to all of the
employees of the Re'Nu Entities as identified on Exhibits G-1, G-2 and G-3 upon
the existing salary terms set forth on such exhibits. Such employment will be
subject to BRG's policies generally applicable to new employees. All such
persons who agree to become employees of RN Acquisition Corp. shall execute and
deliver a Confidentiality and Assignment Agreement in the form attached hereto
as Exhibit I.
(iii) CHANGE OF CORPORATE NAME. Promptly following the
Closing, the parties shall each use its best efforts to change the names of
Re'Nu Office Systems, Re'Nu Nevada and Re'Nu South and to "Xxxx Holdings I,
Inc.," "Xxxx Holdings II, Inc." and "Xxxx Holdings III, Inc.," respectively, and
to change the name of RN Acquisition Corp. to "Re'Nu Office Systems, Inc."
(b) RELEASE OF LIENS AND CONSENTS. Each Re'Nu Entity and the
Shareholder shall take all reasonable actions as may be necessary to (1) release
any outstanding liens or encumbrances on the Purchased Assets, and (2) obtain
such consents as may be necessary for the transfer of the Assumed Contracts to
RN Acquisition Corp. in accordance with the terms of this Agreement.
(c) INDEMNIFICATION.
(i) BY RE'NU ENTITIES AND THE SHAREHOLDER. Each Re'Nu
Entity and the Shareholder jointly and severally agree to indemnify BRG and/or
RN Acquisition Corp. and hold BRG and/or RN Acquisition Corp. harmless from and
against, and to reimburse BRG and/or RN Acquisition Corp. in respect of, any and
all damages, losses, liabilities, claims, judgments, settlements, penalties,
costs and expenses (including attorneys' fees and costs) of every nature
reasonably incurred by BRG and/or RN Acquisition Corp., whether absolute or
contingent, including costs of investigation and defense, arising from or in
connection with (A) any Non-Assumed Liabilities, (B) any breach or inaccuracy of
or omission from any of the representations, warranties or covenants of the
Re'Nu Entities or the Shareholder set forth in this Agreement, or (C) any
non-compliance with applicable bulk sales laws.
-13-
14
(ii) BY BRG AND RN ACQUISITION CORP. BRG and RN
Acquisition Corp. jointly and severally agree to indemnify the Re'Nu Entities
and the Shareholder and hold the Re'Nu Entities and the Shareholder harmless
from and against, and to reimburse the Re'Nu Entities and the Shareholder in
respect of, any and all damages, losses, liabilities, claims, judgments,
settlements, penalties, costs and expenses (including attorneys' fees and costs)
of every nature reasonably incurred by either of them, whether absolute or
contingent, including costs of investigation and defense, arising from or in
connection with the Assumed Liabilities and the conduct of RN Acquisition Corp.
following the Closing Date.
(d) EMPLOYEES. Each Re'Nu Entity agrees that, except as otherwise
expressly provided herein, it shall bear sole responsibility for all amounts due
and payable or otherwise arising with respect to such Re'Nu Entity's employees
at and prior to the Closing Date, including, but not limited to, all salaries,
wages, commissions, profit and revenue sharing, and holiday, vacation and
severance pay, bonuses and past service credits and shall have made and
remitted, for all periods through and including the Closing Date, all payroll
deductions, remittances and contributions, including, but not limited, to,
employees' salaries and wages, commissions, bonuses and profit-sharing required
under contract, any collective bargaining agreements or applicable laws and
regulations.
(e) ASSUMED CONTRACTS. Notwithstanding any other provision in
this Agreement to the contrary, each Re'Nu Entity and the Shareholder accept and
acknowledge full responsibility for payment of all obligations under the Assumed
Contracts that were incurred or created or that otherwise arose or became due
prior to the Closing Date.
(f) NONCOMPETITION COVENANT.
(i) AGREEMENT. Each Re'Nu Entity and the Shareholder
hereby agree that it and he shall not, during the period of five (5) years
following the date hereof (the "Noncompetition Period"), do any of the following
within the United States without the prior written consent of BRG:
(A) COMPETE. Carry on any business or activity
(whether directly or indirectly, as a partner, stockholder, principal, agent,
director, affiliate, employee or consultant) which is competitive with the
business conducted by BRG or RN Acquisition Corp. (as conducted now or during
the Noncompetition Period), nor engage in any other activities that conflict
with the business or prospects of BRG or RN Acquisition Corp.
(B) SOLICIT BUSINESS. Solicit or influence or
attempt to influence any client, customer or other person, either directly or
indirectly, to direct his, her or its purchase of BRG's or RN Acquisition
Corp.'s products and/or services to any person, firm, corporation, institution
or other entity in competition with the business of BRG or RN Acquisition Corp.
(C) SOLICIT PERSONNEL. Solicit or influence or
attempt to influence any person employed by BRG or RN Acquisition Corp. to
terminate or otherwise cease
-14-
15
his or her employment with BRG or RN Acquisition Corp. or become an employee of
any competitor of BRG or RN Acquisition Corp.
(ii) TERMINATION. The obligations of each Re'Nu Entity and
the Shareholder under this Section 8(f) shall terminate immediately and be of no
further force or effect on the date on which the Company (i) files a petition in
bankruptcy (or an involuntary petition in bankruptcy is filed against the
Company and is not dismissed within thirty (30) days) or (ii) makes an
assignment of all or substantially all of its assets for the benefit of its
creditors.
(iii) SEVERABILITY. Without limitation, the parties agree
and intend that the covenants contained in this Section 8(f) shall be deemed to
be a series of separate covenants and agreements, one for each and every county
of each state and political subdivision of the United States. If, in any
judicial proceeding, a court shall refuse to enforce in such action all of the
separate covenants deemed included herein, then at the option of BRG, wholly
unenforceable covenants shall be deemed eliminated from the provisions hereof
for the purpose of such proceeding to the extent necessary to permit the
remaining separate covenants to be enforced in such a proceeding.
(g) CONFIDENTIALITY. Each party hereto agrees that, except with
the prior written permission of the other parties hereto, it shall at all times
keep confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or other information concerning or relating
to (1) the business or financial affairs of the other parties to which such
party has been or shall become privy by reason of this Agreement, (2) the terms
of this Agreement or any other agreement contemplated or executed hereby, (3)
the content of any discussions or negotiations relating to this Agreement or the
transactions and other agreements contemplated or executed hereby and (4) the
performance of obligations hereunder; provided, however, that each party may
disclose the terms and conditions of this Agreement (i) as required by any court
or other governmental body or as otherwise required by law, (ii) to legal
counsel of the parties, (iii) in confidence to accountants, banks, and financing
sources and their advisors, (iv) in connection with the enforcement of this
Agreement or rights under this Agreement or (v) in confidence by BRG in
connection with an actual or proposed merger, acquisition or similar
transaction. The provisions of this Section 8(g) shall be in addition to, and
not in substitution for, the provisions of any separate nondisclosure agreement
executed by the parties hereto with respect to the transactions contemplated
hereby.
9. MISCELLANEOUS.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of BRG, RN Acquisition Corp., the Re'Nu Entities
and the Shareholder made in this Agreement or in any certificate, document or
other instrument delivered pursuant hereto shall survive for a period of two
years following the execution and delivery hereof and the Closing; provided,
however, that: (i) the representations and warranties of the Re'Nu Entities and
the Shareholder set forth in Section 3(n) ("Taxes") shall survive until all
applicable statutes of limitations, including waivers and extensions thereof,
have expired with respect to each matter addressed therein, and shall thereafter
automatically expire; and (ii) the representations and
-15-
16
warranties of the Re'Nu Entities and the Shareholder set forth in Section 3(q)
("Environmental and Safety Laws") shall survive until all applicable statutes of
limitations have expired with respect to each matter addressed therein, and
shall thereafter automatically expire. Any actions or claims brought pursuant to
this Section 9(a) shall be brought within six (6) months of the respective
designated survival periods described in the immediately preceding sentence.
(b) FEES AND EXPENSES. Each of the parties hereto shall bear its
own fees and expenses, including fees of counsel and accountants, incurred in
connection with the negotiation of this Agreement and the consummation of the
transactions contemplated hereby or otherwise arising out of, or by reason of,
this Agreement.
(c) ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement
and the exhibits and schedules hereto constitute the entire agreement among the
parties hereto and thereto with respect to the subject matter hereof and thereof
and supersede all prior and contemporaneous agreements, term sheets,
understandings, negotiations and discussions, whether oral or written, of the
parties with respect thereto. The parties hereto acknowledge and agree that no
third party (including, without limitation, employees of any Re'Nu Entity) is
intended to be a third-party beneficiary of this Agreement.
(d) AMENDMENTS. No amendment, modification or rescission of this
Agreement shall be effective unless set forth in writing executed by the party
sought to be bound thereby.
(e) NOTICES. Any notice given under this Agreement shall be in
writing and shall be deemed effective upon the earlier of personal delivery
(including personal delivery by telex or other means) to the President of such
party or to such party if an individual, the day after delivery by commercial
courier or the third day after mailing by certified or registered mail, postage
prepaid, to the address first set forth above, or to such other address as any
party may have furnished in writing to the other party in the manner provided
above.
(f) ASSIGNMENT. Neither the Re'Nu Entities nor the Shareholder
may assign this Agreement or any of its respective rights hereunder in any
manner without the prior written consent of BRG and RN Acquisition Corp. BRG may
not assign its obligation under this Agreement to issue the Shares. Subject to
the foregoing, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective transferees, successors,
assigns and legal representatives.
(g) SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
(h) GOVERNING LAW. This Agreement and the respective rights and
obligations of the parties in this Agreement shall be construed under and by the
laws of the Xxxxx
-00-
00
xx Xxxxxxxxxx as such laws are applied to contracts entered into in that state
between residents thereof.
(i) ATTORNEYS' FEES. If any legal action or proceeding is brought
to enforce or interpret this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees and
out-of-pocket costs in connection with such action or proceeding in addition to
all other relief to which such party may be entitled.
(j) NO WAIVER. It is understood and agreed that no failure or
delay by any party in exercising any right, power, or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege be deemed to operate as a waiver of any other right,
power or privilege under this Agreement.
(k) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be considered to be an original, but all of
which together shall constitute one and the same instrument.
(l) ADVICE OF COUNSEL. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES
THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK
THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE
TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED
AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.
(m) CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES WHICH
ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE
QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE
QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON
THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.
(Signature Page Follows)
-17-
18
The parties hereto have duly executed this Asset Purchase Agreement as
of the date first set forth above.
BUSINESS RESOURCE GROUP, RN ACQUISITION CORP.,
a California corporation a California corporation
By: /s/ XXXX X. XXXX By: /s/ XXXX X. XXXX
------------------------------- -------------------------------
Name: Xxxx X. Xxxx Name: Xxxx X. Xxxx
Title: President and CEO Title: President and CEO
SHAREHOLDER, RE'NU OFFICE SYSTEMS, INC.
an individual a California corporation
/s/ XXXX XXXX By: /s/ XXXX XXXX
----------------------------------- -------------------------------
Xxxx Xxxx
Name: Xxxx Xxxx
Title: CEO
RE'NU SOUTH, INC., RE'NU OFFICE SYSTEMS, INC.,
a California corporation a Nevada corporation
By: /s/ XXXX XXXX By: /s/ XXXX XXXX
------------------------------- -------------------------------
Name: Xxxx Xxxx Name: Xxxx Xxxx
Title: CEO Title: CEO
-18-
19
LIST OF EXHIBITS
Exhibit A-1 Purchased Assets of Re'Nu Office Systems
Exhibit A-2 Purchased Assets of Re'Nu South
Exhibit A-3 Purchased Assets of Re'Nu Nevada
Exhibit B-1 Assumed Liabilities of Re'Nu Office Systems
Exhibit B-2 Assumed Liabilities of Re'Nu South
Exhibit B-3 Assumed Liabilities of Re'Nu Nevada
Exhibit C Additional Purchase Price Schedule
Exhibit D Form of Xxxx of Sale
Exhibit E-1 Purchase Price Allocation of Re'Nu Office Systems
Exhibit E-2 Purchase Price Allocation of Re'Nu South
Exhibit E-3 Purchase Price Allocation of Re'Nu Nevada
Exhibit F Re'Nu Entities Disclosure Schedule
Exhibit G-1 Employees of Re'Nu Office Systems
Exhibit G-2 Employees of Re'Nu South
Exhibit G-3 Employees of Re'Nu Nevada
Exhibit H BRG Disclosure Schedule
Exhibit I Form of Confidentiality and Assignment Agreement
20
EXHIBIT A-1
PURCHASED ASSETS OF RE'NU OFFICE SYSTEMS
- All trademark, tradename or service xxxx rights or other rights to goodwill
in the names "Re'Nu" and "Re'Nu Office Systems."
Xxxxx Cash --
Cash (39,312)
Accounts Receivable 446,029
Other Accounts Receivable 3,474
Inventory 1,312,136
Prepaid Other --
Leasehold Improvements 26,427
Office Equipment 15,671
Computers and Software 6,759
Vehicles 73,064
Warehouse Equipment 12,153
Deposits 37,240
21
EXHIBIT A-2
PURCHASED ASSETS OF RE'NU SOUTH
- All trademark, tradename or service xxxx rights or other rights to goodwill
in the names "Re'Nu" and "Re'Nu South."
Cash 49,498
Accounts Receivable 389,838
Inventory 13,688
Deposits 4,593
22
EXHIBIT A-3
PURCHASED ASSETS OF RE'NU NEVADA
- All trademark, tradename or service xxxx rights or other rights to goodwill
in the names "Re'Nu" and "Re'Nu Nevada."
Cash 10,319
Accounts Receivable 37,461
Inventory 5,288
Deposits 850
23
EXHIBIT B-1
ASSUMED LIABILITIES OF RE'NU OFFICE SYSTEMS
Accounts Payable 573,854
Accrued Vacation 4,035
Accrued Payroll 113,089
Sales Tax Payable 36,413
Line of Credit 950,000
Customer Deposits 65,419
Notes payable 60,034
401(k) payable 3,370
24
EXHIBIT B-2
ASSUMED LIABILITIES OF RE'NU SOUTH
Accounts Payable 79,224
Accrued Payroll 7,658
Sales Tax Payable 31,502
Customer Deposits 212,200
25
EXHIBIT B-3
ASSUMED LIABILITIES OF RE'NU NEVADA
Accounts Payable 17,992
Accrued Payroll 2,216
Sales Tax Payable 2,981
Customer Deposits 29,128
26
EXHIBIT C
ADDITIONAL PURCHASE PRICE SCHEDULE
The Additional Purchase Price, if any, paid for each Applicable Period
set forth below shall be based on the operating income of RN Acquisition Corp.
as set forth below. The operating income of RN Acquisition Corp. shall be
determined in good faith by BRG in its sole discretion pursuant to the
accounting policies and procedures of BRG then in effect, and shall be
calculated as follows: revenues minus cost of goods sold, operating expenses
(including Xxxxx Xxxx'x and Xxxx Xxxx'x employment compensation) and operating
interest, but before acquisition interest and goodwill. The calculation of the
operating income of RN Acquisition Corp. as set forth in the immediately
preceding sentence shall not include any corporate allocation charges between
BRG and RN Acquisition Corp.
I. Applicable Period = February 1, 1999 to January 31, 2000:
IF THE OPERATING INCOME OF RN
ACQUISITION CORP. DURING THE THEN THE ADDITIONAL PURCHASE
APPLICABLE PERIOD IS: PRICE FOR SUCH APPLICABLE
PERIOD SHALL BE:
$1,181,000 and above $1,000,000
$1,098,000 to $1,180,999.99 $875,000
$1,015,000 to $1,097,999.99 $750,000
$932,000 to $1,014,999.99 $625,000
$849,000 to $931,999.99 $500,000
$766,000 to $848,999.99 $375,000
$683,000 to $765,999.99 $250,000
$600,000 to $682,999.99 $125,000
$0 to $599,999.99 $0.00
II. Applicable Period = February 1, 2000 to January 31, 2001:
IF THE OPERATING INCOME OF RN
ACQUISITION CORP. DURING THE THEN THE ADDITIONAL PURCHASE
APPLICABLE PERIOD IS: PRICE FOR SUCH APPLICABLE PERIOD SHALL BE:
$1,263,000 and above $500,000
$1,180,000 to $1,262,999.99 $427,500
$1,097,000 to $1,179,999.99 $375,000
27
$1,014,000 to $1,096,999.99 $312,500
$931,000 to $1,013,999.99 $250,000
$848,000 to $930,999.99 $187,500
$765,000 to $847,999.99 $125,000
$682,000 to $764,999.99 $62,500
$0 to $681,999.99 $0.00
III. Applicable Period = February 1, 2001 to January 31, 2002:
IF THE OPERATING INCOME OF RN
ACQUISITION CORP. DURING THE THEN THE ADDITIONAL PURCHASE
APPLICABLE PERIOD IS: PRICE FOR SUCH APPLICABLE
PERIOD SHALL BE:
$1,386,000 and above $500,000
$1,303,000 to $1,385,999.99 $427,500
$1,220,000 to $1,302,999.99 $375,000
$1,137,000 to $1,219,999.99 $312,500
$1,054,000 to $1,136,999.99 $250,000
$971,000 to $1,053,999.99 $187,500
$888,000 to $970,999.99 $125,000
$805,000 to $887,999.99 $62,500
$0 to $804,999.99 $0.00
SAMPLE CALCULATION: For purposes of illustration only, and without implying any
probative value whatsoever, the following sets forth an example of a Additional
Purchase Price calculation for a hypothetical Applicable Period based upon
certain assumptions.
Assumptions:
IF, for the 12 months ended 1/31/00 (i.e. first year of operations):
Annual revenue = $10,000,000; and
Annual gross profit % = 42%; and
Annual operating expenses = $3,050,000 (including applicable compensation); and
Annual operating interest = $50,000,
THEN, the Additional Purchase Price for such Applicable Period would be
calculated as follows:
28
Total Revenues of $10,000,000
Gross Profit % of 42%
Gross Profit = $4,200,000
Operating Expenses = $( 3,050,000)
Operating Interest = $(50,000)
Operating Income = $ 1,100,000
========
ADDITIONAL PURCHASE PRICE:: $875,000
========
29
EXHIBIT D
FORM OF XXXX OF SALE
Know all persons by these presents, that Re'Nu Office Systems, Inc., a
California corporation, Re'Nu South, Inc., a California corporation, Re'Nu
Nevada, Inc., a Nevada corporation, and Xxxx Xxxx, an individual and sole
shareholder of the foregoing (each, a "Transferor"), in exchange for
consideration set forth in the Asset Purchase Agreement (the "Agreement") dated
as of February 1, 1999 by and among each Transferor, Business Resource Group, a
California corporation ("BRG"), and RN Acquisition Corp., a wholly-owned
subsidiary of BRG and a California corporation (the "Transferee"), hereby sell,
transfer, assign and convey unto Transferee, its successors and assigns, free
and clear of all liens and encumbrances, all of the right, title and interest of
each respective Transferor in and to the Purchased Assets (as described and
defined in the Agreement).
To have and to hold the same unto the Transferee, its successors or
assigns, forever, and each Transferor does hereby covenant and agree that each
such Transferor will from time to time, if requested by the Transferee, its
successors and assigns, do, execute, acknowledge and deliver, or will cause to
be done, executed and delivered to the Transferee, or its successors or assigns,
such and all further acts, transfers, assignments, deeds, powers and assurances
of title, and additional papers and instruments, and do or cause to be done all
acts or things as often as may be proper or necessary for better assuring,
conveying, transferring and assigning all of the property hereby conveyed,
transferred or assigned, and effectively to carry out the intent hereof, and to
vest in the Transferee the entire right, title and interest of each such
Transferor in and to all of the said property, and each such Transferor will
warrant and defend the same to the Transferee, its successors and assigns,
forever against all claims or demands whatsoever.
In witness whereof, each Transferor has executed this instrument as of
February 1, 1999.
RE'NU OFFICE SYSTEMS, INC.
By: ______________________________________
Title: ___________________________________
RE'NU SOUTH, INC.
By: ______________________________________
Title: ___________________________________
RE'NU NEVADA, INC.
By: ______________________________________
Title: ___________________________________
XXXX XXXX
__________________________________________
30
EXHIBIT E-1
PURCHASE PRICE ALLOCATION FOR RE'NU OFFICE SYSTEMS
Cash (39,312)
Accounts Receivable 446,029
Other Accounts Receivable 3,474
Inventory 1,312,136
Leasehold Improvements 26,427
Office Equipment 15,671
Computers and Software 6,759
Vehicles 73,064
Warehouse Equipment 12,153
Deposits 37,240
Goodwill 2,033,940
Accounts Payable 573,854
Accrued Vacation 4,035
Accrued Payroll 113,089
Sales Tax Payable 36,413
Line of Credit 950,000
Customer Deposits 65,419
Notes Payable 60,034
401(k) Payable 3,370
Cash 1,871,367
Stock 250,000
The Additional Purchase Price, if any, shall be allocated in its entirety to
goodwill.
31
EXHIBIT E-2
PURCHASE PRICE ALLOCATION FOR RE'NU SOUTH
Cash 49,498
Accounts Receivable 389,838
Inventory 13,688
Deposits 4,593
Accounts Payable 79,224
Accrued Payroll 7,658
Sales Tax Payable 31,502
Customer Deposits 212,200
Cash 127,033
32
EXHIBIT E-3
PURCHASE PRICE ALLOCATION FOR RE'NU NEVADA
Cash 10,319
Accounts Receivable 37,461
Inventory 5,288
Deposits 850
Accounts Payable 17,992
Accrued Payroll 2,216
Sales Tax Payable 2,981
Customer Deposits 29,128
Cash 1,600
33
EXHIBIT F
RE'NU ENTITIES DISCLOSURE SCHEDULE
Xxxxxxx Xxxxx vs. Re'Nu Office Systems, Inc., WCAB Case No. MON 227228
34
EXHIBIT G-1
EMPLOYEES OF RE'NU OFFICE SYSTEMS
MANUFACTURING INSTALLATION WAREHOUSE
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx Xxxxx Xxxxxxxxx Xxxxx Xxxxxxxx
Xxxxx X. Xxxxxx Xxxxxxxx Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxx X. Xxxxx Xxxxx Xxxxxx Xxxx Xxxx
Xxxxxxx Xxxx Xxxx Xxxx Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxxx Xxxxxxxx
Xxxxx Xxxxxxxxx Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx
Xxxxx Xxxx Xxxx Xxxxxxx Xxxxx Xxxxxxxx
Xxxxxxxxx Xxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxx Xxxxxxxx Xxxxxxx
Xxxxxx X. Xxxxxxxxx Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx Meno Rumbo
Xxxxx Xxxxxxxx Xxxxx Xxxxxxx
Xxxx Xxxxxxx Xxxxxxx Xxxxx
Xxxxxx Xxxxxxxx
Xxxx Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Xxxx Xxxxxxxx
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxx
Xxxxx Xxxx
Xxxxxxxxx Xxxxxxxx
Xxxxxxxx X. Xxxxxxxx
OFFICE STAFF
Xxxxx Xxxxxx-Xxxxxxx Xxxx Xxxxxxx-Buyer
Xxxxxx Xxxxxxx Xxxxxx Xxxxxx-Manufacturing Supervisor
Xxxxxx Xxxxx-H/R - A/P Xxxx Xxxxxxx-Accounts Receivable
Xxxxx Xxxxx Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxx-Purchasing Xxxxx Xxxxxxxxx
Xxxxxx Xxxxxx-CAD Supervisor Xxxxxxxx Xxxxxxxx-Sales Assistant
Xxxxxxxxx Xxxxxxx-Receptionist Xxxxxxx Xxxxxxxx-Sales Rep
Xxxxx Xxx-Sales Rep Xxxx Xxxxx-Sales Rep
ROSECRANS WAREHOUSE
Xxxxxxx Xxxxxx-Manager Xxxx Xxxxxx-Salesrep
Xxxxxx Xxxx-Warehouse Help Xxxxxxx Xxxxxxxx-Warehouse Help
VALLEY SHOWROOM OFFICE STAFF
Xxxxxx Xxxxxxxx-Manager/Salesrep Xxxx Xxxxxx-Salesrep
Xxx Xxxxx-Salesrep
35
EXHIBIT G-2
EMPLOYEES OF RE'NU SOUTH
OFFICE STAFF
Xxx Xxxxxx-Manager/Sales
Xxxxxx Xxxxxxxx-Sales Assistant
Xxxxxxx Xxxxxxx-Receptionist
Xxxxx Xxxx-Project Manager to Xxxx Xxxxxxxx
Art Baragon-CAD Dept.
Xxxx Xxxxxxxx-Salesrep
Xxxx Xxxxxxxx-Salesrep
Xxxxx Xxxxxx-Salesrep
Xxxx Xxxxxxx-Salesrep
36
EXHIBIT G-3
EMPLOYEES OF RE'NU NEVADA
OFFICE STAFF
Xxxxxxx Oh-Manager/Salesrep
Xxxxxx (Seung) Oh-CAD Dept.
Xxxxxxx Xxxxx-Receptionist/Sales Assistant (Medical Leave)
Xxxxxxxx Xxxxx-Temporary Receptionist
37
EXHIBIT H
BRG DISCLOSURE SCHEDULE
None.
38
EXHIBIT I
FORM OF CONFIDENTIALITY AND ASSIGNMENT AGREEMENT
In consideration of, and as a condition of my employment with Business
Resource Group, a California corporation (the "Company") doing business in the
State of California located at 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx,
Xxxxxxxxxx 00000, I hereby represent to and agree with the Company as follows:
1. PURPOSE OF AGREEMENT. I understand that the Company is engaged in a
continuous program of production, sales and marketing in connection with its
business and that it is critical for the Company to preserve and protect its
Proprietary Information (as defined below), its rights in Inventions (as defined
below) and in all related rights.
2. DISCLOSURE OF INVENTIONS. I will promptly disclose in confidence to
the Company all inventions, improvements, designs, original works of authorship,
processes, computer software programs, databases and trade secrets
("Inventions") that I make or conceive or first reduce to practice or create,
either alone or jointly with others, during the period of my employment, whether
or not in the course of my employment.
3. WORK FOR HIRE; ASSIGNMENT OF INVENTIONS. I acknowledge and agree that
any copyrightable works prepared by me within the scope of my employment are
"works for hire" under the Copyright Act and that the Company will be considered
the author and owner of such copyrightable works. I agree that all Inventions,
and all patent, copyright, trade secret, and other intellectual property rights
relating to such Inventions, that (a) are developed using equipment, supplies,
facilities or trade secrets of the Company, (b) result from work performed by me
for the Company, or (c) relate to the Company's business or current or
anticipated research and development, will be the sole and exclusive property of
the Company and are hereby irrevocably assigned by me to the Company.
4. ASSISTANCE. I agree to assist the Company in every proper way to
obtain for the Company and enforce patents, copyrights, mask work rights, trade
secret rights and other legal protections for the Company's Inventions in any
and all countries and I will execute any documents that the Company may
reasonably request for such purpose both before and after my employment with the
Company terminates. I hereby appoint the Secretary of the Company as my
attorney-in-fact to execute documents on my behalf for this purpose.
5. PROPRIETARY INFORMATION. I understand that my employment by the
Company creates a relationship of confidence and trust with respect to any
information of a confidential or secret nature that may be disclosed to me by
the Company that relates to the business of the Company or to the business of
any parent, subsidiary, affiliate, customer or supplier of the Company or any
other party with whom the Company agrees to hold information of such party in
confidence ("Proprietary Information"). Such Proprietary Information includes
but is not limited to Inventions, marketing plans, product plans, business
strategies, financial information, forecasts, personnel information and customer
lists.
39
6. CONFIDENTIALITY. At all times, both during my employment and after
its termination, I will keep and hold all such Proprietary Information in strict
confidence and trust, and I will not use or disclose any of such Proprietary
Information without the prior written consent of the Company, except as may be
necessary to perform my duties as an employee of the Company for the benefit of
the Company. Upon termination of my employment with the Company, I will promptly
deliver to the Company all documents and materials of any nature pertaining to
my work, including without limitation all documents and materials containing
Proprietary Information. My obligations under Section 5 above and this Section 6
shall survive any termination of my employment with the Company.
7. NO BREACH OF PRIOR AGREEMENT. I represent that my performance of all
the terms of this Agreement and my duties as an employee of the Company will not
breach any invention assignment, proprietary information or similar agreement
with any former employer or other party. I represent that I will not bring with
me to the Company or use in the performance of my duties for the Company any
documents or materials of a former employer that are not generally available to
the public or have not been legally transferred to the Company.
8. SEVERABILITY. In the event that any provision of this Agreement is
found by a court, arbitrator or other tribunal to be illegal, invalid or
unenforceable, then such provision shall not be voided, but shall be enforced to
the maximum extent permissible under applicable law, and the remainder of this
Agreement shall remain in full force and effect.
9. NO DUTY TO EMPLOY. I understand that this Agreement does not
constitute a contract of employment or obligate the Company to employ me for any
stated period of time. This Agreement shall be effective as of the first day of
my employment by the Company.
10. ASSIGNMENT. I agree that this Agreement may be assigned to any
successor or parent corporation of the Company.
11. GOVERNING LAW. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of
California, without reference to rules of conflict of law.
12. REMEDIES. I understand and acknowledge that any breach or threatened
breach of this Agreement by me is likely to cause or threaten irreparable harm
to the Company, and, accordingly, I agree that in such event, the Company shall
be entitled to equitable relief to protect its interest therein, including but
not limited to preliminary and permanent injunctive or mandatory relief, as well
as money damages. This Section 12 shall survive any termination of my employment
with the Company.
13. ENTIRE AGREEMENT. This Agreement sets forth the entire Agreement and
understanding of the parties relating to its subject matter and merges all prior
discussions and agreements between them. No modification or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing signed by both parties.
40
14. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
(Signature Page Follows)
41
IN WITNESS WHEREOF, the parties have executed this Confidentiality and
Assignment Agreement as of February 1, 1999.
BUSINESS RESOURCE GROUP EMPLOYEE:
("COMPANY")
By: _______________________________ __________________________________
[Name]
Title: ____________________________
Address: 0000 Xxxxx Xxxxx Xxxxxx Address: ____________________________
Xxxxx 000 ____________________________
Xxx Xxxx, XX 00000
