SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
January 28, 2000
----------------------------------------------------
THE RANDERS KILLAM GROUP INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-18095 38-2788025
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
27 Bleeker Street
Milburn, New Jersey 07041
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (781) 622-1000
<PAGE>
FORM 8-K
THE RANDERS KILLAM GROUP INC.
Item 2. Disposition of Assets
On January 28, 2000, The Randers Killam Group Inc. (the "Company") sold
substantially all of the assets and liabilities of its Randers division,
exclusive of certain real estate and certain ongoing litigation, to RGI
Muskegon, Inc. The purchaser is a newly formed Michigan corporation that is
owned and managed by the former management team of the Randers division, which
includes Thomas Eurich, a Vice President and a Director of the Company until the
closing of the transaction. The Randers division provides engineering and
construction services and constituted the Company's Process Engineering and
Construction segment.
The purchase price for the assets of the Randers Division consisted of a
promissory note in the principal amount of $538,000 bearing interest at the rate
of 8.0% per annum and payable in 36 equal monthly installments of principal and
interest commencing March 1, 2000. The assets sold include all of the Randers
division's operating assets, active contracts and projects, and the real
property located at 570 Seminole Road in Muskegon, Michigan. The liabilities
assumed by the purchaser include all balance sheet liabilities, all lease
obligations, and all liabilities and obligations under the active contracts and
projects. Title to the real estate will be transferred to the purchaser as soon
as practicable after the closing. Upon delivery of the deed by the Company, the
purchaser will deliver to the Company a second mortgage on the real estate to
secure the promissory note.
The purchase price of the assets was determined by the parties in
arms-length negotiations. In agreeing to the purchase price, the Company
considered the additional costs that would be incurred by the Company if the
Randers division were shut down instead of sold.
The Company incurred a loss on the sale of approximately $2.2 million,
which was included in restructuring costs for the third quarter ended January 1,
2000.
2
<PAGE>
FORM 8-K
THE RANDERS KILLAM GROUP INC.
Item 7. Financial Statements, Pro Forma Condensed Financial Information and
Exhibits
(a) Financial Statements
Not applicable.
(b) Pro Forma Condensed Financial Statements
The following unaudited pro forma condensed statements of operations set
forth the results of operations for the fiscal year ended April 3, 1999, and the
nine months ended January 1, 2000, as if the disposition by the Company of the
Randers division had occurred at the beginning of fiscal 1999. The unaudited pro
forma condensed balance sheet sets forth the financial position as of January 1,
2000, as if the disposition had occurred as of that date.
The pro forma results of operations are not necessarily indicative of
future operations or the actual results that would have occurred had the sale of
the Randers division been consummated at the beginning of fiscal 1999. These
statements should be read in conjunction with the accompanying notes herein and
the historical consolidated financial statements and related notes of the
Company included in its Annual Report on Form 10-K, as amended, for the fiscal
year ended April 3, 1999, and Quarterly Report on Form 10-Q for the nine months
ended January 1, 2000.
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<PAGE>
FORM 8-K
THE RANDERS KILLAM GROUP INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
Fiscal Year Ended April 3, 1999
(Unaudited)
Less:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
The Randers Randers Pro Forma
Killam Group Division Adjustments Pro Forma
(In thousands except per share amounts)
Revenues $ 80,773 $18,342 $ - $ 62,431
-------- ------- ------- --------
Costs and Operating Expenses:
Cost of revenues 61,754 15,558 - 46,196
Selling, general, and administrative expenses 13,816 2,201 - 11,615
-------- ------- ------- --------
75,570 17,759 - 57,811
-------- ------- ------- --------
Operating Income 5,203 583 - 4,620
Interest Income 652 9 43 686
Interest Expense (155) (77) - (78)
-------- ------- ------- --------
Income Before Income Tax Provision 5,700 515 43 5,228
Income Tax Provision 2,732 225 15 2,522
-------- ------- ------- --------
Net Income $ 2,968 $ 290 $ 28 $ 2,706
======== ======= ======= ========
Basic and Diluted Earnings per Share $ .12 $ .11
======== ========
Weighted Average Shares:
Basic 25,429 25,429
======== ========
Diluted 25,452 25,452
======== ========
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<PAGE>
FORM 8-K
THE RANDERS KILLAM GROUP INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
Nine Months Ended January 1, 2000
(Unaudited)
Less:
The Randers Randers Pro Forma
Killam Group Division Adjustments Pro Forma
(In thousands except per share amounts)
Revenues $ 52,209 $ 6,844 $ - $ 45,365
-------- ------- ------- --------
Costs and Operating Expenses:
Cost of revenues 38,417 6,468 - 31,949
Selling, general, and administrative expenses 9,172 1,284 - 7,888
Restructuring costs 17,939 5,777 - 12,162
-------- ------- ------- --------
65,528 13,529 - 51,999
-------- ------- ------- --------
Operating Loss (13,319) (6,685) - (6,634)
Interest Income 708 2 32 738
Interest Expense (95) (50) - (45)
-------- ------- -------- --------
Loss Before Income Tax Provision (12,706) (6,733) 32 (5,941)
Income Tax Provision 291 (750) 11 1,052
-------- ------- ------- --------
Net Loss $(12,997) $(5,983) $ 21 $ (6,993)
======== ======= ======= ========
Basic and Diluted Loss per Share $ (.51) $ (.27)
========= ========
Basic and Diluted Weighted Average Shares 25,432 25,432
========= ========
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<PAGE>
</TABLE>
<TABLE>
<CAPTION>
FORM 8-K
THE RANDERS KILLAM GROUP INC.
PRO FORMA CONDENSED BALANCE SHEET
As of January 1, 2000
(Unaudited)
<S> <C> <C> <C>
Less:
The Randers Randers
Killam Group Division Pro Forma
------------ -------- ---------
(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 2,084 $ 1,180 $ 904
Advance to affiliate 19,030 - 19,030
Accounts receivable, net 11,309 1,283 10,026
Unbilled contract costs and fees 7,842 378 7,464
Prepaid taxes and deferred tax asset 1,550 - 1,550
Prepaid expenses 242 - 242
------- ------- --------
42,057 2,841 39,216
------- ------- --------
Property, Plant, and Equipment, at Cost, Net 9,756 - 9,756
------- ------- --------
Other Assets 1,930 - 1,930
------- ------- --------
Cost in Excess of Net Assets of Acquired Companies 31,195 - 31,195
------- ------- --------
$84,938 $ 2,841 $ 82,097
======= ======= ========
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<PAGE>
FORM 8-K
THE RANDERS GROUP INC.
PRO FORMA CONDENSED BALANCE SHEET (continued)
As of January 1, 2000
(Unaudited)
Less:
The Randers Randers
Killam Group Division Pro Forma
------------ -------- ---------
(In thousands)
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Current maturities of long-term obligations $ 82 $ - $ 82
Accounts payable 3,617 650 2,967
Accrued payroll and employee benefits 2,506 168 2,338
Accrued income taxes 1,953 - 1,953
Accrued restructuring costs 2,484 986 1,498
Other accrued expenses 1,356 1,037 319
Due to parent company and affiliated companies 119 - 119
------- ------- --------
12,117 2,841 9,276
------- ------- --------
Deferred Income Taxes 997 - 997
------- ------- --------
Other Deferred Items 1,097 - 1,097
------- ------- --------
Long-term Obligations 694 - 694
------- ------- --------
Shareholders' Investment:
Common stock 3 - 3
Capital in excess of par value 79,395 - 79,395
Accumulated deficit (9,365) - (9,365)
------- ------- --------
70,033 - 70,033
------- ------- --------
$84,938 $ 2,841 $ 82,097
======= ======= ========
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<PAGE>
FORM 8-K
</TABLE>
THE RANDERS KILLAM GROUP INC.
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Pro Forma Adjustments to Pro Forma Condensed Statements of Operations
(In thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal Year Ended Nine Months Ended
April 3, 1999 January 1, 2000
Debit (Credit)
Interest Income
Increase in interest income earned on the $538,000
note receivable issued to the Company by the
acquirer at an interest rate of 8% $43 $32
--- ---
Income Tax Provision
Increase in the income tax provision as a result of
an increase in interest income calculated at the
federal income tax rate of 34% $15 $11
--- ---
</TABLE>
Note 2 - Pro Forma Adjustments to Pro Forma Condensed Balance Sheet
The sales price of the Randers division consisted of a $538,000 promissory
note issued to the Company secured by certain real estate. In addition, the
acquirer assumed $776,000 of mortgage debt. Due to the fact that the Company
received no consideration at the time of sale, the sale of the real estate is
being accounted for under the deposit method. Under the deposit method, the
Company did not record the note receivable and continues to report the property
that was sold as well as the existing mortgage debt in the accompanying pro
forma condensed balance sheet. Cash received from the acquirer will be reported
as a deposit on the contract. As a result, there are no pro forma adjustments to
the pro forma condensed balance sheet as of January 1, 2000.
8
<PAGE>
FORM 8-K
THE RANDERS KILLAM GROUP INC.
Item 7. Financial Statements, Pro Forma Condensed Financial Information and
Exhibits (continued)
(c) Exhibits
2.1Asset Purchase Agreement by and among RGI Muskegon, Inc. (as Buyer),
Randers Engineering, Inc., Redeco, Inc., Viridian Technology, Inc., and
Randers Group Property Corporation (as Sellers), and The Randers Killam
Group Inc. (as Sellers' Parent) dated January 28, 2000. Exhibits to the
Agreement have been omitted from the copy of the Agreement filed
herewith. Copies of such exhibits will be furnished supplementally to
the Commission upon request to the Company.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, on this 11th day of February 2000.
THE RANDERS KILLAM GROUP INC.
By: /s/ Paul F. Kelleher
Paul F. Kelleher
Chief Accounting Officer
ASSET PURCHASE AGREEMENT
by and among
RGI MUSKEGON, INC.
(as Buyer),
RANDERS ENGINEERING, INC.,
REDECO, INC.,
VIRIDIAN TECHNOLOGY, INC.
and
RANDERS GROUP PROPERTY CORPORATION
(as Sellers)
and
THE RANDERS KILLAM GROUP INC.
(as Sellers' Parent)
January 28, 2000
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
January 28, 2000 by and among (i) RGI Muskegon, Inc., a Michigan corporation
(the "Buyer"), on the one hand; and (ii) Randers Engineering, Inc. ("REI"),
Redeco, Inc. ("Redeco"), Viridian Technology, Inc. ("Viridian"), and Randers
Group Property Corporation ("RGPC"), each of which is a Michigan corporation
(each of REI, Redeco, Viridian and RGPC, a "Seller" and all, collectively, the
"Sellers"); and The Randers Killam Group Inc., a Delaware corporation (the
"Sellers' Parent"), on the other hand.
RECITALS
WHEREAS, the Sellers' Parent owns in the aggregate 100% of the issued and
outstanding shares of the each of the Sellers; and
WHEREAS, the officers and directors of the Buyer are, as of the date of
this Agreement, also officers, directors and/or employees of the Sellers and or
of the Sellers' Parent, and manage the business of Sellers; and
WHEREAS, subject to the terms and conditions of this Agreement, each Seller
desires to sell to the Buyer substantially all of such Seller's properties and
assets; and
WHEREAS, subject to the terms and conditions of this Agreement, the Buyer
desires to purchase said properties and assets of the Sellers for the
consideration specified herein and the assumption by the Buyer of certain
liabilities and obligations of the Sellers;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the parties agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Sale of Assets. Subject to the provisions of this Agreement, each
Seller agrees to sell and each Buyer agrees to purchase, at the Closing (as
defined in Section 1.7 hereof), all of the properties, assets and rights of such
Seller of every kind and description, tangible and intangible, real, personal or
mixed, and wherever located, owned by such Seller as of the Closing Date (as
defined in Section 1.7 hereof), other than the Excluded Assets (as defined in
Section 1.2 below), including, without limitation:
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(a) Names. All of such Seller's right, title and interest in and to
the names, trade names and trademarks "Randers," "Redeco" and "Viridian";
(b) Real Property Interests. All of RGPC's right, title and interest
in and to the real property located at 570 Seminole Road, Muskegon, Michigan
("Randers Professional Building IV"), together with all of RGPC's rights under
leases with tenants in such real property and all deposits and prepayments made
by such tenants under such leases (all such interests, collectively, the
"Building IV Interests");
(c) Operating Assets. All of REI's, Redeco's and Viridian's
furniture, fixtures, software and equipment used in the conduct of the
engineering/construction businesses of REI, Redeco and Viridian, and all of the
Sellers' physical assets, accounts, files, client lists, project files,
drawings, specifications, reference materials and other information relating to
the operation of the business of the Sellers;
(d) Contracts and Projects. All of such Seller's active contracts
and projects, including without limitation, the Contracts and Projects listed on
Schedule 1.1(d) attached to this Agreement (the "Contracts and Projects");
(e) Balance Sheet Assets. All of such Seller's assets including cash
(other than Excluded Assets) reflected on the consolidated balance sheet of the
Sellers as of the Closing Date (the "Balance Sheet");
(f) Licenses and Permits. All of such Seller's licenses, permits and
regulatory approvals (to the extent transferable);
(g) Books and Records. Except as set forth in Section 1.2(d) below,
all of such Seller's books and records, wherever located; and
(h) Other Assets. All of such Seller's other tangible and intangible
assets (other than Excluded Assets) not described above.
The assets, property and rights to be sold by the Sellers and to be
purchased by the Buyer under this Agreement are hereinafter sometimes referred
to as the "Purchased Assets."
1.2 Excluded Assets. Notwithstanding anything in this Agreement to the
contrary, there shall be excluded from the Assets the following assets and
property:
(a) Goodwill. The goodwill reflected on the Balance Sheet;
(b) Real Property Interests. The real property located at 3391
Merriam Avenue, Muskegon, Michigan ("Randers Professional Building III"),
together with any and all of any Seller's rights under leases with tenants in
such real property and any and all deposits and prepayments made by such tenants
under such leases;
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<PAGE>
(c) Future Tax Benefits. The value of any future tax benefits
reflected on the Balance Sheet; and
(d) Corporate Records. Each Seller's corporate seals, corporate
franchise, Articles of Incorporation (or comparable charter document)
("Charter"), By-laws, stock record books, corporate record books containing
minutes of meetings of directors and stockholders and such other records as have
to do exclusively with such Seller's organization or stock capitalization
(collectively, the "Corporate Records").
The assets, property and rights of the Sellers to be excluded from the
sale to the Buyers shall be referred to as the "Excluded Assets."
1.3 Assumption of Liabilities. Upon the sale and purchase of the Purchased
Assets, and subject to the provisions of this Agreement, the Buyer shall agree
to assume and to pay or to discharge when due in accordance with their
respective terms, the following liabilities and obligations (collectively, the
"Assumed Liabilities"):
(a) Balance Sheet Liabilities. The liabilities and obligations of
the Sellers shown or reflected and reserved against on the Balance Sheet;
(b) Contract and Project Liabilities. All liabilities and
obligations of the Sellers under or relating to any of the Contracts and
Projects, irrespective of whether such liabilities and obligations accrue prior
to or subsequent to the Closing or relate to the period of time prior to or
subsequent to the Closing;
(c) Lease Obligations. All liabilities and obligations of any of the
Sellers under or relating to (i) the leases for Sellers' office space located in
Novi, Lansing and Muskegon, Michigan and (ii) the leases for the Sellers' closed
offices formerly located in Cincinnati, Ohio and South Charleston, West
Virginia, all as more specifically identified on Schedule 1.3(c) attached to
this Agreement;
(d) Mortgagee Obligations. All liabilities and obligations of any of
the Sellers under or relating to Randers Professional Building III and Randers
Professional Building IV; and
(e) Other Liabilities. All other liabilities and obligations of any
of the Sellers (i) under or relating to compliance with any statute, regulation
or rule relating to the protection of the environment or to the generation,
transportation, storage, treatment, disposal or management of any "hazardous
material" (as so defined under the Federal Hazardous Materials Transportation
Act, codified within 49 U.S.C. Sections 5101-5127 and its implementing
regulations, or under any similar federal, state or local law); "hazardous
waste" (as so defined under the Federal Solid Waste Disposal Act as amended by
the Resource Conservation and Recovery Act, as codified within 42 U.S.C.
Sections 6901-6992k and its implementing regulations, or under any similar
federal, state or local laws); and/or any "hazardous substances" (as listed or
3
<PAGE>
identified pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 in Section 302.4 of the National Contingency Plan
(Title 40 of the Code of Federal Regulations) as in effect as of the Closing
Date, or under any similar federal, state or local laws; and (ii) except as set
forth in Section 1.4 below, all other liabilities and obligations of any of the
Sellers resulting from the conduct of the businesses of any of the Sellers prior
to the Closing Date.
1.4 Excluded Liabilities. Notwithstanding anything in this Agreement to the
contrary, the Buyer shall not assume and shall not pay any of the following
liabilities or obligations:
(a) Ongoing Litigation. Any liability or obligation with respect
to any of the litigation and/or disputes identified on Schedule 1.4(a) attached
to this Agreement (the "Ongoing Litigation");
(b) Certain Taxes. Any liability or obligation for any federal,
state or local income, gross receipts, payroll, employment or other tax arising
solely out of the inclusion of any of the Sellers in any consolidated, combined
or unitary tax returns filed by the Sellers' Parent, Thermo TerraTech Inc.
("Thermo TerraTech") or Thermo Electron Corporation ("Thermo Electron");
(c) Liabilities with respect to Certain Benefit Plans. Any liability
or obligation under any pension, benefit, profit sharing, retirement, stock,
deferred compensation, welfare, insurance, disability, salary continuation or
other similar plan, program or agreement maintained by the Sellers' Parent,
Thermo TerraTech or Thermo Electron in which none of the Sellers' employees
participate as of the Closing; and
(d) Liabilities with respect to Completed Contracts and Projects.
Any liability or obligation with respect to any contract or project of any
Seller that is not a Contract or Project, as defined in Section 1.1(d) (the
"Completed Contracts and Projects").
The liabilities and obligations which are not assumed by the Buyer under
this Agreement are hereinafter sometimes referred to as the "Excluded
Liabilities." Any Excluded Liability to which the Buyer shall succeed as a
matter of law notwithstanding the express terms of this Agreement shall, as
between the parties, nonetheless be deemed to be an Excluded Liability, which,
as between the parties shall be the sole obligation of the Sellers.
1.5 No Enlargement of Third Party Rights. Neither the assumption of the
Assumed Liabilities by the Buyer nor the retention of the Excluded Liabilities
by the Sellers, as contemplated by this Agreement, shall enlarge any rights of
third parties under contracts or arrangements with the Buyer or the Sellers and
nothing herein shall prevent any party from contesting in good faith with any
third party any of said liabilities.
4
<PAGE>
1.6 Purchase Price and Payment. In consideration of the sale by the Sellers
to the Buyer of the Purchased Assets, subject to the assumption by the Buyers of
the Assumed Liabilities and the satisfaction of all of the conditions contained
herein, the Buyer agrees that it shall pay to the Seller's Parent, on behalf of
the respective Sellers, the amount of $538,000 (the "Purchase Price"). The
Buyer's obligation to pay the Purchase Price shall be represented by the
execution and delivery to the Sellers' Parent at the Closing of the Buyer's
promissory note, in the form attached as Exhibit A to this Agreement, in the
principal amount of the Purchase Price (the "Note"). To the extent that any
funds representing any portion of the Purchase Price are in fact received from
the Buyers by the Sellers' Parent, the Sellers' Parent shall receive such funds
solely as agent for such Seller.
1.7 The Closing. The closing of the purchase and sale provided for in this
Agreement (herein called the "Closing") shall take place at the offices McShane
& Bowie, PLC, in Grand Rapids, Michigan, immediately upon the execution and
delivery of this Agreement by the parties hereto, or at such other time, date or
place as may be mutually agreeable to the parties (the date on which the Closing
occurs being herein called the "Closing Date"). All transactions at the Closing
shall be deemed to take place as of the end of the business day in Grand Rapids,
Michigan, on the Closing Date simultaneously and no transaction shall be deemed
to have been completed and no document or certificate shall be deemed to have
been delivered until all transactions are completed and all documents delivered.
1.8 Closing Deliveries. At the Closing, in addition to the taking of such
other actions as may be provided in this Agreement, each party shall deliver
such closing documents, instruments and certificates as are specified in Article
4 of this Agreement, together with such other documents, instruments and
certificates as may be reasonably requested by counsel to the other parties
hereto (collectively, the "Closing Deliveries").
1.9 Delivery of Contracts and Records and Contracts; Further Assurances.
(a) At the time of the Closing, subject to Section 1.9(b) below,
each Seller shall deliver or cause to be delivered to the Buyer all of such
Seller's leases, contracts, commitments, agreements and rights which are
included in the Purchased Assets. Each Seller shall also deliver to the Buyer at
the time of the Closing all of such Seller's business records, copies of all tax
returns, books and other data relating to its assets, business and operations
(except Corporate Records and other property of such Seller excluded under
Section 1.2(d)), and each Seller shall take all requisite steps to put the Buyer
in actual possession and operating control of the Purchased Assets sold by such
Seller. For a period of six years after Closing, or such longer period as may be
reasonably requested by the Sellers' Parent, upon written request of the
Sellers' Parent, the Buyer or its successor shall make or cause to be made
available to the Sellers' Parent, as the case may be, (i) all books and records
included in the Purchased Assets that are needed by any Seller or any successors
or assigns for a valid business purpose, and permit the Sellers' Parent and its
agents to inspect and copy such books and records and (ii) assistance in
arranging discussions with officers, employees and agents of the Buyer or its
affiliated companies on matters which relate to the business as previously
conducted by the Sellers and the same as continued by the Buyer; provided,
however, that all such inspection or assistance shall be at reasonable times as
may be mutually agreed upon by the Buyer and the Sellers' Parent and shall be at
the sole cost and expense of the Sellers' Parent.
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(b) If an attempted sale, conveyance, assignment, transfer or
delivery of any contracts, claims, leases, commitments, franchises, privileges,
permits, consents, certificates, licenses or any other assets, rights or
benefits to be sold, conveyed, assigned, transferred and delivered to the Buyer
which are included in the Purchased Assets (collectively, the "Rights") would be
ineffective without the consent of any other person, and such consent has not
been obtained on or before the Closing Date, this Agreement shall not constitute
an assignment or an attempted assignment of such Right if such assignment or
attempted assignment would constitute a breach thereof or be unlawful. In such
case, each Seller at and after the Closing will, at the request and under the
direction of the Buyer and in the name of such Seller or otherwise as the Buyer
shall specify, take or cause to be taken all such action (including without
limitation the appointment of the Buyer as attorney-in-fact for such Seller, but
with powers limited to the specific purposes contemplated hereby) and do or
cause to be done all such things as shall in the reasonable opinion of the Buyer
or its counsel be necessary or proper to (a) assure that Rights shall be
preserved for the benefit of the Buyer, and (b) facilitate receipt by the Buyer
of the consideration to which the Sellers would otherwise be entitled in and
under all Rights, which consideration shall be held for the benefit of, and
shall be delivered to, the Buyer. In order to accomplish the foregoing, any
Seller may designate the Buyer as its subcontractor to perform obligations of
such Seller under any Rights. The Seller whose Rights are being assigned shall
also use commercially reasonable efforts to obtain, as soon as practicable, the
consent of each such or other person in all cases in which such consent is
required, and such Seller and the Buyer will cooperate in any reasonable
arrangement designed to enable such Seller to perform its obligation hereunder,
and to provide for the assumption by the appropriate Buyer of the benefits,
risks and burdens of any such agreement.
(c) The Sellers from time to time after the Closing at the request
of the Buyer and without further consideration shall execute and deliver further
instruments of transfer and assignment and take such other action as the Buyer
may reasonably require to more effectively transfer and assign to, and vest in,
the Buyer each of the Purchased Assets. The Buyer from time to time after the
Closing at the request of the Sellers' Parent and without further consideration
shall execute and deliver further instruments and take such other action as the
Sellers' Parent may reasonably require to more effectively assume and vest in
the Buyer each of the Assumed Liabilities.
6
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF
THE SELLERS AND THE SELLERS' PARENT
The Sellers and the Sellers' Parent represent and warrant to the Buyer,
jointly and severally, that the statements contained in this Article 2 are
correct and complete as of the date of this Agreement:
2.1 Organization. Each of the Sellers and the Sellers' Parent is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation.
2.2 Authorization of Transaction. Each of the Sellers and the Sellers'
Parent has full corporate power and authority to execute and deliver this
Agreement and the Closing Deliveries to be executed and/or delivered pursuant to
Section 4.1 of this Agreement (collectively, the "Sellers' Documents") and to
perform its obligations hereunder and thereunder. This Agreement constitutes the
valid and legally binding obligation of the Sellers and the Sellers' Parent,
enforceable in accordance with its terms and conditions. When executed and
delivered pursuant to this Agreement, each of the Sellers' Documents shall
constitute the valid and legally binding obligation of each of the Sellers and
the Sellers' Parent who is a party thereto, enforceable against such Seller
and/or the Sellers' Parent, as the case may be, in accordance with its
respective terms and conditions. Neither the Sellers nor the Sellers' Parent is
required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order to consummate the transactions contemplated by this Agreement or by the
Sellers' Documents.
2.3 Noncontravention. Neither the execution and the delivery of this
Agreement or the Sellers' Documents, nor the consummation of the transactions
contemplated hereby or thereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which any Seller
or the Sellers' Parent is subject or, any provision of its respective Charter or
By-Laws. The transactions contemplated by this Agreement and by the Sellers'
Documents have been approved by all requisite corporate action of each Seller
and of the Sellers' Parent.
2.4 Consents and Approvals. The execution and delivery of this Agreement by
each Seller and by the Sellers' Parent do not, the execution and delivery of the
Sellers' Documents by each Seller and by the Sellers' Parent will not, and the
performance of the transactions contemplated hereby and thereby by each Seller
and the Sellers' Parent will not, require any filing with or notification to, or
any consent, approval, authorization or permit from, any governmental or
regulatory authority or any other person except where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications (i) would not prevent or delay the consummation of the
transactions contemplated by this Agreement, and (ii) would not have a material
adverse effect on the businesses of the Sellers. Except as set forth in this
Section 2.4, neither the Sellers nor the Sellers' Parent makes any
representation or warranty as to any requirement that may exist for the Sellers
or the Sellers' Parent to give any notice to, or obtain any consent of, any
third party in order to consummate the transactions contemplated by this
Agreement or by the Sellers' Documents.
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2.5 Litigation. There is no litigation or, to the knowledge of the Sellers
and of the Sellers' Parent, governmental or administrative proceeding or
investigation pending against any Seller or against the Sellers' Parent or, to
the knowledge of the Sellers or of the Sellers' Parent, threatened against any
Seller or against the Sellers' Parent, which would prevent or hinder the
consummation of the transactions contemplated by this Agreement.
2.6 Brokers' Fees. None of the Sellers or the Sellers' Parent has any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement for which
the Buyer could become liable or obligated.
2.7 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SALE
OF THE PURCHASED ASSETS TO THE BUYER, AND THE ASSUMPTION OF THE ASSUMED
LIABILITIES BY THE BUYER, ARE BEING MADE ON AN "AS IS, WHERE IS" BASIS. EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND OF THE SELLERS' PARENT
CONTAINED IN THIS AGREEMENT, THEREFORE, THE SELLERS AND THE SELLERS' PARENT
DISCLAIM ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR
PURPOSE.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Sellers and the Sellers' Parent
that the statements contained in this Article 3 are correct and complete as of
the date of this Agreement:
3.1 Organization of the Buyer. The Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation.
3.2 Authorization of Transaction. The Buyer has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and the Closing Deliveries to be executed and/or delivered pursuant to
Section 4.2 of this Agreement (collectively, the "Buyer's Documents") and to
perform its obligations hereunder and thereunder. This Agreement constitutes the
valid and legally binding obligation of the Buyer, enforceable in accordance
with its terms and conditions. When executed and delivered pursuant to this
Agreement, each of the Buyer's Documents shall constitute the valid and legally
binding obligation of the Buyer, enforceable against the Buyer in accordance
with its respective terms and conditions. The Buyer need not give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement or by the Buyer's Documents.
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3.3 Noncontravention. Neither the execution and the delivery of this
Agreement or the Buyer's Documents, nor the consummation of the transactions
contemplated hereby or thereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the Buyer
is subject or any provision of its Charter or By-Laws. The transactions
contemplated by this Agreement and by the Buyer's Documents have been approved
by all requisite corporate action of the Buyer.
3.4 Consents and Approvals. The execution and delivery of this Agreement by
the Buyer does not, the execution and delivery of the Buyer's Documents by the
Buyer will not, and the performance of the transactions contemplated hereby and
thereby by the Buyer will not, require any filing with or notification to, or
any consent, approval, authorization or permit from, any governmental or
regulatory authority or any other person except where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications would not prevent or delay the consummation of the transactions
contemplated by this Agreement. Except as set forth in this Section 3.4, the
Buyer makes no representation or warranty as to any requirement that may exist
for the Buyer to give any notice to, or obtain any consent of, any third party
in order to consummate the transactions contemplated by this Agreement or by the
Buyer's Documents.
3.5. Litigation. There is no litigation or, to the knowledge of the Buyer,
governmental or administrative proceeding or investigation pending against the
Buyer or, to the knowledge of the Buyer, threatened against the Buyer, which
would prevent or hinder the consummation of the transactions contemplated by
this Agreement.
3.6 Brokers' Fees. The Buyer has no liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which any Seller or the Sellers' Parent could
become liable or obligated.
ARTICLE 4
CONDITIONS TO OBLIGATIONS
4.1 Conditions to Obligations of the Buyer. The obligations of the Buyer to
consummate the transactions contemplated hereby are subject to the satisfaction,
on or before the Closing, of the following conditions (unless waived in writing
by the Buyer in the manner provided in Section 6.2 hereof):
(a) Representations, Warranties and Performance of the Sellers and
of the Sellers' Parent. The representations and warranties set forth in Article
2 hereof shall be accurate on and as of the date hereof, and on and as of the
Closing Date as though made on and as of the Closing Date, and the Sellers and
the Sellers' Parent shall have performed all obligations and complied with all
covenants required to be performed or to be complied with by them under this
Agreement prior to the Closing.
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(b) Authorization. All action necessary to authorize the execution,
delivery and performance hereof by the Sellers and the Sellers' Parent and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken by the Sellers and the Sellers' Parent. The Sellers and the
Sellers' Parent shall have furnished the Buyer with a copy of all resolutions
adopted by their Board of Directors in connection with such actions, certified
by the Secretary or an Assistant Secretary of the Sellers' Parent or of the
relevant Seller.
(c) Bills of Sale. At the Closing, each of the Sellers shall have
executed and delivered to the Buyer a Bill of Sale transferring to the Buyer all
of such Seller's right, title and interest in and to all the Purchased Assets
owned by such Seller (other than Randers Professional Building IV and the
Building IV Interests), substantially in the form attached as Exhibit B to this
Agreement.
(d) Consents. Any governmental authority having jurisdiction over
any Seller, over the Sellers' Parent or over the Buyer, to the extent that its
consent or approval is required by applicable law or regulation for the
performance of this Agreement or the consummation of the transactions
contemplated hereby shall have granted any necessary consent or approval.
(e) Legal Existence Certificates. Each Seller and the Sellers'
Parent shall have delivered to the Buyer a corporate legal existence certificate
from its jurisdiction of incorporation.
(f) Severance Agreement. The Sellers' Parent and Thermo TerraTech
shall have executed and delivered to Thomas R. Eurich, Michael J. Krivitzky,
Thomas J. McEnhill, Bruce M. Bourdon and David A. Wiegerink a Severance
Agreement substantially in the form attached as Exhibit C to this Agreement (the
"Severance Agreement").
4.2 Conditions to Obligations of the Sellers and the Sellers' Parent. The
obligations of the Sellers and the Sellers' Parent to consummate the
transactions contemplated hereby are subject to the satisfaction, on or before
the Closing, of the following conditions (unless waived by the Sellers' Parent
in writing in the manner provided in Section 6.2 hereof):
(a) Representations, Warranties and Performance of the Buyer. The
representations and warranties set forth in Article 3 hereof shall be accurate
on and as of the date hereof, and on and as of the Closing Date as though made
on and as of the Closing Date, and the Buyer shall have performed all
obligations and complied with all covenants required to be performed or to be
complied with by them under this Agreement prior to the Closing.
(b) Authorization. All action necessary to authorize the execution,
delivery and performance hereof by the Buyers and the consummation of the
transactions contemplated hereby shall have been duly and validly taken by the
Buyer. The Buyer shall have furnished the Sellers' Parent with a copy of all
resolutions adopted by its Board of Directors in connection with such actions,
certified by the Secretary or an Assistant Secretary of the Buyer.
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(c) The Note. At the Closing, the Buyer shall have executed and
delivered to the Sellers' Parent the Note.
(d) Instruments of Assumption of Liabilities. At the Closing, the
Buyer shall have executed and delivered to each of the Sellers an Instrument of
Assumption of Liabilities in substantially the form attached as Exhibit D to
this Agreement.
(e) Instruments of Assignment and Assumption of Contracts. At the
Closing, the Buyer shall have executed and delivered to each of the Sellers an
Instrument of Assignment and Assumption of Contracts in substantially the form
attached as Exhibit E to this Agreement.
(f) Severance Agreement. Thomas R. Eurich, Michael J. Krivitzky,
Thomas J. McEnhill, Bruce M. Bourdon and David A. Wiegerink shall have executed
and delivered to the Sellers' Parent and Thermo TerraTech the a Severance
Agreement.
(g) Legal Existence Certificate. The Buyer shall have delivered to
the Sellers' Parent a corporate legal existence certificate from its
jurisdiction of incorporation.
ARTICLE 5
CERTAIN COVENANTS
5.1 Insurance Coverage.
(a) From and after the Closing Date, the Seller's Parent shall
maintain, at its sole cost and expense, its existing insurance coverage (but
only so long as such insurance is commercially available at reasonable costs)
with respect to liabilities arising out of any actual or threatened professional
liability claim or any errors or omissions claim which may be asserted against
the Buyer arising out of any act or omission of the Sellers' Parent, any Seller,
or any of their respective officers, directors, employees, agents, servants,
successors, assigns and/or business affiliates or agents occurring prior to the
Closing Date (including, without limitation, coverage with respect to
liabilities that may arise under all Contracts and Projects).
(b) From and after the Closing Date, the Buyer shall obtain and
maintain, at its sole cost and expense, insurance coverage (with policy limits
of not less than $2,000,000 per claim) (but only so long as such insurance is
commercially available at reasonable costs) with respect to liabilities arising
out of any actual or threatened professional liability claim or any errors or
omissions claim which may be asserted against the Sellers or the Sellers' Parent
arising out of any act or omission of the Buyer, or any of its officers,
directors, employees, agents, servants, successors, assigns and/or business
affiliates or agents occurring on or after Closing Date (including, without
limitation, coverage with respect to liabilities that may arise under all
Contracts and Projects).
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(c) The Buyer acknowledges that: (i) at the Closing, the Buyer shall
assume, and shall thereafter (as between the Buyer on the one hand and the
Sellers and the Sellers' Parent on the other hand) be solely liable for, any
such errors and omissions, and neither the Sellers nor the Sellers' Parent shall
have any obligation or liability to the Buyer with respect thereto (other than
pursuant to this Section 5.1); and (ii) except as set forth in this Section 5.1,
the Sellers' Parent shall have no obligation to provide to the Buyer insurance
of any sort (whether professional liability, errors and omissions, general
liability, automobile or otherwise) or to reimburse the Buyer for any portion of
any premium associated with any such insurance.
5.2 Names of Sellers and of Sellers' Parent.
(a) As soon as practicable after the Closing, each of the Sellers
and the Sellers' Parent shall take steps to amend its respective Charter to
change its respective name to remove the name "Randers," "Redeco" and/or
"Viridian," as the case may be, therefrom. The Buyer acknowledges that amending
the Sellers' Parents' Charter will require the Sellers' Parent to convene a
meeting of its stockholders to approve such amendments and that the Sellers'
Parent currently contemplates that it will merge with and into Thermo TerraTech,
at which time, Thermo TerraTech will own 100% of the Sellers' Parent's
outstanding capital stock. The Buyer therefore agrees that the Sellers' Parent
may delay taking any action the change of its name until the earlier of (a) the
completion of such merger or (b) the next annual meeting of the Sellers'
Parent's stockholders.
(b) From and after the date on which the Charter of the respective
Sellers has been changed pursuant to this Section 5.2, no such Seller shall
adopt or use any corporate name, trade name or trademark that includes any of
the words Randers," "Redeco" and/or "Viridian," either alone or in combination
with any other word or words. From and after the date on which the Charter of
the Sellers' Parent has been changed pursuant to this Section 5.2, neither the
Sellers' Parent, Thermo TerraTech, Thermo Electron nor any subsidiary of any of
the foregoing shall adopt or use any corporate name, trade name or trademark
that includes any of the words Randers," "Redeco" and/or "Viridian," either
alone or in combination with any other word or words.
(c) The Buyer may continue to use existing supplies of promotional
and sales materials bearing corporate names, trade names and/or trademarks
including the words "Killam," "Thermo TerraTech" and/or "Thermo Electron") for a
period of 30 days after the Closing, but shall use reasonable efforts to ensure
that its customers and clients are aware that the Buyer is not owned by, and its
services are no longer affiliated with, the Sellers, the Sellers' Parent, Thermo
TerraTech or Thermo Electron.
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(d) Notwithstanding the foregoing, Sellers and Sellers' Parent
acknowledge and agree that Buyer may, as of the Closing Date and thereafter
until each of the Sellers and the Sellers' Parent shall take steps to amend
their respective Charters, use the names "Randers," "Redeco" and/or "Viridian,"
as the case may be, in their business operations, without payment of a fee and
without interference by Sellers or Sellers' Parent.
5.3 Litigation and Administrative Support.
(a) From and after the Closing Date, in the event and for so long as
the Sellers and/or the Sellers' Parent is actively is contesting or defending
against any Ongoing Litigation, the Buyer will cooperate with the Sellers and
the Sellers' Parent or its or their counsel in such contest or defense, make
available its personnel, and provide such testimony and access to its books and
records as shall be necessary in connection with such contest or defense
(b) From and after the Closing, the Buyer shall provide the Sellers
and the Sellers' Parent with such administrative support as any such Seller or
the Sellers' Parent may reasonably request with respect to the management of
Randers Professional Building III, including without limitation, the collection
of rents with respect thereto.
(c) From and after the Closing Date, in the event and for so long as
the Sellers and/or the Sellers' Parent is actively is contesting or defending
against any claim with respect to any Completed Contracts and Projects, the
Buyer will cooperate with the Sellers and the Sellers' Parent or its or their
counsel in such contest or defense, make available its personnel, and provide
such testimony and access to its books and records as shall be necessary in
connection with such contest or defense.
(d) For a period of nine months after the Closing Date, the Buyer
shall provide any and all of the litigation cooperation and administrative
support requested pursuant to Sections 5.3(a) and/or (b) without charge to any
Seller or to the Sellers' Parent. The Sellers and/or the Sellers' Parent shall
reimburse the Buyer for the actual, direct costs of providing any such
litigation cooperation and/or administrative services requested pursuant to
either of such Sections after the end of such nine-month period. The Buyer shall
provide any and all of the litigation cooperation requested pursuant to Section
5.3(c) without charge to any Seller or to the Sellers' Parent, without regard to
when such cooperation is requested.
5.4 Confidentiality. The Sellers and the Sellers' Parent will treat and
hold as confidential all information concerning the businesses and affairs of
the Sellers to be acquired by the Buyer pursuant to this Agreement that is not
already generally available to the public (the "Confidential Information"),
shall refrain from using any of the Confidential Information except in
connection with this Agreement, and deliver promptly to the Buyer or destroy, at
the request and option of the Buyer, all tangible embodiments (and all copies)
of the Confidential Information which are in their possession. In the event that
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any Seller or the Sellers' Parent is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, the Sellers' Parent will notify the Buyer promptly of
the request or requirement so that the Buyer may seek an appropriate protective
order or waive compliance with the provisions of this Section 5.4. If, in the
absence of a protective order or the receipt of a waiver hereunder, such Seller
or the Sellers' Parent is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt, such
party may disclose the Confidential Information to the tribunal; provided,
however, that the disclosing party shall use its best efforts to obtain, at the
request of the Buyer, an order or other assurance that confidential treatment
will be accorded to such portion of the Confidential Information required to be
disclosed as the Buyer shall designate. The foregoing provisions shall not apply
to any Confidential Information which is generally available to the public
immediately prior to the time of disclosure.
5.5 Lock Box Payments. The respective Sellers shall turn over to the Buyer,
promptly upon receipt, the full amount of any accounts receivable of the Sellers
which are paid by deposit of funds to lock boxes maintained by any Seller or its
affiliates.
5.6 Provision of Financial Information. Within 30 days after the Closing,
the Buyer shall provide the Sellers' Parent with such financial information with
respect to the businesses and operations of the Sellers acquired by the Buyer
pursuant to this Agreement for the period from December 31, 1999 up to and
including the Closing as is reasonably requested by the Sellers' Parent for the
purpose of allowing each Seller and the Sellers' Parent to prepare financial
reporting information required by federal and state securities and tax laws.
5.7 Certain Employee Matters.
(a) Officers of Employees; Termination. At or prior to the
Closing, the Buyer shall offer employment as of Closing Date to all
employees of the Sellers who are employed on the Closing Date (the "Employees").
The Sellers shall terminate the employment of all of the Employees as of the
Closing Date.
(b) Responsibility for Obligations to Employees; Constructive
Dismissal. The Buyer shall be responsible for, and hold the Sellers and the
Sellers' Parent harmless against, any severance payments or other obligations
(including without limitation any liability for wrongful discharge) that may be
due by reason of (i) the termination of the employment of any of the Employees
by the Sellers at the Closing Date, (ii) the termination of the employment of
any of the Employees by the Buyer after the Closing Date or (iii) the
constructive dismissal of any of the Employees resulting from differences
between the terms and conditions of their employment by the Buyer after the
Closing and those in effect prior to the Closing.
(c) No Third Party Rights. Except as set forth in the first sentence
of Section 5.7(a), nothing contained in this Agreement shall, under any
circumstances whatsoever, be construed as, expressly or impliedly, constituting
or creating any employment contract, offer of employment, promise of continuing
employment, promise of employee benefits, or other obligation of any other kind
of or by the Buyer, to, or in favor of, any employees or consultants of any
Seller, and the Buyer expressly disclaims any and all liability to any such
third party arising out of this Agreement.
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5.8 Real Estate Matters.
(a) Deed to Randers Professional Building IV. As soon as practicable
after the Closing, RGPC shall execute and deliver to the Buyer a deed
transferring to the Buyer all of RGPC's right title and interest in and to
Randers Professional Building IV and the Building IV Interests (the "Deed"), in
form and substance reasonably satisfactory to the Buyer. RGPC acknowledges and
agrees that Randers Professional Building IV and the Building IV Interests
constitute a portion of the Purchased Assets for which the Buyer shall pay the
Purchase Price at the Closing, and that RGPC shall not receive any additional
consideration from Buyer in connection with the execution and delivery of the
Deed.
(b) The Mortgage. Simultaneously with the execution and delivery of
the Deed pursuant to Section 5.8(a), above, the Buyer shall execute and deliver
to the Sellers' Parent a mortgage on Randers Professional Building IV (the
"Mortgage"), in form and substance satisfactory to the Sellers' Parent and to
Buyer, and the Mortgage shall represent a second priority interest subordinate
only to a first priority mortgage held by Huntington National Bank ("HNB"). Upon
the request of Sellers' Parent, the Buyer shall execute and deliver to the
Sellers' Parent a new promissory note (against delivery of the Note, marked
"cancelled"), identical in all respects to the Note other than that such new
note may reference the fact that it is secured by the Mortgage.
(c) Consents. Simultaneously with the execution and delivery of the
Deed and the Mortgage pursuant to Section 5.8(a) and Section 5.8(b), above,
respectively, the Buyer shall also deliver to the Sellers' Parent the written
consent of HNB to the transfer of Randers Professional Building IV to Buyer and
the execution and delivery of the Mortgage.
ARTICLE 6
MODIFICATION, WAIVER AND TERMINATION
6.1 Modifications and Amendments. The parties may mutually amend any
provision of this Agreement at any time prior to the Closing Date. No amendment
of any provision of this Agreement shall be valid unless the same shall be in
writing and signed by all of the parties.
6.2 Waivers. The Sellers' Parent (on its own behalf and on behalf of the
Sellers) and the Buyer may, by a written signed instrument, extend the time for
or waive the performance of any of the obligations of another party hereto or
waive compliance by such other party with any of the covenants or conditions
contained herein. No waiver by either such party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
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6.3 Termination. At any time prior to the Closing, this Agreement may be
terminated (a) by mutual consent of the Buyer and the Sellers' Parent; (b) by
the Buyer if (i) there has been a material breach by any Seller or by Sellers'
Parent of a covenant, representation or warranty contained in this Agreement;
(ii) the Buyer has notified the Sellers' Parent in writing of the existence of
such breach; and (iii) the party in breach has failed to cure such breach within
a reasonable period of time after receiving such notice; (c) by the Sellers'
Parent if (i) there has been a material breach by the Buyer of a covenant,
representation or warranty contained in this Agreement; (ii) the Sellers' Parent
has notified the Buyer in writing of the existence of such breach; and (iii) the
party in breach has failed to cure such breach within a reasonable period of
time after receiving such notice; or (d) by the Buyer or by the Sellers' Parent
if (i) there shall be an order of a court in effect preventing consummation of
the transactions contemplated by this Agreement or (ii) there shall be any
action taken, or any statute, rule, regulation or order enacted, promulgated,
issued or deemed applicable to this Agreement, by a governmental authority that
would make consummation of such transactions illegal. Any such termination shall
be binding upon the respective affiliates of the Buyer and of the Sellers'
Parent.
6.4 Effect of Termination. If this Agreement shall be terminated as
provided in Section 6.3, this Agreement shall forthwith become void (except as
otherwise provided in Section 8.11); provided, however, that the foregoing shall
not relieve any party from liability for damages actually incurred as a result
of any breach of this Agreement.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification by the Sellers and by the Sellers' Parent. The Buyer,
upon demand, shall be indemnified by the Sellers and by the Sellers' Parent,
jointly and severally, for the full amount of all Damages (as defined in Section
7.7 below) suffered by the Buyer as a direct or indirect result of:
(i) the breach of any representation or warranty made by the
Sellers or by Sellers' Parent in or pursuant to this Agreement (including
without limitation the representations and warranties set forth in Article
2);
(ii) any failure by the Sellers or by the Sellers' Parent to
perform any obligation or comply with any covenant or agreement of the
Sellers or of the Sellers' Parent specified herein or in any other
document executed at the Closing;
(iii) any claim asserted with respect to the Excluded
Liabilities;
(iv) any claim asserted with respect to the Ongoing
Litigation;
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(v) any claim with respect to the professional liability of
the Sellers, or their respective officers, directors, employees, agents,
servants, successors, assigns and/or business affiliates or agents,
arising out of any act or omission occurring prior to the Closing Date;
provided, however, notwithstanding any provision of this Article 7 to the
contrary, that so long as the Seller's Parent maintains its existing
professional liability insurance policies, at least at their existing
policy limits, its liabilities and obligations under this clause 7.1(v)
with respect to any such claim shall not exceed the amounts paid to the
Sellers or the Sellers' Parent with respect to such claim under such
policies; or
(vi) any claim asserted as a result of the Sellers' failure to
comply, at the Buyer's request, with the provisions of any applicable bulk
sales, fraudulent conveyance or other law for the protection of creditors
in connection with the transfer of the Purchased Assets under this
Agreement.
7.2 Limitations on Indemnification by the Sellers and by the Sellers'
Parent. Notwithstanding the foregoing Section 7.1, the right of the Buyer to
indemnification under Section 7.1(i) shall be subject to the following
provisions:
(a) No indemnification shall be payable to the Buyer by any Seller
or by the Sellers' Parent pursuant to Section 7.1(i) unless the total of all
claims for indemnification pursuant to Section 7.1(i) shall exceed $50,000, at
which point the Buyer shall be entitled to indemnification relating back to the
first dollar.
(b) No indemnification shall be payable to the Buyer pursuant to
Section 7.1(i) for amounts in excess of the amount of the net equity in the
Sellers' business as shown on the Balance Sheet (after eliminating any portion
of such net equity represented by Excluded Assets) (the "Net Equity").
(c) No indemnification shall be payable to the Buyer pursuant to
Section 7.1(i) with respect to any claim asserted by the Buyer after the second
anniversary of the Closing Date.
7.3 Indemnification by the Buyer. The Sellers and the Sellers' Parent, upon
demand, shall be indemnified by the Buyer for the full amount of all Damages
suffered by the Sellers and/or the Sellers' Parent as a direct or indirect
result of:
(i) the breach of any representation or warranty made by the
Buyer in or pursuant to this Agreement (including without limitation the
representations and warranties set forth in Article 3);
(ii) any failure by the Buyer to perform any obligation or
comply with any covenant or agreement of the Buyer specified herein or in
any other document executed at the Closing;
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(iii) any claim asserted with respect to the Assumed
Liabilities;
(iv) any claim asserted with respect to the Contracts and
Projects;
(v) any claim with respect to the professional liability of
the Buyer, or its officers, directors, employees, agents, servants,
successors, assigns and/or business affiliates or agents, arising out of
any act or omission occurring on or after the Closing Date; provided,
however, notwithstanding any provision of this Article 7 to the contrary,
that so long as the Buyer maintains professional liability insurance
coverage with policy limits of not less than $2,000,000 per claim, its
liabilities and obligations under this clause 7.3(v) with respect to any
such claim shall not exceed the amounts paid to the Buyer with respect to
such claim under such policies;
(vi) any claim for severance payments or other liabilities
(including without limitation any liability for wrongful discharge) that
may be due to any Employee by reason of (A) the termination of the
employment of any of the Employees by the Sellers at the Closing Date, (B)
the termination of the employment of any of the Employees by the Buyer
after the Closing Date or (C) the constructive dismissal of any of the
Employees resulting from differences between the terms and conditions of
their employment by the Buyer after the Closing and those in effect prior
to the Closing.
7.4 Limitations of Indemnification by the Buyer. Notwithstanding the
foregoing Section 7.3, the rights of the Sellers and of the Sellers' Parent to
indemnification under Section 7.3(i) shall be subject to the following
provisions:
(a) No indemnification shall be payable to the Sellers or to the
Sellers' Parent by the Buyer pursuant to Section 7.3(i) unless the total of all
claims for indemnification pursuant to Section 7.3(i) shall exceed $50,000, at
which point the Sellers and the Sellers' Parent shall be entitled to
indemnification relating back to the first dollar.
(b) No indemnification shall be payable to the Sellers or to the
Sellers' Parent pursuant to Section 7.3(i) for amounts in excess of the Net
Equity.
(c) No indemnification shall be payable to the Sellers or to the
Sellers' Parent pursuant to Section 7.3(i) with respect to any claim asserted by
the Sellers or by the Sellers' Parent after the second anniversary of the
Closing Date.
7.5 Notice; Defense of Claims.
(a) Promptly after receipt by any indemnified party of notice of any
claim, liability or expense to which the indemnification obligations hereunder
are reasonably likely to apply, such party shall give notice thereof in writing
to (i) the Sellers' Parent, in the case of an indemnification demand by the
Buyer, or (ii) the Buyer, in the case of an indemnification demand by the
Sellers or by the Sellers' Parent (as the case may be, the "Indemnifying
Party"). Such notice shall state the information then available regarding the
amount and nature of such claim, liability or expense.
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(b) The Indemnifying Party shall have the right, exercisable upon
written notice to the party demanding indemnification (the "Indemnified Party")
within 20 days after receiving the notice referred to in Section 7.5(a), at its
expense, to defend, contest, protest, settle and otherwise control the
resolution of any such claim, action or proceeding. The Indemnifying Party shall
keep the Indemnified Party apprised of developments with respect to any such
claim, action or proceeding, and the Indemnified Party shall have the right to
consult with the Indemnifying Party, and to participate therein, subject to the
Indemnifying Party's right of control thereof, at the Indemnified Party's
expense and with counsel selected by the Indemnified Party. If the Indemnifying
Party shall notify the Indemnified Party that the Indemnifying Party has elected
to assume any such defense, contest or protest, then the Indemnifying Party
shall not be liable to the Indemnified Party hereunder for any legal or other
expense subsequently incurred by the Indemnified Party in connection therewith.
(c) If the Indemnifying Party does not notify the Indemnified Party
of its election to defend any claim as provided in Section 7.5(b), then the
Indemnified Party may defend, contest, protest, settle and otherwise control the
resolution of such claim, action or proceeding. The Indemnified Party shall keep
the Indemnifying Party apprised of developments with respect to any such claim,
action or proceeding, and the Indemnifying Party shall have the right to consult
with the Indemnified Party, and to participate therein, subject to the
Indemnified Party's right of control thereof, at the Indemnifying Party's
expense and with counsel selected by the Indemnifying Party. If such event, then
the Indemnified Party shall not be liable to the Indemnifying Party hereunder
for any legal or other expense subsequently incurred by the Indemnifying Party
in connection therewith.
7.6 Payment of Claims. All claims (other than claims made by third parties
which are the subject of a good faith dispute between the Indemnified Party (or
the Indemnifying Party) and any such third party) shall be paid or otherwise
satisfied by the Indemnifying Party within 60 days after notice thereof is given
by the Indemnified Party.
7.7 Definition of Damages. An Indemnified Party shall be entitled to
recover the full amount of any liabilities, expenses, costs or loss incurred due
to the matter for which indemnification is sought, including reasonable
attorney's fees incurred in connection therewith, but any recovery shall be net
of any economic benefit to which the Indemnified Party is entitled due to such
liabilities, expenses, costs or loss, including, without limitation, (i) any tax
refund, reduction or benefit and (ii) any insurance proceeds (excluding
self-insured amounts and deductible amounts) (collectively, "Damages"). In no
event shall any Indemnified Party be awarded punitive or multiple damages.
7.8 Limitation on Remedies. It is specifically understood and agreed that,
in the absence of knowing and intentional fraud by any party hereto, in the
event a misrepresentation or breach of warranty or covenant is discovered by any
party after the Closing, such party's remedies shall be limited solely to the
indemnification set forth in this Article 7 of this Agreement.
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ARTICLE 8
MISCELLANEOUS
8.1 Bulk Sales Law. Subject to the indemnification obligations under
Section 7.1(v) hereunder, the Buyer waives compliance by the Sellers with the
provisions of any applicable bulk sales, fraudulent conveyance or other law for
the protection of creditors in connection with the transfer of the Purchased
Assets under this Agreement.
8.2 Press Releases and Public Announcements. No party to this Agreement
shall issue any press release or make any public announcement relating to the
subject matter of this Agreement prior to the Closing without the prior written
approval of the Buyer and the Sellers' Parent; provided, however, that any party
may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing party will use its best
efforts to advise the other parties prior to making the disclosure).
8.3 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person or entity other than the parties hereto and
their respective successors and permitted assigns.
8.4 Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the parties and supersedes any
prior understandings, agreements, or representations by or among the parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
8.5 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective successors
and permitted assigns. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the Buyer and the Sellers' Parent.
8.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
8.7 Headings. The article and section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
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8.8 Notices. All notices, requests, demands, consents and other
communications which are required or permitted hereunder shall be in writing,
and shall be deemed given when actually received or if earlier, two days after
deposit with the U.S. postal authorities, certified or registered mail, return
receipt requested, postage prepaid or two days after deposit with an
internationally recognized air courier or express mail, charges prepaid,
addressed as follows:
If to the Buyer:
RGI Muskegon, Inc.
570 W. Seminole Road
Muskegon, Michigan 49444
Attention: Thomas R. Eurich
With a copy to:
McShane & Bowie, P.L.C.
1100 Campau Square Plaza
99 Monroe Avenue, NW
Grand Rapids, Michigan 49501-0360
Attention: John F. Shape, Esq.
If to any Seller or to the Sellers' Parent:
The Randers Killam Group Inc.
27 Bleeker Street
P.O. Box
Milburn, NJ
Attention: Emil C. Herkert
With a copy to:
Carl F. Barnes, Esq.
Morse, Barnes-Brown & Pendleton, P.C.
1601 Trapelo Road
Reservoir Place
Waltham, MA 02451
or to such other address as any party hereto may designate in writing to the
other parties, specifying a change of address for the purpose of this Agreement.
8.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Michigan without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Michigan or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Michigan.
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8.10 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
8.11 Expenses. Each of the parties to this Agreement will bear its own
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, The Sellers' Parent agrees that none of the
Sellers has borne or will bear any of the Sellers' costs and expenses in
connection with this Agreement or any of the transactions contemplated hereby.
This Section 8.11 shall survive the termination of this Agreement.
8.12 Construction. The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant.
8.13 Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
8.14 Specific Performance. Each of the parties acknowledges and agrees that
the other parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
parties and the matter, in addition to any other remedy to which they may be
entitled, at law or in equity.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
RGI MUSKEGON, INC., THE RANDERS KILLAM GROUP
a Michigan corporation INC., a Delaware corporation
By: /s/ Thomas R. Eurich By: /s/ Emil C. Herkert
------------------------------- ----------------------------------
Thomas R. Eurich, Its President Emil C. Herkert, Its President
and CEO
RANDERS ENGINEERING, INC.,
a Michigan corporation
By: /s/ Emil C. Herkert
----------------------------------
Emil C. Herkert, Its President
REDECO, INC., a Michigan corporation
By: /s/ Emil C. Herkert
----------------------------------
Emil C. Herkert, Its President
VIRIDIAN TECHNOLOGY, INC.,
a Michigan corporation
By: /s/ Emil C. Herkert
----------------------------------
Emil C. Herkert, Its President
RANDERS GROUP PROPERTY
CORPORATION, a Michigan corporation
By: /s/ Emil C. Herkert
----------------------------------
Emil C. Herkert, Its President
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