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):
April 14, 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 April 14, 2000, BAC Killam, Inc. (the "Business"), an indirect wholly
owned subsidiary of The Randers Killam Group Inc. (the "Company"), sold all of
its assets to Hatch Mott McDonald, Inc. (the "Buyer"). The BAC Killam, Inc.
subsidiary provides both private and public sector clients with a broad
range of consulting services that address transportation planning and design.
The assets sold in the transaction include all tangible personal property
of the Business located at the Business's Buffalo, New York; Queensboro, New
York; and Milburn, New Jersey, offices, as well as all rights under certain
ongoing consulting contracts, and the rights to "Bettigole Andrews and Clark"
and "NH Bettigole" names used by the Business. The Buyer assumed all liabilities
and obligations under the assumed contracts that arise after the closing and all
liabilities and obligations relating to certain real property leases.
The purchase price for the assets was $3 million of which approximately
$1.4 million was paid in cash at the closing and of which the balance represents
accounts receivable of the Business that will be collected by the Buyer and be
paid to the Company upon collection (less a five percent collection fee). The
purchase price of the assets was determined by the parties in arms-length
negotiations.
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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 BAC
Killam 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
BAC Killam 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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FORM 8-K
THE RANDERS KILLAM GROUP INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
Fiscal Year Ended April 3, 1999
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
The Randers Less: Pro Forma
Killam Group BAC Killam Adjustments Pro Forma
(In thousands except per share amounts)
Revenues $ 80,773 $12,158 $ - $ 68,615
-------- ------- ------- --------
Costs and Operating Expenses:
Cost of revenues 61,754 10,474 - 51,280
Selling, general, and administrative expenses 13,816 2,890 - 10,926
-------- ------- ------- --------
75,570 13,364 - 62,206
-------- ------- ------- --------
Operating Income (Loss) 5,203 (1,206) - 6,409
Interest Income 652 9 75 718
Interest Expense (155) - - (155)
-------- ------- ------- --------
Income (Loss) Before Income Tax Provision 5,700 (1,197) 75 6,972
Income Tax Provision (Benefit) 2,732 (440) 26 3,198
-------- ------- ------- --------
Net Income (Loss) $ 2,968 $ (757) $ 49 $ 3,774
======== ======= ======= ========
Basic and Diluted Earnings per Share $ .12 $ .15
======== ========
Weighted Average Shares:
Basic 25,429 25,429
======== ========
Diluted 25,452 25,452
======== ========
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FORM 8-K
THE RANDERS KILLAM GROUP INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
Nine Months Ended January 1, 2000
(Unaudited)
The Randers Less: Pro Forma
Killam Group BAC Killam Adjustments Pro Forma
(In thousands except per share amounts)
Revenues $ 52,209 $ 8,598 $ - $ 43,611
-------- ------- ------- --------
Costs and Operating Expenses:
Cost of revenues 38,417 6,679 - 31,738
Selling, general, and administrative expenses 9,172 1,368 - 7,804
Restructuring costs 17,939 9,569 - 8,370
-------- ------- ------- --------
65,528 17,616 - 47,912
-------- ------- ------- --------
Operating Loss (13,319) (9,018) - (4,301)
Interest Income 708 3 58 763
Interest Expense (95) - - (95)
-------- ------- -------- --------
Loss Before Income Tax Provision (12,706) (9,015) 58 (3,633)
Income Tax Provision (Benefit) 291 (443) 20 754
-------- ------- ------- --------
Net Loss $(12,997) $(8,572) $ 38 $ (4,387)
======== ======= ======= ========
Basic and Diluted Loss per Share $ (.51) $ (.17)
======== ========
Basic and Diluted Weighted Average Shares 25,432 25,432
======== ========
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<PAGE>
FORM 8-K
THE RANDERS KILLAM GROUP INC.
PRO FORMA CONDENSED BALANCE SHEET
As of January 1, 2000
(Unaudited)
The Randers Less: Pro Forma
Killam Group BAC Killam Adjustments Pro Forma
(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 2,084 $ 200 $ 1,374 $ 3,258
Advance to affiliate 19,030 - - 19,030
Accounts receivable, net 11,309 1,598 - 9,711
Unbilled contract costs and fees 7,842 1,091 - 6,751
Prepaid taxes and deferred tax asset 1,550 - - 1,550
Prepaid expenses 242 9 - 233
------- -------- ------- --------
42,057 2,898 1,374 40,533
------- -------- ------- --------
Property, Plant, and Equipment, at Cost, Net 9,756 443 - 9,313
------- -------- ------- --------
Other Assets 1,930 - - 1,930
------- -------- ------- --------
Cost in Excess of Net Assets of Acquired Companies 31,195 - - 31,195
------- -------- ------- --------
$84,938 $ 3,341 $ 1,374 $ 82,971
======= ======== ======= ========
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<PAGE>
FORM 8-K
THE RANDERS KILLAM GROUP INC.
PRO FORMA CONDENSED BALANCE SHEET (continued)
As of January 1, 2000
(Unaudited)
The Randers Less: Pro Forma
Killam Group BAC Killam Adjustments Pro Forma
(In thousands)
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Current maturities of long-term obligations $ 82 $ - $ - $ 82
Accounts payable 3,617 - - 3,617
Accrued payroll and employee benefits 2,506 - - 2,506
Accrued income taxes 1,953 - - 1,953
Accrued restructuring costs 2,484 - - 2,484
Other accrued expenses 1,356 - 100 1,456
Due to parent company and affiliated companies 119 - - 119
-------- ------- ------- --------
12,117 - 100 12,217
-------- ------- ------- --------
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) - (2,067) (11,432)
Parent company investment - 3,341 3,341 -
-------- ------- ------- --------
70,033 3,341 1,274 67,966
-------- ------- ------- --------
$ 84,938 $ 3,341 $ 1,374 $ 82,971
======== ======= ======= ========
</TABLE>
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FORM 8-K
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 except in text)
<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 $1,374,000 $(75) $(58)
of cash paid to the Company by the acquirer for BAC
Killam, calculated using the 30-day Commercial Paper Composite Rate plus 50
basis points, or 5.46% in fiscal 1999 and 5.58% in the first nine months of
fiscal 2000 ---- ----
Income Tax Provision
Increase in the income tax provision as a result of $ 26 $ 20
an increase in interest income calculated at the
federal income tax rate of 34% ---- ----
</TABLE>
Note 2 - Pro Forma Adjustments to Pro Forma Condensed Balance Sheet
(In thousands)
<TABLE>
<CAPTION>
<S> <C>
January 1, 2000
Debit (Credit)
Cash and Cash Equivalents
Cash received for sale of assets of BAC Killam $ 1,374
-------
Other Accrued Expenses
Estimated accrued transaction costs, including legal fees and other costs for BAC Killam $ (100)
-------
Shareholders' Investment
Elimination of BAC Killam's equity account and excess $(1,274)
of parent company investment in BAC Killam over
proceeds from sale -------
</TABLE>
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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 BAC Killam, Inc. and The Randers
Killam Group Inc. (as Sellers) and Hatch Mott McDonald, Inc. (as
Buyer), dated as of March 31, 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.
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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 28th day of April 2000.
THE RANDERS KILLAM GROUP INC.
/s/ Theo Melas-Kyriazi
Theo Melas-Kyriazi
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Exhibit 2.1
ASSET PURCHASE
AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement"), dated as of March 31, 2000, is
by and among BAC Killam, Inc., a New York corporation ("BAC"), The Randers
Killam Group Inc., a Delaware corporation ("Randers") (BAC and Randers sometimes
hereinafter referred to individually as a "Seller" and collectively as
"Sellers"), and Hatch Mott MacDonald, Inc., a Delaware corporation ("Buyer").
RECITALS:
WHEREAS, BAC is engaged in the business of designing, constructing,
inspecting, rehabilitating and resident engineering of bridges, highways,
railways, airports and transportation facilities, excluding environmental work
in connection with transportation facilities (the "Business");
WHEREAS, BAC has offices in Buffalo, New York; Queensboro, New York;
Millburn, New Jersey (collectively, the "Purchased Locations") and Toms River,
New Jersey (the "Excluded Location");
WHEREAS, BAC is presently engaging in the Business at the Purchased
Locations (the "Purchased Business") and the Excluded Location (the "Excluded
Business") and has current and on-going projects carried on from or at each of
the Purchased Locations (the "Purchased Projects") and the Excluded Location
(the "Excluded Projects"); and
WHEREAS, pursuant to this Agreement, Sellers will sell, and Buyer will
purchase, substantially all of the property and assets of Sellers which are used
in or associated with the Purchased Business, whether located at the Purchased
Locations or elsewhere, including, without limitation, all of the Purchased
Projects.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein the
parties hereto agree as follows:
<PAGE>
ARTICLE I
PURCHASE AND SALE
SECTION 1.01 Sale of Purchased Assets. At the Closing and subject to all
other terms and conditions of this Agreement, Sellers agree to sell, assign,
transfer and convey to Buyer, and Buyer agrees to purchase from Sellers, good
and marketable title, free and clear of all liabilities, liens, pledges,
security interests, encumbrances, claims and other restrictions ("Liens"), all
of Sellers' right, title and interest in and to all of the property and assets
of Sellers used primarily in connection with the Purchased Business, including
all such property and assets located at the Purchased Locations and such other
property and assets located elsewhere which are primarily used to conduct the
Purchased Business and to perform the Purchased Projects, other than the
Excluded Assets (as defined in Section 1.02 hereof) (collectively the "Purchased
Assets"). The Purchased Assets include, but are not limited to the following:
(a) all tangible personal property of the Sellers located at the
Purchased Locations and all tangible personal property of the
Sellers located elsewhere that is primarily used by or in
connection with the Purchased Business;
(b) all intellectual property, goodwill associated therewith,
licenses and sublicenses granted and obtained with respect
thereto, and rights thereunder, remedies against infringements
thereof, and rights to protection of interests therein used
primarily in connection with the Purchased Business;
(c) all of Sellers' rights under agreements, contracts, indentures,
mortgages, instruments, security interests, guaranties, leases
(excluding leases for office equipment and automobiles),
subleases, and other similar agreements relating to the Purchased
Business, the Purchased Locations or the Purchased Projects (each
such Purchased Project listed on Schedule 1.01(c) hereto) (each
such agreementsometimes may be referred to as a "Contract" or
collectively as "Contracts");
(d) all claims, refunds, causes of action, choses in action, rights
of recovery, rights to insurance proceeds, rights of set off, and
rights of recoupment of Sellers relating to the Purchased
Business, the Purchased Locations or the Purchased Projects;
(e) all franchises, approvals, permits, licenses (excluding any
license to practice engineering), orders, registrations,
certificates, variances, and similar rights of Sellers obtained
from governments and governmental agencies relating to the
Purchased Business, the Purchased Locations or the Purchased
Projects;
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(f) copies of all books, records, ledgers, files, documents,
correspondence, lists, plats, architectural plans, drawings,
specifications, creative materials, advertising and promotional
materials, studies, reports, and other printed or written
materials of Sellers relating to the Purchased Projects (it being
understood and agreed that the Sellers shall retain the originals
of all such documents other than creative materials and
advertising and promotional materials);
(g) all goodwill associated with the Purchased Business; and
(h) all of the Sellers' rights to the "Bettigole, Andrews and Clark"
and "NH Bettigole" names, styles or logos and all variations
thereof.
SECTION 1.02 Excluded Assets. Notwithstanding anything else
contained in this Agreement, the Purchased Assets do not include (a) fixtures,
free standing partitions, telephone systems, other than those telephone systems
at the Buffalo, New York office, whether located at the Purchased Locations or
otherwise; (b) any deposits, prepayments, refunds, or Tax refunds or credits
other than those, if any, reflected on the Closing Balance Sheet (as defined in
Section 1.05(a)); (c) the corporate charter of either Seller or any license to
practice engineering or any financial books and records of Sellers except as
specifically referred to in Section 1.01(f); (d) contracts, agreements,
understandings, and commitments relating to the Purchased Projects where
services for such Purchased Projects are completed or in respect of which no
further services are anticipated to be rendered as of or subsequent to the
Effective Date; (e) the Excluded Projects; (f) all property or assets located at
the Excluded Location or otherwise related to the items described in subsections
(d) and (e) above; (g) the Accounts Receivable (as hereinafter defined); (h) the
Supplementals (as hereinafter defined); and (i) all rights in and with respect
to the assets associated with any "employee welfare benefit plan" or "employee
pension benefit plan" (each as defined in the Employee Retirement Income
Security Act of 1974) (subsections (a) through (i) in this Section 1.02 are
referred to herein collectively as the "Excluded Assets").
SECTION 1.03 Assumed Liabilities.
(a) Subject to the terms and conditions of this Agreement, Buyer agrees to
assume, pay, perform and discharge in full when due, and Sellers agree to
transfer and assign to Buyer, any and all obligations of Sellers under or in
connection with the Real Property Leases and the Contracts and Purchased
Projects which arise after the Effective Date (such obligations are referred to
herein collectively as the "Assumed Liabilities"). Buyer's assumption of the
Assumed Liabilities shall be as set forth in the assumption agreement in the
form attached as Exhibit 1.03 hereto (the "Assumption Agreement"). Except as
provided in the foregoing sentences Buyer shall not assume, or in any way become
liable for, any liabilities or obligations of Sellers of any kind or nature,
whether accrued, absolute, contingent or otherwise, or whether due or to become
due, and whether known or unknown, arising out of events, transactions or facts
which occurred, arose or existed on or prior to the Effective Date, which
liabilities and obligations shall continue to be liabilities and obligations of
Sellers (the "Retained Liabilities"). The Retained Liabilities shall include,
without limitation, (i) any liability for Taxes (as hereinafter defined),
including any liability for Taxes resulting from the transactions contemplated
in this Agreement, (ii) any liability for trade accounts payable or notes
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<PAGE>
payable, (iii) any liability for employment matters (whether in connection with
or related to employee benefit matters, worker's compensation and occupational
safety and health matters, labor disputes, unfair labor practices, notice of
termination, severance, claims for overtime, back wages, vacation or minimum
wage or otherwise) except where such liability arises from the failure of Buyer
to make offers of employment to the Transferred Employees (as hereinafter
defined) in accordance with Section 7.02 hereof, (iv) any claim, liability or
obligation arising out of circumstances or occurrences or the operations of
Sellers with respect to the Purchased Business on or prior to the Effective Date
or with respect to the Excluded Business, (v) any liabilities or obligations
arising out of or relating to any act or omission of Sellers or breach of any
Contract or Purchased Project by Sellers on or prior to the Effective Date, and
(vi) any liability or obligation not expressly assumed hereunder. Sellers
covenant and agree to maintain its existing professional liability and errors
and omissions insurance coverage, as long as such coverage is available on
commercially reasonable terms, for a period of at least three years after the
Effective Date.
(b) Buyer hereby agrees to indemnify and hold Sellers harmless in
accordance with the provisions of Article VI hereof from and against any
liabilities and obligations of Buyer expressly assumed by Buyer pursuant to the
Assumption Agreement. Sellers hereby agree to indemnify and hold Buyer harmless
in accordance with the provisions of Article VI hereof from and against any
liabilities and obligations of Sellers not expressly assumed by Buyer pursuant
to the Assumption Agreement.
(c) Notwithstanding the foregoing, if the assignment and transfer of any of
the Assumed Liabilities would cause a breach thereof and if no required consent
to such assignment and transfer has been obtained from the third parties
involved, then, without limiting the effect of any representations and
warranties hereunder, such Assumed Liabilities shall not be assigned and
transferred to Buyer, and Buyer shall not assume any of the obligations and
liabilities with respect thereto, but, instead, Sellers shall continue to hold
its interests in and be obligated under and for such Assumed Liabilities, with
such Assumed Liabilities to be held by Sellers in trust for the benefit of
Buyer, with Buyer to second to Sellers such of the Transferred Employees in its
employ as may be necessary or desirable to carry out the relevant Purchased
Projects or Contracts, and with Sellers to receive in trust and remit as
promptly as possible to Buyer any money paid thereunder to Sellers and Sellers
shall cooperate in any reasonable arrangement or action requested by Buyer to
secure for Buyer all benefits under such Assumed Liabilities; provided however,
at and effective as of such time as any such required consent with respect to
such Assumed Liability shall be obtained, such Assumed Liability shall forthwith
be transferred and assigned to Buyer, and all related obligations and
liabilities of Sellers shall be simultaneously assumed by Buyer hereunder.
SECTION 1.04 Purchase Price. In consideration of the sale by Sellers to
Buyer of the Assets and Sellers' performance of this Agreement, Buyer shall pay
to Sellers the aggregate amount equal to $1,515,025, less the agreed adjustments
in respect of (a) the Cross Bay-Guy Brewer Project, (b) the Livingston Street,
Bergen County, Project, and (c) Monmouth County Bridges W-7, W-8 and W-9, in the
aggregate amount of $141,500, and shall assume the Assumed Liabilities. At the
Closing, Buyer shall pay the purchase price in the amount of $1,373,525 (the
"Purchase Price") to BAC by certified check or wire transfer of immediately
available funds. The Purchase Price is subject to the post-closing adjustments
provided in Section 1.05 hereof.
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SECTION 1.05 Post-Closing Purchase Price Adjustment.
(a) Closing Balance Sheet. Within forty-five (45) days following the
Closing Date, the Sellers shall deliver to Buyer a balance sheet as at the
Effective Date (the "Closing Balance Sheet"), prepared by Seller or its
certified public accounting firm in accordance with generally accepted
accounting principals on a basis consistent with the Adjusted Balance Sheet (as
defined in Section 3.05 below) and including the agreed adjustments in respect
of the Cross Bay-Guy Brewer Project, the Livingston Street, Bergen County
Project and the Monmouth County Bridges W-7, W-8 and W-9. In the event that
Seller does not deliver the Closing Balance Sheet within said forty-five (45)
day period, Buyer may, at its option and at Sellers' expense, prepare and
deliver to Sellers a Closing Balance Sheet prepared as aforesaid.
(b) Adjustment. The Purchase Price shall be adjusted on a dollar-for-dollar
basis by the amount, if any, by which the amount for the entry described as
"Cash to be paid upon Closing" on the Closing Balance Sheet is less than or
greater than the Purchase Price ("Adjustment"). The Adjustment shall be paid by
or refunded to the Buyer as the case may be. Such payment shall be made in cash
within ten (10) days after final determination of the Adjustment. If such
payment is not made within such ten (10) day period, interest shall accrue on
the amount of the Adjustment remaining unpaid at the rate of twelve percent
(12%) per annum. The Adjustment shall not be subject to the Indemnification
Threshold provided in Section 6.04.
(c) Determination of Adjustment. If Buyer does not object in writing to the
Adjustment proposed by the Sellers within thirty (30) days of receipt of the
proposed Adjustment, the proposed Adjustment shall become final and binding on
the parties. If Buyer does not agree with the proposed Adjustment, Buyer shall,
prior to the expiration of such thirty (30) day period, deliver to Seller a
written statement of the matters with respect to which there is disagreement. If
the parties fail to resolve the disagreement within thirty (30) days thereafter,
then the party who claims to be entitled to payment of the Adjustment from the
other party or parties may refer the items of disagreement to a nationally
recognized accounting firm that has not otherwise been engaged by Buyer or
Sellers within the preceding 12-month period (the "Accounting Firm"). The
parties will use their best efforts to cause the Accounting Firm to resolve all
items of disagreement within thirty (30) days after submission and the
Accounting Firm's determination will be final and binding on the parties. The
Accounting Firm shall reach its determination on the same basis as was used in
the Adjusted Balance Sheet. If the Accounting Firm determines that the
Adjustment proposed by Seller is not substantially correct, in the judgment of
the Accounting Firm, Seller shall bear the cost of such referral and
determination. If the Accounting Firm determines that the Adjustment proposed by
Seller is substantially correct, Buyer shall bear the cost of such referral and
determination.
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ARTICLE II
CLOSING
SECTION 2.01 Closing. The sale and purchase of the Purchased Assets and
assumption of the Assumed Liabilities referred to in Article I hereof shall be
consummated at a closing (the "Closing") to be held at the offices of BAC in
Millburn, New Jersey immediately upon the execution of this Agreement by the
parties, unless another date or place is agreed to in writing by Sellers and
Buyer (the "Closing Date") with effect from April 1, 2000 (the "Effective
Date").
SECTION 2.02 Closing Documentation. At the Closing,
(a) Sellers will deliver to Buyer:
(i) a duly executed bill of sale and assignment agreement in
substantially the form of Exhibit 2.02(a)(i) and such other instruments as
Buyer shall reasonably request to effectively transfer to and vest in Buyer
good and marketable title to all of the Purchased Assets, free and clear of
all Liens;
(ii) a duly executed undertaking in substantially the form of Exhibit
2.01(a)(ii), with respect to the Premises located at Randers' Millburn, New
Jersey location; and
(iii) such other documents as Buyer may reasonably request.
(b) Buyer will deliver to Sellers:
(i) the funds constituting the Purchase Price as provided in Section
1.04 hereof;
(ii) the duly executed Assumption Agreement;
(iii) a duly executed undertaking in substantially the form of Exhibit
2.01(b)(iii), with respect to the Premises located at Randers' Millburn,
New Jersey location; and
(iv) such other documents as Sellers may reasonably request.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers jointly and severally represent and warrant to Buyer as follows and
acknowledge that Buyer is relying on the accuracy of each such representation
and warranty in connection with the execution of this Agreement and the
completion of the transactions contemplated hereby:
SECTION 3.01 Organization. Each Seller is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all requisite power and authority, corporate and other,
and all necessary governmental approvals to own, lease and operate its
properties and to carry on the Purchased Business as now and heretofore
conducted.
SECTION 3.02 Authority Relative to Agreement. Sellers have all necessary
power and authority, and have taken all necessary actions required, to execute
and deliver this Agreement and all other agreements, instruments and
certificates contemplated hereby (the "Related Agreements") and to consummate
the transactions contemplated hereby and thereby and to perform all obligations,
undertakings and agreements to be observed and performed hereunder and
thereunder. This Agreement and the Related Agreements have been duly executed
and delivered by Sellers and constitute legal, valid and binding obligations of
Sellers, enforceable against Sellers in accordance with their respective terms.
SECTION 3.03 No Violation. Neither the execution and delivery of this
Agreement and the Related Agreements by Sellers, nor the consummation of the
transactions contemplated hereby and thereby, will violate, conflict with or
result in a breach of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or the loss of a material benefit under, or the
creation of any Lien on any of the Purchased Assets, pursuant to (i) any
provision of Sellers' charter documents, (ii) any provision of any agreement,
obligation, instrument, permit, or license to which either Seller is a party or
is otherwise bound, or (iii) any judgment, order, decree, statute, law,
ordinance, rule or regulation.
SECTION 3.04 Consents and Approvals. Except as to any third party consents
and novations which may be required with respect to assignment of the Assumed
Liabilities (which Sellers shall use commercially reasonably efforts to obtain
or assist Buyer to obtain, as required by Section 7.06 of this Agreement), no
consent, approval, order or authorization of, or registration, declaration or
filing with any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, is required by or with
respect to Sellers in connection with the execution and delivery of this
Agreement or the Related Agreements or the consummation by Sellers of the
transactions contemplated hereby and thereby.
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SECTION 3.05 Adjusted Balance Sheet. The unaudited adjusted balance sheet
of BAC as at December 31, 1999 attached hereto as Schedule 3.05 ("Adjusted
Balance Sheet") is accurate and complete and presents fairly the financial
position of BAC as of such date, and, subject to the agreed adjustments, has
been prepared in conformity with generally accepted accounting principles
applied on a basis consistent with that of similar periods for preceding years.
December 31, 1999 is referred to herein as the "Adjusted Balance Sheet Date".
SECTION 3.06 Absence of Certain Changes or Events. Since the Adjusted
Balance Sheet Date, Sellers have conducted the operations of the Purchased
Business in the ordinary and regular course, and in connection with the
Purchased Business Sellers have not: (i) allowed the Purchased Business to
undergo any change in its condition (financial or other), properties, assets,
liabilities, business, operations or prospects except changes in the ordinary
and usual course of its business and consistent with its past practice and which
have not been, either in any case or in the aggregate, materially adverse to it;
(ii) mortgaged, pledged or subjected to any Lien, any of the Purchased Assets;
(iii) acquired or disposed of any interest in any of the Purchased Assets except
the purchase of materials and supplies and the sale of inventory in the ordinary
and usual course of its business and consistent with its past practice; (iv)
suffered any damage, destruction or loss (whether or not covered by insurance)
which has an adverse effect on its condition (financial or other), business,
operations, prospects or the Purchased Assets; (v) amended or terminated any
Contract; (vi) experienced any labor difficulty or loss of employees or
customers; (vii) sold or granted or transferred to any party or parties any
contract or license, or granted an option to acquire a license, to use any
trademark, service mark, trade name, copyright, patent or any pending
application for any foregoing, or any of its trade secrets or know-how; (viii)
without limiting the generality of any of the foregoing, entered into any
transaction except in the ordinary and usual course of its business and
consistent with its past practice; or (ix) agreed to, permitted or suffered any
of the acts, transactions or other things described in this Section 3.06.
SECTION 3.07 Taxes. All federal, state and local taxes ("Taxes") due or to
become due by reason of the Purchased Assets or operation of the Purchased
Business by Sellers prior to the Closing Date have been or will be paid by
Sellers when due.
SECTION 3.08 Real Property Leases. All of the real property used in
connection with the Purchased Business is described in Schedule 3.08 (the
"Premises"). Except with respect to the Premises located at Randers' Millburn,
New Jersey location, which are owned by Elson T. Killam Associates, Inc., a
wholly-owned subsidiary of Randers, the Premises are leased by Sellers pursuant
to the real property leases identified in Schedule 3.08 ("Real Property
Leases"). The Real Property Leases are valid and binding agreements, enforceable
in accordance with their terms. Sellers have performed all obligations required
to be performed by it to date under the Real Property Leases and are not in
breach in any respect thereunder, and are not aware of any breach by any
landlord under the Real Property Leases, and there has been no event which, with
the giving of notice or the lapse of time or both, would become a breach under
the Real Property Leases. Sellers have not received any notice of default under
any of the Real Property Leases, and all rental and other payments due under
each of the Real Property Leases have been fully paid to date.
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SECTION 3.09 Environmental Compliance. To Sellers' knowledge, Sellers are
not liable for clean up or response costs with respect to the emission,
discharge or release of any hazardous substance or for any other matter arising
under applicable environmental laws due to their lease or operation of all or a
portion of the Premises.
SECTION 3.10 Title to and Condition of the Purchased Assets. Sellers have
good and marketable title, subject to no Liens, to all of the Purchased Assets.
The tangible assets included in the Purchased Assets are, in all material
respects, in good condition and repair, reasonable wear and tear excepted, have
been well maintained, and conform with all applicable laws, ordinances and
regulations.
SECTION 3.11 Proprietary Rights. All of the patents, trademarks, service
marks, trade names, copyrights (including any pending applications for any of
the foregoing), inventions, trade secrets and any other intellectual or
intangible rights owned or used by Sellers in the Purchased Business which
constitute part of the Purchased Assets (collectively referred to as
"Proprietary Rights") are not subject to any outstanding licenses or Liens and
there are no pending or threatened challenges to any of the Proprietary Rights.
The Purchased Business as heretofore conducted does not infringe or constitute,
and has not infringed or constituted, an unlawful invasion of any rights of any
person and no notice of any infringement or invasion has been received by
Sellers with respect to the Proprietary Rights.
SECTION 3.12 Contracts; No Defaults. All of the Contracts are listed in
Schedule 3.12 and are valid, binding and in full force and effect and Sellers
are not in default or alleged to be in default thereunder and Sellers have no
knowledge that any other party thereto is in default. Nothing has occurred
which, with or without the passage of time or giving of notice or both, would
constitute a default by Sellers or any other party under any such Contract.
Sellers have no knowledge that any such Contract will be, and have not received
any notification that any such Contract is likely to be, terminated or canceled.
SECTION 3.13 Labor Matters. With regard to the Purchased Business, Sellers
are not a party to any union, collective bargaining or other similar agreement
with any labor or employee union representing any of its employees. There are no
strikes, arbitrations, material grievances, other labor disputes or union
organizational drives pending or threatened between Sellers and any of the
employees involved in the Purchased Business. Sellers have paid or accrued in
full all wages, salaries, commissions, bonuses and other compensation (including
vacation benefits) for all services performed by the employees involved in the
Purchased Business prior to the Effective Date. To Sellers' knowledge, Sellers
are not liable for any arrears of wages or any payroll taxes or any penalties or
other damages for failure to comply with any applicable foreign, federal or
local laws, relating to the employment of labor in the Purchased Business. No
Transferred Employee will have a valid claim against Buyer due to the
termination of said Transferred Employee's employment by Sellers in connection
with the transactions contemplated by this Agreement or to the failure of
Sellers to make any payments to said Transferred Employee on account of such
termination.
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SECTION 3.14 Litigation and Claims. Except as set forth on Schedule 3.14
hereto, there are no pending or threatened actions, suits, proceedings, claims,
investigations or notices by or against Sellers relating to the Purchased
Business or the Purchased Assets, whether or not covered by insurance, and there
is no outstanding order, notice, writ, injunction or decree of any court,
government or governmental agency against or affecting Sellers relating to the
Purchased Business. Except as set forth on Schedule 3.14 hereto, there are no
incidents or occurrences (whether or not covered by insurance) of any kind which
either Seller believes are likely to give rise to material claims against either
of them, whether or not covered by insurance, relating to the Purchased
Business.
SECTION 3.15 Compliance with Applicable Laws. Sellers hold all permits,
licenses, variances, exemptions, orders and approvals of all governmental
entities which are required for the operation of the Purchased Business (the
"Permits"). Sellers are in compliance with the terms of the Permits. Sellers are
not in material violation of any law, ordinance or regulation of any
governmental entity.
SECTION 3.16 Finders' Fees. No person acting on behalf of Sellers, other
than the Environmental Financial Consulting Group, who will be remunerated by
the Sellers, has claims to, or is entitled to, under any contract or otherwise,
any payment as a broker, finder or intermediary in connection with the origin,
negotiation, execution or consummation of the transactions provided for in this
Agreement or the Related Agreements.
SECTION 3.17 General Representation and Warranty. Neither this Agreement
nor any Schedule or other documents and information furnished by or on behalf of
Sellers in connection with this Agreement or the Related Agreements contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements contained herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
SECTION 4.01 Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware and has
all requisite power and authority and all other necessary governmental approvals
to own, lease and operate its properties and to carry on its business as now and
heretofore being conducted.
SECTION 4.02 Authority Relative to Agreement. Buyer has all necessary power
and authority, and has taken all necessary actions required, to execute and
deliver this Agreement and the Related Agreements and to consummate the
transactions contemplated hereby and thereby and perform all obligations,
undertakings and agreements to be observed and performed hereunder and
thereunder. This Agreement and the Related Agreements have been duly executed
and delivered by Buyer and constitute valid and binding obligations of Buyer,
enforceable against it in accordance with their respective terms.
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SECTION 4.03 No Violation. Neither the execution and delivery of this
Agreement and the Related Agreements nor the consummation of the transactions
contemplated hereby and thereby will result in any conflict with or violate (i)
any provision of the charter documents of Buyer, (ii) any provision of any
agreement, obligation, instrument, permit or license to which Buyer is bound or
(iii) any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Buyer or its properties or assets.
SECTION 4.04 Consents and Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any governmental
entity is required by Buyer in connection with the execution and delivery of
this Agreement and the Related Agreements by Buyer or the consummation by Buyer
of the transactions contemplated hereby and thereby, the failure to obtain which
would have a material adverse effect on Buyer or the transactions contemplated
hereby.
SECTION 4.05 Finders' Fees. No person acting on behalf of Buyer has claims
to, or is entitled to, under any contract or otherwise, any payment as a broker,
finder or intermediary in connection with the origin, negotiation, execution or
consummation of the transactions provided for in this Agreement or the Related
Agreements.
ARTICLE V
NON-COMPETITION AND NON-DISCLOSURE
SECTION 5.01 Non-competition and Non-disclosure. Following the Effective
Date and for three (3) years thereafter (or for such shorter periods as are
specified below), Sellers jointly and severally agree not to:
(a) engage or become interested, directly or indirectly, through affiliates
or otherwise, as owner, employee, partner, through stock ownership (except
ownership of less than one percent (1%) of the number of shares outstanding of
any securities which are listed for trading on any securities exchange),
investment of capital, lending of money or property, rendering of services, or
otherwise, whether alone or in association with others, in the operation of any
business or enterprise in any way competitive to the Purchased Business anywhere
in New York or New Jersey or, for a period of one (1) year following the
Effective Date, Boston, Massachusetts and the area serviced by the Massachusetts
Bay Transit Authority ("MBTA"); solicit or accept orders for goods or services
competitive to those heretofore provided or sold by Sellers in the course of
conducting the Purchased Business in New York or New Jersey or, for a period of
one (1) year following the Effective Date, Boston, Massachusetts and the area
serviced by the MBTA; or induce or attempt to induce any customer of the
Purchased Business to reduce such customer's patronage of it or to direct such
customer's business to any competitor or the Purchased Business or of the Buyer
(for the purposes hereof, a customer includes any client of the Purchased
Business during the five year period preceding the Effective Date).
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(b) divulge, communicate, or utilize any confidential information of or
pertaining to the business or affairs of the Purchased Business or any of its
customers; and
(c) use the "BAC", "Bettigole, Andrews and Clark", "NH Bettigole" names,
styles or logos or any variation thereof, in any organization or enterprise or
business.
SECTION 5.02 Exceptions.
(a) Buyer acknowledges and agrees that after the Closing, the capital stock
or assets of one or both Sellers may be sold to one or more third parties (each
a "Subsequent Purchaser"), and Sellers do not currently know, and cannot
control, the identities or actions of any such Subsequent Purchasers.
Accordingly, Buyer agrees that neither the activities of any such Subsequent
Purchaser, nor the acquisition of the capital stock or assets of one or both of
the Sellers, shall be deemed to be a violation of the covenants set forth in
Section 5.01(a).
(b) Buyer acknowledges and agrees that after the Closing, Randers intends
to merge with and into BAC, such that BAC will be the surviving corporation and
that the surviving corporation will change its name to remove any reference to
"BAC" or any variation thereof. Prior to such merger and name change, however,
Buyer acknowledges and agrees that the Excluded Business has certain contracts
with third parties entered into under one or more of the names "BAC Killam" or
"Bettigole, Andrews and Clark." Accordingly, Buyer agrees that Sellers may
continue to use such names for the limited purpose of fulfilling such contracts
until such time as such merger and name change have been completed.
(c) Buyer acknowledges and agrees that Sellers frequently enter into joint
ventures, partnerships, subcontractor and similar relationships with third
parties, which third parties may engage in competition with the Purchased
Business. Accordingly, Buyer agrees that no such joint venture, partnership,
subcontractor or similar relationship shall be deemed to be a violation of the
covenants set forth in Section 5.01(a) unless the activities of the Sellers (not
taking into account the activities of its joint venturers, partners,
subcontractors or prime contractors) would violate such covenants. For greater
certainty, environmental work undertaken by Sellers in connection with the
Newark Airport MOTBY project to Brooklyn, New York in support of other
consultants shall be considered to be governed by this clause.
(d) Without limiting the generality of the foregoing, Sellers engagement in
(i) road resurfacing work conducted as a result of performing municipal
engineering projects, (ii) the Toms River Bridge project, and/or (iii) work
undertaken with or for the New York City Department of Environmental Protection,
shall not be deemed to be a violation of the covenants set forth in Section
5.01(a).
SECTION 5.03 Equitable Remedies. Sellers specifically acknowledge and agree
that the remedy at law for any breach of any provision of this Article V
available to Buyer will be inadequate and that, in addition to any other relief
available to Buyer under this Agreement, shall be entitled to seek temporary and
permanent injunctive or other equitable relief without the necessity of proving
actual damage and without the necessity of posting a bond or other surety.
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SECTION 5.04 Severability. If any provision of this Article V shall for any
reason be held to be excessively broad as to any activity or subject, it shall
be construed, by limiting and reducing it, to be enforceable to the extent
compatible with applicable law. If any provision in this Article V shall,
notwithstanding the preceding sentence, be held illegal or unenforceable, such
illegality or unenforceability shall not affect any other provision of this
Article V but this Agreement shall be construed as if such illegal or
unenforceable provision had never been contained herein.
SECTION 5.05 No Waiver. The rights and obligations of Buyer set forth in
this Article V are in addition to, and not in lieu of, all other rights and
obligations provided by applicable law.
SECTION 5.06 Survival. Except as otherwise set forth above with respect to
certain covenants, agreements and undertakings that shall survive the Closing
for a period of one (1) year after the Effective Date, the covenants, agreements
and undertakings of Sellers in this Article V and all rights of Buyer with
respect thereto shall survive the Closing for a period of three (3) years after
the Effective Date.
ARTICLE VI
SURVIVAL AND INDEMNIFICATION
SECTION 6.01 Survival. The representations and warranties, agreements and
obligations of the parties hereto in Articles III and IV shall survive the
Closing and shall continue thereafter without limitation except as provided in
Section 6.05 below.
SECTION 6.02 Indemnification of Buyer. Sellers hereby agree to indemnify
and hold Buyer harmless from and against any and all Buyer's Damages (as defined
in Section 6.06 below) arising out of, attributable to, resulting from, or
incurred with respect to (i) any breach of warranty or misrepresentation by or
on behalf of Sellers under this Agreement, or the breach or non-performance of
any covenant, agreement, or obligation to be performed by Sellers; (ii) any
misrepresentation in, or omission from, any certificate or instrument executed
and delivered or to be executed and delivered by or on behalf of Sellers in
connection with this Agreement; (iii) any error or omission of Sellers in the
operation of the Purchased Business or relating to work performed or services
rendered on the Purchased Projects on or prior to the Effective Date or on the
Excluded Projects at any time for which professional liability accrues under
Sellers' Professional Indemnity insurance policy; (iv) any act or omission of
Sellers in the operation of the Purchased Business or relating to work performed
or services rendered on the Purchased Projects on or prior to the Effective Date
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or on the Excluded Projects at any time for which liability accrues for personal
injury or property damage; (v) any liability or obligation related to the
Purchased Assets or the Excluded Assets which arose on or prior to the Effective
Date; (vi) any liability or obligation of Sellers not expressly assumed under
this Agreement by Buyer, including without limitation any liability or
obligation of Sellers arising out of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), with respect to any employee welfare benefit plan
or employee pension benefit plan (as such terms are defined in ERISA),
maintained by Sellers or any of their affiliates; (vii) any failure of Buyer or
Sellers to comply with any bulk sales act or similar statute in connection with
this Agreement; (viii) client audits relating to work performed or services
rendered on the Purchased Projects or the Excluded Projects on or prior to the
Effective Date; or (ix) any claim made against Buyer by any creditor or past
creditor of Sellers.
SECTION 6.03 Indemnification of Seller. Buyer agrees to indemnify and hold
Seller harmless from and against any and all Sellers' Damages (as defined in
Section 6.06 below) arising out of, attributable to or incurred with respect to
(i) any breach of warranty or misrepresentation by or on behalf of Buyer under
this Agreement, or the breach or non-performance of any covenant or obligation
to be performed by Buyer; (ii) any misrepresentation in, or omission from, any
certificate or instrument executed and delivered or to be executed and delivered
by or on behalf of Buyer pursuant to this Agreement; (iii) any error or omission
of Buyer in the operation of the Purchased Business or relating to work
performed or services rendered on the Purchased Projects after the Effective
Date for which professional liability accrues under Buyer's Professional
Indemnity insurance policy; (iv) any act or omission of Buyer in the operation
of the Purchased Business or relating to work performed or services rendered on
the Purchased Projects after the Effective Date for which liability accrues for
personal injury or property damage; (v) client audits relating to work performed
or services rendered on the Purchased Projects after the Effective Date; or (vi)
the failure of Buyer to pay, discharge or perform any of the Assumed
Liabilities.
SECTION 6.04 Limitations; Procedure. Subject to the remaining provisions of
this Section 6.04, notwithstanding anything to the contrary herein, any claim
under this Article VI by Buyer against Sellers for Buyer's Damages or by Sellers
against Buyer for Sellers' Damages shall be payable by Buyer or Sellers,
respectively, only in the event and to the extent that the accumulated amount of
Buyer's Damages or Sellers' Damages shall exceed in the aggregate the amount of
$40,000 (the "Indemnification Threshold"); and at such time as the aggregate
amount of Buyer's Damages or Sellers' Damages shall exceed the Indemnification
Threshold, Sellers or Buyer shall thereafter be liable on a dollar-for-dollar
basis for the full amount of all Buyer's Damages or Sellers' Damages,
respectively, including the Indemnification Threshold, it being the intention of
the parties (i) that the initial amount of Buyer's Damages or Sellers' Damages
excluded by reason of the Indemnification Threshold would not be recoverable
against Sellers or Buyer, respectively, until such time as the Indemnification
Threshold is reached and (ii) the aggregate amount of Buyer's Damages or
Sellers' Damages recoverable against Sellers or Buyer, respectively, shall be
limited to the Purchase Price, as adjusted, such that the aggregate amount of
Buyer's Damages or Sellers' Damages in excess of the Purchase Price, as
adjusted, shall not be recoverable against Sellers or Buyer, respectively, and
shall be borne by Buyer or Sellers; provided, however, that (i) the aggregate
amount of Buyer's Damages recoverable against Sellers by Buyer which arises out
of, is attributable to, results from or is incurred with respect to Sections
6.02(iii), (iv) and (viii) shall not be limited to the Purchase Price, and (ii)
the aggregate amount of Sellers' Damages recoverable against Buyer by Sellers
which arises out of, is attributable to, results from or is incurred with
respect to Section 6.03(iii), (iv) and (v) shall not be limited to the Purchase
Price.
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SECTION 6.05 Duration. Neither party may assert a claim against the other
(or others) based upon a breach of the representations contained in Article III
(with respect to Sellers) or Article IV (with respect to Buyer) after the third
anniversary of the Effective Date unless such party shall have notified the
other (or others) in writing of such breach prior to the third anniversary of
the Effective Date; provided, however, that (a) Seller's representations and
warranties contained in Section 3.07 of this Agreement shall survive and be
subject to Buyer's assertion of a claim against Seller until the expiration of
the applicable statute of limitations and (b) Seller's representations and
warranties contained in the first sentence of Section 3.10 of this Agreement
shall survive and be subject to Buyer's assertion of a claim against Seller
until the tenth anniversary of the Effective Date.
SECTION 6.06 Definition of Damages. For purposes of this Agreement, the
Buyer's or Sellers' Damages, as the case may be, shall mean and include the full
amount of any liabilities, losses, debts, obligations, monetary damages, fines,
fees, penalties, deficiencies, expenses (including those related to client
audits and including amounts paid in settlement, interest obligations, court
costs, the reasonable costs of investigators, the reasonable fees and expenses
of attorneys, accountants, financial advisors or other experts, and other
reasonable expenses of litigation or administrative proceedings) incurred due to
the matter for which indemnification is sought, 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, (ii) any insurance proceeds to which the
indemnified party is entitled (including self-insured amounts) and (iii) any
warranty reimbursements. In no event shall any party be awarded punitive or
multiple damages.
SECTION 6.07 Nonexclusivity in the Event of Fraud. It is specifically
understood and agreed that, in the absence of 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 VI of this Agreement.
ARTICLE VII
POST CLOSING
COVENANTS OF THE PARTIES
SECTION 7.01 Account and Supplemental Receivables. Buyer covenants and
agrees that it shall, within fifteen (15) days after its receipt from time to
time of any of the (a) amounts in respect of the "Total Old Outstanding
Receivables" entry on the Adjusted Balance Sheet ("Accounts Receivable"), for
which the details of the relevant accounts are specified in Exhibit 7.01(a), or
(b) amounts in respect of Cross Bay - Guy Brewer accounts receivable, Cross Bay
- - Guy Brewer work in progress and supplemental expenditures approved after the
Effective Date for services rendered and completed prior to the Effective Date,
as identified in the "Miscellaneous" entry on the Adjusted Balance Sheet
("Supplementals") for which the details of the relevant accounts are specified
in Exhibit 7.01(b), transfer to Sellers ninety-five percent (95%) of all amounts
received by Buyer as payment for Accounts Receivable and Supplementals. Sellers
covenant and agree that they shall, within fifteen (15) days after their receipt
from time to time of any Accounts Receivable or Supplemental, transfer to Buyer
five percent (5%) of all amounts received by Sellers as payment for Accounts
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Receivable and Supplementals. Buyer shall have no obligation to seek collection
of payment on any Accounts Receivable or Supplementals; provided, however, that
Buyer, in addition to remitting payments received as set forth above, shall use
commercially reasonable efforts to cooperate with Sellers in Sellers' efforts to
prepare invoices and/or collect Accounts Receivable and prepare Supplementals.
SECTION 7.02 Treatment of Employees. Upon the Closing, Sellers shall
terminate, as of the Effective Date, the employment of each of the employees of
Sellers who perform services for the Purchased Business, except for Mr. Fletcher
Platt and Mr. Jungmin Lee, who shall remain as employees of Sellers (the
"Transferred Employees"), and Buyer shall make employment offers to all such
Transferred Employees, such offers to be on terms and conditions, as a package,
which are substantially similar to those terms and conditions enjoyed by the
Transferred Employees immediately prior to their termination by Sellers. Buyer
shall have no liability to Sellers or any Transferred Employee or former
employee or dependent of any former employee of any Seller as a result of,
arising out of, or in connection with the termination of any such Terminated
Employee or former employee including, without limitation, liability for group
health plan continuation coverage pursuant to Sections 601 through 608 of ERISA
and Section 4980B(f) of the Code or applicable state law, severance payments,
accrued vacation, or failure to provide adequate notice of termination, and
Sellers shall indemnify, defend, and hold harmless Buyer from and against any
and all such liabilities except where such liability arises from the failure of
Buyer to make offers of employment to the Transferred Employees in accordance
with this Section 7.02, in which case Buyer shall indemnify, defend, and hold
harmless Sellers from and against any and all such liabilities. This Section
7.02 is not intended and shall not be construed to create any rights or remedies
in any person not a party to this Agreement other than Sellers and Buyer and no
person not a party to this Agreement shall assert any rights or remedies as a
third party beneficiary hereunder. Mr. Lee shall be transferred by Sellers to
the Buyer, on the same basis as described for Transferred Employees under this
Section 7.02 upon the issue of new visa documentation by the Immigration and
Naturalization Service (the "INS") reflecting his employment by the Buyer.
Provided that Mr. Lee's employment is not otherwise terminated, in the event
that the INS rejects the visa application in respect of Mr. Lee or if six (6)
months transpire from the Effective Date and the INS does not make a decision on
the visa application in respect of Mr. Lee within that period, Sellers shall
have no further obligation to maintain Mr. Lee's employment.
SECTION 7.03 Non-Solicitation of Employees. For a period of eighteen (18)
months after the Effective Date, Buyer and Sellers each agree not to, directly
or indirectly, employ or solicit any employee of the other; provided, however,
that nothing herein shall prohibit Buyer from making employment offers to
Transferred Employees.
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SECTION 7.04 Post-Closing Support.
(a) Following the Closing, Sellers shall make Mr. Fletcher Platt, Chairman
of the Board of BAC, available to Buyer to provide consulting and other
transitional services on all matters pertaining to the Purchased Business to
facilitate the successful transfer of the Purchased Business and the integration
of the Transferred Employees into the business of the Buyer, upon the request of
Buyer, through at least June 1, 2000. In consideration of Mr. Platt's services,
Buyer shall pay to Sellers a fee in the amount of $175 per hour of Mr. Platt's
services. Following the Closing, Sellers shall, if requested by Buyer, provide
Buyer with various transitional administrative services including, but not
limited to, accounting, invoicing, and human resource services, through at least
June 1, 2000. Sellers shall provide such administrative services for a fee to be
determined in accordance with the rate schedule attached as Exhibit 7.04 hereto.
(b) Following the Closing, Buyer shall make the Transferred Employees
available to Seller at reasonable times and upon reasonable notice, at such
commercial rates and upon such terms and conditions as may be standard for the
performance of similar work by Buyer at the relevant time, or as may be
specifically agreed otherwise by the parties, to assist Sellers in completing
the Excluded Projects.
SECTION 7.05 Client Audits. Following the Closing, Sellers shall be
responsible for responding to all client audit inquiries, and all costs and
expenses associated therewith, relating to work performed or services rendered
on the Purchased Projects on or prior to the Effective Date and on the Excluded
Projects at any time, and Buyer shall be responsible for responding to all
client audit inquiries, and all costs and expenses associated therewith,
relating to work performed or services rendered on the Purchased Projects after
the Effective Date.
SECTION 7.06 Representations of Abilities. Following the Closing, Buyer
shall be entitled to represent itself to all others, including, but not limited
to, clients and prospective clients, as possessing all of the capabilities and
experience of the Purchased Business prior to the Effective Date, including
"Bettigole, Andrews and Clark" and "NH Bettigole."
SECTION 7.07 Consents of Others. After the Closing, Sellers and Buyer shall
fully cooperate with one another and shall use commercially reasonable efforts
to obtain all consents and novations required to permit the consummation of the
assignment of the Contracts and the Real Property Leases to Buyer.
SECTION 7.08 Further Assurances. After the Closing, Sellers shall assist
and cooperate with Buyer in effecting a transition of ownership of the Purchased
Assets and the Purchased Business to Buyer without a material disruption of the
operations of the Purchased Business and in preserving the goodwill of the
customers of the Purchased Business and others having business relationships
therewith all for the benefit of Buyer. Subject to Sellers' right to destroy
documents and records from time to time in accordance with its records retention
policies, which policies provide for the destruction of documents following the
later of ten years from the date of completion of the project to which the
documents relate and the next audit following completion of the project to which
the documents relate, Sellers shall provide Buyer with access to the originals
of the items referred to in Section 1.01(f) at reasonable times and on
reasonable notice upon the reasonable request of Buyer.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(which is confirmed) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) if to Buyer, to
Hatch Mott MacDonald, Inc.
2800 Speakman Drive
Sheridan Science and Technology Park
Mississauga, Ontario, Canada L5K 2R7
Attention: John P. Tummers, Secretary
and
(b) If to Sellers, to
The Randers Killam Group Inc.
27 Bleeker Street
Millburn, New Jersey 07041
United States of America
Attention: Emil C. Herkert, President
with a copy to:
Morse, Barnes-Brown & Pendleton, P.C.
1601 Trapelo Road
Waltham, Massachusetts 02451
United States of America
Attention: Carl F. Barnes, Esq.
SECTION 8.02 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
SECTION 8.03 Entire Agreement; No Third Party Beneficiaries. This Agreement
(including the documents and the instruments referred to herein) and the Related
Agreements, (a) constitute the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, and (b) are not intended to and shall not
be construed to create or confer upon any person other than the parties hereto
any rights or remedies and no other person shall assert any rights or remedies
as a third party beneficiary hereunder.
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SECTION 8.04 Knowledge. When used in this Agreement in reference to the
knowledge of the Sellers, the term "knowledge" refers to the actual knowledge of
the management of the Sellers following reasonable investigation.
SECTION 8.05 Governing Law. This Agreement shall be governed and construed
in accordance with the internal laws of the State of New Jersey without regard
to any principles of conflicts of law.
SECTION 8.06 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, and any such purported assignment or
delegation shall be void, except that Buyer may assign or delegate, in its sole
discretion, any or all of its rights, interests and obligations hereunder to an
affiliate of Buyer; provided, however, that Buyer guarantees the performance of
all obligations of such affiliate hereunder. Sellers acknowledge and agree that
Buyer may acquire the Purchased Assets through various existing or newly formed
affiliates of Buyer; provided, however that Buyer guarantees the performance of
all obligations of such affiliates hereunder. Subject to the foregoing, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
SECTION 8.07 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect. Upon any such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner,
to the end that the transactions contemplated by this Agreement are consummated
to the extent possible.
SECTION 8.08 Publicity. Buyer and Sellers shall promptly consult with each
other as to the form and substance thereof prior to the release or issuance of
the first press release or other public disclosure related to this Agreement or
any other transactions contemplated hereby. Sellers and Buyer agree not to
release or issue any such press release or other public disclosure without the
reasonable approval of the other party to the form and substance thereof, which
approval shall not be unreasonably withheld or delayed.
SECTION 8.09 Expenses. Buyer and Sellers shall each bear and pay all costs
and expenses respectively incurred by them in connection with this Agreement,
including, without limitation, fees and expenses of their own financial
consultants, accountants, and counsel and any costs and expenses relating to
this Agreement and the Related Agreements.
SECTION 8.10 Consent to Jurisdiction. Any action, suit or proceeding
arising out of or relating to this Agreement or the Related Agreements may be
brought in either the New Jersey State Supreme Court or the United States
District Court having as a situs Bergen County in the State of New Jersey and
Sellers and Buyer hereby irrevocably submits to the exclusive jurisdiction of
any of such courts for the purpose of any such action, suit or proceeding.
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IN WITNESS WHEREOF, each of the parties hereto have duly executed this
Agreement as of the date first above written.
SELLERS:
BAC KILLAM, INC.
By: /s/ Emil C. Herkert
Title: President
THE RANDERS KILLAM GROUP INC.
By: /s/ Emil C. Herkert
Title: President
BUYER:
HATCH MOTT MACDONALD, INC.
By: /s/ Gordon A. Smith
Title: President and C.E.O.
By: /s/ R. R. Nolan
Title: Director
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