Exhibit 2.3
Execution Copy
ASSET ACQUISITION AGREEMENT
dated as of February 22, 2001
among
RENAISSANCE WORLDWIDE IT CONSULTING SERVICES, INC.
as Seller,
and
GM ACQUISITION COMPANY, LLC
as Buyer
-1-
List of Schedules
-----------------
Schedule 1.1 Assets Being Sold to Buyer
Schedule 1.2 Liabilities Being Assumed By Buyer
Schedule 7.3A Customers Being Assumed By Buyer
Schedule 7.3B Employees Being Assumed By Buyer
________________________________________________________________________________
List of Exhibits
Exhibit 1.3A Form of Subordinated Promissory Note
Exhibit 1.3B Form of Security Agreement
Exhibit 1.4 January Balance Sheet
Exhibit 5.2A Form of Xxxx of Sale
Exhibit 5.2B Form of Assignment and Assumption Agreement
Exhibit 5.3 Form of Transition Services Agreement
Exhibit 5.4 Form of Amended and Restated Operating Agreement of GM
Acquisition Company, LLC
Exhibit 7.5 Form of Employee Offer Letter
-2-
ASSET ACQUISITION AGREEMENT
THIS AGREEMENT is made as of February 22, 2001, among Renaissance Worldwide
IT Consulting Services, Inc., a Delaware corporation ("Seller") and GM
------
Acquisition Company, LLC, a Virginia limited liability company ("Buyer").
-----
WHEREAS, Seller is in the business of providing integrated business and
technology consulting in the strategy area; and
WHEREAS, Buyer desires to purchase from Seller certain assets of the
Align360 division of Seller that represent the portion of the Align360 division
that was formerly known as the Business Solutions Delivery Group and desires to
assume certain specified liabilities of Seller related thereto (such assets and
liabilities constituting the "Business"), all on the terms and subject to the
--------
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of these premises, the respective
covenants of Buyer and Seller set forth below and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Purchase and Sale of the Purchased Assets.
1.1. Assets Being Sold to Buyer. Seller agrees to sell and assign to
Buyer, or as applicable cause to be sold and assigned to Buyer, and Buyer agrees
to purchase at the Closing (as hereinafter defined), certain assets of the
Business set forth on Schedule 1.1 which is attached hereto (collectively, the
------------
"Purchased Assets").
----------------
1.2. Liabilities Being Assumed. Buyer shall assume all payment and
performance obligations and related liabilities of the Business as set forth on
Schedule 1.2 which is attached hereto (the "Assumed Liabilities"). Buyer is
------------ -------------------
expressly not assuming any other liabilities of Seller of any kind whatsoever.
1.3. Purchase Price. In addition to the assumption of the liabilities
assumed pursuant to Section 1.2 hereof, the purchase price to be paid by Buyer
to Seller (or to Renaissance Worldwide, Inc., a Massachusetts corporation and
the parent of the Seller ("Parent"), as specified below) for the Purchased
Assets shall be an aggregate amount consisting of (i) $4,550,000 in cash, (ii)
$500,000, to be paid by means of a Subordinated Promissory Note payable to
Parent substantially in the form of Exhibit 1.3A which is attached hereto (the
------------
"Purchase Note") as secured pursuant to a Security Agreement substantially in
-------------
the form of Exhibit 1.3B which is attached hereto and (iii) a Class B Unit of
------------
Buyer, issued to Parent, consisting of 6,250,000 shares and representing 25% of
the outstanding membership interests of Buyer (the "Purchase Price"). In
addition, Buyer shall pay Seller $54,000 in cash on the Closing Date to
reimburse Seller for certain bonus payments to employees and related tax
payments made by Seller on behalf of Buyer prior to the Closing Date.
-3-
1.4. Adjustment to Purchase Price.
(a) Attached as Exhibit 1.4 is a representative balance sheet of
-----------
the Business as of January 27, 2001. Seller shall, within twenty-one (21)
days of the Closing Date, prepare and deliver to Buyer a balance sheet of
the Business as of the Closing Date (the "Closing Balance Sheet"). Buyer
---------------------
and Seller acknowledge that the January Balance Sheet may differ from the
Closing Balance Sheet. Upon delivery of the Closing Balance Sheet, Seller
shall instruct its accountants to provide Buyer and its accountants and
other representatives with full access to all work papers associated with
the calculation of the Closing Balance Sheet.
(b) Buyer may contest Seller's calculation of the working
capital reflected on the Closing Balance Sheet (the "Closing Working
---------------
Capital") by notifying Seller in writing on or before the tenth (10/th/)
-------
day following Seller's delivery to Buyer of the Closing Balance Sheet (the
"Contest Notice"), which notice shall set forth with particularity the
--------------
reasons for Buyer's disagreement with Seller's calculation of the Closing
Working Capital. In the event Buyer does not so object, Seller's
calculation of the Closing Working Capital shall constitute the final
calculation of the Closing Working Capital. During the ten (10) days
following delivery of the Contest Notice, the parties shall seek to resolve
any disagreement regarding the calculation of the Closing Working Capital
and any such resolution shall be conclusive with respect to the matter so
resolved. If all such disagreements are not resolved by the end of such ten
(10) day period (each an "Unresolved Dispute"), the parties shall appoint
------------------
one of the five largest independent certified public accounting firms as
shall be mutually agreed upon (the "Designated Arbitrator") to resolve any
---------------------
Unresolved Dispute and make a final determination of the Closing Working
Capital. The Designated Arbitrator shall be instructed to make its
determination within sixty (60) days following its retention and such
determination shall be final and binding upon the parties hereto. All fees
and expenses of the Designated Arbitrator shall be allocated between Buyer
and Seller by the Designated Arbitrator in proportion to the resolution of
the Unresolved Dispute.
(c) In the event that the Closing Working Capital, as finally
calculated and determined in accordance with Sections (a) and (b) of this
Section 1.4 (the "Final Closing Working Capital"), is less than $2,250,000,
Seller shall pay to Buyer an amount equal to the difference between
$2,250,000 and the Final Closing Working Capital. In the event that the
Final Closing Working Capital is greater than $2,750,000, Buyer shall pay
to Seller an amount equal to the difference between $2,750,000 and the
Final Closing Working Capital. Any payment required by this paragraph
shall be made within ten (10) days after the completion of the
determination of the Final Closing Working Capital to an account and as
reasonably instructed by the party entitled to receive such payment.
1.5. Allocation of Purchase Price. The aggregate purchase price will be
allocated to the Purchased Assets as agreed by Buyer and Seller in accordance
with applicable accounting and tax principles after consultation by Buyer and
Seller with their respective independent accountants. Buyer and Seller shall,
not later than ninety days after the Closing, execute and
-4-
cause to be filed Form 8594 under the Internal Revenue Code of 1986, as amended,
reflecting such allocation and shall execute and file such other documents as
may be necessary to document such allocation.
1.6. Further Assurances. Each of the parties hereto, before, at and
after the Closing, upon the request from time to time of any other party hereto
and without further consideration, will do each and every reasonable act and
thing as may be necessary or reasonably desirable to consummate the transactions
contemplated hereby and to effect an orderly transfer to Buyer of good title
to, and to put Buyer in actual possession and operating control of the Purchased
Assets, including without limitation: executing, acknowledging and delivering,
and causing to be executed, acknowledged and delivered, assurances, assignments,
powers of attorney and other documents and instruments; furnishing information
and copies of documents, books and records; filing reports, returns,
applications, filings and other documents and instruments with governmental
authorities; and cooperating with the other party hereto (at such other party's
expense, subject to Section 8.2) in exercising any right or pursuing any claim,
whether by litigation or otherwise, other than rights and claims running against
the party from whom or which such cooperation is requested. In addition to the
foregoing, Seller agrees to forward promptly to Buyer any and all payments
received by Buyer in respect of any Purchased Assets after the Closing Date that
rightfully belong to Buyer pursuant to Section 1.1.
2. Closing. The closing of the transactions contemplated hereby
("Closing") shall be held at the offices of Ropes & Xxxx, One International
-------
Place, Boston, Massachusetts, at 2:00 p.m. on February 23, 2001 or on such other
date as Buyer and Seller may agree upon (the "Closing Date").
------------
3. Representations of Seller. Seller represents and warrants to Buyer
that the statements contained in this Section 3 are correct and complete as of
the date of this Agreement, and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Section 3).
3.1. Due Organization, Authorization and Good Standing. Seller is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, has the requisite corporate power and authority
to enter into, execute, deliver and perform this Agreement and any other
instruments of transfer and conveyance (collectively, with this Agreement, the
"Transaction Documents"), and to consummate all transactions contemplated hereby
---------------------
and thereby and has taken all corporate action required by law and its
Certificate of Incorporation and by-laws to authorize such execution, delivery
and performance. This Agreement is, and each of the other Transaction Documents
will upon execution by a duly authorized officer of Seller at the Closing be,
the valid and legally binding obligation of Seller, enforceable against Seller
in accordance with its terms.
3.2. No Violation or Approval. The execution, delivery and performance
of this Agreement and the other Transaction Documents to which it will be a
party and the consummation of the transactions contemplated hereby and thereby
will not (i) result in a breach or violation of, or a default under, its
Certificate of Incorporation or by-laws, any statute or
-5-
constitution applicable to it, or any order, judgment, decree, rule, injunction
or regulation of any court or any governmental agency or body having
jurisdiction over it or its properties, or (ii) result in a breach or violation
of, or a default under, or result in the acceleration of any material agreement,
contract, lease, license, instrument, or other arrangement to which Seller is a
party or by which it is bound or to which any of the Purchased Assets is
subject, except for such breaches, violations or defaults that would not
reasonably be expected to have a material adverse effect on the business,
financial condition, operations or results of operations of the Business. No
consent, approval, order or authorization of, or declaration or filing with, any
governmental authority or other entity is required of, and has not been obtained
or made by, it in connection with the execution and delivery of this Agreement
and the other Transaction Documents or the consummation of the transactions
contemplated hereby and thereby.
3.3. Title to Assets. Seller has good title to all the Purchased
Assets, free and clear of all liens, claims, encumbrances or rights of any other
parties, including without limitation liens for taxes, other than any defects in
title, liens, claims, encumbrances or rights of any other parties actually known
to Xxxxx X. Xxxxxxxxx or Xxxxxxx X. Xxxxxxxxx ("Buyer's Knowledge").
3.4. Litigation. To the actual knowledge of the directors and executive
officers of the Seller ("Seller's Knowledge"), the Seller is not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge relating
directly to the Purchased Assets, other than any such items within Buyer's
Knowledge. To the Seller's Knowledge, Seller is not a party or is threatened to
be made a party to any action, suit, proceeding, hearing, or investigation of,
in, or before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator relating
directly to the Purchased Assets, other than any such items within Buyer's
Knowledge.
3.5. Employee Benefit Matters. Buyer will not assume any "employee
benefit plan" (as such term is defined in the Employee Retirement Income
Security Act (S)3(3) and any other employee benefit plan, program or arrangement
of any kind maintained by Seller. Effective as of the Closing, Seller will be
liable and responsible for continuation coverage obligations under internal
revenue code section 4980B and Part 6 of Title 1 of ERISA ("COBRA") for any
employee of Seller (including dependents of such employees) who is not hired by
Buyer. After Closing and until March 31, 2001, Seller will provide to its
former employees who are hired by Buyer the same health, life, dental, vision
and short and long term disability benefits and coverage as Seller currently
provides for such employees in accordance with the terms of the Transition
Services Agreement (a form of which is attached hereto as Exhibit 5.3).
-----------
3.6. Brokers, Finders, etc. All negotiations relating to this Agreement
and the transactions contemplated hereby have been carried on without the
intervention of any person acting on behalf of Seller in such manner as to give
rise to any valid claim against Seller or Buyer for any brokerage or finder's
commission, fee or similar compensation.
4. Representations of Buyer. Buyer represents and warrants to Seller
that the Statements contained in this Section 4 are correct and complete as of
the date of this Agreement,
-6-
and will be correct and complete as of the Closing Date (as though made then and
as though the Closing Date were substituted for the date of this Agreement
throughout this Section 4).
4.1. Due Organization, Authorization and Good Standing. Buyer is a
limited liability company duly organized, validly existing and in good standing
under the laws of Virginia, has the requisite power and authority to enter into,
execute, deliver and perform this Agreement, the other Transaction Documents,
the Subordinated Promissory Note (a form of which is attached hereto as Exhibit
-------
1.3A) and the Security Agreement (a form of which is attached hereto as Exhibit
----- -------
1.3B), and to consummate all transactions contemplated hereby and thereby and
----
has taken all action required by law and its Articles of Organization and
operating agreement to authorize such execution, delivery and performance. This
Agreement is, and each of the other Transaction Documents, the Subordinated
Promissory Note and the Security Agreement will upon execution thereof by a duly
authorized officer of Buyer at the Closing be, the valid and legally binding
obligation of Buyer, enforceable in accordance with its terms.
4.2. No Violation or Approval. The execution, delivery and performance
of this Agreement and the other Transaction Documents to which it will be a
party and the consummation of the transactions contemplated hereby and thereby
will not result in a breach or violation of, or a default under, its Articles of
Organization or operating agreement, any statute applicable to it, any agreement
to which it is a party or by which it or any of its properties are bound, or any
order, judgment, decree, rule or regulation of any court or any governmental
agency or body having jurisdiction over it or its properties. No consent,
approval, order or authorization of, or declaration or filing with, any
governmental authority or other entity is required of, and has not been obtained
or made by, it in connection with the execution and delivery of this Agreement
and the other Transaction Documents or the consummation of the transactions
contemplated hereby and thereby.
4.3. Brokers, Finders, etc. All negotiations relating to this Agreement
and the transactions contemplated hereby have been carried on without the
intervention of any person acting on behalf of Buyer in such manner as to give
rise to any valid claim against Seller or Buyer for any brokerage or finder's
commission, fee or similar compensation, except for the services provided by
Dominion Partners LLC, a Virginia limited liability company, whose commission,
fee, or similar compensation (including all expenses) have been paid by Buyer.
4.4. Financial Ability to Perform. On or before the date hereof the
Buyer has received a Debt Commitment Letter (as defined below) in an amount
equal to the cash portion of the Purchase Price. At Closing, the Buyer will
have cash funds sufficient as and when needed to pay the Purchase Price, to pay
all fees and expenses of the Buyer incurred in connection with the transactions
contemplated hereby, to provide adequate working capital for the continued
operation of the Business and to pay the Assumed Liabilities in the ordinary
course of business. The Buyer has provided the Company with a commitment letter
from Wachovia Bank, dated as of February 16, 2001, (the "Debt Commitment Letter"
and the financing to be provided thereunder being referred to herein, as the
"Financing"). The obligations to fund the commitment under the Debt Commitment
Letter are not subject to any condition other than as set forth in the Debt
Commitment Letter. The Buyer is not aware of any fact or occurrence that makes
any of
-7-
the assumptions or statements set forth in the Debt Commitment Letter inaccurate
or that causes the Debt Commitment Letter to be ineffective or that precludes
the satisfaction of the conditions set forth in the Debt Commitment Letter. The
Debt Commitment Letter has been duly executed by all parties thereto and is in
full force and effect as of the date hereof. All commitment and other fees
required to be paid under the Debt Commitment Letter on or prior to the date
hereof have been paid. Upon the consummation of the transactions contemplated
hereby, including the Financing, the Buyer will not: (i) be left with
unreasonably small capital or (ii) have incurred debts beyond its ability to pay
such debts as they mature.
5. Conditions Precedent to the Obligations of Buyer. The obligations of
Buyer to purchase the Purchased Assets and to consummate the other transactions
contemplated hereby and by the other Transaction Documents are subject to the
satisfaction on or prior to the Closing Date of each of the following
conditions, unless expressly waived by Buyer at the Closing:
5.1. Due Authorization. This Agreement and the other Transaction
Documents shall have been duly authorized by Seller, including without
limitation by Seller's board of directors, and duly executed and delivered by
Seller.
5.2. Xxxx of Sale, Assignment and Assumption. Seller shall have
executed and delivered to Buyer a xxxx of sale substantially in the form of
Exhibit 5.2A which is attached hereto, as well as an assignment and assumption
------------
agreement substantially in the form of Exhibit 5.2B which is attached hereto.
------------
5.3. Transition Services Agreement. Seller shall have entered into a
Transition Services Agreement with attached Statements of Work substantially in
the form of Exhibit 5.3 which is attached hereto.
-----------
5.4. Operating Agreement. Seller shall have entered into an Operating
Agreement substantially in the form attached as Exhibit 5.4.
-----------
5.5. Legal Opinion. Buyer shall have received from counsel to the
Seller an opinion in a form reasonably acceptable to Buyer.
5.6. Other Obligations. Seller shall have performed and complied with
all material agreements and conditions required by any Transaction Documents to
be performed or complied with by it at or prior to the Closing Date.
5.7. Representations and Warranties. The representations and warranties
of Seller in this Agreement or in any written statement, listing or certificate
furnished pursuant to this Agreement shall be true and correct in all material
respects as of the Closing Date as if made on and as of the Closing Date and
Buyer shall have received a certificate of Seller signed by an executive officer
of Seller to the foregoing effect.
5.8. Injunctions, etc. No action or proceeding shall have been
instituted prior to or on the Closing Date before any court or governmental body
or authority pertaining to the
-8-
transactions contemplated by this Agreement or the other Transaction Documents,
the result of which could prevent, curtail or make illegal the consummation of
such transactions.
5.9. General. All instruments and legal and corporate proceedings in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents shall be reasonably satisfactory in form and substance to
Buyer, and Buyer shall have received counterpart originals, or certified or
other copies, of all documents, including without limitation records of
corporate proceedings, that it may reasonably request in connection therewith.
6. Conditions Precedent to Obligations of Seller. Seller's obligations
to sell the Purchased Assets to Buyer and to consummate the other transactions
contemplated hereby and by the other Transaction Documents are subject to the
satisfaction on or prior to the Closing Date of each of the following
conditions, unless expressly waived by Seller at or prior to Closing:
6.1. Due Authorization. This Agreement and, to the extent applicable,
the other Transaction Documents shall have been duly authorized by Buyer,
including without limitation by Buyer's board of managers, and duly executed and
delivered by Buyer.
6.2. Subordinated Promissory Note. Buyer shall have executed and
delivered to Buyer the Purchase Note in the form of Exhibit 1.3.
-----------
6.3. Assignment and Assumption. Buyer shall have executed and delivered
to the Buyer an assignment and assumption agreement substantially in the form of
Exhibit 5.2B which is attached hereto covering those liabilities of Seller
------------
assumed by Buyer pursuant to Section 1.2 hereof.
6.4. Transition Services Agreement. Buyer shall have entered into a
Transition Services Agreement with attached Statements of Work substantially in
the form of Exhibit 5.3.
-----------
6.5. Operating Agreement. Buyer shall have entered into an Operating
Agreement substantially in the form attached hereto as Exhibit 5.4.
-----------
6.6. Legal Opinion. Seller shall have received from counsel to the
Buyer an opinion in a form reasonably acceptable to Seller.
6.7. Payment of Purchase Price. Buyer shall have delivered the Purchase
Price specified to the Seller.
6.8. Other Obligations. Buyer shall have performed and complied with
all agreements and conditions required by any Transaction Document to be
performed or complied with by Buyer at or prior to the Closing Date.
6.9. Representations and Warranties. The representations and warranties
of Buyer in this Agreement or in any written statement, listing or certificate
furnished pursuant to this Agreement shall be true and correct in all material
respects as of the Closing Date as if made on
-9-
and as of the Closing Date and Seller shall have received a certificate of Buyer
signed by the President of Buyer to the foregoing effect.
6.10. Injunctions, etc. No action or proceedings shall have been
instituted prior to or at the Closing Date before any court or governmental body
or authority pertaining to the transactions contemplated by this Agreement or
the other Transaction Documents, the result of which could prevent, in any way
limit or make illegal the consummation of any such transactions.
6.11. General. All instruments and legal and corporate proceedings in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents shall be reasonably satisfactory in form and substance to
Seller, and Seller shall have received counterpart originals, or certified or
other copies, of all documents, including without limitation records of
corporate proceedings, that it may reasonably request in connection therewith.
7. Covenants of the Parties.
7.1. Access to Premises and Information. On, prior to and after the
Closing Date, each party hereto will permit any other party hereto and each of
its authorized representatives to have reasonable access during normal operating
hours to records in possession of such party that relate in any manner to the
conduct or operations on or prior to the Closing Date of the Business, including
without limitation records in respect of accounts payable, bank statements,
financial statements and general ledgers.
7.2. Non-Disclosure, Announcements, etc. Except as otherwise explicitly
provided herein, each party hereto represents and warrants that it has not, and
covenants and agrees that it will not for a period of one year after the
Closing, disclose to any other party, orally or in writing, formally or
informally, any of the terms and conditions of the Transaction Documents and the
transactions contemplated hereby and thereby (although the existence of the
Transaction Documents and the sale of the Business and the other transactions
contemplated by the Transaction Documents may be disclosed, subject to the next
sentence) without the prior written consent of the other, which consent shall
not unreasonably be withheld. Formal announcements by either party hereto of
the transactions contemplated hereby and by the other Transaction Documents must
be approved in advance by the other party, which approval will not unreasonably
be withheld, it being understood that the consummation of such transactions will
be announced promptly after the Closing.
No provisions of this Section 7.2 shall be construed as prohibiting the
following disclosures: (i) disclosures to appropriate persons of such
information as may be legally required for securities, tax, accounting or other
reporting purposes, (ii) disclosures with respect to the direction of
communications to Seller, (iii) disclosures to employees or independent
contractors concerning changes in their status and/or benefits, including
without limitation Buyer's communications to employees of the Business
concerning the transactions contemplated in this Agreement (iv) confidential
disclosures to legal counsel, creditors and independent accountants, (v)
disclosures to corporate parents and other corporate affiliates, (vi)
disclosures pursuant to the
-10-
terms of an order of a court or other governmental authority of competent
jurisdiction, (vii) disclosures required in connection with legal proceedings or
(viii) disclosures of matters of which there is public knowledge other than as a
result of disclosures made in breach hereof. Buyer and Seller agree to cooperate
with one another in good faith with respect to any discussions which Buyer may
have with any clients, vendors or others having business relationships with
Seller, relating to the Business or the transactions contemplated hereby.
7.3. Agreement Not to Compete, Not to Solicit. For a period of one year
after the Closing Date, the Seller and its affiliates (as such term is defined
in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act
of 1934, as amended ("Affiliates") shall not, without the prior consent of the
----------
Buyer, provide services which are substantially similar to those services
provided by Buyer to any customer set forth on Sections (a) and (d) Schedule
--------
7.3A attached hereto, or any Affiliates of such customer; and the Buyer and its
----
Affiliates, shall not, without the prior consent of the Seller, provide services
which are substantially similar to those services provided by Seller to any
client of Seller, or any Affiliates of such client, that Buyer (including its
equity holders, directors, officers and employees) was aware of as of the
Closing Date as a result of work performed for Seller or its Affiliates. For a
period of one year after the Closing Date, the Seller and Buyer shall not, and
shall each cause its Affiliates not to, either directly or indirectly as a
stockholder, investor, partner, director, officer, employee or otherwise,
solicit or attempt to induce any person employed by the other party or its
Affiliates as of the date hereof to terminate his or her employment with such
party or its Affiliates, except, in the case of the Buyer, for the employees
listed on Schedule 7.3B attached hereto, provided they remain employed by Buyer
-------------
after the Closing Date.
7.4. Conduct of Business Prior to Closing. The Buyer and the Seller
each covenant and agree to operate the Business in the ordinary course of
business during the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement or the Closing Date, unless the
Buyer and the Seller shall otherwise agree.
7.5. Employment Offers. On the Closing Date, the Buyer shall deliver to
each employee listed on Schedule 7.3B a letter substantially in the form
-------------
attached as Exhibit 7.5 offering such employee employment with the Buyer and
-----------
requiring the employee, as a condition to accepting such employment with the
Buyer, to agree to waive any claims against Seller with respect to any and all
accrued vacation time earned while the employee was employed by the Seller
("Accrued Vacation Time") in exchange for an agreement from Buyer to assume any
---------------------
liabilities of Seller with respect to such Accrued Vacation Time.
Notwithstanding anything to the contrary in this Agreement or the Transaction
Documents, Buyer agrees to assume any and all liabilities of the Seller or
Parent with respect to any such Accrued Vacation Time and agrees to indemnify,
defend and hold harmless the Seller and each of its directors, officers,
shareholders and Affiliates against and in respect of all Losses (as defined in
Section 8.2(c)) after the Closing arising directly from the Accrued Vacation
Time. Buyer shall use its best efforts to obtain the counter-signature of each
employee who receives an offer letter, evidencing such employee's acceptance of
the terms set forth therein.
-11-
7.6. Use of Name. Seller shall cause Parent to file the papers
necessary to dissolve Align360, Inc., a Delaware corporation and wholly-owned
subsidiary of Parent, by the end of the next business day following the Closing
Date, and shall take all other actions reasonably requested by Buyer to allow
Buyer to make use of the name "Align360".
8. Indemnification.
8.1. Survival of Representations and Warranties. All of the
representations and warranties contained herein or in any document, certificate
or other instrument required to be delivered hereunder shall survive the Closing
and continue in full force and effect until December 31, 2001, except with
respect to those representations and warranties set forth in Section 3.1, which
shall not expire. The termination of any such representation and warranty,
however, shall not affect any claim for any breach of any representation or
warranty if written notice thereof is given to the breaching party or parties
prior to such termination date.
8.2. General Indemnity. From and after Closing, and subject to Section
8.3:
(a) the Seller hereby agrees to indemnify, defend and hold
harmless the Buyer and each of its directors, officers, shareholders and
Affiliates (each, in its capacity as an indemnified party, an "Indemnified
-----------
Party") against and in respect of all Losses (as defined below) after the
-----
Closing resulting from: (i) any breach of any representation or warranty
made by the Seller herein or in any certificate delivered pursuant to this
Agreement, and (ii) any breach by the Seller of any covenant, agreement or
obligation to be performed by it hereunder; and
(b) the Buyer hereby agrees to indemnify, defend and hold
harmless the Seller and each of its directors, officers, shareholders and
Affiliates (each, in its capacity as an indemnified party, an "Indemnified
Party") against and in respect of all Losses after the Closing resulting
from: (i) any breach of any representation or warranty made by the Buyer
herein or in any certificate delivered pursuant to this Agreement, (ii) any
breach by the Buyer of any covenant, agreement or obligation to be
performed by it hereunder and (iii) any failure to pay any Assumed
Liabilities.
(c) The term "Losses" means any and all damages, deficiencies,
------
awards, assessments, amounts paid in good faith settlement, judgments,
fines, penalties, costs and expenses (including reasonable legal costs and
expenses).
The applicable Indemnified Party shall provide prompt written notice for
any claim made or proposed to be made for indemnification under this Section
8.2, whether or not arising out of a claim by a third party.
8.3. Limitations on Indemnity. Notwithstanding the foregoing, no claim
may be made or suit instituted under this Section 8 with respect to any breach
(or purported breach) of representation or warranty after December 31, 2001,
except for Reserved Claims. The term "Reserved Claims" shall mean all claims as
---------------
to which the Indemnified Party has given any indemnifying party reasonably
specific written notice (in light of the facts then known) on or
-12-
prior to May 31, 2001. No party shall be liable under this Section 8, and no
claim for indemnification hereunder shall be asserted, for any loss of profits
or consequential or incidental damages. In addition, no claim may be made by any
party pursuant to this Section 8 with respect to any breach of one or more
representations or warranties unless the aggregate amount of all Losses incurred
by such party as a result of such breaches that would, but for the limitations
contained in this sentence, be indemnifiable hereunder exceeds $100,000, in
which case the indemnifying party's liability, if any, hereunder with respect to
such claims shall only be for any amount of such aggregate indemnifiable Losses
in excess of such $100,000 deductible amount. In addition, no party shall be
liable to any Indemnified Party pursuant to this Section 8 for Losses of the
types described in Sections 8.2(a)(i) or 8.2(b)(i) to the extent that the total
liability for such indemnifying party hereunder for such breach of
representation or warranty claims would exceed $1,000,000. The amount of any
indemnification payment under this Section 8 shall be reduced by the present
value of any tax benefit (including, without limitation, any increase in tax
basis) received by the Indemnified Party (or a related entity) resulting from
the Loss. The foregoing time and dollar limitations on indemnification shall not
apply to any breach of any covenant contemplated by this Agreement to be
performed after the Closing. Notwithstanding the foregoing, the provisions
contained in this Section 8.3 shall not apply to any Losses of the type
described in Section 8.2(b)(iii).
8.4. Third Party Claims. Promptly after the receipt by any Indemnified
Party of notice of the commencement of any action against such Indemnified Party
by a third party, such Indemnified Party shall, if a claim with respect thereto
is or may be made against any party pursuant to this Section 8, give such
indemnifying party written notice thereof. The failure to give such notice
shall not relieve any indemnifying party from any obligation hereunder except
where, and then solely to the extent that, such failure actually prejudices the
rights of such indemnifying party. Such indemnifying party shall have the right
to defend such claim, at such indemnifying party's expense and with counsel of
its choice reasonably satisfactory to the Indemnified Party. If the
indemnifying party assumes the defense of such claim, the Indemnified Party
agrees to cooperate in such defense. So long as the indemnifying party is
conducting the defense of such claim as provided in this Section 8.4, the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and may participate in defense of such claim, and neither the Indemnified Party
nor the indemnifying party will consent to the entry of any judgment or enter
into any settlement with respect to such claim without the prior written consent
of the other, which consent will not be unreasonably withheld. In the event the
indemnifying party does not or ceases to conduct the defense of such claim as so
provided, (i) the Indemnified Party may defend against, and consent to the entry
of any judgment or enter into any settlement with respect to, such claim in any
manner it may reasonably deem to be appropriate, (ii) subject to the limitations
set forth in Section 8.3, the indemnifying party will reimburse the Indemnified
Party promptly and periodically for the costs of defending against such claim,
including reasonable attorneys' fees and expenses against reasonably detailed
invoices, and (iii) the indemnifying party will remain responsible for any
Losses the Indemnified Party may suffer as a result of such claim to the full
extent provided in this Section 8.
8.5. Exclusive Remedy. From and after Closing, indemnification pursuant
to (and subject to the conditions of) this Section 8 shall be the sole and
exclusive remedy of the parties and their
-13-
respective Affiliates with respect to any breach of this Agreement and each
party hereby waives, to the fullest extent permitted under applicable law, and
agrees not to assert after Closing any other claim or action in respect of any
such breach.
9. Post-Closing Matters. Buyer will notify the employees set forth on
Schedule 7.3B of the sale of the Business and will offer each such employee
-------------
employment on terms substantially similar to those previously offered by Seller.
10. Termination.
10.1. Termination of Agreement. The parties may terminate this Agreement
as provided below:
(a) the parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;
(b) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing if the Closing shall
not have occurred on or before February 27, 2001 because the Seller has
breached any representation or warranty contained in Section 3 of this
Agreement; and
(c) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing if the Closing shall
not have occurred on or before February 27, 2001 because the Buyer has
breached any representation or warranty contained in Section 4 of this
Agreement.
10.2. Effect of Termination. If any party terminates this Agreement
pursuant to Section 10.1 above, all rights and obligations of the parties
hereunder shall terminate without any liability of any party to any other party
(except for any liability of any party then in breach).
11. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be sent by hand delivery or certified
mail, return receipt requested, postage prepaid, addressed as follows or to such
other address or addresses of which the respective party shall have notified the
other party.
If to Buyer, to
Xxxxx X. Xxxxxxxxx
and
Xxxxxxx X. Xxxxxxxxx
000 Xxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Telephone: 000 000-0000 and 000 000-0000
-14-
Telecopier: 000 000-0000
With a copy to:
Xxxx X. XxXxxxx, Esq.
XxXxxxx Xxxx, a Professional Corporation
000 Xxxx Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxxxxxxx, XX 00000
Telephone: 000 000-0000
Telecopier: 804 783-2294
If to Seller, to it at
Renaissance Worldwide, Inc.
00 Xxxxxx Xxx
Xxxxxxx, XX 00000
Attn: General Counsel
Telephone: 000-000-0000
Telecopier: 000-000-0000
With a copy to:
Xxxxx X. Xxxxxxx
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Telephone: 000-000-0000
Telecopier: 000-000-0000
-15-
12. Expenses of Transaction. Whether or not the transactions provided
for herein are consummated, each of the parties hereto will assume and bear all
expenses, costs and fees incurred by such party in connection with the
preparation, negotiation and execution of this Agreement and the other
Transaction Documents.
13. Entire Agreement. The agreement of the parties that is comprised of
this Agreement, the Exhibits and Schedules hereto, the other Transaction
Documents and the other documents referred to herein sets forth the entire
agreement and understanding between the parties and supersedes any prior written
agreement or understanding and any prior or contemporaneous oral agreement or
understating relating to the subject matter of this Agreement.
14. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the successors and permissible assigns of
Seller and Buyer. Prior to the Closing, this Agreement and any rights hereunder
shall not be assigned, hypothecated or otherwise transferred by any party hereto
without the prior written consent of the other parties hereto, which consent
shall not unreasonably be withheld.
15. Governing Law, etc. This Agreement shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts.
16. Waiver of Jury Trial. Each of Seller and Buyer hereby irrevocably
waive, to the fullest extent permitted by law, all rights to trial by jury in
any action, proceeding, or counterclaim (whether based upon contract, tort or
otherwise) arising out of or relating to this Agreement or any of the
transactions contemplated hereby.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original for all purposes and all
of which together shall constitute one and the same instrument.
18. Headings. The headings contained in this Agreement are inserted
only as a matter of convenience and for reference and in no way define, limit,
or describe the scope or intent of this Agreement.
-16-
IN WITNESS WHEREOF, Seller and Buyer and each of the persons listed below
have caused this Agreement to be executed under seal by their respective duly
authorized officers as of the day and year first written above.
RENAISSANCE WORLDWIDE IT
CONSULTING SERVICES, INC.
By: /s/ G. Xxxx Xxxxxx
----------------------------------
Name: G. Xxxx Xxxxxx
Title: President
GM ACQUISITION COMPANY, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Manager
EXHIBIT 1.4
Estimated Balance Sheet
for the BSDG portion of Align360
as of January 27, 2001
Renaissance Worldwide, Inc.
Balance Sheet - Consolidated
January 27, 2001 BSDG 1/27/01
-----------------------------------------------------------
ASSETS
Current Assets
Cash and Cash Equivalents 0
Accounts Receivable, net (total) 3,345,498
Deferred income taxes 0
Other Current Assets 0
-----------
Total Current Assets 3,345,498
-----------
Fixed Assets (net) 156,455
Goodwill & other Intangible Assets (net) 12,222,800
Other Assets 0
Deferred income taxes 0
-----------
Total Assets 15,724,753
===========
LIABILITIES AND EQUITY
Current Liabilities
Line of Credit 0
Current portion of long-term debt 0
Accounts Payable 50,000
Accrued Salaries, Wages, & Fees 767,814
Total other accrued expenses 0
-----------
Total Current Liabilities 817,814
-----------
Total Liabilities 817,814
-----------
Total Stockholders' Equity 14,906,939
-----------
Total Liabilities and Stockholders' Equity 15,724,753
===========
The parties understand and agree that this Balance Sheet represents both
parties' good faith estimates of the actual assets and liabilities of the
Business on January 27, 2001. The parties further agree that the sole purpose
of this Balance Sheet is to provide a representative snap shot of the Balance
Sheet to be acquired at Closing on February 23, 2001. The Balance Sheet
acquired at Closing will be the actual Balance Sheet on that date, and Seller
agrees to provide the Closing Balance sheet to Buyer within 21 days of Closing.
Both parties agree that it is their intention that the Balance Sheet at Closing
shall not be materially different than this Balance Sheet. Accordingly, the
parties agree that there will be no post-closing working capital adjustment to
either party unless the actual working capital turned over at Closing is less
------
than $2,250,000 or greater than $2,750,000, in which case the working capital
adjustment shall be calculated in accordance with Section 1.4 of this Agreement.
