LAYN Layne Christensen Company (delisted)

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On February 8, 2017, Layne Christensen Company ("Layne") and certain of its subsidiaries (collectively, the "Company"), entered into an Asset Purchase Agreement (the "Purchase Agreement") to sell substantially all of the assets of Layne's Heavy Civil business for $10.1 million, subject to certain working capital adjustments.  The purchaser of the Heavy Civil business is Reycon Partners LLC (the "Buyer"), which is owned by a group of private investors, including members of the current Heavy Civil senior management team.  

Subject to certain exceptions, the Buyer will assume the Company's obligations under all the job contracts of the Heavy Civil business that are open as of the date of the Purchase Agreement and the Company will retain any other obligations of the business, including warranty obligations for the business' job contracts that were completed as of the date of the Purchase Agreement.

The Buyer has the option to pay up to $3.7 million of the consideration in the form of Layne common stock currently owned by the owners of the Buyer (valued at the weighted average price of Layne's common stock for the 10 trading days immediately prior to the closing date).  The total purchase price for the assets will increase or decrease on a dollar-for-dollar basis to the extent the Heavy Civil business' working capital is more or less than an agreed upon target working capital amount.  In addition, Layne and the Buyer have agreed to split equally any amounts received with respect to a $3.5 million outstanding receivable related to a job contract that is substantially completed.

The Purchase Agreement contains customary representations and warranties, closing conditions and indemnification provisions.  The Company and Buyer have agreed to mutual non-solicitation of employees and non-competition covenants for a period of two years after the closing of the Purchase Agreement.

The Asset Purchase Agreement may be terminated under specific circumstances described therein, including by mutual written consent, in connection with a material breach of the agreement by a party thereto.  Subject to satisfaction of customary closing conditions, including obtaining any required consents and approvals, the transaction is expected to close in approximately 90 days.