UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_____________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
July 31,
2006
Date
of
Report (Date of earliest event reported)
Huron
Consulting Group Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
000-50976
|
01-0666114
|
|
(State
or other jurisdiction
|
(Commission
|
(IRS
Employer
|
|
of
incorporation or organization)
|
File
Number)
|
Identification
Number)
|
550
West Van Buren Street
Chicago,
Illinois
60607
(Address
of principal executive offices)
(Zip
Code)
(312)
583-8700
(Registrant’s
telephone number, including area code)
_____________________
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.01. Completion
of Acquisition or Disposition of Assets.
On
August 1, 2006, we announced that we had acquired Document Review
Consulting Services LLC pursuant to a Membership Interest Purchase and
Sale
Agreement by and among Huron Consulting Group Holdings LLC, Document
Review
Consulting Services LLC, and Robert Rowe, dated as of July 31, 2006 (the
“Agreement”), for an aggregate purchase price of approximately
$17.4 million, consisting of $2.0 million cash paid at closing and
approximately $15.4 million of debt and liabilities assumed, $14.4 million
of which we immediately discharged. In addition, we may be required to
pay
additional purchase consideration if the acquired business meets specified
future performance targets. This transaction was closed on July 31,
2006.
The
foregoing description is qualified in its entirety by reference to the
text of
the Agreement, a copy of which is filed as exhibit 2.1 to this Current
Report on
Form 8-K.
Also
on
August 1, 2006, we announced that we had acquired Aaxis
Technologies.
In
addition to historical information, this Current Report on Form 8-K contains
forward-looking statements as defined in Section 21E of the Securities
Exchange
Act of 1934 and the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are identified by words such as “may,” “should,”
“expects,” “plans,” “anticipates,” “believes,” “estimates,” or “continue.” These
forward-looking statements reflect our current expectation about our future
performance or achievements. These statements involve known and unknown
risks,
uncertainties and other factors that may cause actual performance or
achievements to be materially different from any expressed by these
forward-looking statements. Please see “Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2005 and in other documents that
we
file with the Securities and Exchange Commission for a complete description
of
the material risks we face.
Item
9.01. Financial
Statements and Exhibits.
| (c) |
Exhibits
|
|
Exhibit
2.1
|
Membership
Interest Purchase and Sale Agreement by and among Huron Consulting
Group
Holdings, LLC, Document Review Consulting Services LLC, and
Robert Rowe,
dated as of July 31, 2006.
|
|
Exhibit
99.1
|
Press
release, dated August 1, 2006, announcing the purchases of Document
Review Consulting Services, LLC and Aaxis
Technologies.
|
-
1
-
SIGNATURE
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 hereunto
duly authorized.
|
Huron
Consulting Group Inc.
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|||
|
(Registrant)
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|||
|
Date:
|
August 3,
2006
|
/s/
Gary L. Burge
|
|
|
Gary
L. Burge
|
|||
|
Vice
President,
|
|||
|
Chief
Financial Officer and
Treasurer
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-
2
-
EXHIBIT
2.1
MEMBERSHIP
INTEREST
PURCHASE
AND SALE AGREEMENT
by
and among
HURON
CONSULTING GROUP HOLDINGS, LLC
DOCUMENT
REVIEW CONSULTING SERVICES LLC,
and
ROBERT
ROWE
Dated
as of July 31, 2006
TABLE
OF CONTENTS
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Page
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||
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ARTICLE
I
\
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DEFINITIONS;
INTERPRETATION
|
1
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1.1
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Definitions
|
1
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1.2
|
Incorporation
by Reference of Other Terms
|
5
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1.3
|
Interpretation
|
5
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ARTICLE
II
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SALE
AND PURCHASE OF MEMBERSHIP INTERESTS
|
6
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2.1
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Transfer
of Membership Interests
|
6
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2.2
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Cash
Purchase Price
|
6
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2.3
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Annual
Earn-Out Payments
|
6
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2.4
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Cumulative
Earn-Out Payment
|
7
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2.5
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Earn-Out
Statements
|
8
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2.6
|
Purchase
Price Allocation
|
9
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ARTICLE
III
|
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND SELLER
|
9
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3.1
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Organization
of the Company
|
9
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3.2
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Authorization
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9
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3.3
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No
Conflict or Violation
|
9
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3.4
|
Consents
and Approvals
|
10
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3.5
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Binding
Effect
|
10
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3.6
|
Ownership
of the Company
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10
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|
3.7
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Tax
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10
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3.8
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Business
of the Company
|
10
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3.9
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Customers
|
10
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3.10
|
Representations
and Warranties of Nextra
|
11
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3.11
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Employee
Benefit Plans
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11
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3.12
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No
Brokers
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11
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ARTICLE
IV
|
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
|
11
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4.1
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Organization
of Purchaser
|
11
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4.2
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Authorization
|
11
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4.3
|
No
Conflict or Violation
|
11
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4.4
|
Consents
and Approvals
|
11
|
|
4.5
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Binding
Effect
|
12
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-
i
-
TABLE
OF CONTENTS
(continued)
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Page
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||
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4.6
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No
Brokers
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12
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ARTICLE
V
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COVENANTS
OF SELLER AND PURCHASER
|
12
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5.1
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Implementing
Agreement
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12
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5.2
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Access
to Information
|
12
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5.3
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Exercise
of Rights under the Nextra Asset Purchase Agreement; Conduct
of Business
|
13
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5.4
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Updated
Disclosure Schedules
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14
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5.5
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Exclusivity
|
14
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5.6
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Availability
of Financing
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14
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ARTICLE
VI
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CONDITIONS
PRECEDENT TO OBLIGATIONS OF PURCHASER
|
14
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6.1
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Consents
and Approvals
|
15
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6.2
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Warranties
True as of Both Present Date and Closing Date
|
15
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6.3
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Compliance
with Agreements and Covenants
|
15
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6.4
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Documents
|
15
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6.5
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Employee
Acceptance of Employment with Purchaser
|
15
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6.6
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Actions
or Proceedings
|
15
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6.7
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Acquisition
of Nextra by the Company
|
15
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6.8
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Senior
Management Agreement
|
15
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ARTICLE
VII
|
CONDITIONS
PRECEDENT TO OBLIGATIONS OF SELLER
|
16
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7.1
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Warranties
True as of Both Present Date and Closing Date
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16
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7.2
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Compliance
with Agreements and Covenants
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16
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7.3
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Documents
|
16
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7.4
|
Consent
and Approvals
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16
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7.5
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Actions
or Proceedings
|
16
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7.6
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Acquisition
of Nextra by the Company
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16
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7.7
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Senior
Management Agreement
|
16
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ARTICLE
VIII
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CLOSING
|
16
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8.1
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Closing
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16
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8.2
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Conveyances
at Closing
|
17
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ARTICLE
IX
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[INTENTIONALLY
OMITTED]
|
18
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ARTICLE
X
|
TERMINATION
|
18
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-
ii
-
TABLE
OF CONTENTS
(continued)
|
Page
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||
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10.1
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Termination
|
18
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10.2
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Effect
of Termination
|
19
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ARTICLE
XI
|
ACTIONS
BY SELLER AND PURCHASER AFTER THE CLOSING
|
19
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11.1
|
Tax
Matters
|
19
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11.2
|
Availability
of Records
|
19
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11.3
|
Non-Competition
Undertaking
|
20
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ARTICLE
XII
|
SURVIVAL
AND INDEMNIFICATION
|
20
|
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12.1
|
Survival
of Representations
|
20
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12.2
|
Seller
Indemnifications
|
21
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12.3
|
By
Purchaser
|
21
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12.4
|
Notice
of Claims
|
21
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12.5
|
Assumption
of Defense of Third Party Claims
|
22
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12.6
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Settlement
of Third Party Claims
|
22
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12.7
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Limitations
on Indemnity Payments
|
23
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12.8
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Characterization
of Indemnity Payments
|
23
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12.9
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Offset
Rights
|
23
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12.10
|
Mitigation;
Exclusive Remedy
|
23
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ARTICLE
XIII
|
MISCELLANEOUS
|
24
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13.1
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Assignment
|
24
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13.2
|
Amendment
|
24
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13.3
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Notices
|
24
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13.4
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Waivers
|
25
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13.5
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No
Third Party Beneficiaries
|
25
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13.6
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Publicity
|
26
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13.7
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Further
Assurances
|
26
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13.8
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Severability
|
26
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13.9
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Entire
Understanding
|
26
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13.10
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Applicable
Law
|
26
|
|
13.11
|
Jurisdiction
of Disputes; Waiver of Jury Trial
|
26
|
|
13.12
|
Counterparts
|
27
|
-
iii
-
TABLE
OF CONTENTS
(continued)
|
Page
|
||
|
13.13
|
Facsimile
Signatures
|
27
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|
13.14
|
Expenses
|
27
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|
13.15
|
Transfer
Taxes and Fees
|
27
|
|
13.16
|
Representation
of Counsel; Mutual Negotiation
|
27
|
-
iv
-
EXHIBITS
|
EXHIBIT
|
|
|
EXHIBIT
A
|
FORM
OF ASSIGNMENT OF MEMBERSHIP INTERESTS
|
|
EXHIBIT
B
|
FORM
OF PROMISSORY NOTE
|
|
EXHIBIT
C
|
FORM
OF SENIOR MANAGEMENT AGREEMENT
|
SCHEDULES
|
Schedule
2.3:
|
Annual
Earn-Out Percentage
|
|
Schedule
3.3:
|
Compliance
with
Law
|
|
Schedule
3.4:
|
Seller
Consents and Approvals
|
|
Schedule
3:9:
|
Material
Customers
|
|
Schedule
4.4:
|
Purchaser
Consents and Approvals
|
|
Schedule
6.1:
|
Required
Consents
|
MEMBERSHIP
INTEREST PURCHASE AND SALE AGREEMENT
This
MEMBERSHIP INTEREST PURCHASE
AND SALE AGREEMENT
(this
“Agreement”),
dated
as of July 31, 2006, is entered into by and among Huron Consulting Group
Holdings, LLC, a Delaware limited liability company (“Purchaser”),
Document Review Consulting Services LLC, a Delaware limited liability company
(the “Company”),
and
Robert Rowe (the “Seller”).
Certain capitalized terms used herein are defined in Article
I.
W
I T N E S S E T H:
WHEREAS,
Seller owns all of the outstanding membership interests in the Company (the
“Membership
Interests”);
WHEREAS,
the Company is party to an Asset Purchase Agreement, dated July 31, 2006
(the
”Nextra
Asset Purchase Agreement”)
with
Nextra Litigation Solutions, LLC, a South Carolina limited liability company
(“Nextra”),
and
Nexsen Pruet Adams Kleemeier, PLLC, a South Carolina professional limited
liability company (“Nexsen
Pruet”),
pursuant to which, subject to the terms and conditions thereof, the Company
has
agreed to acquire substantially all of the assets of Nextra; and
WHEREAS,
Seller desires to sell to Purchaser all Membership Interests in the Company
and
Purchaser desires to acquire said Membership Interests in the Company from
Seller, upon the terms and subject to the conditions of this Agreement,
immediately following the transactions contemplated by the Nextra Asset Purchase
Agreement;
NOW
THEREFORE, in consideration of the foregoing and the respective covenants
and
agreements contained herein and for other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE
I
DEFINITIONS;
INTERPRETATION
1.1 Definitions.
(a) Definitions.
The following terms shall have the following indicated meanings for purposes
of
this Agreement:
“Affiliate”
shall
mean, with respect to a Person, any Person that directly, or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with the specified Person. For the purposes of this definition,
“control”
(including, with the correlative meaning, the term “controlled”
and
“is
under common control”)
shall
mean the possession, directly or indirectly, of the power to direct or cause
the
direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.
“Agreement”
shall
mean this Membership Interest Purchase and Sale Agreement, including all
exhibits and schedules hereto, as it may be amended from time to time in
accordance with its terms.
“Assignment
of Membership Interests”
shall
mean the Assignment of Membership Interests in the form attached hereto as
Exhibit
A,
to be
executed at Closing by Purchaser and Seller.
“Benefit
Plan”
each
“employee benefit plan” (as defined in sections 3(3) of ERISA), and each
retirement or deferred compensation plan, incentive compensation plan, stock
plan, retention plan or agreement, unemployment compensation plan, vacation
pay,
change in control, severance pay, bonus or benefit arrangement, insurance
or
hospitalization program or any fringe benefit arrangements for any current
or
former employee, director, consultant or agent, whether pursuant to contract,
arrangement, custom or informal understanding which does not constitute an
employee benefit plan, which is sponsored, maintained or contributed to by
the
Company or any of its ERISA Affiliates, with respect to which the Company
or any
of its ERISA Affiliates has any obligation to contribute or with respect
to
which the Company or any of its ERISA Affiliates may have any
liability.
“Business”
shall
mean the document review, database processing and database hosting business
conducted by Nextra prior to the closing of the Nextra Asset Purchase Agreement
and by the Company thereafter (as such business may be expanded following
the
Closing Date).
“Business
Day”
shall
mean any day of the year, other than a Saturday, a Sunday or a day on which
banks in South Carolina are authorized or obligated by law or executive order
to
close.
“Business
Revenue”
shall
have the meaning set forth in Section
2.4(b).
“Calculation
Period”
shall
have the meaning set forth in Section
2.3(b).
“Claim”
shall
have the meaning set forth in Section
12.4.
“Claim
Notice”
shall
have the meaning set forth in Section
12.4.
“Closing”
shall
have the meaning set forth in Section
8.1.
“Closing
Date”
shall
have the meaning set forth in Section
8.1.
“Closing
Date Cash Payment”
shall
have the meaning set forth in Section
2.2.
“Closing
Date Expense Payment”
shall
have the meaning set forth in Section
13.14.
“Code”
shall
mean the Internal Revenue Code of 1986, as amended.
“Company”
shall
have the meaning set forth in the preamble to this Agreement.
“Confidentiality
Agreement”
means
the Confidentiality and Non-Disclosure Agreement, dated July 5, 2006, between
Purchaser and Rowe.
2
“Contract”
shall
mean any contract, lease, commitment, understanding, sales order, purchase
order, agreement, indenture, mortgage, note, bond, warrant, instrument or
license.
“Cumulative
Earn-Out Payment”
shall
have the meaning set forth in Section
2.4(a).
“Cumulative
Earn-Out Period”
shall
have the meaning set forth in Section
2.4(a).
“Cumulative
EBITA Margin”
shall
have the meaning set forth in Section
2.4(b).
“Disclosure
Schedules”
shall
mean, collectively, the Purchaser Disclosure Schedules and the Seller
Disclosures Schedules.
“Earn-Out
Calculation Statements”
shall
have the meaning set forth in Section
2.5.
“Earn-Out
Payment”
shall
have the meaning set forth in Section
2.3(a).
“Earn-Out
Period”
shall
have the meaning set forth in Section
2.3(a).
“EBITA”
shall
have the meaning set forth in Section
2.3(b).
“ERISA”
shall
mean the Employee Retirement Income Security Act of 1974, as
amended.
“ERISA
Affiliate”
means,
with respect to any Person, any corporation, trade or business which, together
with such person, is a member of a controlled group of corporations or a
group
of trades or businesses under common control within the meaning of section
414
of the Code.
“GAAP”
shall
mean United States generally accepted accounting principles.
“Governmental
Authority”
shall
mean the government of the United States or any state or political subdivision
thereof and any entity, body or authority exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including the Pension Benefit Guaranty Corporation and other quasi-governmental
entities established to perform such functions.
“Indemnified
Party”
shall
have the meaning set forth in Section
12.4.
“Indemnifying
Party”
shall
have the meaning set forth in Section
12.4.
“Independent
Accountant”
shall
have the meaning set forth in Section
2.5(b).
“IRS”
shall
mean the United States Internal Revenue Service.
“Knowledge”
shall
mean the actual knowledge of Robert Rowe, as such knowledge may exist at
the
Closing Date, without any duty whatsoever of any investigation or inquiry
into
the matter to which reference to Seller’s Knowledge is made.
3
“Law”
shall
mean any law, statute, regulation, ordinance, rule, order, decree, judgment,
consent decree, settlement agreement or governmental requirement enacted,
promulgated, entered into, agreed or imposed by any Governmental
Authority.
“Liabilities”
shall
mean any direct or indirect liability, indebtedness, or obligation of any
Person
of any type, whether accrued, absolute, contingent, matured, unmatured or
other.
“Lien”
shall
mean any lien, pledge, charge, security interest, deed of trust, mortgage
or
other similar encumbrance, including any agreement to give any of the foregoing
in the future.
“Loss”
shall
mean any and all liabilities, losses, costs, claims, damages, penalties and
expenses (including attorney’s fees and expenses and costs of investigation and
litigation).
“Membership
Interest”
shall
have the mean set forth in the recitals to this Agreement.
“Nexsen
Pruet”
shall
have the meaning set forth in the recitals to this Agreement.
“Nextra”
shall
have the meaning set forth in the recitals to this Agreement.
“Nextra
Asset Purchase Agreement”
shall
have the meaning set forth in the recitals to this Agreement.
“Permits”
shall
mean all licenses, certificates, permits, variances, interim permits, permit
applications, approvals, franchises, rights, code approvals and private product
approvals required by any Governmental Authority in connection with the conduct
of the Business.
“Person”
shall
mean any individual, corporation, proprietorship, firm, partnership, limited
partnership, limited liability company or other entity.
"Promissory
Note"
shall
have the meaning set forth in Section
5.6.
“Prorated
Earn-Out Amount”
shall
have the meaning set forth in the Section
2.4(a).
“Purchaser”
shall
have the meaning set forth in the Preamble.
“Purchaser
Disclosure Schedules”
shall
mean the Schedules prepared by Purchaser and delivered to Seller setting
forth
the disclosures required to be made hereunder by Purchaser, including exceptions
and qualifications to the representations and warranties contained in
Article IV,
as the
same may be amended or updated in accordance with this Agreement.
“Related
Agreements”
shall
mean the Assignment of Membership Interests and all other instruments of
transfer and assumption delivered pursuant to Section
8.2.
“Representative”
shall
mean any officer, director, principal, attorney, agent, employee or other
representative of a Person.
“Required
Consents”
shall
have the meaning set forth in Section
6.1.
“Restricted
Period”
shall
have the meaning set forth in Section
11.3.
4
“Seller”
shall
have the meaning set forth in the Preamble.
“Seller
Disclosure Schedules”
shall
mean the Schedules prepared by Seller and delivered to Purchaser setting
forth
the disclosures required to be made by Seller, including exceptions and
qualifications to the representations and warranties contained in Article
III,
as the
same may be amended from time to time in accordance with this
Agreement.
“Senior
Management Agreement”
shall
have the meaning set forth in Section
6.8.
“Tax”
shall
mean any federal, state, local, foreign or other tax, levy, impost, fee,
assessment or other government charge, including income, estimated income,
business, occupation, franchise, property, payroll, personal property, sales,
transfer, use, employment, commercial rent, occupancy, escheat, franchise
or
withholding taxes, and any premium, including interest, penalties and additions
in connection therewith.
“Tax
Return”
shall
mean any return (including any information return), report, statement, schedule,
notice, form, or other document or information filed with or submitted to,
or
required to be filed with or submitted to, any Governmental Authority or
any
Person in connection with the determination, assessment, collection, or payment,
of any Tax.
“Territory”
shall
mean the entire United States of America and its territories and
possessions.
“Third
Party Claim”
shall
have the meaning set forth in Section
12.5.
“Title
and Authorization Warranties”
means
the representations and warranties set forth in Sections
3.1,
3.2,
3.3,
3.4
and
3.6
and
Sections
4.1,
4.2,
4.3
and
4.4.
“Transfer
Taxes”
shall
have the meaning set forth in Section
13.15.
1.2 Incorporation
by Reference of Other Terms.
Unless otherwise defined herein or the context requires otherwise, capitalized
terms used herein are used herein with the meaning ascribed to such terms
in the
Nextra Asset Purchase Agreement.
1.3 Interpretation.
The headings preceding the text of Articles and Sections included in this
Agreement and the headings to Schedules attached to this Agreement are for
convenience only and shall not be deemed part of this Agreement or be given
any
effect in interpreting this Agreement. The use of the masculine, feminine
or
neuter gender or the singular or plural form of words herein shall not limit
any
provision of this Agreement. The use of the terms “including” or “include” shall
in all cases herein mean “including, without limitation” or “include, without
limitation,” respectively. Reference to any Person includes such Person’s
successors and assigns to the extent such successors and assigns are permitted
by the terms of any applicable agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or individually.
Reference to any Law means as amended, modified, codified, replaced or
re-enacted, in whole or in part, and in effect on the date hereof, including
rules, regulations, enforcement procedures and any interpretations promulgated
thereunder. Underscored references to Articles, Sections, clauses, Exhibits
or
Schedules shall refer to those portions of this Agreement, and any underscored
references to a clause shall,
5
unless
otherwise identified, refer to the appropriate
clause within the same Section in which such reference occurs. The use of
the
terms “hereunder,” “hereof,” “hereto” and words of similar import shall refer to
this Agreement as a whole and not to any particular Article, Section or clause
of or Exhibit or Schedule to this Agreement.
ARTICLE
II
SALE
AND PURCHASE OF MEMBERSHIP INTERESTS
2.1 Transfer
of Membership Interests.
Subject to the terms and conditions of this Agreement, at the Closing, Seller
shall sell, assign, transfer and deliver to Purchaser, and Purchaser shall
purchase, acquire and take assignment and delivery of, free and clear of
all
Liens, all of the Membership Interests in the Company owned by Seller, which
Membership Interests constitute all of the outstanding membership interests
in
the Company.
2.2 Cash
Purchase Price.
On the terms and subject to the conditions set forth in this Agreement, in
consideration of the transfer of the Membership Interests in the Company
by
Seller to Purchaser, Purchaser shall pay to Seller at Closing $2,000,000
in cash
(the “Closing
Date Cash Payment”).
In
addition, on the last day of the Earn-Out Period, Purchaser shall pay Seller
$75,0000 in cash. Both the latter payment and the Closing Date Cash Payment
shall be paid by wire transfer of immediately available funds to such account
as
shall have been designated by Seller prior to the date of the relevant
payment.
2.3 Annual
Earn-Out Payments.
(a)
As
additional consideration for the sale of the Membership Interests by Seller
to
Purchaser, for the three-year period following the first day of the calendar
month immediately following the Closing (referred to herein as the “Earn-Out
Period”),
Purchaser shall pay to Seller with respect to each Calculation Period within
the
Earn-Out Period an amount (each an “Earn-Out
Payment”)
equal
to (A) the EBITA generated by the Business for the applicable Calculation
Period
multiplied
by (B)
the percentage specified on Schedule
2.3.
(b) For
purposes hereof, the following definitions shall apply:
(i) “Calculation
Periods”
with
respect to the Earn-Out Payments means (i) the period beginning on the first
day
of the calendar month following the Closing Date and ending on December 31,
2006, (ii) the twelve-month period beginning on January 1, 2007 and ending
on
December 31, 2007, (iii) the twelve-month period beginning January 1, 2008
and
ending on December 31, 2008 and (iv) the period beginning on January 1, 2009
and
ending in 2009 on the last day of the month in which the Closing Date
occurs.
(ii) “EBITA”
for
any
Calculation Period means the net income of the Business for the applicable
Calculation Period, before the subtraction of any interest, income taxes
or
goodwill amortization, but after deduction for depreciation of the Business.
All
calculations of EBITA shall be made in accordance with GAAP as in effect
on the
Closing Date, as applied by Purchaser consistent with past practices, provided
(i) that any payments, charges or expenses for allocation of home office,
executive, general and administrative expenses or other payments, charges,
expenses or commissions of or paid by Purchaser and/or its
affiliates
6
(including
any affiliate that itself succeeds to the
Business) shall not be deducted for purposes of the calculation, except that
any
services (other than referrals) rendered to the Business by Purchaser and/or
its
affiliates (including other practice groups) that are provided directly to
the
Business shall be charged to the Business for purposes of the calculation
at
customary inter-group rates and (ii) no expenses incurred pursuant to Section
2.5
(relating to the Earn-Out Calculation Statements) shall be deducted for purposes
of the calculation. Further, for avoidance of doubt, no Earn-Out Payment
or
Cumulative Earn-Out Payment shall be deducted for purposes of such calculation
for any year, whether in the year such payment accrues, is paid, or in any
other
year.
2.4 Cumulative
Earn-Out Payment.
(a)
Subject
to clause
(iv)
of this
Section
2.4,
as
additional consideration for the sale of the Membership Interests by Seller
to
Purchaser, Purchaser shall pay to Seller an amount (the “Cumulative
Earn-Out Payment”)
determined as follows if the Business Revenue generated over the three year
period (the “Cumulative
Earn-Out Period”)
beginning on January 1, 2007 and ending on December 31, 2009 exceeds $100
million:
(i) If
the
Business Revenue over the Cumulative Earn-Out Period is equal to or greater
than
$100 million, but less than $125 million, then the Cumulative Earn-Out Payment
to be paid to Seller shall be (A) $2 million plus
(B) an
amount (the “Prorated
Earn-Out Amount”)
as
determined in accordance with the following formula:
Prorated
Earn-Out Amount =
|
[
|
(Business
Revenue - $100 million)
|
]
|
x
|
$3
million
|
|
$25
million
|
(ii) Subject
to clause
(iv)
of this
Section
2.4,
if the
Business Revenue over the Cumulative Earn-Out Period is equal to or greater
than
$125 million, then the Cumulative Earn-Out Payment to be paid to Seller shall
be
$5 million.
(iii) If
the
Business Revenue over the Cumulative Earn-Out Period is less than $100,000,000,
Purchaser shall not be required to make any Cumulative Earn-Out
Payment.
(iv) Notwithstanding
anything to the contrary in this Section
2.4,
Purchaser will not be required to make a Cumulative Earn-Out Payment to Seller
if the Cumulative EBITA Margin of the Company is less than twenty percent
(20%)
over the Cumulative Earn-Out Period.
(b) For
purposes hereof, the following definitions shall apply:
(i) “Cumulative
EBITA Margin”
means
the percentage obtained by dividing the aggregate EBITA over the Cumulative
Earn-Out Period by the aggregate Business Revenue over the Cumulative Earn-Out
Period.
(ii) “Business
Revenue”
means
with respect to a period, the revenue of the Business for the applicable
period,
as determined on an accrual basis in accordance with GAAP, consistently applied.
For purposes of this definition, Business Revenue shall exclude the
7
reimbursement
of out-of-pocket expenses incurred by
the Business for incidental services (e.g.; travel, copying and courier charges,
etc.) that are not integral to the services provided by the
Business.
2.5 Earn-Out
Statements.
(a)
Within
sixty (60) days of the end of each Calculation Period within the Earn-Out
Period, Purchaser shall prepare a statement setting forth Purchaser’s
calculation of the amount of the Earn-Out Payment that is due with respect
to
the relevant period, and within sixty (60) days of the end of the Cumulative
Earn-Out Period, Purchaser shall prepare a statement setting forth Purchaser’s
calculation of the amount of the Cumulative Earn-Out Payment said statements
being referred to herein as the “Earn-Out
Calculation Statements”).
Concurrently with the delivery of each Earn-Out Calculation Statement, Purchaser
shall pay Seller the amount of the Earn-Out Payment or Cumulative Earn-Out
Payment, as applicable, reflected thereon by wire transfer of immediately
available funds to such account as shall be designated from time to time
by
Seller. Purchaser shall provide Seller, in addition to said statements, such
additional documentation and supporting information as may be necessary to
allow
Seller to review and verify Purchaser’s determinations and calculations as
reflected in each such Earn-Out Calculation Statement.
(b) Seller
shall notify Purchaser of any disagreement that Seller may have with Purchaser’s
calculation of the Earn-Out Payments or Cumulative Earn-Out Payment, as
applicable, within thirty (30) days of the receipt thereof by Seller. If
Seller
advises Purchaser of its disagreement with an Earn-Out Calculation Statement,
Seller and Purchaser shall attempt in good faith to resolve any dispute within
thirty (30) days of receipt by Purchaser of Seller’s objection and Purchaser
shall make any adjusting payment and resolve the disputed Earn-Out Calculation
Statement within three Business Days of the dissolution of the dispute. If
within said thirty (30) day period, Seller and Purchaser are unable to resolve
the dispute, either Purchaser or Seller shall be entitled to submit the dispute
for resolution to a nationally recognized accounting firm reasonably acceptable
to Seller and Purchaser (the “Independent
Accountant”)
or in
the absence of an agreement, Grant Thornton LLP. If the Independent Accountant
is retained, each of Purchaser and Seller shall submit a written statement
summarizing its position on the disputed payments to the Independent Accountant
not more than ten (10) Business Days after its appointment, together with
any
necessary supporting documentation as it deems necessary or as requested
by the
Independent Accountant. The Independent Accountant shall be instructed to
render
its decision on the disputed amounts within thirty (30) days of receipt of
the
written statements. The decision of the Independent Accountant shall be final
and binding on, and shall not be subject to appeal by Seller or Purchaser.
The
Earn-Out Calculation Statement shall be revised to reflect the determination
of
the Independent Accountant and any payments required to be made as a result
thereof shall be paid within three (3) Business Days of the final determination
by the Independent Accountant. The fees of the Independent Accountant shall
be
borne equally by Purchaser and Seller.
(c) During
the Earn-Out Period and Cumulative Earn-Out Period, appropriate measures
will be
taken by Purchaser to ensure that the Company continues to generate separate
financial statements for the Business at least for each calendar quarter
sufficient to allow the Earn-Out Payments and Cumulative Earn-Out Payments
to be
reviewed and calculated in accordance with this Agreement setting forth,
without
limitation, EBITA for the Calculation
8
Period
in which such quarter is included and EBITA
and Business Revenue for the Cumulative Earn-Out Period to date.
2.6 Purchase
Price Allocation.
The parties agree to allocate the combined amount consisting of the
Closing Date Cash Payment plus the tax purchase price under the Nextra Asset
Purchase Agreement among the assets and non-competition provisions contained
in
Section
11.3
in
accordance with Section 1060 of the Code and the regulations thereunder and
the
principles set forth in Section 3.3 of the Nextra Asset Purchase Agreement
provided however, that the parties agree to allocate any consideration in
excess
of the Closing Date Cash Payment (less any amount allocated to the
non-competition undertaking) provided in the Nextra Asset Purchase Agreement
in
its entirety to "Class VII assets" (in goodwill and going concern value)
pursuant to Treasury Regulations §§ 1.1060-1(c)(2). Any adjustment to the
Closing Date Cash Payment shall be allocated as provided by the Treasury
Regulation § 1.1060-1(c).
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND SELLER
The
Seller hereby represents and warrants to Purchaser, as of the date hereof
and as
of the Closing Date, except in the case of any representations or warranties
that by its terms is made as of a date specified thereon, and except as
otherwise set forth on the Seller Disclosure Schedule, as follows:
3.1 Organization
of the Company.
The Company is a limited liability company duly formed, validly existing
and in
good standing under the laws of the State of Delaware with full
organizational power
and
authority to conduct the Business. The Company is duly qualified or licensed
to
do business as a limited liability company and
is in
good standing in each jurisdiction in which the conduct of the Business requires
such qualification, except where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company’s ability to
conduct the Business. The Company has no direct or indirect subsidiaries
and
does not hold any ownership interest in any Person.
3.2 Authorization.
The Company has all requisite organizational power and authority, and has
taken
all action necessary, to execute and deliver this Agreement and the Related
Agreements to which it is a party, to consummate the transactions contemplated
hereby and thereby and to perform its obligations hereunder and thereunder.
No
other organizational proceedings on the part of the Company is necessary
to
authorize this Agreement and the Related Agreements and the transactions
contemplated hereby and thereby.
3.3 No
Conflict or Violation.
Neither the execution, delivery or performance of this Agreement or the
Related Agreements by the Company or Seller, nor the consummation of the
transactions contemplated hereby or thereby will (a) violate or conflict
with any provision of the Certificate of Formation or operating agreement
or
limited liability agreement of the Company, (b) result in or constitute a
breach of, or a default under, any term or provision of any Contract or Permit
to which the Company is a party, or (c) except as set forth on Schedule
3.3,
violate
any applicable Law.
9
3.4 Consents
and Approvals.
Except as set forth on Schedule
3.4,
no
notice to, declaration, filing or registration with, or consent, authorization,
clearance, consent or approval of, or Permit from, any Governmental Authority
or
any other Person is required to be made or obtained by the Company or Seller
in
connection with the execution, delivery and performance of this Agreement
and
the Related Agreements and the consummation of the transactions contemplated
hereby and thereby.
3.5 Binding
Effect.
This Agreement has been, and on the Closing Date each of the Related Agreements
to which each of the Company or Seller is or will become a party will have
been,
duly and validly executed and delivered by the Company or Seller, as applicable.
This Agreement constitutes the legal, valid and binding obligation of the
Company and Seller, and each Related Agreement to which the Company or Seller
is
or becomes a party, when executed and delivered, will constitute the legal,
valid and binding obligation of the Company or Seller, as applicable, in
each
case, enforceable against such party in accordance with its terms, except
as
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditor’s rights generally or by equitable principles (whether
considered in an action at law or in equity).
3.6 Ownership
of the Company.
All of the Membership Interests in the Company are, as of the date hereof
and as
of the Closing Date, owned beneficially and of record by Seller free and
clear
of all Liens. Seller has furnished to Purchaser true and correct copies of
the
Company’s Certificate of Formation and the operating agreement or limited
liability agreement of the Company, in each case, as amended through the
date
hereof. Except for the Membership Interests transferred to Purchaser pursuant
to
this Agreement, there are no outstanding ownership or voting interests in
the
Company, and there are no options, warrants, calls, instruments or other
rights
of any character which would give a third party the right to acquire any
interest in the Company. The execution and delivery of the Assignment of
Membership Interests at Closing will be sufficient to transfer the entire
legal
and beneficial membership interests of Seller in the Company to Purchaser
free
and clear of all Liens.
3.7 Tax.
The Company is currently, and has at all times been, classified for U.S.
federal
income tax purposes as either a partnership or disregarded entity. The Company
has not made an election pursuant to Treasury Regulation section 301.7701-3(c)
to be treated as an association taxable as a corporation for U.S. federal
income
tax purposes.
3.8 Business
of the Company.
Prior to the date of this Agreement, the Company has not conducted any material
business operations. Except for the Nextra Asset Purchase Agreement and such
immaterial agreements as the Company shall have entered into in connection
with
its formation, the Company is not a party to any Contract.
3.9 Customers.
Schedule
3.9
identifies the five (5) largest customers of the Business for the most recently
completed calendar year, and the current calendar year. Except as set forth
on
Schedule
3.9,
since
January 1, 2006, to the Knowledge of Seller, (i) there have been no material
adverse changes in the business relationship with any such customer and Nextra
(other than resulting from the termination in the ordinary course of client
engagements) and (ii) there have been no material disputes between any such
customer and Nextra.
10
3.10 Representations
and Warranties of Nextra.
To the Knowledge of Seller (and without giving effect to any knowledge
qualifications in the Nextra Asset Purchase Agreement), the representations
and
warranties of Nextra in Article III of the Nextra Asset Purchase Agreement
are
true and correct in all material respects.
3.11 Employee
Benefit Plans.
The Company does not maintain, contribute to, sponsor, have an obligation
to
contribute to or have any liability under or with respect to any Benefit
Plan.
3.12 No
Brokers.
Neither Seller, the Company nor any of its respective officers, directors,
employees, shareholders or Affiliates has employed or made any agreement
with
any broker, finder or similar agent or any other Person which will result
in any
obligation of Purchaser or any of its Affiliates, including following the
Closing Date, the Company, to pay any finder’s fee, brokerage fee or commission
or similar payment in connection with the transactions contemplated
hereby.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
hereby represents and warrants to Seller, as of the date hereof and as of
the
Closing Date, and except as otherwise set forth on the Purchaser Disclosure
Schedule, as follows:
4.1 Organization
of Purchaser.
Purchaser is a limited liability company duly formed, validly existing and
in
good standing under the Laws of the State of Delaware and is duly qualified
to
do business in each jurisdiction where the nature of its business requires
such
qualification.
4.2 Authorization.
The execution, delivery and performance by Purchaser of this Agreement and
each
of the Related Agreements to which Purchaser is or will become a party and
the
consummation by Purchaser of the transactions contemplated hereby and thereby
are within Purchaser’s powers and have been duly and validly authorized by all
necessary action of Purchaser.
4.3 No
Conflict or Violation.
Neither the execution, delivery or performance of this Agreement or the Related
Agreements by Purchaser, nor the consummation of the transactions contemplated
hereby or thereby by Purchaser, will (a) violate or conflict with any provision
of the Articles of Incorporation or Bylaws of Purchaser (b) result in or
constitute a breach of, or a default under, any terms or provision of any
agreement, instrument, obligation, permit or license to which Purchaser is
a
party or by which its assets are bound or (c) violate any applicable
Law.
4.4 Consents
and Approvals.
Except as set forth on Schedule
4.4,
no
notice to, declaration, filing or registration with, or authorization,
clearance, consent or approval of, or permit from, any Governmental Authority
or
any other Person is required to be made or obtained by Purchaser in connection
with the execution, delivery and performance of this Agreement and the Related
Agreements and the consummation of the transactions contemplated hereby and
thereby.
11
4.5 Binding
Effect.
This Agreement has been, and on the Closing Date each of the Related Agreements
to which Purchaser is or will become a party will have been, duly and validly
executed and delivered by Purchaser. This Agreement constitutes the legal,
valid
and binding obligation of Purchaser, and each Related Agreement to which
Purchaser is or becomes a party, when executed and delivered, will constitute
the legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditor’s rights generally or by equitable principles (whether considered in an
action at law or in equity).
4.6 No
Brokers.
Neither Purchaser nor any of its officers, directors, employees, shareholders
or
Affiliates has employed or made any agreement with any broker, finder or
similar
agent or any other Person or firm which will result in any obligation of
Seller,
the Company or any of its Affiliates to pay any finder’s fee, brokerage fees or
commission or similar payment in connection with the transactions contemplated
hereby.
ARTICLE
V
COVENANTS
OF SELLER AND PURCHASER
Seller
and Purchaser each covenant with the other as follows:
5.1 Implementing
Agreement.
(a) Subject
to the terms of this Agreement, each of the parties hereto agrees to use
commercially reasonable best efforts to take, or cause to be taken, all action,
and to do or cause to be done, and to assist and cooperate with the other
party
hereto in doing, both before and after the Closing, all things reasonably
necessary, proper or advisable to consummate and make effective, the
transactions contemplated by this Agreement, including (i) the obtaining of
all necessary waivers, consents and approvals from Governmental Authorities,
and
the making of all necessary registrations and filings with, and the taking
of
all reasonable steps as may be necessary to obtain any approval or waiver,
consents or approvals from, or to avoid any action or proceeding by, any
Governmental Authority, and (ii) the obtaining of all necessary waivers,
consents or approvals from any Persons other than Governmental Authorities.
Notwithstanding the foregoing, the parties agree that the obtaining of such
waivers, consents and approvals and the making of all such registrations
and
filings and the taking of such other steps (including waivers, consents or
approvals that may be required under any Contract or Permit) shall not be
a
condition to any party’s obligation to consummate the transactions contemplated
by this Agreement, except that the Required Consents shall be a closing
condition.
5.2 Access
to Information.
Prior to the Closing Date, the Company and Seller shall cooperate with Purchaser
and provide Purchaser and its authorized Representatives with reasonable
access
to its books and records, facilities and employees, and to the extent permitted
by Nextra, to the books and records, facilities and employees of Nextra,
and
will permit Purchaser and its authorized Representatives to make such
inspections and conduct such interviews and inquiries as Purchaser may
reasonably request. Purchaser shall conduct all such inspections, and other
information-gathering activities described above only (a) at Purchaser’s
12
sole
cost and expense, (b) during regular
business hours after reasonable advance notice, (c) in a manner to maintain
appropriate confidentiality regarding the Business, and (d) in a manner
which will not unduly interfere with the operation of the Business. Any and
all
such information gathered by Purchaser as a result of, or in connection with,
such information-gathering shall be kept strictly confidential and shall
not be
revealed to, or discussed with, any Person other than the authorized
Representatives of Purchaser who agree to maintain the confidentiality of
any
such information in accordance with the provisions of this Section
5.2
and the
Confidentiality Agreement. In the event the transactions contemplated hereby
are
not consummated, such information shall be returned to Seller or destroyed
in
accordance with this Agreement. Without limiting the foregoing, Seller shall
keep Purchaser informed of any material developments with respect to the
Business of which Seller shall become aware prior to the Closing Date, and
shall
further keep Purchaser informed of all material communications occurring
prior
to the Closing between Seller and the Company, on the one hand, and Nextra
and
Nexsen Pruet, on the other hand, related to the Nextra Asset Purchase
Agreement.
5.3 Exercise
of Rights under the Nextra Asset Purchase Agreement; Conduct of
Business.
From the date hereof through the Closing, Seller and the Company shall not,
except as contemplated by this Agreement, or as consented to by Purchaser
in
writing, amend the Nextra Asset Purchase Agreement or grant any waiver to
or
extension of any of the terms and conditions thereof or otherwise exercise
any
material right thereunder. Without limiting the generality of the foregoing,
neither the Company nor Seller shall except as specifically contemplated
by this
Agreement or as consented to by Purchaser in writing:
(a) approve
or commit to make any individual capital expenditure that is in excess of
$25,000, or aggregate capital expenditures that are in excess of $50,000
which
would be required to be expended by the Company following the Closing
Date;
(b) other
than Contracts with clients of the Business for the performance of services
by
the Company which are contingent on the Closing of the Nextra Asset Purchase
Agreement, enter into any Contract, other than any Contract which is necessary
in connection with the transactions contemplated hereby;
(c) except
as
required by Law, agree to any material increases, in the aggregate wages,
salaries, bonuses or other compensation payable to or with respect to current
or
former employees, or adopt or establish any Benefit Plan;
(d) amend
the
operating agreement or limited liability company agreement of the
Company;
(e) agree
to
cancel any debts or affirmatively waive any rights of any customer of the
Business;
(f) make
any
Tax election;
(g) issue
any
Membership Interests or grant any right to acquire Membership Interests to
any
Person; or
13
(h) enter
into any agreement, or otherwise become obligated to do any of the
foregoing.
5.4 Updated
Disclosure Schedules.
From the date hereof through the Closing Date, Seller and Purchaser shall
update
those portions of the Disclosure Schedules relating to the representations
and
warranties contained in Articles
III
and
IV,
respectively, in each case to reflect changes thereto through the Closing
Date
or to correct any inaccuracies thereto of which Seller or Purchaser becomes
aware prior to the Closing. No such supplement or amendment to the Disclosure
Schedules shall be deemed to cure any breach for purposes of Sections
6.2
or
7.2,
as
applicable. If, however, the Closing occurs, any such supplement or amendment
will be effective to cure and correct the Disclosure Schedules (and the
corresponding representations and warranties to which such supplement or
amendment relates) for all other purposes of this Agreement, including for
purposes of Article
XIII,
and all
references to the Schedule which is supplemented or amended as provided in
this
Section
5.4
shall
for all purposes after the Closing be deemed to be a reference to such Schedule
as so supplemented or amended.
5.5 Exclusivity.
During
the period beginning the date hereof and ending on the first to occur of
the
Closing or the termination of this Agreement pursuant to Section
10.1,
neither
the Company, Seller nor any of their Representatives shall, directly or
indirectly, solicit inquiries or proposals from, or provide any confidential
information to, or participate in any discussions or negotiations with, any
Person (other than Purchaser, and its Representatives) concerning (a) any
merger, sale of assets not in the ordinary course of business, acquisition,
business combination, change of control or other similar transaction involving
the Company, or (b) any purchase or other acquisition by any Person of the
Membership Interests.
5.6 Availability
of Financing.
Subject to the satisfaction of the conditions to the closing of the Nextra
Asset
Purchase Agreement and this Agreement, Purchaser agrees to make available
to the
Company financing in such amount as shall be required to permit the Company
to
satisfy its payment obligations under Sections 3.1 and 3.2 of the Nextra
Asset
Purchase Agreement. The financing to be made available to the Company shall
be
evidenced by a promissory note (the “Promissory
Note”)
in
substantially the form set forth in Exhibit
B.
Purchaser may elect, prior to making the loan, to require that the Company
grant
a security interest in favor of Purchaser over substantially all of its assets,
including the rights of the Company under the Nextra Asset Purchase Agreement
(with the Seller hereby expressly disclaiming any representation or warranty
whatsoever regarding the legal assignability of such rights), in which case,
the
Company shall execute a security agreement in favor of the Company on such
terms
as are customarily executed in favor of commercial lenders. Prior to making
the
loan contemplated by this Section
5.6,
the
Company shall take all action as may be reasonably requested by Purchaser
to
evidence the authorization, execution and delivery of the Promissory
Note.
ARTICLE
VI
CONDITIONS
PRECEDENT TO OBLIGATIONS OF PURCHASER
The
obligations of Purchaser to consummate the Closing are subject to the
satisfaction or waiver by Purchaser of the following conditions precedent
on or
before the Closing Date:
14
6.1 Consents
and Approvals.
Purchaser shall have received written evidence satisfactory to it that (a)
except as indicated on Schedule 6.1, all clients in respect of the In-Process
Engagements shall have (i) either entered into new engagements with the Company
on terms that explicitly confirm that the Company’s performance of the
engagements after the Closing will not involve the practice of law or (ii)
consented to the transfer of their files to the Company, (b) all consents
and
approvals described on Schedule
6.1
have
been obtained, and (c) all required filings described on Schedule
6.1
have
been made (all of the foregoing consents, approvals and filings, are referred
to
collectively herein as the “Required
Consents”).
6.2 Warranties
True as of Both Present Date and Closing Date.
The representations and warranties of the Company and Seller contained herein
shall have been accurate and correct in all material respects at and as of
the
date of this Agreement, and at and as of the Closing Date as though restated
on
and as of such date (except in the case of any representation or warranty
that
by its terms is made as of a date specified thereon, in which case such
representation or warranty shall be accurate and correct as of the specified
date).
6.3 Compliance
with Agreements and Covenants.
Seller and the Company shall have performed and complied in all material
respects with all of its covenants, obligations and agreements contained
in this
Agreement to be performed and complied with by it on or prior to the Closing
Date.
6.4 Documents.
Purchaser shall have received all of the agreements, documents and items
specified in Section
8.2(a).
6.5 Employee
Acceptance of Employment with Purchaser.
Not less than eighty percent (80%) of all employees, and all of the team
leaders
of Nextra, shall have agreed to continue their employment with the Company
following the Closing on the standard terms of employment of Purchaser and
its
Affiliates for similarly situated employees.
6.6 Actions
or Proceedings.
No order, statute, rule, regulation, executive order, injunction, stay, decree
or restraining order shall have been enacted, entered, promulgated or enforced
by any Court of competent jurisdiction or Governmental Authority that prohibits,
enjoins, restrains or challenges or seeks to prohibit, enjoin or restrain
the
consummation of the transactions contemplated by this Agreement.
6.7 Acquisition
of Nextra by the Company.
The Company shall have completed the acquisition of the assets of Nextra
on
terms and conditions set forth in the Nextra Asset Purchase
Agreement.
6.8 Senior
Management Agreement.
Seller shall have executed a senior management agreement (the “Senior
Management Agreement’)
in the
form set forth in Exhibit
C
covering
the employment period beginning on the Closing Date and ended on December
31,
2009.
15
ARTICLE
VII
CONDITIONS
PRECEDENT TO OBLIGATIONS OF SELLER
The
obligations of Seller to consummate the Closing are subject to the satisfaction
or waiver by Seller of the following conditions precedent on or before the
Closing Date:
7.1 Warranties
True as of Both Present Date and Closing Date.
The representations and warranties of Purchaser contained herein shall have
been
accurate and correct in all material respects on and as of the date of this
Agreement, and shall also be accurate and correct on and as of the Closing
Date
as though restated on and as of such date (except in the case of any
representation or warranty that by its terms is made as of a date specified
thereon, in which case such representation or warranty shall be accurate
and
correct as of the specified date).
7.2 Compliance
with Agreements and Covenants.
Purchaser shall have performed and complied in all material respects with
all of
its covenants, obligations and agreements contained in this Agreement to
be
performed and complied with by it on or prior to the Closing Date.
7.3 Documents.
Seller shall have received all of the agreements, documents and items specified
in Section
8.2(b).
7.4 Consent
and Approvals.
All consents and approvals which are Required Consents shall have been obtained
and all filings which are Required Consents shall have been made.
7.5 Actions
or Proceedings.
No order, statute, rule, regulation, executive order, injunction, stay, decree
or restraining order shall have been enacted, entered, promulgated or enforced
by any Court of competent jurisdiction or Governmental Authority that prohibits,
enjoins, restrains or challenges or seeks to prohibit, enjoin or restrain
the
consummation of the transactions contemplated by this Agreement.
7.6 Acquisition
of Nextra by the Company.
The Company shall have completed the acquisition of the assets of Nextra
on the
terms and condition set forth in the Nextra Asset Purchase
Agreement.
7.7 Senior
Management Agreement.
Purchaser shall have executed the Senior Management Agreement.
ARTICLE
VIII
CLOSING
8.1 Closing.
The closing of the transactions contemplated herein (the “Closing”)
shall
be held at 9:00 a.m. local time on the date (the “Closing
Date”)
that
is the later to occur of (i) July 31, 2006 and (ii) the date which is three
(3)
business days after the first date that all of the conditions set forth in
Articles
VI
and
VII
have
been satisfied or waived at the offices of Seller, or at such other date,
time
and place as the parties hereto otherwise agree and to the extent practicable
shall take place immediately following the closing of the Nextra Asset Purchase
16
Agreement.
For the purpose of any calculation or
determination required to be made by any of the parties following the Closing,
the Closing shall be deemed to have been effective as of 12:01 a.m.,
Eastern Standard Time, on the date immediately following Closing Date. All
transactions and deliveries required to be made or completed at the Closing
pursuant to the terms of this Agreement shall be deemed to occur concurrently
and none shall be deemed completed unless all are completed or are otherwise
waived in a writing signed by each of the parties hereto.
8.2 Conveyances
at Closing.
(a) Seller’s
Deliveries.
At the Closing, to effect the sale, transfer, conveyance, assignment and
assumption referred to in Article
II
and the
other transactions contemplated hereby, Seller shall deliver to
Purchaser:
(i) The
Assignment of Membership Interests, duly executed by Seller and the
Company;
(ii) Such
other instruments of transfer reasonably requested by Purchaser to evidence
the
transfer of the Membership Interests;
(iii) A
certificate, dated the Closing Date, of Seller certifying compliance by Seller
with Sections
6.2
and
6.3,
which
delivery shall be waived in the event of a simultaneous signing and
closing.
(iv) A
certificate of the managing member of the Company, certifying resolutions
of the
sole member of the Company, approving the execution, delivery and performance
of
this Agreement, the Related Agreements and the Nextra Asset Purchase Agreement
by the Company;
(v) A
certificate of non-foreign status, in the form provided in Treasury Regulation
section 1.1445-2(b)(2)(iv), issued pursuant to and in compliance with (including
the making of any required filings with the IRS) Treasury Regulation section
1.1445-2(b)(2), certifying that Seller is not a foreign person within the
meaning of Treasury Regulation section 1.1445-2(b)(2); and
(vi) Evidence
satisfactory to Purchaser that Nextra’s lenders shall have released any Liens
over the Acquired Assets.
(b) Purchaser’s
Deliveries.
At the Closing, to effect the sale, transfer, conveyance, assignment and
assumption referred to in Article
II
and the
other transactions contemplated hereby, Purchaser shall deliver to
Seller:
(i) The
Closing Date Cash Payment;
(ii) The
Closing Date Expense Payment;
(iii) The
Assignment of Membership Interests, duly executed by Purchaser;
17
(iv) A
certificate, dated the Closing Date, of an officer of Purchaser certifying
compliance by Purchaser with Sections
7.1
and
7.2,
which
delivery shall be waived in the event of a simultaneous signing and closing;
and
(v) [Intentionally
Omitted.]
ARTICLE
IX
[INTENTIONALLY
OMITTED]
ARTICLE
X
TERMINATION
10.1 Termination.
This Agreement may be terminated at any time on or prior to the Closing
Date:
(a) With
the
mutual consent of Seller and Purchaser;
(b) By
Purchaser, if there shall have been a breach of any covenant, representation
or
warranty of the Company or Seller hereunder, and such breach shall not have
been
remedied within ten (10) Business Days after receipt by Seller of a notice
in
writing from Purchaser specifying the breach and requesting such be remedied;
provided,
however,
that if
the nature of the breach is such that it is incapable of cure within the
ten
(10) Business Day period, such cure period shall be extended, but no later
than
through the date specified in clause
(d)
below so
long as promptly following receipt of the notice from Purchaser, Seller has
commenced, and diligently continues to pursue to remedy the
default;
(c) By
Seller, if there shall have been a material breach of any covenant,
representation or warranty of Purchaser hereunder, and such breach shall
not
have been remedied within ten (10) Business Days after receipt by Purchaser
of
notice in writing from Seller specifying the breach and requesting such be
remedied; provided, however, that if the nature of the breach is such that
it is
incapable of cure within the ten (10) Business Day period; such cure period
shall be extended, but not later than through the date specified in clause
(d)
below,
so long as promptly following receipt of the notice from Seller, Purchaser
has
commenced, and diligently continues to pursue to remedy the default;
and
(d) By
Seller
or Purchaser, if the Closing shall not have taken place on or before August
30,
2006; provided
that the
right to terminate this Agreement under this clause
(d)
shall
not be available to any party whose failure to fulfill any obligation under
this
Agreement has been the cause of or resulted in the failure of the Closing
to
occur on or before such date.
In
the
event of any termination pursuant to this Section
10.1
(other
than pursuant to clause
(a)),
written notice setting forth the reasons thereof shall forthwith be given
by the
terminating party to the other party.
10.2 Effect
of Termination.
If this Agreement is terminated pursuant to Section
10.1,
all
obligations of the parties hereunder shall terminate, except for the obligations
of
18
confidentiality
set forth in Section
5.2
and the
Confidentiality Agreement, which shall survive the termination of this
Agreement, and except that no such termination shall relieve any party from
liability for any prior willful breach of this Agreement.
ARTICLE
XI
ACTIONS
BY SELLER AND PURCHASER AFTER THE CLOSING
11.1 Tax
Matters.
Seller and Purchaser shall (a) each provide the other with such assistance
as may reasonably be requested by either of them in connection with the
preparation of any Tax Return, making of any Tax election, audit, or other
examination by any taxing authority or judicial or administrative proceedings
relating to Liabilities for Taxes, (b) each retain and provide the other
with any records or other information that may be relevant to such Tax Return,
election audit or examination, proceeding or determination, and (c) each
provide the other with any final determination of any such audit or examination,
proceeding, or determination that affects any material amount required to
be
shown on any Tax Return of the other for any period. Without limiting the
generality of the foregoing or of Section
11.2,
Purchaser and Seller shall each retain, until the applicable statutes of
limitations (including any extensions of which a party holding the following
has
notice) have expired, copies of all Tax Returns, supporting work schedules
and
other records or information that may be relevant to such returns for all
Tax
periods or portions thereof ending on or before the Closing Date and shall
notify the other prior to destroying any such records; provided,
however,
that
failure to provide such notification shall not constitute a basis for any
liability or claim for damages by the other party hereto.
11.2 Availability
of Records.
After the Closing, Purchaser shall make available to Seller as reasonably
requested by Seller, its agents and representatives, any taxing authority,
or
any other Governmental Authority all information, records and documents relating
to the Business and the employees of the Company for periods prior to Closing
and shall preserve all such information, records and documents until the
later
of: (a) six (6) years after the Closing Date; (b) the expiration of all statutes
of limitations for Taxes for periods prior to the Closing or extensions thereof
applicable to Seller for Tax information, records or documents; or (c) the
required retention period for all government contract information, records
or
documents. Purchaser shall also make available to Seller, as reasonably
requested by Seller, personnel responsible for preparing or maintaining
information, records and documents, in connection with Tax matters, governmental
contracts, litigation or potential litigation, including claims for workers’
compensation, product liability, general insurance liability and automobile
insurance liability. Prior to destroying any records related to Seller for
the
period prior to the Closing Date, Purchaser shall notify Seller thirty (30)
days
in advance of any such proposed destruction of its intent to destroy such
records, and Purchaser will permit Seller to retain any such records;
provided,
however,
that
failure to provide such notification shall not constitute a basis for any
liability or claim for damages. With respect to any litigation and claims
that
are Excluded Obligations, Purchaser shall render all reasonable assistance
that
Seller may request in defending such litigation or claim and shall make
available to Seller personnel most knowledgeable about the matter in
question.
19
11.3 Non-Competition
Undertaking.
(a)
From and
after the Closing Date until the fourth anniversary thereof (the “Restricted
Period”),
the
Seller shall not, directly or indirectly:
(i) engage
in, control, advise, manage, serve as a director, officer or employee of,
act as
a consultant to, or exert any influence upon, any business which conducts
activities within the Territory competitive with the Business;
(ii) except
on
behalf of Purchaser and its Affiliates, solicit, divert or attempt to solicit
or
divert any Person who is, was, or is or was solicited to become, a customer
of
the Business, or offer to provide or sell to any such Person, services which
are
similar to those provided by the Business; or
(iii) employ,
solicit for employment or encourage to leave their employment with the Company
or with Purchaser or its Affiliates any employee of the Company or of Purchaser
or its Affiliates.
For
purposes of this Section
11.3(a),
the
term “directly or indirectly” shall include acts or omissions as proprietor,
partner, joint venturer, employer, salesman, agent, employee, officer, director,
lender or consultant of, or owner of any interest in, any Person. Seller
shall
cause its Affiliates to comply with the restrictions of this Section
11.3(a)).
The
restrictions imposed by clause (i) of this Section
11.3(a)
shall
not apply to the ownership of one percent (1%) or less of the outstanding
securities of any Person whose securities are listed on a national securities
exchange.
(b) In
the
event of actual or threatened breach of the provisions of this Section
11.3,
Purchaser, in addition to any other remedies available to it for such breach
or
threatened breach, including the recovery of damages, shall be entitled to
an
injunction restraining Seller or its Affiliates from such conduct.
(c) Section
11.3
shall
automatically terminate with respect to Seller if Seller’s employment with the
Company and/or Purchaser is terminated other than for “Cause” or if Seller
terminates his employment for “Good Reason” (as each of such terms is defined in
the Senior Management Agreement).
ARTICLE
XII
SURVIVAL
AND INDEMNIFICATION
12.1 Survival
of Representations.
The representations and warranties of the Company, Seller and Purchaser
contained in this Agreement shall survive the Closing Date but shall terminate
twelve (12) months after the Closing Date; provided,
however,
that
the representations and warranties regarding Tax Matters set forth in
Section
3.7
shall
survive for the applicable statute of limitation period and the Title and
Authorization Warranties shall survive indefinitely. No claim may be made
with
respect to any alleged breach of a representation or warranty of Seller or
Purchaser contained in this Agreement, whether for indemnification in respect
thereof or otherwise, unless written notice of such claim setting forth the
alleged breach and resulting claimed damages in reasonable detail is given
to
Seller or Purchaser, as applicable, within the
20
period
specified in the immediately preceding
sentence, in which case, the survival period with respect to such claim shall
be
extended until it is resolved.
12.2 Seller
Indemnifications.
Seller shall indemnify Purchaser and its Representatives and Affiliates,
and hold each of them harmless from and against any and all Losses incurred
by
any of them in connection with, arising out of, or resulting from any of
the
following:
(a) any
breach or inaccuracy of any representation or warranty made by Seller in
this
Agreement or any Related Agreement; or
(b) any
failure by the Company or Seller to perform any agreement, covenant or
obligation of the Company or Seller pursuant to this Agreement or any Related
Agreement, provided that the foregoing shall only apply to covenants of the
Company which are required to be performed prior to the Closing.
12.3 By
Purchaser.
Purchaser shall indemnify Seller and its Representatives and Affiliates,
and hold each of them harmless from and against any and all Losses incurred
by
any of them in connection with, arising out of or resulting from any of the
following:
(a) any
breach or inaccuracy of any representation or warranty made by Purchaser
in this
Agreement or any Related Agreement; or
(b) any
failure by Purchaser to perform any agreement, covenant or obligation of
Purchaser pursuant to this Agreement or any Related Agreement; or
(c) any
Liability incurred by Seller under or in connection with a guarantee or other
assurance of performance provided by Seller to Nextra or Nexsen Pruet in
connection with any Real Property Lease.
12.4 Notice
of Claims.
If a claim (a “Claim”)
is
proposed to be made by a party entitled to indemnification hereunder (the
“Indemnified
Party”)
against the party from which indemnification is claimed (the “Indemnifying
Party”),
the
Indemnified Party shall give written notice (a “Claim
Notice”)
to the
Indemnifying Party as soon as practicable after the Indemnified Party becomes
aware of any fact, condition or event which may give rise to a Loss for which
indemnification may be sought under this Article
XII.
If any
legal proceeding is commenced against any party entitled to the benefit of
indemnity hereunder, written notice thereof shall be given to the Indemnifying
Party as promptly as practicable (and in any event within ten (10) Business
Days after the service of the citation or summons). The failure of any
Indemnified Party to give timely notice hereunder shall not affect rights
to
indemnification hereunder, except to the extent that the Indemnifying Party
demonstrates actual prejudice caused by such failure. Notwithstanding the
foregoing, a Claim Notice that relates to a representation or warranty that
is
subject to the survival period set forth in Section
12.1
must be
made within such survival period, whether or not the Indemnifying Party is
prejudiced by any failure to give a Claim Notice relating thereto. A Claim
Notice shall describe in reasonable detail the nature of the Claim, including
an
estimate of the amount of Losses that have been or may be suffered or incurred
by the Indemnified Party attributable to such Claim, the basis of the
Indemnified Party’s request for indemnification under this Agreement and all
information in the Indemnified Party’s possession relating to such
Claim.
21
12.5 Assumption
of Defense of Third Party Claims.
After receipt of a Claim Notice with respect to a claim, demand or action
initiated by a Person which is not a party to this Agreement (a “Third
Party Claim”),
the
Indemnifying Party shall be entitled, if it so elects, at its own cost, risk
and
expense, to (i) take control of the defense and investigation of such Third
Party Claim and (ii) employ and engage attorneys of its own choice to
handle and defend the same. If the Indemnifying Party fails to assume the
defense of such Third Party Claim within ten (10) Business Days after receipt
of
the Claim Notice, the Indemnified Party against which such Third Party Claim
has
been asserted will (upon delivering notice to such effect to the Indemnifying
Party) have the right to undertake, at the Indemnifying Party’s cost and
expense, the defense, compromise or settlement of such Third Party Claim
on
behalf of and for the account and risk of the Indemnifying Party; provided,
however,
that
such Third Party Claim shall not be compromised or settled without the written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed. The party that assumes the defense of the Claim shall
keep
the other party reasonably informed of the progress of any such defense,
compromise or settlement and,
provided, further, that in any event, the Indemnified Party may participate
in
such defense at its own expense.
12.6 Settlement
of Third Party Claims.
In the event that the Indemnified Party settles any Third Party Claim without
the prior written consent of the Indemnifying Party, the Indemnifying Party
shall have no further indemnification obligations under this Article
XII
with
respect to such Third Party Claim; provided,
however,
that if
the Indemnifying Party refuses to defend or otherwise handle such Third Party
Claim and it is subsequently determined that the Indemnifying Party is or
was
obligated to defend or indemnify the Indemnified Party with respect to such
Third Party Claim, then the Indemnifying Party shall remain obligated with
respect to such settlement amount. If the Indemnifying Party controls the
defense of any such Third Party Claim, the Indemnifying Party shall obtain
the
prior written consent of the Indemnified Party (which shall not be unreasonably
withheld or delayed) before entering into any settlement of a Third Party
Claim
or ceasing to defend such Third Party Claim if, pursuant to or as a result
of
such settlement or cessation, injunctive or other equitable relief shall
be
imposed against the Indemnified Party or if such settlement or cessation
does
not expressly and unconditionally release the Indemnified Party from all
liabilities and obligations with respect to such Third Party Claim, without
prejudice. In the event that the Indemnifying Party proposes a settlement
to any
Third Party Claim with respect to which the Indemnifying Party is or was
entitled to defend, which settlement is satisfactory to the party instituting
such Third Party Claim, and the Indemnified Party withholds its consent to
such
settlement, and thereafter a final judgment is entered against the Indemnifying
Party or Indemnified Party pursuant to which Losses exceed the amount of
the
proposed settlement, then in such case the Indemnifying Party shall have
no
obligation to indemnify the Indemnified Party under this Article
XII
against
and in respect of the amount by which the Losses resulting from such final
judgment exceed the amount of the proposed settlement.
12.7 Limitations
on Indemnity Payments.
(a) Threshold.
Seller
shall not be liable to Purchaser under Section
12.2(a)
for any
Losses, unless and until (i) each individual amount otherwise due Purchaser
exceeds $5,000 (excluding legal fees and expenses), and (ii) the aggregate
amount of all such Losses under this Agreement, otherwise due Purchaser
(excluding Losses incurred in any individual claim of less
22
than
$5,000) exceeds an accumulated total of
$100,000, and thereafter the total amount of all such Losses in excess of
$5,000
per claim (excluding legal fees and expenses) actually incurred (excluding
the
first $100,000) shall be indemnifiable as and to the extent herein
provided.
(b) Maximum
Indemnity.
Seller’s aggregate liability under Sections
12.2(a)
for all
claims for Losses incurred by Purchaser (and its Representatives and Affiliates)
shall not in any event exceed the Closing Date Cash Payment.
(c) Tax
Gross-Up.
The
amount of any loss recoverable by a party entitled to indemnification shall
be
reduced by the amount of any tax benefit actually realized by the Indemnified
Party with respect to the Claim.
12.8 Characterization
of Indemnity Payments.
Any indemnity payments made pursuant to this Article
XII
shall be
treated as an adjustment to the aggregate purchase price to the maximum extent
possible.
12.9 Offset
Rights.
Purchaser shall have the right to withhold payments under this Agreement
or offset payments otherwise required to be made to Seller hereunder against
any
payments to which Purchaser is entitled under this Article
XII.
Notwithstanding the foregoing, Purchaser agrees to exercise its right of
offset
or withholding only in a commercially reasonable manner and only after providing
Seller not less than ten (10) Business Days' advance written notice. In
addition, Purchaser agrees to exercise its right of offset or withholding
only
up to an amount equal to the reasonably ascertainable or estimable amount
of the
Loss incurred or which reasonably may be incurred by Purchaser with respect
to
the events or circumstances giving rise to Purchaser's exercise of such
rights.
12.10 Mitigation;
Exclusive Remedy.
(a)
Any
Indemnified Party having a claim under this Article
XII
shall
make a good faith effort to recover all Losses from insurers of such Indemnified
Party under applicable insurance policies so as to reduce the amount of any
Losses hereunder. The amount of any Loss shall be reduced by the amounts
actually and irrevocably recovered by the Indemnified Party with respect
to any
claim.
(b) The
rights and remedies of Seller and Purchaser under this Article
XII
are
exclusive and in lieu of any and all other rights and remedies which Seller
or
Purchaser may have under or in connection with this Agreement for monetary
relief (but not injunctive relief) with respect to any breach or failure
to
perform any covenant or agreement or breach or inaccuracy of any representation
or warranty set forth in this Agreement. The foregoing limitation shall not
apply with respect to claims for intentional misrepresentation, intentional
breach, willful misconduct or fraud.
(c) Prior
to
recovering any loss against Seller (but without limiting Purchaser's right
to
exercise its offset or withholding rights in accordance with Section
12.9),
Purchaser agrees to use good faith commercial efforts to pursue and prosecute
a
claim for indemnification against Nextra or Nexsen Pruet to the extent that
the
Claim asserted by Purchaser against Seller gives rise to a corresponding
claim
for indemnification against either or both of such Persons under the Nextra
Asset Purchase Agreement; provided,
that
Purchaser shall not be required to continue to pursue a claim for
indemnification against Nextra or Nexsen Pruet
23
if,
in the opinion of counsel to Purchaser, recovery
from such Persons is unlikely or cost prohibitive (and provided that Seller
agrees in writing to waive any statute of limitation applicable to the Claim)
and; provided, further, that Purchaser shall not be required to pursue an
appeal
of any adverse judgment.
ARTICLE
XIII
MISCELLANEOUS
13.1 Assignment.
This Agreement and all the provisions hereof shall be binding upon and inure
to
the benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise,
by
either party without the prior written consent of the other party, except
that
Purchaser may assign its rights, in whole or in part, including its right
to
acquire the Membership Interests of Seller in the Company, under this Agreement
to an Affiliate (which assignment shall not release Purchaser from its
obligations hereunder).
13.2 Amendment.
Except as contemplated by Section
5.4,
this
Agreement may be amended, modified and supplemented only by mutual written
agreement of the parties.
13.3 Notices.
Any notice, request, instruction or other document to be given hereunder
by a
party hereto shall be in writing and shall be deemed to have been given (a)
when
received if given in person or by courier or a courier service, (b) on the
date
of transmission if sent by telex, facsimile or other wire transmission or
(c)
three (3) Business Days after being deposited in the mail, certified or
registered, postage prepaid:
If
to the
Purchaser, addressed as follows:
Huron
Consulting Group Holdings, LLC
550
W.
Van Buren Street
Chicago,
IL 60607
Attention:
Chief Financial Officer
Facsimile:
(312) 583-8752
with
a
copy to:
Mayer,
Brown, Rowe & Maw LLP
71
South
Wacker Drive
Chicago,
Illinois 60606
Attention:
David A. Carpenter
Telephone:
(312) 782-0600
Facsimile:
(312) 701-7711
If
to
Seller, addressed as follows:
Robert
Rowe
2100
Lake
Forest Drive
24
Tega
Cay,
SC 29708
Telephone
No.: (800) 863-8296
Facsimile
No.: (803) 980-2899
with
a
copy to:
Rogers
& Hardin LLP
229
Peach
Street, N.E., Suite 2700
Atlanta,
GA 30303
Attention:
David D. Willoughby
Telephone
No.: (404) 522-4700
Facsimile
No.: (404) 525-2224
If
to the
Company, addressed as follows:
Document
Review Consulting Services LLC
140
East
Main Street, Suite 400
Rock
Hill, South Carolina 29730
Attention:
Robert Rowe
Telephone
No.: (800) 863-8296
Facsimile
No.: (803) 980-2899
or
to
such other individual or address as a party hereto may designate for itself
by
notice given as herein provided.
13.4 Waivers.
The failure of a party hereto at any time or times to require performance
of any
provision hereof shall in no manner affect its right at a later time to enforce
the same. No waiver by a party of any condition or of any breach of any term,
covenant, representation or warranty contained in this Agreement shall be
effective unless in writing, and no waiver in any one or more instances shall
be
deemed to be a further or continuing waiver of any such condition or breach
in
other instances or a waiver of any other condition or breach of any other
term,
covenant, representation or warranty.
13.5 No
Third Party Beneficiaries.
The provisions of this Agreement are for the benefit only of the parties
hereto,
and no third party may seek to enforce, or benefit from, these provisions;
provided,
however,
that
the Representatives and Affiliates of Purchaser and Seller are intended third
party beneficiaries of Sections
12.2
and
12.3,
as
applicable. Except for the Persons described in the immediately preceding
sentence, the parties specifically disavow any desire or intention to create
any
third party beneficiary hereunder, and specifically declare that no Person,
except for the parties, and their respective successors, shall have any right
hereunder nor any right of enforcement hereof.
13.6 Publicity.
Prior to the Closing Date, except as required by Law or the rules of any
stock exchange, no public announcement or other publicity regarding the
transactions referred to herein shall be made by Purchaser or Seller or any
of
their respective Affiliates, officers, directors, employees, representatives
or
agents, without the prior written agreement of Purchaser and Seller, in any
case, as to form, content, timing and manner of distribution or publication;
25
provided
that nothing in this Section 13.6
shall
prevent such parties from discussing such transactions with those Persons
whose
approval, agreement or opinion, as the case may be, is required for consummation
of such particular transaction or transactions. After the Closing, each of
the
parties shall be entitled to make such additional disclosure of the terms
and
conditions hereof as may be required by Law or the rules of any stock exchange
to which they may be subject.
13.7 Further
Assurances.
Upon the reasonable request of Purchaser, Seller will on and after the Closing
Date execute and deliver to Purchaser such other documents, releases,
assignments and other instruments as may be required to effectuate completely
the transfer and assignment to Purchaser of, and to vest fully in Purchaser
title to, each of the Membership Interests, and to otherwise carry out the
purposes of this Agreement.
13.8 Severability.
If any provision of this Agreement shall be held invalid, illegal or
unenforceable, the validity, legality or enforceability of the other provisions
hereof shall not be affected thereby, and there shall be deemed substituted
for
the provision at issue a valid, legal and enforceable provision as similar
as
possible to the provision at issue.
13.9 Entire
Understanding.
This Agreement and the Related Agreements set forth the entire agreement
and
understanding of the parties hereto in respect to the transactions contemplated
hereby and supersede any and all prior agreements, arrangements and
understandings among the parties relating to the subject matter
hereof.
13.10 Applicable
Law.
This Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of Delaware without giving effect to
the
principles of conflicts of law thereof.
13.11 Jurisdiction
of Disputes; Waiver of Jury Trial.
In the event any party to this Agreement commences any litigation, proceeding
or
other legal action in connection with or relating to this Agreement, any
Related
Agreement or any matters described or contemplated herein or therein, with
respect to any of the matters described or contemplated herein or therein,
the
parties to this Agreement hereby (a) agree under all circumstances absolutely
and irrevocably to institute any litigation, proceeding or other legal action
in
a court of competent jurisdiction located within the State of Delaware, whether
a state or federal court; (b) agree that in the event of any such litigation,
proceeding or action, such parties will consent and submit to personal
jurisdiction in any such court described in clause
(a)
and to
service of process upon them in accordance with the rules and statutes governing
service of process (it being understood that nothing in this Section
13.11
shall be
deemed to prevent any party from seeking to remove any action to a federal
court
in the State of Delaware; (c) agree to waive to the fullest extent permitted
by
law any objection that they may now or hereafter have to the venue of any
such
litigation, proceeding or action in any such court or that any such litigation,
proceeding or action was brought in an inconvenient forum; (d) agree as an
alternative method of service to service of process in any legal proceeding
by
mailing of copies thereof to such party at its address set forth in Section
13.3
for
communications to such party; (e) agree that any service made as provided
herein
shall be effective and binding service in every respect; and (f) agree that
nothing herein shall affect the rights of any party to effect service of
process
in any other manner permitted by Law. EACH PARTY HERETO WAIVES THE RIGHT
TO A
TRIAL BY JURY IN ANY
26
DISPUTE
IN CONNECTION WITH OR RELATING TO THIS
AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED
HEREIN
OR THEREIN, AND AGREE TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE
TO
EFFECT SUCH WAIVER.
13.12 Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed
an
original, but all of which together shall constitute one and the same
instrument.
13.13 Facsimile
Signatures.
Any signature page delivered via a fax machine shall be binding to the same
extent as an original signature page. Any party who delivers such a signature
page agrees to later deliver an original counterpart to any party which requests
it.
13.14 Expenses.
Purchaser shall pay the reasonable out-of-pocket and customary legal and
other
out-of-pocket expenses incurred by Seller or the Company incident to this
Agreement, the Nextra Asset Purchase Agreement, the Senior Management Agreement,
and all related agreements, with the payment of such expenses through the
Closing Date to be paid via wire transfer at the Closing as directed by Seller
(the “Closing
Date Expense Payment”);
provided that Seller furnishes to Purchaser invoices or other satisfactory
evidence of the incurrence by Seller of the expenses.
13.15 Transfer
Taxes and Fees.
Purchaser shall pay the cost of all sales, use and transfer Taxes arising
out of
the transfer of the Membership Interests pursuant to this Agreement
(“Transfer
Taxes”).
The
parties agree to cooperate with each other in connection with the preparation
and filing of Tax Returns with respect to the Transfer Taxes, in obtaining
all
available exemptions from such sales, use and transfer Taxes, and in timely
providing each other with resale certificates and any other documents necessary
to satisfy any such exemptions.
13.16 Representation
of Counsel; Mutual Negotiation.
Each party has had the opportunity to be represented by counsel of its choice
in
negotiating this Agreement. This Agreement shall therefore be deemed to have
been negotiated and prepared at the joint request, direction, and construction
of the parties, at arm’s-length, with the advice and participation of counsel,
and will be interpreted in accordance with its terms without favor to any
party.
The parties’ respective counsel may not be disqualified from representing their
clients in indemnification or other disputes arising out of this transaction
by
virtue of such counsel’s prior representation of the other party in an unrelated
matter.
[Signature
Page Follows]
27
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the date first written above.
|
HURON
CONSULTING GROUP
HOLDINGS,
LLC
|
DOCUMENT
REVIEW CONSULTING
SERVICES
LLC
|
|||
|
By:
|
/s/
Stanley N. Logan
|
By:
|
/s/
Robert Rowe
|
|
|
Name:
|
Stanley
N. Logan
|
Robert
Rowe, Member
|
||
|
Title:
|
Authorized
Signatory
|
|||
ROBERT
ROWE
/s/ Robert Rowe
/s/ Robert Rowe
S-1
EXHIBIT
99.1
[HURON
LOGO]
FOR
IMMEDIATE RELEASE
August
1, 2006
Huron
Consulting Group Acquires
Aaxis
Technologies and Document Review Consulting Services, LLC
Acquisitions
Bolster Huron’s Service Offerings to the Legal
Community
CHICAGO
-
August 1, 2006 - Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider
of financial and operational consulting services, today announced the
acquisitions of Aaxis Technologies and Document Review Consulting Services,
LLC
to enhance the Company’s service offerings to the office of the general counsel
and their law firms.
“The
advent of communication technologies has created a document explosion, and
legal
counsel need experts to manage the proliferation of printed and electronic
documents,” said Gary E. Holdren, chairman and chief executive officer, Huron
Consulting Group. “The acquisitions of Aaxis Technologies and Document Review
Consulting Services, LLC bolsters Huron’s ability to help the office of the
general counsel manage information in a comprehensive manner in litigation,
investigations, and mergers and acquisitions, and other major
transactions.”
Aaxis
Technologies, based in Washington, D.C., provides full-service electronic
data
discovery support to litigation teams and corporate counsel across the country
with a focus on forensics and data gathering, end-to-end data processing,
and
information consulting.
Eric
Ansley, president, Aaxis Technologies said, “Joining forces with Huron will
enable us to provide a broader range of services to clients in the legal
community. We have worked on client assignments with Huron in the past, and
we
have a great deal of respect for their reputation, capabilities, and market
presence.”
Document
Review Consulting Services, LLC (“DRCS”) is based in Rock Hill, South Carolina.
The management team of DRCS, which formerly operated NEXTRA Litigation
Solutions, LLC, will continue to provide a comprehensive document review
business using experienced contract reviewers. The utilization of experienced
contract reviewers allows for cost-effective and flexible solutions to meet
client needs.
Bob
Rowe,
president,
Document Review Consulting Services, LLC said, “We and Huron are believers in
providing solutions-oriented services to clients, and this transaction will
enable our clients to benefit from a broad portfolio of litigation support
and
review services.”
Under
the
terms of the purchase agreements, Huron has acquired all the assets of one
company and the stock of the other company, including approximately $6 million
of accounts receivable, for an aggregate purchase price of $24 million. On
a
combined basis, Aaxis Technologies and Document Review Consulting Services,
LLC
had unaudited trailing 12 month revenues of approximately $18 million.
The
acquisitions of these two companies provide more than the addition of their
existing business to Huron. Both companies have established facilities and
proven methodologies, solutions, and workforces that will expand Huron’s service
offerings to its current general counsel and law firm
clients.
Huron
expects that the acquisitions will be accretive to 2006 earnings and will
provide guidance updates when it releases results for the second quarter
of
2006.
About
Huron Consulting Group
Huron
Consulting Group helps clients effectively address complex challenges that
arise
in litigation, disputes, investigations, regulatory compliance, procurement,
financial distress, and other sources of significant conflict or change.
The
Company also helps clients deliver superior customer and capital market
performance through integrated strategic, operational, and organizational
change. Huron provides services to a wide variety of both financially sound
and
distressed organizations, including Fortune 500 companies, medium-sized
businesses, leading academic institutions, healthcare organizations, and
the law
firms that represent these various organizations. Learn more at www.huronconsultinggroup.com.
Statements
in this press release, which are not historical in nature and concern Huron
Consulting Group’s current expectations about the company’s reported results for
2006 and future results in 2006 are "forward-looking" statements as defined
in
Section 21E of the Securities Exchange Act of 1934 and the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are identified
by
words such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,”
“estimates,” or “continue.” These forward-looking statements reflect our current
expectation about our future results, performance or achievements, including
without limitation, that our business continues to grow at the current
expectations with respect to, among other factors, utilization and billing
rates
and number of consultants; that we are able to expand our service offerings
through our existing consultants and new hires; and that existing market
conditions do not change from current expectations. These statements involve
known and unknown risks, uncertainties and other factors that may cause actual
results, performance or achievements to be materially different from any
future
results, performance or achievements expressed or implied by these
forward-looking statements. Therefore you should not place undue reliance
on
these forward-looking statements. Please see “Risk Factors” in
our Form 10-K
and
in other documents we file with the Securities and Exchange Commission for
a
complete description of the material risks we face.
Media
Contact:
Jennifer
Frost Hennagir
312-880-3260
jfrost-hennagir@huronconsultinggroup.com
Investor
Contact:
Gary
L.
Burge, Chief Financial Officer
312-583-8722
garyburge@huronconsultinggroup.com
###