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Exhibit 2.1
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Purchase Agreement"), dated as of
this 15th day of December, 1998, by and among Xxxxxxx River Associates
Incorporated, a Massachusetts corporation ("CRA"), The Xxxxxx Group, LLC, a
California limited liability company ("Xxxxxx"), and Xxxx Xxxxxxx and Xxxxxxx X.
Xxxx, the sole members of Xxxxxx (the "Members"),
W I T N E S S E T H:
WHEREAS, Xxxxxx is in the business of providing economic, business and
strategic consulting services, which Xxxxxx has conducted and marketed
throughout the United States and other countries worldwide;
WHEREAS, CRA wishes to purchase from Xxxxxx, and Xxxxxx wishes to sell
to CRA, substantially all of the tangible and intangible assets and properties
of Xxxxxx, including the goodwill of Xxxxxx, (the "Business") and to assume
certain of the obligations of Xxxxxx;
WHEREAS, in connection with the purchase of the Business, CRA and each
of the Members wish to enter into exclusive consulting agreements; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
Article 1. DEFINITIONS
1.1. "Accounting Arbitrator" shall have the meaning set forth in
Section 2.5.1(c).
1.2. "Act" shall have the meaning set forth in Section 2.5.2.
1.3. "active as an exclusive consultant" and "active exclusive
consultant" means, at any time, a Member who (i) at such time and in the
preceding 12 month period, is not working, and has not worked, in competition
with CRA (without regard to work done for Xxxxxx prior to the Closing), has not
taken any position or appointment which by regulation or practice, precludes him
from meeting the definition of an "active exclusive consultant" to CRA and has
not retired as a consultant and (ii) in the 12 months preceding such time has
had at least 200 management and billable hours working for CRA or, to the extent
the Member has not worked such number of hours for CRA, the Member has
reasonably been available to work such hours for CRA; PROVIDED, HOWEVER, that
for the first 12 month period after the Closing 100 hours worked or reasonably
available for work during the second six month period after the Closing will
satisfy clause (ii). The determination of whether a Member has ceased to be
active as an exclusive consultant to CRA will be made by the Board of Directors
of CRA.
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1.4. "Affiliate" means, with respect to any Person, any other
Person that controls, is controlled by or is under common control with such
Person.
1.5. "Agreement" means any contract, agreement, understanding,
indenture, note, bond, loan, instrument, lease, mortgage, franchise, license,
commitment or binding arrangement, whether express or implied, whether written
or oral.
1.6. "Assumed Liabilities" shall have the meaning set forth in
Section 2.3.
1.7. "Benefit Plans" shall have the meaning set forth in
Section 3.18.
1.8. "billable hours" means hours worked which under its normal
policies, CRA bills to clients.
1.9. "Broker" shall have the meaning set forth in Section 3.21.
1.10. "Business" shall have the meaning set forth in the Recitals.
1.11. "Certification Letter" shall have the meaning set forth in
Section 2.5.1(b).
1.12. "Claim Amount" shall have the meaning set forth in
Section 7.3.
1.13. "Claim Establishment Date" shall have the meaning set forth in
Section 7.4.
1.14. "Client Contracts" shall have the meaning set forth in
Section 2.1(h).
1.15. "Closing" shall have the meaning set forth in Section 2.6.
1.16. "Closing Book Value" shall have the meaning set forth in
Section 2.5.1(a).
1.17. "Common Stock" means the common stock, without par value, of
CRA.
1.18. "competition with CRA" means participation of a Member, on his
own behalf or as owner, manager, stockholder, consultant, director, officer,
partner, member or employee of any business entity, directly or indirectly, in
any capacity, in any economic, business or strategic consulting business or
activity which is in direct or indirect competition with CRA, which intends to
compete directly or indirectly with CRA or which otherwise provides any services
similar to any services provided or proposed to be offered by CRA anywhere in
the world, PROVIDED, HOWEVER, this will not restrict a Member from owning,
without more, up to one percent of the outstanding voting power of a corporation
whose common stock is listed on an established national securities exchange or
national market system. The foregoing notwithstanding, a Member will not be
deemed hereunder to be in "competition with CRA" if (i) with the Company's prior
written consent (which will not be unreasonably withheld in the case of
activities not involving a project which if performed by the Company would
involve a legal or significant actual or reasonably anticipated business
conflict for the Company), such Member participates in an economic, business or
strategic consulting project conducted on a commercial basis in which the
Company has declined in writing to participate; or
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(ii) such Member participates in an economic, business or strategic consulting
project not conducted on a commercial basis if the Member gives the Company at
least 15 days prior written notice of his intent to undertake the project and if
within such 15 day period the Company does not object to his undertaking such
project because (A) such project would materially conflict with a current
project or relationship of the Company or (B) the Company has reason to believe
that the Member's acceptance of the project is likely to preclude the Company
from a significant engagement in the future.
1.19. "Consulting Agreement" shall have the meaning set forth in
Section 8.3.
1.20. "control" (including with correlative meaning, controlled by
and under common control with) means, as used with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
1.21. "CRA" shall have the meaning set forth in the Recitals.
1.22. "CRA's Accountants" shall have the meaning set forth in
Section 2.5.1(b).
1.23. "CRA Group" shall have the meaning set forth in Section 7.1.
1.24. "CRA Reports" shall have the meaning set forth in Section 4.3.
1.25. "Disability" shall have the meaning set forth in Section 5.9.
1.26. "Dispute Notice" shall have the meaning set forth in
Section 7.3.
1.27. "ERISA" shall have the meaning set forth in Section 3.18.
1.28. "Excluded Accounts Receivable" shall have the meaning set
forth in Section 2.2.1.
1.29. "Excluded Assets" shall have the meaning set forth in
Section 2.2.1.
1.30. "Excluded Obligations" shall have the meaning set forth in
Section 7.11(c).
1.31. "Final Statement" shall have the meaning set forth in
Section 2.5.1(c).
1.32. "Financial Statements" shall have the meaning set forth in
Section 3.5.
1.33. "Fixed Assets" shall have the meaning set forth in
Section 2.1(b).
1.34. "GAAP" means United States generally accepted accounting
principles.
1.35. "Governmental Agency" means any federal, state, county, local
or foreign governmental or regulatory body.
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1.36. "Intellectual Property" shall have the meaning set forth in
Section 2.1(j).
1.37. "Inventory" shall have the meaning set forth in
Section 2.1(a).
1.38. "Laws" means federal, state, county, local and foreign laws,
ordinances, regulations, orders, judgments, injunctions, awards or decrees.
1.39. "Liens" means liens, charges, mortgages, pledges, security
interests or other encumbrances.
1.40. "management hours" means hours worked for CRA in defining and
developing its consulting practices and other businesses and in assisting CRA in
strategy, development, recruiting and training.
1.41. "Material Adverse Change" shall have the meaning set forth in
Section 3.6.
1.42. "Material Adverse Effect" means an effect, whether or not
covered by insurance, that is or will be materially adverse to the business,
operations, property, prospects, condition (financial or otherwise), assets or
liabilities of Xxxxxx.
1.43. "Member" or "Members" shall have the meaning set forth in the
Recitals.
1.44. "Note" shall have the meaning set forth in Section 2.5.
1.45. "Operating Agreements" shall have the meaning set forth in
Section 2.1(f).
1.46. "Permit" means all licenses, permits, orders and approvals of
any federal, state, county, local or foreign governmental or regulatory body
relating to or used or useful in connection with the Business.
1.47. "Person" means any natural person, firm, partnership,
association, corporation, company, limited liability company, trust, public body
or government or other entity.
1.48. "Preliminary Statement" shall have the meaning set forth in
Section 2.5.1(a).
1.49. "Prepaid Expenses" shall have the meaning set forth in
Section 2.1(g).
1.50. "Purchase Agreement" shall have the meaning set forth in the
Recitals.
1.51. "Purchase Price" shall have the meaning set forth in
Section 2.5.
1.52. "Purchased Accounts Receivable" shall have the meaning set
forth in Section 2.1(c).
1.53. "Purchased Assets" shall have the meaning set forth in
Section 2.1.
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1.54. "Related Agreements" means the Consulting Agreements, the Note
and any other agreements contemplated by this Purchase Agreement to be signed at
or before the Closing.
1.55. "Sale" means (i) a merger or consolidation of CRA with or into
any other entity if immediately after such transaction Persons who were
stockholders of CRA immediately before such transaction own less than 50% in
voting power of the issued and outstanding stock of the resulting or surviving
entity, (ii) a sale for value by CRA of all or substantially all of its assets,
(iii) a sale of stock by CRA to one purchaser or group of affiliated purchasers
in which they purchase stock having more than 50% of the voting power of all of
CRA's issued and outstanding stock, (iv) as a result of a tender offer or series
of related transactions involving a tender offer, shareholders of CRA
immediately before such offer or transactions hold less than a majority in
voting power of the capital stock of CRA immediately after such offer or
transactions, or (v) as a result of a proxy contest or other contest for control
of CRA, a majority of the Board of Directors of CRA consists of individuals who
were neither (A) directors of CRA on the date of the Closing nor (B) individuals
approved for nomination by other directors, a majority of which approving
directors were directors of CRA on the date of the Closing or other persons
approved for nomination in accordance with this clause (B).
1.56. "Shares" shall have the meaning set forth in Section 2.5.
1.57. "Tangible Assets" shall have the meaning set forth in
Section 2.1(b).
1.58. "Tax" or "Taxes" means all federal, state, county, local,
foreign and other taxes, including income taxes, estimated taxes, excise taxes,
sales taxes, use taxes, gross receipts taxes, franchise taxes, employment and
payroll related taxes, unemployment taxes, property taxes and import duties,
whether or not measured in whole or in part by net income and including
deficiencies or other additions to tax, interest and penalties with respect
thereto.
1.59. "Ten Year Shares" means $750,000 of the Common Stock,
calculated using the average of the closing sale prices for the Common Stock as
reported on the NASDAQ National Market System for the ten trading days ending
two days before the Closing, which CRA will deliver to Xxxx Xxxxxxx at the
Closing and which are subject to the transfer restrictions set forth in Section
5.9.
1.60. "Xxxxxx" shall have the meaning set forth in the Recitals.
1.61. "Xxxxxx Claim Amount" shall have the meaning set forth in
Section 7.11(a).
1.62. "Third Party Action" shall have the meaning set forth in the
Section 7.5.
Article 2. PURCHASE AND SALE OF ASSETS.
2.1. PURCHASE AND SALE. Upon and subject to the terms and
conditions hereof, at the Closing, Xxxxxx shall sell, transfer and assign to
CRA, and CRA shall purchase and acquire from Xxxxxx, all right, title and
interest of Xxxxxx in and to all of the tangible and intangible assets of Xxxxxx
other than the Excluded Assets, used or useful in Xxxxxx'x business (the
"Purchased Assets"), in each case free and clear of all Liens whatsoever,
including, without limitation:
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(a) All supplies, training and consulting materials, and
other tangible inventory of Xxxxxx (collectively, the "Inventory");
(b) All machinery, equipment, furniture, fixtures,
vehicles and other tangible assets of Xxxxxx not included in Inventory
(collectively, "Tangible Assets"), including, without limitation, those fixed
assets listed on SCHEDULE 2.1(b) hereto (the "Fixed Assets");
(c) All of Xxxxxx'x rights to payment for goods or
services provided prior to the Closing (other than the Excluded Accounts
Receivable), including Xxxxxx'x work in process, (the "Purchased Accounts
Receivable"), as described on SCHEDULE 2.1(c) hereto;
(d) All rights of Xxxxxx, whether now existing or
hereafter arising, against manufacturers, vendors or subcontractors with respect
to any of the Inventory or Tangible Assets or any part thereof, including,
without limitation, all product warranties thereon;
(e) Copies of all price lists, client and vendor lists,
historical sales data and other accounting and business records, files and data
relating to Xxxxxx and the Business since Xxxxxx'x inception, except Xxxxxx'x
minute books and records and books of membership interests;
(f) All of Xxxxxx'x rights under all leases, licenses and
other agreements and arrangements listed on SCHEDULE 2.1(f) hereto (the
"Operating Agreements");
(g) All prepaid expenses and related rights listed on
SCHEDULE 2.1(g) hereto (the "Prepaid Expenses");
(h) All of Xxxxxx'x rights under client contracts,
purchase orders, proposals, work orders, authorizations and other agreements for
the provision by Xxxxxx of goods and services (the "Client Contracts") listed on
SCHEDULE 2.1(h) hereto;
(i) All rights to the names "The Xxxxxx Group, LLC" and
all other trademarks, trade names, service marks, trademark registrations and
trademark applications of Xxxxxx and all good will of Xxxxxx related thereto;
(j) All of Xxxxxx'x patents, patent applications,
specifications, processes, know-how, blueprints, drawings, designs, patterns,
copyrights, copyright applications, formulae, inventions, technology, trade
secrets, proprietary information and other information and documents
(collectively, the "Intellectual Property"), including, without limitation,
those items set forth on SCHEDULE 2.1(j) hereto and all good will of Xxxxxx
related thereto;
(k) All Permits transferrable by Xxxxxx; and
(l) All notes receivable of Xxxxxx.
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2.2. EXCLUDED ASSETS.
2.2.1. DESCRIPTION. The following are not being sold,
assigned or otherwise transferred to CRA (collectively, the "Excluded Assets"):
(a) cash and bank accounts of Xxxxxx, and (b) Xxxxxx'x work in process and
accounts receivable that are listed on SCHEDULE 2.2.1 hereto (the "Excluded
Accounts Receivable"). In identifying which of Xxxxxx'x work in process and
accounts receivable are Purchased Assets and which are Excluded Assets, CRA and
Xxxxxx will attempt to cause the net book value of the Fixed Assets plus the
Purchased Accounts Receivable (after consideration of all appropriate reserves
and depreciation) less the value of the Assumed Liabilities to equal $400,000.
Personal items of the Members or employees of Xxxxxx stored at Xxxxxx'x offices
are not included in the Purchased Assets.
2.2.2. COLLECTION OF ACCOUNTS RECEIVABLE. From and after the
Closing, Xxxxxx shall be entitled to retain and exercise all of its rights in
the Excluded Accounts Receivable. CRA shall be entitled to all payments in
respect of the Purchased Assets (including the Purchased Accounts Receivable)
and in that regard Xxxxxx hereby irrevocably constitutes and appoints CRA, from
and after the Closing, its true and lawful attorney-in-fact, with full power of
substitution, in its name, place and stead to endorse the name of Xxxxxx on any
checks and other remittances received as payments with respect to the Purchased
Assets and to perform all other acts necessary or desirable to collect such
payments. Xxxxxx hereby grants to CRA the full and irrevocable right, from and
after the Closing, to use the current letterhead of Xxxxxx in order to collect
any payments with respect to the Purchased Assets. CRA shall provide reasonable
assistance to Xxxxxx in the processing of documentation related to the billing
and collection of Excluded Accounts Receivable in the ordinary course of
business. In no event will CRA have any obligation to pursue any non-routine
activities with respect to any Excluded Account Receivable such as litigation or
other enforcement action to collect it. In the event CRA or Xxxxxx receives a
payment from a client which the other is entitled to keep pursuant to the
provisions of this Section 2.2.2, then the party receiving such payment shall
promptly, within five days of the receipt of such payment, pay over such payment
to the party entitled to keep the payment. In the event CRA or Xxxxxx receives
payment from a client and such payment does not reference a specific invoice
number, then in that event the payment shall be deemed to apply to the longest
outstanding unpaid invoice or invoices for such client.
In addition to its obligations set forth above in this Section 2.2.2,
Xxxxxx agrees that it will, forthwith after receipt, transfer and deliver to CRA
any property that Xxxxxx may receive in respect of any of the Purchased Assets
and any mail or other documents received by Xxxxxx relating to any of the
Purchased Assets or Assumed Liabilities transferred to CRA hereunder, such
property, mail and documents to be delivered in the form and condition in which
received, except for the opening of any envelope or package. CRA agrees that it
will, forthwith after receipt, transfer and deliver to Xxxxxx any property that
CRA may receive in respect of any of the Excluded Assets and any mail or other
documents received by CRA relating to any of the Excluded Assets, such property,
mail and documents to be delivered in the form and condition in which received,
except for the opening of any envelope or package. CRA hereby grants to Xxxxxx
the full and irrevocable right to use the names "Xxxxxx" and "The Xxxxxx Group"
in order to collect the Excluded Accounts Receivable.
2.3. NO ASSUMPTION OF LIABILITIES. Except for (a) liabilities
arising after the Closing under the Operating Agreements assigned to CRA
pursuant to Section 2.1(f) above, (b) obligations to
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provide goods and services after the Closing under any Client Contract assigned
to CRA pursuant to Section 2.1(h) above and (c) the liabilities described on
SCHEDULE 2.3 hereto (the "Assumed Liabilities"), which Assumed Liabilities CRA
hereby agrees to assume and perform, CRA assumes no obligations or liabilities
of Xxxxxx in connection with this transaction. Without limiting the generality
of the foregoing, Xxxxxx shall be solely responsible for payment promptly when
due of all amounts at any time owing by Xxxxxx with respect to the business of
Xxxxxx, both before and after the Closing, whether accrued or contingent, known
or unknown, other than the Assumed Liabilities, including, without limitation,
liabilities arising out of the provision by Xxxxxx of goods or services provided
by Xxxxxx prior to the Closing, obligations for accrued salaries, wages,
bonuses, benefits, severance or other payments that may be due to employees of
Xxxxxx and obligations for any of Xxxxxx'x Taxes.
2.4. INSTRUMENTS OF TRANSFER. The transfer of the Purchased Assets
to be transferred to CRA at the Closing shall be effected by bills of sale,
assignments and such other instruments of transfer as shall transfer to CRA full
title to the Purchased Assets free and clear of all Liens whatsoever except the
Assumed Liabilities, all of which documents shall contain appropriate and
customary warranties and covenants of title consistent herewith and shall be in
form and substance reasonably acceptable to CRA and its counsel.
2.5. PURCHASE PRICE. CRA shall pay to Xxxxxx, in consideration of
the transfer of the Purchased Assets, a purchase price (the "Purchase Price") of
$8,850,000, which will consist of (a) a promissory note of CRA in favor of
Xxxxxx in the principal amount of $7,350,000 and in substantially the form
attached as EXHIBIT A hereto (the "Note") and (b) $1,500,000 of the Common
Stock. In determining the number of shares of Common Stock to be delivered to
Xxxxxx in the payment of the Purchase Price (the "Shares") and the number of
Shares which will be tradeable as set forth in Section 2.5.2, the Common Stock
will be priced at the average of the closing sale prices for the Common Stock as
reported on the NASDAQ National Market System for the ten trading days ending
two days before the Closing.
2.5.1. PURCHASE PRICE ADJUSTMENT. The Purchase Price may be
adjusted after the Closing as follows:
(a) CRA shall prepare (or cause to be prepared) within
120 days after the Closing a statement (the "Preliminary Statement") showing the
net book value of the Fixed Assets (after consideration of depreciation), plus
the Purchased Accounts Receivable to the extent collected by CRA within 90 days
of the Closing, plus the value of the Prepaid Expenses, less the value of the
Assumed Liabilities (the "Closing Book Value"). For these purposes, (i) the net
book value of the Fixed Assets (after consideration of depreciation) shall be
the value set forth on SCHEDULE 2.1(b), (ii) the value of the Prepaid Expenses
shall be the value set forth on SCHEDULE 2.1(g) (subject to a true-up after the
Closing for prepaid health, vision, dental and disability expenses), and (iii)
the value of the Assumed Liabilities shall be the value set forth on SCHEDULE
2.3 (subject to a true-up after the Closing for accounts payable for independent
contractors' work done in December 1998). The Preliminary Statement shall be
prepared in accordance with GAAP consistent with the principles applied in the
preparation of the audited balance sheet of CRA as at November 29, 1997.
Notwithstanding the foregoing, the Preliminary Statement may omit footnotes and
related disclosures normally included in audited balance sheets prepared in
accordance with GAAP.
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(b) CRA shall cause Ernst & Young LLP, CRA's independent
certified public accountants ("CRA's Accountants"), to certify as to the
accuracy of the Preliminary Statement and shall deliver to Xxxxxx within 120
days after the Closing the Preliminary Statement, together with the
certification of CRA's Accountants with respect thereto (the "Certification
Letter").
(c) Within 30 days after its receipt of the Preliminary
Statement and the Certification Letter, Xxxxxx shall notify CRA whether it
accepts or disputes the accuracy of the Preliminary Statement. If Xxxxxx accepts
the Preliminary Statement or shall fail to notify CRA of any dispute with
respect thereto within the 30 day period, the Preliminary Statement shall be
deemed to be final, conclusive and binding on Xxxxxx and CRA (the "Final
Statement"). If Xxxxxx disputes the accuracy of the Preliminary Statement, it
shall in such notice set forth in reasonable detail those items that Xxxxxx
believes are not fairly presented and the reasons for its opinion. The parties
shall then meet and in good faith use their best efforts to try to resolve their
disagreements over the disputed items. If the parties resolve their
disagreements over the disputed items in accordance with the foregoing
procedure, the Preliminary Statement, with those modifications to which the
parties shall have agreed, shall be deemed to be the Final Statement. If the
parties have not resolved their disagreements over the disputed items on the
Preliminary Statement within 15 days after Xxxxxx'x notice of dispute, the
parties shall forthwith jointly request an independent, national accounting firm
other than CRA's Accountants mutually agreed to by CRA and Xxxxxx (the
"Accounting Arbitrator") to make a binding determination of those disputed items
in accordance with this Agreement. The Accounting Arbitrator will have 30 days
from the date of referral to render its decision with respect to the disputed
items concerning the Preliminary Statement, which decision shall be final and
binding upon Xxxxxx and CRA and enforceable as an arbitration award pursuant to
the Massachusetts Uniform Arbitration Act for Commercial Disputes, Mass. Gen.
Xxxx Xxx. ch. 251 or the Federal Arbitration Act, 9 U.S.C. ss.ss.1 ET seq. The
Preliminary Statement, with those modifications determined by the Accounting
Arbitrator, shall be deemed to be the Final Statement. The fees and expenses of
the Accounting Arbitrator engaged pursuant to this Section 2.5.1 shall be borne
50% by Xxxxxx and 50% by CRA.
(d) If the Final Statement indicates that the Closing
Book Value is less than $400,000, then Xxxxxx shall pay the difference to CRA
not later than 10:00 a.m., Eastern Time, on the third business day after the
date of completion of the Final Statement. If the Final Statement indicates that
the Closing Book Value is greater than $400,000, then CRA shall pay the
difference to Xxxxxx not later than 10:00 a.m., Eastern Time, on the third
business day after the date of completion of the Final Statement.
2.5.2. TRADING OF COMMON STOCK; RESTRICTIONS ON TRANSFER.
The Shares delivered to Xxxxxx will constitute "restricted securities," as such
term is defined under the Securities Act of 1933, as amended, (the "Act"). In
addition to restrictions on transfer necessary to comply with the Act, transfer
of the Shares delivered to Xxxxxx as part of the payment of the Purchase Price
will be restricted, and such Shares must be held, as follows:
(a) $750,000 of the Shares may not be sold (i) in any
private sale for a period of six months after the Closing, which period may be
extended for as long as CRA in good faith is considering and working in good
faith on a public offering registered under the Act (other than a
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registration statement on Form S-8 or Form S-4) in that period but in no case
longer than one year after the Closing or (ii) in any public sale for a period
of one year after the Closing, unless in either case the Shares are sold as
described in the next sentence. If prior to the time such Shares could be sold
pursuant to the preceding sentence, CRA undertakes a public offering registered
under the Act which involves the filing by it of a registration statement with
the Securities and Exchange Commission (other than a registration statement on
Form S-8 or Form S-4, or their successors, or any other form for a similar
limited purpose, or any registration statement covering only securities proposed
to be issued in exchange for securities or assets of another corporation), the
entire $750,000 of such Shares may be sold in such offering, subject, in the
case of an underwritten offering, to the Company limiting the number of such
Shares that may be sold in such Offering if the managing underwriter of such
offering determines that the inclusion of such Shares would adversely affect the
offering;
(b) $750,000 of the Shares may not be sold for two years
after the Closing and thereafter 12.5% of such shares will become saleable on
each anniversary of the Closing commencing on the second anniversary of the
Closing.
The above restrictions on transfer will not apply to (i) any transfer
to or for the benefit of family members of the Member or, in connection with
death or marital dissolution and (ii) any transfer to the Members upon the
dissolution of Xxxxxx; provided that any of the Shares so transferred will
remain subject to this Section 2.5.2, and it shall be a condition to such
transfer that the transferee enter into an agreement in form reasonably
satisfactory to CRA agreeing to be so bound.
In the event of a Sale of CRA, the restrictions on transfer on any
consideration received by Xxxxxx with respect to the Shares will be of no
greater duration or severity than the restrictions on consideration received by
CRA's executive officers with respect to CRA's Common Stock owned by them and
subject to transfer restrictions under CRA's Stock Restriction Agreement dated
April 17, 1998 unless pooling of interests accounting rules require a different
approach.
2.5.3. PURCHASE PRICE ALLOCATION. CRA and Xxxxxx agree that
the Purchase Price shall be allocated among the Purchased Assets and the Assumed
Liabilities as set forth on SCHEDULE 2.5.3 hereto.
2.6. CLOSING. The closing of the purchase and sale of the Purchased
Assets and of the assumption of the Assumed Liabilities (the "Closing") shall be
held at 10:00 A.M. at the offices of Xxxxx, Xxxx & Xxxxx LLP, Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 on December 15, 1998 or on such other date
as the parties hereto may mutually agree upon in writing.
Article 3. REPRESENTATIONS AND WARRANTIES OF XXXXXX AND THE MEMBERS
Xxxxxx and the Members jointly and severally hereby represent and
warrant to, and agree with, CRA as follows:
3.1. DUE ORGANIZATION AND QUALIFICATION. Xxxxxx is duly organized
and validly existing as a limited liability company in good standing under the
laws of California, with full power to own
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its properties, to lease its leased properties and to conduct its business as
now conducted. Xxxxxx is duly qualified to transact business and is in good
standing in each of the jurisdictions listed on SCHEDULE 3.1 hereto, which are
the only jurisdictions in which the character of the property owned or held
under lease by Xxxxxx or the nature of the business transacted by it requires
such qualification and for which failure to qualify would or could have a
Material Adverse Effect. Xxxxxx does not file in any jurisdiction other than the
jurisdictions listed on SCHEDULE 3.1 any franchise, income or other tax return
in connection with any tax based upon the ownership, lease or use of property in
such jurisdiction or the derivation of income from such jurisdiction.
3.2. SUBSIDIARIES AND OTHER AFFILIATES. Xxxxxx has no subsidiaries
and does not own, directly or indirectly, any capital stock or other equity
ownership or proprietary interest in any other Person.
3.3. AUTHORITY TO EXECUTE AND PERFORM AGREEMENT; BINDING EFFECT.
3.3.1. THE MEMBERS. Each Member has full right, power and
authority to enter into this Purchase Agreement and the Related Agreements to
which he is a party and to perform fully his obligations hereunder and
thereunder. This Purchase Agreement and the Related Agreements to which such
Member is a party have been duly executed and delivered by such Member, and,
assuming due authorization, execution and delivery by the other parties hereto
and thereto, are the legal, valid and binding obligation of such Member,
enforceable against him in accordance with their terms.
3.3.2. XXXXXX. Xxxxxx has full right, power and authority to
enter into this Purchase Agreement and the Related Agreements to which it is a
party and to perform fully its obligations hereunder and thereunder. The
execution and delivery of this Purchase Agreement and such Related Agreements
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action of Xxxxxx. This Purchase Agreement
and such Related Agreements have been duly executed and delivered by Xxxxxx,
and, assuming due authorization, execution and delivery by the other parties
hereto and thereto, are the legal, valid and binding obligation of Xxxxxx,
enforceable against it in accordance with their terms.
3.4. TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES. Xxxxxx
has the full right to sell, transfer, and assign all of the Purchased Assets to
CRA, and has good title thereto, free and clear of all Liens whatsoever other
than the Assumed Liabilities, current period property taxes, and materialmen's
and repairmen's Liens arising in the ordinary course of Xxxxxx'x business.
Following the Closing, CRA will be the lawful owner of, and have good title to,
the Purchased Assets, free and clear of any Liens whatsoever other than the
Assumed Liabilities. The Purchased Assets include all of the assets and
properties necessary for CRA to conduct the Business, substantially as Xxxxxx
has conducted its business in the past. None of the Purchased Assets is in the
possession, custody or control of any Person other than Xxxxxx. All of the
tangible Purchased Assets are located at the offices of Xxxxxx at 0000 Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
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3.5. FINANCIAL STATEMENTS.
(a) Xxxxxx has delivered to CRA the following financial
statements of Xxxxxx (collectively, the "Financial Statements"):
(i) an unaudited balance sheet and related unaudited
statement of income as at the end of and for its year ended December
31, 1997; and
(ii) an unaudited balance sheet and related unaudited
statement of income as at the end of and for its ten months ended
October 31, 1998.
(b) All of the foregoing Financial Statements have been
prepared using the Quickbooks accounting software package, with the following
assumptions and policies: (i) expenses are generally recorded as they are
incurred, (ii) fixed assets are depreciated using an aggregate quarterly figure
as recommended by Xxxxxx'x tax accountants, (iii) accrued income is entered at
the time invoices are sent to clients, (iv) Xxxxxx has maintained no accounts
payable except for monies due to the Members for their professional fees and for
selected independent contractors who are paid after fees are collected from the
client, and (v) Xxxxxx has not accrued employee vacation time or possible profit
sharing payments as liabilities. On this basis, the Financial Statements are
complete and correct in all material respects and fairly present the financial
position and the results of operations of Xxxxxx at the dates and for the
periods indicated thereon.
(c) All accounting ledgers and other books and records of
Xxxxxx are located at the offices of Xxxxxx in Oakland, California, and present
fairly the transactions they purport to represent. There has been no material
transaction with respect to the business of Xxxxxx which is not fully described
in such ledgers, books and records.
3.6. NO MATERIAL ADVERSE CHANGE. Since October 31, 1998, there has
not been any change, whether or not covered by insurance, in the condition
(financial or otherwise), assets, liabilities, operations, business, prospects
or properties of Xxxxxx, or in its relationships with suppliers, clients,
lessors, employees, consultants or others, other than changes in the ordinary
course of business which have not been, either in any case or in the aggregate,
materially adverse to Xxxxxx (a "Material Adverse Change"), and Xxxxxx and the
Members do not know of any Material Adverse Change that is threatened or
reasonably likely to occur.
3.7. TAX MATTERS. Except as set forth on SCHEDULE 3.7 hereto,
within the times and in the manner prescribed by law, (a) all Tax returns that
were or are required to be filed by Xxxxxx have been filed and all Taxes that
have become due or assessed from or against Xxxxxx have been timely paid in
full; (b) no Tax liens have been filed and no material claims are being asserted
or, to the knowledge of Xxxxxx and the Members, have been threatened with
respect to any of such Taxes; and (c) Xxxxxx has withheld, collected and paid to
the proper Governmental Agencies all amounts which it has been required by law
to withhold or collect.
3.8. COMPLIANCE WITH LAWS.
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3.8.1. GENERAL MATTERS. Except as set forth on
SCHEDULE 3.8.1 hereto, Xxxxxx has complied with all Laws applicable to it or its
business and with respect to which the failure to comply would or could have a
Material Adverse Effect. Xxxxxx has not made any illegal payment to officials or
employees of any governmental or regulatory body or to any other Person. Except
as set forth on SCHEDULE 3.8.1 hereto, to the knowledge of Xxxxxx and the
Members, Xxxxxx has all Permits and has made all required registrations, notices
and filings with any Governmental Agencies that are material to, or necessary
for, the lawful conduct of its business. To the knowledge of Xxxxxx and the
Members, all Permits of Xxxxxx are set forth on SCHEDULE 3.8.1 hereto and are in
full force and effect, no violations material to the business of Xxxxxx have
been recorded with respect to any Permit, and no proceeding is pending or, to
the knowledge of the Members or Xxxxxx, threatened for the revocation or
limitation of any Permit. Neither the Members nor Xxxxxx has any knowledge of
any notice by any Governmental Agency, written or oral, asserting any
noncompliance with any Permit.
3.8.2. ENVIRONMENTAL MATTERS. Xxxxxx has duly complied with
all Laws relating to the protection of the environment and with respect to which
the failure to comply would or could have a Material Adverse Effect. There are
no past or present actions or activities by Xxxxxx, or, to the knowledge of
Xxxxxx or the Members, any circumstances, conditions, events or incidents,
including the storage, treatment, release, emission, discharge, disposal or
arrangement for disposal of any hazardous substances, that is reasonably likely
to form the basis of a claim against Xxxxxx or against any Person whose
liability for any such claim Xxxxxx has or may have retained either
contractually or by operation of law and no such claim is pending or, to the
knowledge of Xxxxxx or the Members, threatened.
3.9. EXECUTION AND PERFORMANCE OF AGREEMENT. Except as set forth on
SCHEDULE 3.9 hereto:
3.9.1. NO CONFLICT. The execution, delivery and performance
of this Purchase Agreement and the Related Agreements and the consummation of
the transactions contemplated hereby do not, and will not, violate, conflict
with or otherwise result in the breach or violation of any of the terms and
conditions of, result in the creation of (or require Xxxxxx or the Members to
create) any Lien on any of the Purchased Assets, or result in a material
modification of the effect of or constitute (or with notice, lapse of time or
both constitute) a default under (a) the articles of organization or operating
agreement of Xxxxxx, (b) any Client Contract, any Operating Agreement or any
material instrument, contract or other agreement to which Xxxxxx or any Member
is a party or by or to which it or he or any of its or his assets or properties
(including the Purchased Assets) is bound or subject, or (c) any statute or any
regulation, order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body known to be against or binding
upon, or applicable to, Xxxxxx or the Members or upon its or their assets or
properties (including the Purchased Assets). No approval or consent of any
Person is needed in order to transfer any of the Purchased Assets, including any
Operating Agreement or Client Contract to CRA at the Closing or to give CRA the
full benefit of such Purchased Assets after the Closing.
3.9.2. REQUIRED FILINGS AND CONSENTS. Neither Xxxxxx nor the
Members is required to submit any notice, report or other filing with any
Governmental Agency in connection with the execution, delivery and performance
of this Purchase Agreement or the Related Agreements and the consummation of the
transactions contemplated hereby and thereby, except for notices, reports or
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other filings for which failure to submit would not or could not reasonably be
expected to materially impair the value to CRA of the Purchased Assets. No
waiver, consent, approval or authorization of (a) any Governmental Agency or (b)
any party to or pursuant to any Agreement to which Xxxxxx or any Member is a
party or by which Xxxxxx or any Member or any of its or his assets or properties
(including the Purchased Assets) is bound or affected, is required to be
obtained or made by either Xxxxxx or the Members in connection with the
execution, delivery and performance of this Purchase Agreement or the Related
Agreements and the consummation of the transactions contemplated hereby and
thereby, except for waivers, consents, approvals or authorizations for which
failure to obtain or make would not or could not reasonably be expected to
materially impair the value to CRA of the Purchased Assets.
3.10. LITIGATION. Neither Xxxxxx nor either of the Members has
received notice of any outstanding orders, judgments, injunctions, awards or
damages of any court, governmental or regulatory body or arbitration tribunal
against or adversely affecting Xxxxxx or a Member. Neither Xxxxxx nor either of
the Members is a party to or, to the knowledge of Xxxxxx or the Members,
threatened with, any litigation or judicial, administrative, investigative or
arbitration proceeding. Xxxxxx and the Members do not know of any dispute with
any Person that is reasonably likely to give rise to any such litigation or
judicial, administrative, investigative or arbitration proceeding and there is
no fact, event or circumstance that is reasonably likely to give rise to any
such litigation or judicial, administrative, investigative or arbitration
proceeding.
3.11. EMPLOYMENT MATTERS.
3.11.1. GENERAL. SCHEDULE 3.11 hereto sets forth (a) the
names, positions and current compensation rates of all full-time and part-time
employees of Xxxxxx; (b) any Agreement currently in effect to which Xxxxxx is a
party with any current or former member, manager, officer, employee, consultant
or agent; and (c) statistical information setting forth since Xxxxxx'x inception
the number of Xxxxxx employees hired and the number terminated or departed. The
Company has not at any time had, nor to the knowledge of Xxxxxx or the Members
is there now threatened, any walkout, strike, union activity, picketing, work
stoppage, work slowdown or any other similar occurrence. The Company has
complied in all material respects with all applicable laws, rules and
regulations relating to the employment of labor, including those relating to
wages, hours and collective bargaining. Xxxxxx has withheld any material amounts
required by law or agreement to be withheld from the wages or salaries of its
employees and it has paid all such amounts to the appropriate Governmental
Agency, insurer or other Person in accordance with such laws or agreements.
Xxxxxx is not liable in any material respect for any arrears of wages or other
Taxes or penalties for failure to comply with such laws or agreements. No
material controversies are pending between Xxxxxx and any of its employees, and
no material controversies have been threatened by any such employee.
3.11.2. CONTINUED EMPLOYMENT. The Members do not have any
knowledge of any current full-time or part-time employee of Xxxxxx who will
refuse to accept CRA's offer of employment.
3.12. AGREEMENTS. Except as set forth on SCHEDULE 3.12 hereto,
Xxxxxx is not a party to, and it and its assets or properties are not bound or
subject to any:
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(a) Agreement for the sale by Xxxxxx of its products or
services under which Xxxxxx has or could have any continuing liability, or
obligation to perform after the Closing;
(b) Agreement, whether a license, royalty agreement or
otherwise, relating to copyrights, know-how, technology, processes, formulae,
trade secrets, confidential or proprietary information or materials, royalties,
distribution or agency arrangements or patents or other similar Agreements;
(c) Agreement for the sale of Xxxxxx'x assets or
properties other than in the ordinary course of business;
(d) Agreement under which Xxxxxx agrees to indemnify any
party or to share any Tax liability of any party other than this Purchase
Agreement;
(e) Agreement containing covenants of Xxxxxx not to
compete in any line of business or with any Person in any geographical area or
confidentiality provisions;
(f) Agreement to pay brokerage or finder's fees; or
(g) any other Agreement calling for payments or receipts
in excess of $10,000 over any 12-month period, or that has a remaining term in
excess of twelve months and is not terminable at will by Xxxxxx on not more than
60 days notice (in either case whether or not made in the ordinary course of
business), or any other Agreement which a reasonable person would consider is
material to the assets, condition (financial or otherwise), results of
operations, business or prospects of Xxxxxx.
Copies of each written Agreement identified on SCHEDULE 3.12 or any
other Schedule have been delivered or made available to CRA, and the material
terms of each oral Agreement set forth on SCHEDULE 3.12 have been disclosed
thereon. Each Agreement identified on SCHEDULE 3.12 or any other Schedule is in
full force and effect except as set forth on such Schedule. Xxxxxx is not in
material default under any Agreement set forth on Schedule 3.12, and to the
knowledge of Xxxxxx and the Members no condition exists that, with notice or
lapse of time or both, would constitute a material default thereunder by Xxxxxx.
To the knowledge of Xxxxxx and the Members, (i) no Person (other than Xxxxxx)
that is a party to any Agreement set forth on SCHEDULE 3.12 or any other
Schedule is in material default thereunder and (ii) no condition exists that,
with notice or lapse of time or both, would constitute a material default
thereunder by such Person.
3.13. TANGIBLE ASSETS. Subject to exceptions not material to the
Business, all of the Tangible Assets are in good operating condition and repair,
and Xxxxxx has not received any notice that it or any of the Tangible Assets is
in violation of any existing Law or any building, zoning, health, safety or
other ordinance, code or regulation. All of the Tangible Assets are located at
Xxxxxx'x offices in Oakland, California.
3.14. INTELLECTUAL PROPERTY. The Intellectual Property constitutes
all intellectual property rights owned by or licensed to Xxxxxx and material or
necessary to the conduct of the Business as
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conducted by Xxxxxx. Except for Agreements regarding confidentiality, Xxxxxx is
not a party to any written or oral agreement whereby the use of any Intellectual
Property is restricted, and CRA's use after the Closing of the Intellectual
Property will not cause any violation or infringement of the rights of others.
3.15. LIABILITIES. Xxxxxx has no liabilities or other obligations of
any nature which are required by the basis of accounting set forth in Section
3.5(b) to be reflected on the balance sheets referred to in Section 3.5 and
which were not reflected on such balance sheets, except for liabilities and
obligations incurred since October 31, 1998 in the ordinary course of business
that are not, either in any case or in the aggregate, material to Xxxxxx.
3.16. CLIENTS. SCHEDULE 3.16 hereto contains a complete and correct
list as of the date hereof of all of Xxxxxx'x clients who have been billed for
services or products since Xxxxxx'x inception. No current client has expressed
its intention to terminate or materially reduce its usage of Xxxxxx'x services
as a result of its expressed dissatisfaction with Xxxxxx'x services. In the last
12 months, no client has terminated or materially reduced (or threatened to
terminate or materially reduce) its usage of Xxxxxx'x services as a result of
its expressed dissatisfaction with Xxxxxx'x services. There is no pending
material dispute with any client.
3.17. REPUTATION. To the knowledge of Xxxxxx and the Members, no
fact or circumstance exists which may have, or is reasonably likely to have, a
material adverse effect on the reputation of Xxxxxx or its consulting services
or of any Member, or senior economist of Xxxxxx.
3.18. EMPLOYEE BENEFIT PLANS. SCHEDULE 3.18 hereto sets forth a list
of all pension, profit sharing, retirement, deferred compensation, security
purchase, security option, incentive, bonus, vacation, severance, disability,
hospitalization, medical insurance, life insurance and other employee benefit
plans, programs or arrangements maintained by Xxxxxx or under which Xxxxxx has
any obligations (other than obligations to make current wage or salary payments
or sales commissions terminable on notice of thirty days or less) in respect of,
or which otherwise cover, any of the current or former members, managers,
officers, employees or consultants of Xxxxxx, or their beneficiaries, including
without limitation any such plans, programs or arrangements, whether written or
oral, that Xxxxxx may have with its employees created by Xxxxxx'x custom and
usage in dealing with its employees (collectively, the "Benefit Plans"). Except
as set forth on SCHEDULE 3.18, Xxxxxx has no accrued obligations or liabilities
under any Benefit Plan to any of the current or former members, managers,
officers, employees or consultants of Xxxxxx, or their beneficiaries. Xxxxxx has
never been obligated to make any contributions to any "multiemployer plan"
within the meaning of Section 3(37)(a) of Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). Xxxxxx does not currently maintain, and has
never in the past maintained, an employee pension benefit plan within the
meaning of Section 3(2) of ERISA which is or was intended to be a duly qualified
plan and trust under Sections 401(a) and 501(a), respectively, of the Code.
Xxxxxx has delivered or made available to CRA copies of all plan texts and any
other documents, descriptions or materials related thereto.
3.19. INSURANCE. SCHEDULE 3.19 hereto sets forth (a) a list of all
policies or binders of fire, liability, casualty, product liability, workmen's
compensation, health, medical, life, group, vehicular or other insurance held by
or on behalf of Xxxxxx and its employees, (b) a brief description thereof
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specifying the insurer, the policy number or covering note number with respect
to binders, each pending claim thereunder, the aggregate amounts paid out under
each such policy through the date hereof, the aggregate limit, if any, of the
insurer's liability thereunder, and the termination date thereof and (c) a list
of claims and notices to the insurer (or its agent) of possible claims existing
or made since Xxxxxx'x inception through the date of the Closing and a
description of the resolution or current status of any such claims or possible
claims. Such policies and binders are in full force and effect, and the
insurance provided by such policies and binders is reasonable in coverage and
amounts for the industry in which Xxxxxx operates. Xxxxxx is not in default with
respect to any provision contained in any such policy or binder and has not
failed to give any notice or present any material claim under any such policy or
binder in due and timely fashion. There are no outstanding unpaid claims under
any such policy or binder nor has Xxxxxx received notice from any of its
insurance carriers that any insurance premiums will be materially increased in
the future or that any insurance coverage listed on SCHEDULE 3.19 will not be
available in the future on substantially the same terms as now in effect. Xxxxxx
has not received or given a notice of cancellation with respect to any such
policy or binder. Neither Xxxxxx nor either of the Members has knowledge of any
material inaccuracy in any application for such policies or binders, any failure
to pay premiums when due, or any similar state of facts that might form the
basis for termination of any such insurance.
3.20. POTENTIAL CONFLICTS OF INTEREST. To the knowledge of the
Members, no senior economist of Xxxxxx, including, without limitation, the
Members (a) owns, directly or indirectly, any interest in (excepting not more
than one percent stock holdings solely for investment purposes in securities of
publicly held and traded companies) or is an officer, director, employee or
consultant of any Person which is a competitor, lessor, lessee, sublessor,
sublessee, client or supplier of Xxxxxx; (b) owns, directly or indirectly, in
whole or in part, any copyright, other than in materials produced for Xxxxxx'x
clients in the ordinary course of business, trademark, trade name, service xxxx,
franchise, patent, invention, permit, license or trade secret or confidential
information that Xxxxxx is using or the use of which is necessary for the
business of Xxxxxx, PROVIDED that this clause (b) shall not apply to the
personal reputation and goodwill of a Member; (c) has any cause of action or
other claim whatsoever against Xxxxxx, except for claims in the ordinary course
of business, such as for accrued vacation pay, accrued benefits under Benefit
Plans, and similar matters and agreements existing on the date hereof; (d) has
made, on behalf of Xxxxxx, any payment to or commitment to pay any commission,
fee or other amount to, or purchase or obtain or otherwise contract to purchase
or obtain any goods or services from, any corporation or other Person of which
any member, manager or officer of Xxxxxx, or, to the knowledge of Xxxxxx and the
Members, a relative of any of the foregoing, is a partner or member; or (e) owes
any money to Xxxxxx.
3.21. NO BROKER. No broker, finder, agent or intermediary (a
"Broker") has acted for or on behalf of Xxxxxx or the Members in connection with
this Purchase Agreement, the Related Agreements or the transactions contemplated
hereby and thereby, and no Broker is entitled to any broker's, finder's or
similar fee or other commission in connection therewith based on any agreement,
arrangement or understanding with Xxxxxx or the Members or any action taken by
Xxxxxx or the Members. Xxxxxx and the Members have no obligation to pay to any
Broker any broker's finder's or similar fee for or in connection with the
providing by Xxxxxx of its products and services to clients.
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3.22. SUPPLIERS. SCHEDULE 3.22 hereto sets forth a list of all
vendors or other suppliers from or through whom Xxxxxx has purchased goods (for
sale or lease) or services, each in excess of $10,000 in any calendar year,
during the period from Xxxxxx'x inception to the present, other than utilities,
and summarizes all contractual arrangements for continued supply from each such
firm. Except as set forth on SCHEDULE 3.23, Xxxxxx has no currently existing
open purchase orders or contracts with vendors or other suppliers of materials
or services in excess of $2,500 individually or $10,000 in the aggregate.
3.23. BIDS AND PROPOSALS. SCHEDULE 3.23 hereto contains a true and
complete list of all of Xxxxxx'x open bids or proposals, and Xxxxxx has supplied
CRA with a true and correct copy of each such bid or proposal.
3.24. PAYMENTS ON OPERATING CONTRACTS. Xxxxxx is current on all of
its obligations arising under the Operating Contracts.
3.25. ASSUMED LIABILITIES. Xxxxxx has delivered to CRA true and
correct copies of all instruments and other documents which constitute or
evidence, in whole or in part, any of the Assumed Liabilities. None of the
Assumed Liabilities and such instruments or documents has been modified or
amended, whether in writing, by custom or usage or otherwise and all of the
Assumed Liabilities and such instruments and documents are in full force and
effect in accordance with their respective terms.
3.26. INVESTIGATION OF TAX EFFECTS. Xxxxxx and each Member
acknowledge that they and those Persons retained by them to advise them with
respect to the Tax effects of the transactions contemplated by this Purchase
Agreement have fully and independently examined the Tax effects of such
transactions as they may relate to Xxxxxx and the Members. Xxxxxx and the
Members acknowledge that CRA has made no representation or warranty whatsoever
with respect to such Tax effects.
3.27. INVESTMENT REPRESENTATIONS.
(a) Xxxxxx and each of the Members understands that the
Shares have not been registered under the Act or qualified under the securities
or "blue sky" laws of any jurisdiction, and CRA is not, nor will it be, under
any obligation to register the Shares under the Act or the "blue sky" laws of
any jurisdiction. Xxxxxx and each of the Members further understands that the
Shares will constitute "restricted securities" within the meaning of Rule 144
promulgated under the Act and that, as such, the Shares must be held
indefinitely unless they are subsequently registered under the Act or unless an
exemption from the registration requirements thereof is available.
(b) Xxxxxx and each of the Members is acquiring the
Shares for its own account for investment and not for, with a view to, or in
connection with any resale or distribution thereof.
(c) Xxxxxx and each of the Members is an "accredited
investor" within the meaning of Rule 501 promulgated under the Act.
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(d) Xxxxxx and each of the Members by reason of their
business and financial experience, and the business and financial experience of
those persons retained by them to advise them with respect to Xxxxxx'x and the
Members' investment in the Shares, has such knowledge, sophistication and
experience in business and financial matters as to be capable of evaluating the
merits and risks of the prospective investment, and are able to bear the
economic risk of such investment and are able to afford a complete loss of such
investment. Xxxxxx and each of the Members acknowledge that they have been
granted the opportunity to ask questions of, and receive answers from,
representatives of CRA concerning CRA and the Shares and to obtain any
additional information that Xxxxxx or the Members deem necessary to verify the
accuracy of the answers Xxxxxx or the Members received from such
representatives.
(e) In addition to the other restrictions on transfer
contained in this Purchase Agreement, Xxxxxx and each of the Members shall not
sell or otherwise dispose of any of the Shares without registration under the
Act and qualification under the "blue sky" laws of the appropriate jurisdiction,
unless an exemption from registration and qualification thereunder is available.
In connection with the proposed transfer of any Shares that have not been
registered under the Act, Xxxxxx and each of the Members shall deliver written
notice to CRA describing in reasonable detail the proposed transfer, together
with an opinion, in form and substance reasonably satisfactory to CRA and its
counsel, of counsel which (to CRA's reasonable satisfaction) is knowledgeable in
securities laws matters, to the effect that such transfer of the Shares may be
effected without registration under the Act and qualification under any
applicable state securities laws.
(f) The certificates for the Shares will be imprinted
with legends in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR REGISTERED OR
QUALIFIED UNDER THE SECURITIES OR "BLUE SKY" LAWS OF ANY
JURISDICTION. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR
QUALIFICATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND
SUCH BLUE SKY LAWS AND AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY TO SUCH EFFECT.
THE SALE OR OTHER DISPOSITION OF ANY OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY THE TERMS OF
AN ASSET PURCHASE AGREEMENT DATED AS OF DECEMBER 15, 1998 (THE
"AGREEMENT"). A COPY OF THE AGREEMENT IS AVAILABLE FOR
INSPECTION FROM THE CLERK OF THE COMPANY.
(g) Xxxx Xxxxxxx acknowledges and agrees that, for
purposes of this Section 3.27, any reference to "Shares" shall be deemed also to
include the Ten Year Shares.
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3.28. ACCOUNTS RECEIVABLE. The Purchased Accounts Receivable of
Xxxxxx have arisen in the ordinary course of business and are valid, collectible
and payable in full. SCHEDULE 3.28 hereto sets forth the aging of accounts
receivable of Xxxxxx as of October 31, 1998. To the knowledge of Xxxxxx and the
Members, except as set forth on SCHEDULE 3.28, each account receivable of Xxxxxx
represents the undisputed, bona fide sale and delivery of goods or services to,
or as directed by, the account debtors set forth on such Schedule. Xxxxxx has
good and marketable title to all of the accounts receivable, free and clear of
all Liens and other rights and claims of other persons or entities, other than
the Assumed Liabilities. To the knowledge of Xxxxxx and the Members, no account
receivable or work in process is subject to any defense, counterclaim, set-off,
discount, dispute or condition of any nature.
3.29. MEMBERS. The Members are the only members of Xxxxxx as such
term is defined in Title 2.5 of the California Corporations Code, as amended.
3.30. FULL DISCLOSURE. Neither this Purchase Agreement, the Related
Agreements, nor any written statement, report or other document furnished or to
be furnished by Xxxxxx or the Members pursuant to this Purchase Agreement or the
Related Agreements contains, or will contain, any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not false or misleading. There is no fact known to
the Members which the Members have not disclosed to CRA in writing that is
reasonably likely to preclude the Members from performing their obligations
under this Purchase Agreement and the Related Agreements.
Article 4. REPRESENTATIONS AND WARRANTIES OF CRA.
CRA represents and warrants to Xxxxxx and the Members as follows:
4.1. DUE INCORPORATION. CRA is a corporation duly organized and
validly existing as a corporation in good standing under the laws of The
Commonwealth of Massachusetts, with corporate power to own its properties, to
lease the properties purported to be leased by it and to conduct its business as
now conducted. CRA is duly qualified to transact business and is in good
standing in each of the jurisdictions listed on SCHEDULE 4.1 hereto, which are
the only jurisdictions in which the character of the property owned or held
under lease by CRA or the nature of the business transacted by it requires such
qualification and for which failure to qualify would or could have a material
adverse effect on the business, operations, property, prospects, condition
(financial or otherwise), assets or liabilities of CRA.
4.2. EXECUTION AND PERFORMANCE OF AGREEMENT.
4.2.1. AUTHORIZATION AND VALIDITY. CRA has full right, power
and authority to enter into this Purchase Agreement and the Related Agreements
to which it is party and to perform fully its obligations hereunder and
thereunder. The execution and delivery of this Purchase Agreement and such
Related Agreements and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action of CRA.
This Purchase Agreement and such Related Agreements have been duly executed and
delivered by CRA and, assuming due authorization, execution and delivery by the
other parties hereto and thereto, are the legal, valid and binding obligation of
CRA, enforceable against it in accordance with their terms.
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4.2.2. NO CONFLICT. The execution, delivery and performance
of this Purchase Agreement and the Related Agreements to which CRA is a party
and the consummation of the transactions contemplated hereby and thereby do not,
and will not, violate, conflict with or otherwise result in the breach or
violation of any of the terms and conditions of, result in the creation of (or
require CRA to create) any Lien on any of CRA's assets, properties or business,
or result in a material modification of the effect of or constitute (or with
notice, lapse of time or both constitute) a default under (a) the articles of
organization or the by-laws of CRA, (b) any instrument, contract or other
agreement to which CRA is a party or by or to which its assets or properties are
bound or subject, or (c) any statute or any regulation, order, judgment,
injunction, award or decree of any court, arbitrator or governmental or
regulatory body against or binding upon, or applicable to, CRA's properties or
business.
4.2.3. REQUIRED FILINGS AND CONSENTS. CRA is not required to
submit any notice, report or other filing with any Governmental Agency, in
connection with the execution, delivery and performance of this Purchase
Agreement and the Related Agreements to which it is a party and the consummation
of the transactions contemplated hereby and thereby except for filings that may
be required under applicable federal or state securities laws. No waiver,
consent, approval or authorization of (a) any Governmental Agency or (b) any
party to or pursuant to any Agreement to which CRA is a party or by which it or
any of its property is bound or affected is required to be obtained or made by
CRA in connection with the execution, delivery and performance of this Purchase
Agreement and the Related Agreements to which it is a party and the consummation
of the transactions contemplated hereby and thereby.
4.3. SEC STATEMENTS, REPORTS AND DOCUMENTS. CRA heretofore has
delivered or made available to Xxxxxx and the Members true and complete copies
of (a) its Registration Statement on Form S-1 (Registration Statement No.
333-46941) as amended when it became effective on April 23, 1998 and (b) all
other Forms 10-Q and 8-K filed by it with the SEC since April 23, 1998 (the
documents referred to in clauses (a) and (b) being hereinafter referred to as
the "CRA Reports"). As of their respective dates, the CRA Reports complied in
all material respects with all applicable requirements of the Act and the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, and did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements (including any related
notes) of CRA included in the CRA Reports were prepared in conformity with GAAP
applied on a consistent basis (except as otherwise stated in the financial
statements), and present fairly the consolidated financial position, results of
operations and changes in cash flows of CRA and its consolidated subsidiaries as
of the dates and for the periods indicated, subject, in the case of unaudited
interim consolidated financial statements, to (i) the absence of certain notes
thereto and (ii) normal year-end audit adjustments. There have been no material
adverse changes to the business, operations, property, prospects, condition
(financial or otherwise), assets or liabilities of CRA since September 4, 1998.
4.4. NO BROKER. Except as disclosed on SCHEDULE 4.4 hereto no
Broker has acted for or on behalf of CRA in connection with this Purchase
Agreement, the Related Agreements or the transactions contemplated hereby and
thereby, and no Broker is entitled to any broker's, finder's or
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similar fee or other commission in connection therewith based on any agreement,
arrangement or understanding with CRA or any action taken by CRA.
Article 5. COVENANTS OF XXXXXX AND THE MEMBERS.
5.1. ACCESS TO INFORMATION. Xxxxxx shall give CRA and its
representatives access at all reasonable times to the facilities, properties,
books, financial statements, records, managers, officers, employees and agents
of Xxxxxx and shall permit CRA after the Closing to confirm with suppliers or
clients of Xxxxxx the title to any Purchased Assets in such suppliers' or
clients' possession, and shall permit CRA after the Closing to confirm with
obligors under the Purchased Accounts Receivable and Excluded Accounts
Receivable the value and amount thereof. Xxxxxx shall furnish to CRA all such
reasonable information concerning the affairs of Xxxxxx as CRA or its
representatives may reasonably request. Without limiting the generality of the
foregoing, Xxxxxx and the Members acknowledge that CRA may be required to
provide audited and unaudited historical and pro forma financial information of
Xxxxxx in order to comply with federal securities laws, and Xxxxxx and the
Members agree that they will cooperate, and will cause their accountants and
other representatives to cooperate, with CRA and its representatives, at CRA's
expense, to enable them to obtain, prepare and disclose such financial
information in a timely manner.
5.2. COVENANT OF FURTHER ASSURANCES. Each of Xxxxxx and the Members
shall use its and their reasonable best efforts to satisfy or cause to be
satisfied all the closing conditions that are set forth in Article 8 hereof, and
each of Xxxxxx and the Members shall use its and their reasonable best efforts
to cause the transactions contemplated hereby to be consummated. Xxxxxx and the
Members shall use all reasonable efforts to comply promptly with all legal
requirements that may be imposed on them with respect to the consummation of the
transactions contemplated hereby and to obtain any consent, authorization, order
or approval of, or any exemption by, and to make any registration, declaration
or filing with, any Governmental Agency or other third party, required to be
obtained or made by any of them in connection with the taking of any action
contemplated hereby. In addition, Xxxxxx and the Members shall, from time to
time after the Closing, execute, acknowledge, seal and deliver all such
instruments and documents, and do all such further things, as CRA may request to
perfect the transfer and delivery to CRA of any and all of the Purchased Assets
or to transfer to or otherwise obtain for CRA any consent, license, permit,
registration or approval necessary or desirable to accomplish the purchase of
the Purchased Assets or the assumption of the Assumed Liabilities or to enable
CRA fully and without restriction to carry on the Business.
5.3. PAYMENT OF TAXES. Xxxxxx or the Members shall pay, promptly
and when due, whether at the original time fixed therefor or pursuant to any
extension of time to pay, any and all Taxes, fees and other charges which shall
become due or shall have accrued on account of the operation and conduct of
Xxxxxx'x business on or before the Closing or on account of any of the
transactions contemplated by this Purchase Agreement, PROVIDED, HOWEVER, that
Tilden and the Members shall not be required to pay any such Tax, fee or charge
if they are contesting the validity or amount thereof through proper
proceedings, in good faith and with reasonable diligence if such contest does
not, and will not, cause CRA to be subject to any fine, penalty or other
payment. Xxxxxx or the Members shall file within the times and in the manner
prescribed by law all Tax returns that are required to be filed with respect to
Xxxxxx. Any sales tax resulting from CRA's purchase of the Tangible Assets from
Xxxxxx hereunder shall be paid promptly when due one-half by CRA and one-
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half by Xxxxxx and the Members. CRA, on the one hand, and Xxxxxx and the Members
on the other, shall cooperate to calculate the amount of such sales tax and to
prepare and file promptly when due any tax returns or other filings related to
such sales tax.
5.4. PAYMENT OF LIABILITIES. Xxxxxx shall pay and discharge
promptly when due all of its liabilities and obligations, due or to become due,
accrued, contingent or otherwise, other than the Assumed Liabilities, and to the
extent necessary shall apply the proceeds of the sale of the Purchased Assets to
such payment and discharge. At CRA's request, Xxxxxx shall provide to CRA
evidence of such payment and discharge, in form and substance satisfactory to
CRA.
5.5. CLIENT INQUIRIES. Xxxxxx and each Member shall refer to CRA
inquiries from potential clients that ask for "Xxxxxx" by name concerning the
possible purchase of any of Xxxxxx'x goods or services related to the Business.
Such referral will not be required where (i) with CRA's prior written consent
(which shall not be unreasonably withheld in the case of activities not
involving a project which if performed by CRA would involve a legal or
significant actual or reasonably anticipated business conflict for CRA) a Member
participates in an economic, business or strategic consulting project conducted
on a commercial basis in which CRA has declined in writing to participate; or
(ii) a Member participates in an economic, business or strategic consulting
project not conducted on a commercial basis if the Member has given CRA at least
15 days prior written notice of his intent to undertake the project and if
within such 15 day period CRA did not object to his undertaking such project
because (A) such project would materially conflict with a current project or
relationship of CRA or (B) CRA has reason to believe that a Member's acceptance
of the project is likely to preclude CRA from a significant engagement in the
future.
5.6. CHANGE OF NAME. Within 90 days after the Closing, Xxxxxx shall
change its name to a new name bearing no resemblance to its present name, after
which neither Xxxxxx nor the Members shall, directly or indirectly, through any
entity or otherwise, use the name The Xxxxxx Group, LLC, or any related or
derivative names, in any business or venture other than in connection with their
consulting for, and exclusively for the benefit of, CRA.
5.7. EMPLOYEES. Xxxxxx agrees that CRA may employ any present or
former employee of Xxxxxx whom CRA wishes to employ on and after the Closing.
Xxxxxx hereby waives all contractual or other rights it may have with respect to
any such employee so as to permit CRA to employ such employee for any job CRA
shall deem appropriate and without any conflicting obligation to Xxxxxx and
Xxxxxx and the Members shall cooperate with and assist CRA in its efforts to
employ the employees of Xxxxxx.
5.8. CONTINUED EXISTENCE OF COMPANY. Xxxxxx shall continue to
maintain its existence as a limited liability company, including paying any
Taxes, for a period of at least three years from the Closing under its new name.
CRA shall reimburse Xxxxxx up to $1,000 per year during the second and third
years following the Closing for Xxxxxx'x annual minimum California franchise
tax.
5.9. TEN YEAR SHARES. Xxxx Xxxxxxx acknowledges and agrees that the
Ten Year Shares will constitute "restricted securities," as such term is defined
under the Act. In addition to restrictions on transfer necessary to comply with
the Act, Xx. Xxxxxxx may not sell or otherwise transfer the Ten Year Shares for
ten years after the Closing.
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If at any time, prior to the tenth anniversary of the Closing,
Xx. Xxxxxxx ceases to be an active exclusive consultant, except for reasons of
death or Disability (as hereinafter defined), such portion of the Ten Year
Shares which is not then eligible for sale will revert to CRA, automatically and
without further action by any person or entity. As used herein, the term
"Disability" shall mean any inability to perform duties because of mental or
physical infirmities for a period of six months or more.
The above restrictions on transfer will not apply to any
transfer to or for the benefit of family members of Xx. Xxxxxxx or in connection
with marital dissolution, provided that any of the Ten Year Shares so
transferred will remain subject to this Section 5.9, and it shall be a condition
to such transfer that the transferee enter into an agreement in form and
substance satisfactory to CRA agreeing to be so bound.
In the event of a Sale of CRA, the restrictions on transfer on
any consideration received by Xx. Xxxxxxx with respect to the Ten Year Shares
will be of no greater duration or severity than the restrictions on
consideration received by CRA's executive officers with respect to CRA's Common
Stock owned by them and subject to transfer restrictions under CRA's Stock
Restriction Agreement dated April 17, 1998 unless pooling of interests
accounting rules require a different approach.
Article 6. COVENANTS OF CRA.
6.1. EMPLOYEES. CRA has offered employment to, and will offer to
hire as of the Closing, all Xxxxxx employees listed on SCHEDULE 6.1 hereto on
terms comparable to those given to CRA employees of like seniority and
accomplishments.
6.2. COVENANT OF FURTHER ASSURANCES. CRA shall use its reasonable
best efforts to satisfy or cause to be satisfied all the conditions precedent
that are set forth in Article 9 hereof, and CRA shall use its reasonable best
efforts to cause the transactions contemplated hereby to be consummated. CRA
shall use all reasonable efforts to comply promptly with all legal requirements
that may be imposed on it with respect to the consummation of the transactions
contemplated hereby and to obtain any consent, authorization, order or approval
of, or any exemption by, and to make any registration, declaration or filing
with, any Governmental Agency or other third party, required to be obtained or
made by it in connection with the taking of any action contemplated hereby.
Article 7. INDEMNIFICATION.
7.1. INDEMNIFICATION OF CRA. In addition to, and not by way of
limitation of, CRA's rights otherwise provided in this Purchase Agreement or in
any other document delivered in connection with the transactions contemplated
hereby, or under applicable law, and subject to the terms and conditions of this
Article 7, Xxxxxx and the Members, jointly and severally, agree to defend,
indemnify and hold harmless CRA and its subsidiaries and each of their
respective directors, officers, agents and Affiliates (collectively, the "CRA
Group") from and against any loss, liability, damage or expense suffered,
incurred or paid by any member of the CRA Group:
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(a) which would not have been suffered, incurred or paid
if all the representations, warranties, covenants and agreements of Xxxxxx and
the Members in this Purchase Agreement, the Related Agreements, or in any other
instrument or document furnished to CRA in connection with the transactions
contemplated hereby had been (with respect to representations and warranties)
true, complete and correct and had been (with respect to covenants and
agreements) fully performed and fulfilled;
(b) as a result of any claim, action or proceeding
asserted or brought against any member of the CRA Group or any of such member's
assets (including, without limitation, the Purchased Assets) which arises, in
whole or in part, out of or in connection with Xxxxxx'x conduct of its business
before or after the Closing, including, without limitation, any claim, action or
proceeding relating to Xxxxxx'x failure to perform under any Agreement or
failure to perform properly an engagement for a client, the termination of any
employee, agent, dealer or distributor or any breach of warranty (including,
without limitation, any claim, action or proceeding arising at any time
whatsoever in connection with the purchase or use of any Purchased Asset sold by
Xxxxxx to CRA hereunder but excluding the Assumed Liabilities);
(c) as a result of any claim, action or proceeding
asserted against any member of the CRA Group or any of such member's assets with
respect to any liability or alleged liability of Xxxxxx not specifically assumed
by CRA under this Purchase Agreement;
(d) as a result of any claim, action or proceeding
asserted or brought against any member of the CRA Group or any of such member's
assets which arises out of, or in connection with, Xxxxxx'x failure to pay,
promptly and when due, any amount owing, in whole or in part, whether before or
after the Closing, with respect to Xxxxxx'x business, whether due or to become
due, accrued or contingent, known or unknown (other than the Assumed
Liabilities);
(e) as a result of any claim, action or proceeding
asserted or brought against any member of the CRA Group or any of such member's
assets which arises out of or in connection with Xxxxxx'x or any Member's
failure to pay, promptly and when due, any Tax, fee or other charge which shall
become due or shall have accrued (i) on account of Xxxxxx'x use, acquisition,
ownership or sale of any of the Purchased Assets or (ii) on account of the
transactions contemplated hereby; and
(f) for all costs and expenses (including, without
limitation, attorneys' fees) incurred by any member of the CRA Group in
connection with any action, proceeding, claim, assessment or judgment incident
to any of the foregoing matters.
7.2. BENEFIT OF CRA GROUP. With respect to any member of the CRA
Group other than CRA, Xxxxxx and the Members acknowledge and agree that CRA is
contracting on its own behalf and for such member and CRA shall obtain and hold
the rights and benefits provided for in this Article 7 in trust for and on
behalf of such member.
7.3. NOTICE OF CLAIM. In seeking to collect the amount of any claim
that CRA is entitled to indemnification hereunder, CRA shall first give Xxxxxx
and the Members written notice of such claim. Such notice shall contain a brief
summary of the basis for the claim. If Xxxxxx and the Members do not dispute the
basis or amount of any such claim within 30 days of receiving written
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notice thereof, CRA shall have the right promptly to recover indemnity as and to
the extent provided herein. If Xxxxxx and the Members disagree with the basis of
such claim or the amount of damages caused thereby, then within 30 days of
receiving written notice thereof, they shall give notice to CRA of such
disagreement (the "Dispute Notice"), specifying the reasons for such
disagreement, and, in that case, CRA shall have no right to recover indemnity
hereunder until such time, if at all, as (a) an arbitrator(s) selected pursuant
to Section 10.2 hereof issues a final award or decision specifying the amount of
CRA's recovery, in which case CRA shall have the right promptly to recover the
amount so specified (subject to the limitations contained in this Article 7) or
(b) CRA, on the one hand, and Xxxxxx and the Members, on the other, agree in
writing to the amount of CRA's recovery, in which case CRA shall have the right
promptly to recover the amount so agreed. Any amount that CRA is entitled to
recover as indemnity hereunder shall be referred to as the "Claim Amount."
7.4. METHOD OF RECOVERY. Xxxxxx or one or both of the Members shall
pay to CRA the Claim Amount within ten calendar days after the date (the "Claim
Establishment Date") such Claim Amount was determined to be payable to CRA
pursuant to Section 7.3 above. Xxxxxx and the Members shall make any such
payment either by transfer to CRA of immediately available funds or by transfer
to CRA of Shares or a combination of the foregoing. For these purposes, each
Share will be valued at the average of the closing sale prices for the Common
Stock as reported on the Nasdaq National Market System for the ten trading days
preceding the Claim Establishment Date for the Claim Amount being paid. Such a
transfer of Shares shall not violate the restrictions on transfer contained in
Section 2.5.2. In the event that CRA is not paid the full Claim Amount within
ten calendar days of the Claim Establishment Date, in addition to whatever other
remedies it may have, CRA shall be entitled until such Claim Amount is paid in
full (a) to offset against amounts otherwise due Xxxxxx and the Members,
including, without limitation, amounts due the Members under the Consulting
Agreements and (b) to prohibit any transfer, sale or disposition of the Shares.
7.5. SETTLEMENT OF THIRD PARTY CLAIMS. CRA agrees to notify Xxxxxx
of any action by a third party which, in the opinion of CRA, is reasonably
likely to give rise to a claim for indemnification hereunder (a "Third Party
Action"). Xxxxxx may, at its election and at its sole cost and expense,
participate in the defense of a Third Party Action and employ counsel separate
from the counsel employed by CRA. To the extent that Xxxxxx shall acknowledge
its obligations to indemnify CRA for any Third Party Action, Xxxxxx shall have
the right to conduct and control, through counsel of its own choosing, any Third
Party Action, but CRA may, at its election and at its sole cost and expense,
participate in the defense of any such Third Party Action and employ counsel
separate from the counsel employed by Xxxxxx, it being understood that Xxxxxx
shall have acknowledged its obligation to indemnify CRA and shall control such
defense; PROVIDED, HOWEVER, that if Xxxxxx shall fail to diligently defend any
such Third Party Action, or is prohibited by a conflict of interest from
defending such Third Party Action, then CRA may, through counsel of its own
choosing, defend such Third Party Action and settle such Third Party Action, and
recover from Xxxxxx the amount of such settlement or of any judgment and the
full costs and expenses of such defense. CRA and Xxxxxx agree that they will not
settle any Third Party Action without the consent of the other, which consent
shall not be unreasonably withheld. CRA further agrees that if Xxxxxx wishes to
enter into a settlement with respect to a Third Party Action on terms reasonably
acceptable
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to CRA, CRA will cooperate in such settlement, provided that Xxxxxx directly
pays the full amount of such settlement.
7.6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding
any investigation conducted before or after the Closing, and notwithstanding any
knowledge or notice of any fact or circumstance which either CRA, Xxxxxx or the
Members may have as the result of such investigation or otherwise, CRA, on the
one hand, and Xxxxxx and the Members, on the other, shall each be entitled to
rely upon the representations, warranties, covenants and agreements of the other
in this Purchase Agreement. All representations, warranties, covenants and
agreements made by any party in this Purchase Agreement or any certificate or
other writing delivered pursuant hereto or in connection herewith shall survive
the Closing and any investigation at any time made by or on behalf of any other
party, subject to the following:
(a) except as set forth in Section 7.6(b), any claims by
CRA for indemnification for a breach of representations and warranties must be
made within one year of Closing; and
(b) there shall be no time limit with respect to the
obligations of Xxxxxx and the Members to indemnify members of the CRA Group for
claims arising out of or relating to (i) a breach of Sections 3.3, 3.4, 3.7 or
3.26; (ii) intentional or fraudulent misrepresentations or actions by Xxxxxx or
either of the Members; or (iii) a breach of a covenant or agreement by Xxxxxx or
either of the Members.
7.7. LIMITATION OF LIABILITY. Xxxxxx'x and the Members' aggregate
obligations to indemnify CRA hereunder for claims other than those excepted in
Section 7.6(b) above shall be limited to a maximum of $4,800,000, provided,
however, that Xxxxxxx X. Xxxx'x obligations to indemnify CRA hereunder for
claims other than those excepted in Section 7.6(b) above shall be limited to a
maximum of $2,600,000.
7.8. THRESHOLD. No indemnification shall be required to be made by
Xxxxxx or the Members with respect to claims by CRA under Section 7.1(a) for
breaches of representations and warranties unless the amount of such claims
exceeds $100,000 in the aggregate (ignoring for these purposes materiality
limitations in such representations and warranties), in which case the
indemnification obligations shall apply to the amount of such claims in excess
of $100,000. Such $100,000 threshold shall not apply in the event of intentional
or fraudulent misrepresentations or actions by Xxxxxx or either of the Members.
7.9. LIABILITY FOR FRAUD. In the event of intentional or fraudulent
misrepresentations of either of the Members, liability will not be joint and
several but will be limited to the guilty party.
7.10. EXCLUSIVE REMEDY. The indemnification provided in this Article
7 shall be CRA's exclusive remedy with respect to claims by it under Section
7.1(a) for breaches of representations and warranties.
7.11. INDEMNIFICATION OF XXXXXX AND THE MEMBERS. In addition to, and
not by way of limitation of, Xxxxxx and the Members' rights otherwise provided
in this Purchase Agreement or in any other document delivered in connection with
the transactions contemplated hereby, or under
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applicable law, and subject to the terms and conditions of this Article 7, CRA
agrees to defend, indemnify and hold harmless Xxxxxx and the Members from and
against any loss, liability, damage or expense suffered, incurred or paid by
Xxxxxx and the Members and which would not have been suffered, incurred or paid
if all the representations, warranties, covenants and agreements of CRA in this
Purchase Agreement, the Related Agreements, or in any other instrument or
document furnished to Xxxxxx and the Member in connection with the transactions
contemplated hereby had been (with respect to representations and warranties)
true, complete and correct and had been (with respect to covenants and
agreements) fully performed and fulfilled;
(a) NOTICE OF CLAIM. In seeking to collect the amount of
any claim that Xxxxxx and the Members are entitled to indemnification hereunder,
Xxxxxx and the Members shall first give CRA written notice of such claim. Such
notice shall contain a brief summary of the basis for the claim. If CRA does not
dispute the basis or amount of any such claim within 30 days of receiving
written notice thereof, Xxxxxx and the Members shall have the right promptly to
recover indemnity as and to the extent provided herein. If CRA disagrees with
the basis of such claim or the amount of damages caused thereby, then within 30
days of receiving written notice thereof, it shall give a Dispute Notice to
Xxxxxx and the Members, specifying the reasons for such disagreement, and, in
that case, Xxxxxx and the Members shall have no right to recover indemnity
hereunder until such time, if at all, as (a) an arbitrator(s) selected pursuant
to Section 10.2 hereof issues a final award or decision specifying the amount of
Xxxxxx and the Members' recovery, in which case Xxxxxx and the Members shall
have the right promptly to recover the amount so specified (subject to the
limitations contained in this Article 7) or (b) Xxxxxx and the Members, on the
one hand, and CRA, on the other, agree in writing to the amount of Xxxxxx and
the Members' recovery, in which case Xxxxxx and the Members shall have the right
promptly to recover the amount so agreed. Any amount that Xxxxxx and the Members
are entitled to recover as indemnity hereunder shall be referred to as the
"Xxxxxx Claim Amount."
(b) METHOD OF RECOVERY. CRA shall pay to Xxxxxx and the
Members the Xxxxxx Claim Amount within ten calendar days after the date such
Xxxxxx Claim Amount was determined to be payable to Xxxxxx and the Members
pursuant to Section 7.11(a) above.
(c) LIMITATION OF LIABILITY AND THRESHOLD. Any claims by
Xxxxxx or the Members for indemnification for a breach of representations and
warranties by CRA must be made within one year of Closing, except that there
shall be no time limit with respect to the obligations of CRA to indemnify
Xxxxxx and Members for claims arising out of or relating to (i) a breach of
Section 4.2; (ii) intentional or fraudulent misrepresentations or actions by
CRA; or (iii) a breach of a covenant or agreement by CRA (collectively, clauses
(i), (ii) and (iii) are referred to as the "Excluded Obligations"). CRA's
obligations to indemnify Xxxxxx and the Members hereunder other than for the
Excluded Obligations shall be limited to $4,800,000. No indemnification shall be
required to be made pursuant to this Section 7.11 for breaches of CRA's
representations and warranties unless the amount of such claims exceeds $100,000
in the aggregate (ignoring for these purposes materiality limitations in such
representations and warranties), in which case the indemnification obligations
shall apply to the amount of such claims in excess of $100,000; PROVIDED,
HOWEVER, that this $100,000 threshold shall not apply in the event of
intentional or fraudulent misrepresentations or actions by CRA.
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(d) EXCLUSIVE REMEDY. The indemnification provided in
this Section 7.11 shall be Xxxxxx'x and the Members' exclusive remedy with
respect to claims by them under Section 7.11 for breaches of representations and
warranties.
Article 8. CONDITIONS OF CRA'S OBLIGATIONS.
The obligations of CRA to consummate the transactions contemplated by
this Purchase Agreement and the Related Agreements are subject, at the option of
CRA, to the fulfillment on or prior to the Closing of the following conditions,
any one or more of which may be waived by it:
8.1. REPRESENTATIONS AND COVENANTS. The representations and
warranties of Xxxxxx and the Members contained in this Purchase Agreement and
the Related Agreements shall be true in all material respects on and as of the
Closing. Xxxxxx and the Members shall have performed and complied in all
material respects with all covenants and agreements required by this Purchase
Agreement and the Related Agreements to be performed or complied with by each of
them on or prior to the Closing.
8.2. GOVERNMENTAL PERMITS AND APPROVALS. All permits and approvals
from any Governmental Agency required for the lawful consummation of the
transactions contemplated by this Purchase Agreement and the Related Agreements
shall have been obtained.
8.3. EXCLUSIVE CONSULTING AGREEMENTS. At the Closing, each Member
will enter into an Exclusive Consulting Agreement with CRA in the forms attached
as EXHIBITS B-1 AND B-2 hereto (the "Consulting Agreement" and collectively, the
"Consulting Agreements").
8.4. OPINION OF COUNSEL FOR XXXXXX AND THE MEMBERS. CRA shall have
received an opinion of McCutchen, Doyle, Xxxxx & Xxxxxxx, LLP, counsel for
Xxxxxx and the Members, dated as of the Closing, addressed to CRA, substantially
in the form attached as EXHIBIT C hereto.
8.5. AUTHORIZATION. All action of Xxxxxx necessary to authorize the
execution, delivery and performance of this Purchase Agreement and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken.
8.6. LITIGATION. No action, suit or proceeding shall be pending or
threatened before or by any court or governmental agency to restrain, modify or
prevent the carrying out of the transactions contemplated hereby or to seek
damages or a discovery order in connection with such transactions, or which has
or may have, in the reasonable opinion of CRA, a material adverse effect on the
business, operations, property, prospects, condition (financial or otherwise),
assets or liabilities of either Xxxxxx or CRA.
8.7. INSTRUMENTS OF TRANSFER. Xxxxxx shall have delivered to CRA
appropriate instruments of transfer, conveyance, sale and assignment in respect
of the Purchased Assets, consisting of bills of sale, assignments, certificates
of title (in the case of motor vehicles), confirmation of notices sent to third
parties holding any Purchased Assets, and such other good and sufficient
instruments of conveyance and transfer (including, without limitation, any
consents thereto by third parties necessary to make the same valid and
effective), in such form and containing such terms and
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provisions as CRA may reasonably request, as shall be necessary to vest in CRA
all right, title and interest in and to the Purchased Assets free and clear of
any and all Liens whatsoever other than the Assumed Liabilities, current period
property taxes, and materialmen's and repairmen's Liens arising in the ordinary
course of Xxxxxx'x business.
8.8. BOOKS AND RECORDS. Xxxxxx shall have delivered to CRA all
books, papers, ledgers, documents and records relating to or constituting part
of the Purchased Assets.
8.9. LEGAL EXISTENCE AND GOOD STANDING. Xxxxxx shall have delivered
to CRA (a) a recently dated certificate of status of Xxxxxx, issued by the
Secretary of State for the State of California, (b) a recently dated certificate
of Xxxxxx'x letter of good standing issued by the Franchise State Tax Board for
the State of California and (c) a recently dated certificate of Xxxxxx'x
qualification to do business issued by the secretary of state of each of the
states listed on SCHEDULE 3.1.
8.10. APPROVAL OF COUNSEL FOR CRA. All actions and proceedings
hereunder and all documents required to be delivered by Xxxxxx hereunder or in
connection with the consummation of the transactions contemplated hereby, and
all other related matters, shall be subject to the reasonable approval of
counsel for CRA as to form and substance.
Article 9. CONDITIONS OF XXXXXX'X AND THE MEMBERS' OBLIGATIONS.
The obligations of Xxxxxx and the Members to consummate the
transactions contemplated by this Purchase Agreement and the Related Agreements
are subject, at the option of Xxxxxx and the Members, to the fulfillment on or
prior to the Closing of the following conditions, any one or more of which may
be waived by them:
9.1. REPRESENTATIONS AND COVENANTS. The representations and
warranties of CRA contained in this Purchase Agreement and the Related
Agreements shall be true in all material respects on and as of the Closing. CRA
shall have performed and complied in all material respects with all covenants
and agreements required by this Purchase Agreement and the Related Agreements to
be performed or complied with by it on or prior to the Closing.
9.2. GOVERNMENTAL PERMITS AND APPROVALS. All permits and approvals
from any Governmental Agency required for the lawful consummation of the
transactions contemplated by this Purchase Agreement and the Related Agreements
shall have been obtained.
9.3. THIRD PARTY CONSENTS. All consents, approvals, waivers,
agreements and permits from parties to any Agreements that may be required in
connection with the performance by CRA of its obligations under this Purchase
Agreement and the Related Agreements shall have been obtained.
9.4. CONSULTING AGREEMENTS. At the Closing, CRA will enter into a
Consulting Agreement with each of the Members.
9.5. OPTIONS. In connection with the consulting of the Members for
CRA and the employment of senior Xxxxxx staff by CRA, at the Closing CRA will
grant options to purchase an
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aggregate of 45,000 shares of Common Stock to certain Members and senior staff
of Xxxxxx. The identity of the person receiving such options, the number of
options granted to each such person and the vesting requirements, if any, shall
be agreed to by CRA, Tilden and the Members prior to the Closing. All options
will be governed by an option agreement in CRA's customary form therefor, will
have an exercise price per share equal to the closing sale price of the Common
Stock as reported on the Nasdaq National Market System on the date of grant and,
subject to the terms of the option agreement, will have a ten-year exercise
period. In the event of a Sale of CRA, all such options will receive the same
treatment as options granted to CRA's other employees and senior consultants.
9.6. OPINION OF COUNSEL FOR CRA. Xxxxxx and the Members shall have
received an opinion of Xxxxx, Xxxx & Xxxxx LLP, counsel for CRA, dated as of the
Closing, addressed to Xxxxxx and the Members, substantially in the form of
EXHIBIT D.
9.7. AUTHORIZATION. All corporate actions of CRA necessary to
authorize the execution, delivery and performance of this Purchase Agreement and
the consummation of the transactions contemplated hereby shall have been duly
and validly taken.
9.8. LITIGATION. No action, suit or proceeding shall be pending or
threatened before or by any court or governmental agency to restrain, modify or
prevent the carrying out of the transactions contemplated hereby or to seek
damages or a discovery order in connection with such transactions, or which has
or may have, in the reasonable opinion of Xxxxxx, a material adverse effect on
the business, operations, property, prospects, condition (financial or
otherwise), assets or liabilities of either Xxxxxx or CRA.
9.9. NOTE AND STOCK CERTIFICATE. CRA shall have delivered to Xxxxxx
the Note and a stock certificate registered in the name of Xxxxxx evidencing the
Shares.
9.10. CERTIFICATE FOR TEN YEAR SHARES. CRA shall have delivered to
Xxxx Xxxxxxx a stock certificate registered in his name evidencing the Ten Year
Shares.
9.11. APPROVAL OF COUNSEL FOR XXXXXX AND THE MEMBERS. All actions
and proceedings hereunder and all documents required to be delivered by CRA
hereunder or in connection with the consummation of the transactions
contemplated hereby, and all other related matters, shall be subject to the
reasonable approval of counsel for Xxxxxx and the Members as to form and
substance.
Article 10. MISCELLANEOUS.
10.1. EXPENSES. Xxxxxx and the Members shall assume and bear, and
shall, jointly and severally, indemnify and hold harmless CRA from and against,
any and all expenses, Taxes, costs and fees incurred or assumed by Xxxxxx and
the Members arising out of or in connection with the negotiation, preparation or
performance of this Purchase Agreement and the Related Agreements and the
consummation by Xxxxxx and the Members of the transactions contemplated hereby
(including all expenses, costs, fees and disbursements of Xxxxxx'x and the
Members' attorneys, consultants, investment bankers and other financial
advisors, brokers and finders, and accountants), whether or not the transaction
contemplated hereby shall be consummated, unless the transaction is not
consummated due to CRA's material breach of the Purchase Agreement. CRA shall
assume and
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bear, and shall indemnify and hold harmless Xxxxxx and the Members from and
against, any and all expenses, Taxes, costs and fees incurred or assumed by CRA
arising out of or in connection with the negotiation, preparation or performance
of this Purchase Agreement and the Related Agreements and the consummation by
CRA of the transactions contemplated hereby (including all expenses, costs, fees
and disbursements of CRA's attorneys, consultants, investment bankers and other
financial advisors, brokers and finders, and accountants), whether or not the
transaction contemplated hereby shall be consummated, unless the transaction is
not consummated due to Xxxxxx or a Member's material breach of the Purchase
Agreement.
10.2. ARBITRATION. Except for any dispute, controversy or claim
arising out of or relating to this Agreement or any Related Agreement for which
a party shall seek equitable relief, any dispute, controversy or claim arising
out of or relating to this Purchase Agreement or any Related Agreement
including, without limitation, the breach, termination or invalidity thereof,
shall be finally settled by arbitration according to the Commercial Rules of the
American Arbitration Association. In the case of arbitration requested by Xxxxxx
or the Members against CRA, the arbitration shall be conducted in Boston,
Massachusetts, and Xxxxxx or the Members requesting such arbitration hereby
agree to irrevocably submit to arbitration in Boston, Massachusetts for all
purposes with respect to such arbitration. In the case of arbitration requested
by CRA against Xxxxxx or the Members, the arbitration shall be conducted in San
Francisco, California and CRA hereby agrees to irrevocably submit to arbitration
in San Francisco, California for all purposes with respect to such arbitration.
Such arbitration shall be conducted before a tribunal composed of one or more
arbitrators as the parties to such arbitration shall mutually agree. The award
or decision made by the arbitrator(s) shall be binding upon the parties to such
arbitration; provided, however, the parties hereto waive any claim to any
damages in the nature of punitive, exemplary, or statutory damages in excess of
compensatory damages, and the arbitrator(s) is/are specifically divested hereby
of any power to award damages in the nature of punitive, exemplary or statutory
damages in excess of compensatory damages hereunder. Judgment upon any such
award or decision may be entered in and enforced by any court of competent
jurisdiction. Each party shall bear its own costs of such arbitration except
that the prevailing party in the arbitration, as determined by the
arbitrator(s), shall recover its reasonable attorneys' fees from the other
party.
10.3. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered by hand, sent by facsimile
transmission with confirmation of transmission, sent via a reputable overnight
courier service with confirmation of receipt requested, or mailed by registered
or certified mail (postage prepaid and return receipt requested) to the parties
at the following addresses (or at such address for a party as shall be specified
by like notice), and shall be deemed given on the date on which delivered by
hand (in the case of facsimile transmission, on the date of transmission as
confirmed) or otherwise on the date of receipt as confirmed:
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(a) if to CRA, to:
Xxxxxxx River Associates Incorporated
000 Xxxxxxxxx Xxxxxx
Xxxx Xxxxxxx Tower
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: President
with a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
and
(b) if to the Members or Xxxxxx, to:
Xxxxxxx X. Xxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
and
Xxxx Xxxxxxx
00 Xxxxx Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
with a copy to:
McCutchen, Doyle, Xxxxx & Xxxxxxx, LLP
0000 Xxxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxx, Esq.
Any party may, by notice given to the other parties in accordance with this
Section, designate another address or Person for receipt of notices hereunder.
10.4. ACADEMIC ACTIVITIES. Nothing in this Purchase Agreement will
prevent a Member from pursuing the Member's full academic, teaching, research
and other responsibilities as part of his academic appointment.
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10.5. PUBLIC ANNOUNCEMENTS. Prior to the Closing, except for
announcements or filings required by law, without the prior consent of the other
party, neither party will issue or permit any of its Affiliates, directors,
officers, employees or agents to issue any press release or other information
with respect to this Purchase Agreement or the transactions contemplated hereby
to the press or, except for information included in any such press release which
has been disseminated to the public, generally to Xxxxxx or CRA employees or to
any third party. From and after the Closing, any press release or other public
disclosure of information regarding this Purchase Agreement or the transactions
contemplated hereby shall be developed and disclosed solely by CRA.
10.6. AMENDMENT AND WAIVER. This Purchase Agreement may be amended,
and any provision hereof may be waived, only by a written instrument executed by
all of the parties hereto. No modification, renewal, extension, waiver or
termination of this Purchase Agreement or any of the provisions herein contained
shall be binding upon any party unless made in writing and signed by an
authorized officer of each party hereto. Failure by any party to insist upon
strict compliance with any of the terms, covenants or conditions hereof in a
particular instance shall not be deemed a waiver of such terms, covenants or
conditions in any other instance. All rights and remedies hereunder are
cumulative and are in addition to and not exclusive of any other rights and
remedies available, at law, in equity, by agreement or otherwise.
10.7. ENTIRE AGREEMENT. This Purchase Agreement and the Related
Agreements contain the entire agreement among Tilden, the Members and CRA
respecting the subject matter hereof and supersede all prior agreements and
understandings between them concerning such subject matter, including the letter
of intent among the Members, Xxxxxx and CRA dated October 12, 1998.
10.8. GOVERNING LAW. This Purchase Agreement shall be governed by,
and construed and enforced in accordance with, the substantive laws of The
Commonwealth of Massachusetts without regard to its principles of conflicts of
laws.
10.9. BINDING EFFECT; ASSIGNABILITY. This Purchase Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. This Purchase Agreement is not intended to
confer upon any Person other than the parties hereto and members of the CRA
Group (and such parties' and members' respective successors and assigns) any
rights or remedies hereunder, except as otherwise expressly provided herein.
Neither this Purchase Agreement nor any of the rights and obligations of the
parties hereunder shall be assigned or delegated, whether by operation of law or
otherwise, without the written consent of all parties hereto.
10.10. COUNTERPARTS. This Purchase Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
10.11. SCHEDULES. The Schedules to this Purchase Agreement are a part
of this Purchase Agreement as if set forth in full herein. All references herein
to Articles, Sections, Schedules and Exhibits shall be deemed references to such
parts of this Purchase Agreement.
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10.12. VALIDITY. Any invalid, illegal or unenforceable provision of
this Purchase Agreement shall be severable, and after any such severance, all
other provisions hereof shall remain in full force and effect.
10.13. REFERENCES. The headings in this Purchase Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Purchase Agreement. The terms defined in this Purchase
Agreement refer to the plural as well as the singular, unless the context
otherwise requires. The words "herein" and "hereof" and other words of similar
import refer to this Purchase Agreement as a whole and not to any particular
part of this Purchase Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Purchase Agreement
under seal as of the day and year first above written.
XXXXXXX RIVER ASSOCIATES INCORPORATED
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Xxxxx X. Xxxxxxx
President
THE XXXXXX GROUP, LLC
By: /s/ Xxxx Xxxxxxx
------------------------------------
Title: Member
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Title: Member
/s/ Xxxx Xxxxxxx
----------------------------------------
XXXX XXXXXXX
/s/ Xxxxxxx X. Xxxx
----------------------------------------
XXXXXXX X. XXXX
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Asset Purchase Agreement dated as of December 15, 1998
among Xxxxxxx River Associates Incorporated, The Xxxxxx Group, LLC,
Xxxxxxx X. Xxxx and Xxxx Xxxxxxx
Exhibits and Schedules Omitted in Accordance with Item 601(b)(2)
of Regulation S-K:
Exhibits to Asset Purchase Agreement
Exhibit A: Form of promissory note
Exhibit B-1 and Exhibit B-2: Forms of consulting agreements
Exhibit C: Form of opinion of counsel for The Xxxxxx Group, LLC and
Xxxxxxx X. Xxxx and Xxxx Xxxxxxx
Exhibit D: Form of opinion of counsel for Xxxxxxx River Associates
Incorporated
Disclosure schedules of Xxxxxxx River Associates Incorporated and
The Xxxxxx Group, LLC
* * *
Xxxxxxx River Associates Incorporated will furnish supplementally a copy
of any omitted exhibit or schedule to the Securities and Exchange Commission
upon request, provided, however, that Xxxxxxx River Associates Incorporated may
request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended, for any exhibit or schedule so furnished.
