Investment and Transaction Agreement Dated March 13

Sample Acquisition Agreement for Merging Two Law Firms

THIS ACQUISITION AGREEMENT, dated as of (this "Agreement"), is by and among (a) LLP, a limited liability partnership (the "Buyer"), (b) L.L.P., a limited liability partnership (the "Seller"), and (c) the equity partners of the Seller listed on the signature pages hereto (each an "Equity Partner," collectively the "Equity Partners," and together with the Seller, the "Selling Group").

WHEREAS, the Seller is engaged in the practice of law (the "Business"), and the Buyer desires to purchase certain assets utilized in the operation of the Business and owned by the Seller, and the Seller desires to sell such assets to the Buyer; and

WHEREAS, the Equity Partners constitute all of the equity partners of the Seller, and as such wish the Seller to consummate the transactions contemplated by this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the Buyer and each member of the Selling Group agree as follows:

Article 1 - Purchase and Sale

1.1 Acquired Assets. Subject to the terms and conditions set forth in this Agreement, at the Closing, the Seller shall sell, assign, transfer and deliver to the Buyer, and the Buyer shall purchase, acquire and take assignment and delivery of, the following assets of the Seller (all of which assets are hereinafter referred to collectively as the "Acquired Assets"):

(a) any and all equipment, installations, furniture, fixtures, supplies, materials and other personal property used in connection with the Business, including, without limitation, those items described on Schedule 1.1(a) (the "Equipment");

(b) all of the Seller's title to, interest in and rights under the leases of real property described on Schedule 1.1(b) (the "Real Property Leases"), together with all leasehold improvements on the real property leased thereby;

(c) all of the Seller's title to, interest in and rights under the leases of personal property described on Schedule 1.1(c) (the "Personal Property Leases");

(d) all of the Seller's title to, interest in and rights under the contracts with clients listed on Schedule 1.1(d) (the "Client Contracts"), including all rights with respect to work in process with respect to any Client Contracts;

(e) all of the Seller's rights under the contracts and agreements described on Schedule 1.1(e) (the "Other Contracts");

(f) all of the Seller's transferable rights under the operating authorities, licenses, permits and approvals described on Schedule 1.1(f) (the "Permits");

(g) all of the Seller's accounting books, records and ledgers relating to the Business, all employment and personnel records for all Assumed Employees and all other documents and records relating to the Acquired Assets;

(h) all of the Seller's accounts receivable, notes receivable and miscellaneous receivables that relate to the Business (the "Accounts Receivable");

(i) all of the Seller's work in process that relates to the Business (the "Work in Process");

(j) all of the Seller's rights and interest in the bank accounts listed on Schedule 1.1(j)(A), and all of the Seller's cash, commercial paper, cash equivalents and other investments outstanding on the Closing Date immediately prior to the consummation of the transactions contemplated herein;

(k) all of the Seller's rights with respect to all trademarks, trade names, trade secrets, corporate names, copyrights, designs, patents, licenses, applications, technical information, client information, telephone numbers, computer software programs, computer data bases and other intangible assets utilized by the Seller in conjunction with the Business (the "Intangibles");

(l) all of the Seller's rights under the key man life insurance policies described on Schedule 1.1(l) (the "Life Insurance Policies");

(m) all of the Seller's prepaid expenses and deposits relating to the Business; and

(n) all other assets of the Seller, whether tangible or intangible, that are used in conjunction with the Business, other than the Excluded Assets.

1.2 Excluded Assets. Notwithstanding the foregoing, the Seller is not selling and the Buyer is not purchasing, pursuant to this Agreement, and the term "Acquired Assets" shall not include, any of the following assets (the "Excluded Assets"):

(a) the furniture and other personal property described on Schedule 1.2(a), owned by the Equity Partners, as set forth on such Schedule;

(b) the Seller's rights under the employee benefit plans described on Schedule 1.2(b) and all related plan assets and plan sponsorships;

(c) the Seller's rights (if any) to the name ;

(d) the consideration received by the Seller pursuant to this Agreement and the rights of the Seller under this Agreement;

(e) the assets described on Schedule 1.2(e); and

(f) all goodwill of the Business.

Article 2 - Assumption of Certain Obligations; Additional Payments

2.1 Assumed Obligations; Excluded Liabilities.

(a) At the Closing, as partial consideration for the Acquired Assets, the Buyer shall assume and agree to pay, perform, fulfill and discharge the following obligations of the Seller (the "Assumed Obligations"):

(i) obligations under the Personal Property Leases, Real Property Leases, Life Insurance Policies, Client Contracts and Other Contracts;

(ii) all other obligations and liabilities incurred by the Seller in connection with the Business, including trade payables, subject to the stated conditions;

(iii) all liabilities of the Seller under that certain Standby Credit and Term Loan Agreement and Letter of Credit Reimbursement Agreement, dated as of , between the Seller and Bank, up to but not exceeding the aggregate principal amount of , plus interest accrued to the Closing (the "Bank Obligation"); and

(iv) all liabilities of the Seller owing to in connection with the surrender by the Seller of the floor of that certain real property located at , up to but not exceeding the aggregate amount of (the "Real Estate Broker Obligation").

(b) The Buyer is not assuming any liabilities or obligations of the Seller whatsoever, known or unknown, fixed or contingent, including Excluded Liabilities.

2.2 Additional Payments. As further consideration for the Acquired Assets, the Buyer agrees to pay to the Seller the following amounts, subject to the following terms and conditions:

(a) The Buyer agrees to pay to the Seller the total amount of in sixteen (16) installments. The first such installment shall be due on the Closing Date and shall be in the amount of . Subsequent installments shall be due on the last business day of each December, March, June and September thereafter and shall be in the amount of , the last such installment being due on .

(b) The Buyer agrees to reimburse the Seller for actual litigation expenses and costs incurred in defending the Malpractice Claim, in an amount not to exceed the lesser of the remaining deductible owing by the Seller under the (Policy No. ) issued by with respect to the Malpractice Claim and (the "Malpractice Payment").

(c) The Buyer agrees to pay to the Seller after the Closing Date, upon notice from the Seller, an amount equal to the difference between the amount necessary in order to satisfy the Seller's obligations with respect to accrued vacation and overtime for the period ending on and required tax withholdings with respect thereto (the "Accrued Vacation Obligation") which amount shall not exceed .

(d) The Buyer agrees to pay to the Seller on the Closing Date which the Seller agrees to use to satisfy State and local sales tax on the Acquired Assets.

2.3 Allocation. The Assumed Obligations and the additional payments set forth in Section 2.2 above shall be allocated among the Acquired Assets in the manner set forth on Schedule 2.3.

Article 3 - Closing

3.1 Time and Place. The closing of the transfer and delivery of all documents and instruments necessary to consummate the transactions contemplated by this Agreement (the "Closing") shall be held at the offices of the Seller in , at 11:00 a.m. on a mutually acceptable date, no later than .

3.2 Transactions at Closing.

(a) The Seller shall execute and deliver a bill of sale and other instruments of assignment and transfer with respect to the Acquired Assets.

(b) The Buyer shall execute and deliver an instrument of assumption and other documents with respect to the Assumed Obligations.

(c) The Seller shall deliver or cause to be delivered to the Buyer a consent to assignment from each of the landlords party to the Real Property Leases.

(d) The Seller shall deliver or cause to be delivered assignments and consents necessary to assure the Buyer the full benefit of the same.

(e) The Seller shall deliver evidence that the Seller has purchased prior to or at the Closing "Tail" Professional Liability Insurance for a coverage period of three (3) years after the Closing Date.

(f) The Buyer and each of the Equity Partners and each of the contract partners of the Seller listed on Schedule 3.2(f) shall execute and deliver an agreement relating to their status as a Partner of or as Of Counsel to the Buyer.

Article 4 - Representations and Warranties of the Selling Group

Each member of the Selling Group, jointly and severally, represents and warrants to the Buyer as follows:

4.1 Organization of Seller; Authority. The Seller is a limited liability partnership duly formed, validly existing and in good standing under the laws of the State of .

4.2 Partnership Approval; Binding Effect. The Seller has obtained all necessary authorizations and approvals required for the execution and delivery of the Transaction Documents.

4.3 Non-Contravention. Except as set forth in Schedule 4.3, the execution and delivery by the Seller of the Transaction Documents will not violate or conflict with the Governing Documents or any law or agreement.

4.4 Governmental Consents. Except as set forth on Schedule 4.4, no consent, approval or authorization of, or registration, qualification or filing with, any governmental agency or authority is required.

4.5 Financial Statements. The Seller has delivered the Financial Statements to the Buyer.

4.6 Absence of Certain Changes. Since , there has not been any material adverse change in the assets, liabilities, income or business of the Seller.

4.7 Litigation, Etc. Except as set forth on Schedule 4.7, no action, suit, proceeding or investigation is pending or threatened.

4.8 Conformity to Law. The Seller has complied and is in compliance in all material respects with applicable laws and contracts.

4.9 Title to Acquired Assets. The Seller is the lawful owner of and has good and valid title to all of the Acquired Assets, free and clear of Encumbrances except as listed on Schedule 4.9(b).

4.10 Contracts. Schedule 4.10 lists all material contracts and agreements to which the Seller is a party or by which the Seller is bound.

4.11 Compensation of and Contracts with Partners, Associates and Employees. Schedule 4.11 sets forth compensation and related information for partners, associates and employees.

4.12 Employee Benefit Plans. The Seller maintains or contributes to the plans described on Schedule 4.12.

4.13 Labor Relations. No labor organization represents or purports to represent any employees of the Seller, except as set forth on Schedule 4.13.

4.14 No Undisclosed Liabilities. The Seller has no liabilities or obligations of any nature other than those disclosed.

4.15 Tax Returns. The Seller has filed all required Tax returns and reports and paid all Taxes due.

4.16 Solvency. The Seller is not insolvent and will not be insolvent as of the Closing.

4.17 Disclosure. No representation or warranty by the Seller contains any untrue statement of a material fact or omits a material fact.

4.18 Broker. None of the members of the Selling Group has retained any broker, agent, finder or intermediary.

4.19 Conditions Precedent to Buyer's Obligations. The conditions set forth in Sections 9.1, 9.2, 9.3 and 9.5 have been satisfied as of the Closing Date.

Article 5 - Representations and Warranties of the Equity Partners

Each of the Equity Partners severally represents and warrants to the Buyer as follows:

5.1 Authority. Such Equity Partner has all requisite power, authority and legal competence to execute and deliver this Agreement and the other Transaction Documents.

5.2 Bar Membership. Such Equity Partner is a member in good standing of the bar associations of the jurisdictions set forth opposite his or her name on Schedule 5.2.

5.3 Binding Effect. This Agreement constitutes the legal, valid and binding obligation of such Person.

5.4 Non-Contravention. The execution and delivery by such Equity Partner will not violate or conflict with any provision of the Governing Documents or any law or agreement.

5.5 Tax Returns. Such Equity Partner has filed all required Tax returns and paid all Taxes due.

5.6 Conformity in Debt Documents. Such Equity Partner has complied with all debt documents to which such Equity Partner is a party.

5.7 Litigation, Etc. No action, suit, proceeding or investigation is pending or threatened relating to such Equity Partner or any of his or her assets.

5.8 Disclosure. No representation or warranty by such Equity Partner contains any untrue statement of a material fact or omits a material fact.

Article 6 - Representations and Warranties of the Buyer

6.1 Organization of Buyer; Authority. The Buyer is a limited liability partnership duly organized, validly existing and in good standing under the laws of the State of .

6.2 Corporate Approval; Binding Effect. The Buyer has obtained all necessary authorizations and approvals required for the execution and delivery of the Transaction Documents.

6.3 Non-Contravention. The execution and delivery by the Buyer will not violate or conflict with any provision of the Partnership Agreement or any law or agreement.

6.4 Financial Statements. The Buyer has delivered the financial statements described in this Agreement.

6.5 Absence of Certain Changes. Since there has not been any material adverse change in the assets, liabilities, income or business of the Buyer.

6.6 Governmental Consents. Except as set forth in Schedule 6.6, no consent, approval or authorization of, or registration, qualification or filing with, any governmental agency or authority is required.

6.7 Broker. The Buyer has not retained any broker, agent, finder or other intermediary.

6.8 Conditions Precedent to Seller's Obligations. The conditions set forth in Sections 10.1, 10.2 and 10.3 have been satisfied as of the Closing Date.

Article 7 - Conduct of Business by Seller Pending Closing

7.1 Carry on in Regular Course. The Seller shall maintain the Acquired Assets in good operating condition and repair and carry on the Business diligently and substantially in the same manner as heretofore.

7.2 No General Increases. The Seller shall not grant any general or uniform increase in compensation or benefits.

7.3 No Increase in Distributions. The Seller shall not declare or make any distribution except as permitted.

7.4 Contracts and Commitments. The Seller shall not amend or revise the Partnership Agreement or any Assumed Contract without prior written approval.

7.5 No Shopping, Etc. The Seller shall not negotiate for or enter into any agreement with respect to the sale of the Business to any Person other than the Buyer.

Article 8 - Certain Transitional Matters

8.1 Hiring the Other Employees. At the Closing, the Buyer will offer employment to the associates and other employees of the Seller listed on Schedule 8.1.

8.2 Allocation of Employee Plan Responsibilities.

(a) In General. Except for the Assumed Obligations and as expressly provided otherwise, the Seller shall retain exclusive liability for benefits due under any ERISA Plan or Non-ERISA Plan.

(b) Medical Benefits. Commencing as of the Closing Date, the Buyer shall provide the Assumed Employees and their dependents and beneficiaries medical and dental benefit coverage reasonably comparable to the Seller's comparable ERISA Plan.

(c) Tax Qualified Plans. Those Assumed Employees otherwise qualifying for participation in Buyer Plans shall be eligible to participate subsequent to the Closing.

(d) Access in Information and Employees. To the extent permitted by law, the Seller shall provide the Buyer with employment, personnel, payroll and other information reasonably necessary to administer the Buyer's benefit plans.

(e) Limitations on Liability. Nothing in this Agreement will limit the rights of the Seller or the Buyer to modify, amend, terminate or establish employee plans after the Closing Date.

Article 9 - Conditions Precedent to Buyer's Obligations

9.1 Representations and Warranties True at Closing. The representations and warranties made by any member of the Selling Group shall be true and correct in all material respects at and as of the Closing Date.

9.2 Compliance with Agreement. Each member of the Selling Group shall have performed and complied in all material respects with all obligations under this Agreement.

9.3 No Litigation. No restraining order or injunction shall prevent the transactions contemplated by this Agreement.

9.4 Life Insurance Policies; Consents; Assignments; Agreements. The Seller shall have delivered evidence satisfactory to the Buyer that each of the Life Insurance Policies are in full force and effect as of the Closing Date.

9.5 Assumed Obligations. The Seller shall have delivered copies of each contract, agreement and instrument evidencing any of the Assumed Obligations.

9.6 Proceedings and Documents Satisfactory. All approvals and proceedings in connection with the transactions contemplated by this Agreement shall be satisfactory in all reasonable respects to the Buyer.

Article 10 - Conditions Precedent to Seller's Obligations

10.1 Representations and Warranties True at Closing. The representations and warranties made by the Buyer shall be true and correct in all material respects at and as of the Closing Date.

10.2 Compliance with Agreement. The Buyer shall have performed and complied in all material respects with all obligations under this Agreement.

10.3 No Litigation. No restraining order or injunction shall prevent the transactions contemplated by this Agreement.

10.4 Proceedings and Documents Satisfactory. All approvals and proceedings in connection with the transactions contemplated by this Agreement shall be satisfactory in all reasonable respects to the Seller.

Article 11 - Indemnification

11.1 Indemnity by the Selling Group. The Seller, each Equity Partner, and each member of the Selling Group agrees to indemnify and hold the Buyer harmless from and with respect to any and all Losses related to or arising out of breaches, Excluded Liabilities, and non-compliance with bulk sales laws.

11.2 Indemnity by the Buyer. The Buyer agrees to indemnify and hold the Selling Group harmless from and with respect to any and all Losses related to breaches by the Buyer or failure by the Buyer to perform any of the Assumed Obligations.

Article 12 - Definitions

Person means any corporation, association, partnership, organization, business, individual, government or political subdivision thereof or governmental agency.

Tax means any federal, state, local, or foreign tax or levy of any kind whatsoever, including interest, penalties, or additions thereto.

Article 13 - Termination

(a) This Agreement may be terminated by either the Buyer or the Seller in writing if the Closing shall not have occurred on or before .

(b) This Agreement may be terminated prior to the Closing by the Buyer if the Selling Group materially breaches its obligations and such breaches are not cured by the earlier of the fifteenth (15th) day after the occurrence thereof or , or by the Seller if the Buyer materially breaches its obligations and such breaches are not cured by the earlier of the fifteenth (15th) day after the occurrence thereof or .

(c) This Agreement may be terminated at any time prior to the Closing by mutual action of the Seller and the Buyer.

(d) In the event of termination, each party shall keep secret and confidential all confidential or proprietary information and no party shall have any liability except as provided by this Article 13.

(e) The Buyer agrees that should this Agreement be terminated for any reason, the Buyer shall not retain or offer to retain any partner, of counsel, associate or other employee of the Seller for a one (1) year period commencing on the date of such termination and concluding on the first anniversary thereof.

Article 14 - General

14.1 Survival of Representations and Warranties. The representations and warranties of the parties shall survive the Closing.

14.2 Bulk Sales. The Buyer hereby waives compliance by the Seller with the provisions of the bulk sales laws of any jurisdiction insofar as applicable.

14.3 Confidential Information. Each member of the Selling Group shall keep secret and maintain in strictest confidence all confidential or proprietary information.

14.4 Employee Benefit Plans. The Seller shall, as soon as practicable and in any event within one (1) year after the Closing Date, terminate each of its ERISA Plans and Non-ERISA Plans.

14.5 Expenses. All expenses of the preparation, execution and consummation of this Agreement shall be borne by the party incurring such expenses.

14.6 Notices. All notices, demands and other communications hereunder shall be in writing or by written telecommunication.

14.7 Seller Representative. By the execution and delivery of this Agreement, each member of the Selling Group hereby irrevocably constitutes and appoints as the Seller Representative.

14.8 Entire Agreement. This Agreement contains the entire understanding of the parties and may be amended only by a written instrument signed by the Buyer, the Seller and two-thirds of the Equity Partners living and not disabled at the time.

14.9 Governing Law. The validity and construction of this Agreement shall be governed by the internal laws of the State of .

14.10 Sections and Section Headings. The headings of sections and subsections are for reference only.

14.11 Assigns. Neither this Agreement nor the obligations of any party hereunder shall be assignable or transferable without prior written consent.

14.12 Severability. If any provision is held invalid, void or illegal, it shall be severable from the remainder of this Agreement.

14.13 Further Assurances. The parties agree to take such reasonable steps and execute such other and further documents as may be necessary.

14.14 Tax Treatment. The Buyer and the Selling Group shall treat and report the transactions consistently for tax purposes and file IRS Form 8594 with their respective federal income tax returns.

14.15 No Implied Rights or Remedies. Except as otherwise expressly provided herein, nothing herein is intended to confer rights or remedies upon any Person other than the Seller and the Buyer and their respective partners.

14.16 Counterparts. This Agreement may be executed in multiple counterparts.

14.17 Dispute Resolution. Any legal disputes arising out of or related to this Agreement shall be resolved exclusively through final and binding private arbitration.

14.18 Dissolution. As of the Closing Date, the Selling Group shall promptly begin to wind-up the Business and operations of the Seller.

14.19 Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent.

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have caused this Agreement to be duly executed and delivered as a sealed instrument as of the date and year first above written.

Equity Partner Signatures

Schedule 2.3 - Purchase Price Allocation

ALLOCATION OF PAYMENTS MADE PURSUANT TO SECTION 2.2

The Buyer and the Seller agree that the assumption by the Buyer of the Assumed Obligations described in clauses (iii), (iv) and (v) of Section 2.1(a), and the payments to be made pursuant to Section 2.2 shall represent the purchase price for federal income tax purposes and its allocation will be consistent with the rules provided for under IRC section 1060.

A. Fair market value of Certain Assets

With respect to the furniture being transferred as part of the Acquired Assets, the fair market value is , with respect to the Seller's interests in the Real Property Leases, the fair market value is , and with respect to the equipment being transferred as part of the Acquired Assets, the fair market value is .

B. Allocation of Purchase Price

The purchase price shall be allocated to each class of Acquired Assets under the provisions of IRC Section 1060.

The allocation to each class shall be made in the following manner:

Purchase Price

First to: Class One assets (cash) to the extent thereof.

Next to: Class Two assets (marketable securities and cash equivalents) to the extent of and in proportion to their fair market value as set forth above.

Next to: Class Three assets (all other assets except for intangibles described in IRC Section 197(d)) to the extent of and in proportion to their fair market value as set forth above.

The remainder of the purchase price, if any, is allocated to Class IV assets (intangibles described in IRC Section 197(d)).