Exhibit 1.1
FTI Consulting,
Inc.
7 3 / 4 % Senior Notes due
2016
PURCHASE AGREEMENT
September 27, 2006
DEUTSCHE BANK SECURITIES
INC.
GOLDMAN, SACHS & CO.
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Ladies and Gentlemen:
FTI Consulting, Inc., a Maryland
corporation (the “ Company ”), proposes, subject
to the terms and conditions stated herein, to issue and sell to
Deutsche Bank Securities Inc. and Goldman, Sachs & Co.
(the “ Initial Purchasers ”) an aggregate of
$215,000,000 principal amount of the 7
3
/ 4 % Senior Notes due 2016 of the
Company, specified above (the “ Securities ”).
The Securities will be unconditionally guaranteed as to the payment
of principal, premium and interest (including special interest), if
any (the “ Guarantees ”), by each of the
entities listed on Schedule I hereto (the “
Guarantors ”). Capitalized terms used but not defined
herein shall have the meanings assigned to them in the Pricing
Offering Memorandum (as defined below) under the heading
“Description of Notes.”
The Securities are being offered and
sold in connection with the acquisition (the “
Acquisition ”) by FTI FD LLC (“ Bidco
”), a wholly-owned subsidiary of the Company, of the
outstanding shares in FD International (Holdings) Limited (the
“ Target ”) and the outstanding Preferred
Finance Securities of FD International 2 Limited. The acquisition
will be effected by means of an offer for such shares and Preferred
Finance Securities as described in the offer documents dated
September 11, 2006 (collectively, the “ Offer
Document ”).
1. Each of the Company and the
Guarantors, jointly and severally, represents and warrants to, and
agrees with each of the Initial Purchasers that:
(a) (i) A preliminary offering
memorandum, dated September 15, 2006 (the “
Preliminary Offering Memorandum ”), and a Pricing
Supplement dated September 27, 2006 (the “ Pricing
Supplement ”), have been prepared in connection with the
offering of the Securities. As used herein, “ Pricing
Offering Memorandum ” shall mean, with respect to any
date or time referred to in this Agreement, the Preliminary
Offering Memorandum, as supplemented by the Pricing Supplement, in
the most recent form that has been prepared and delivered by the
Company to the Initial Purchasers in connection with its
solicitation of offers to purchase Notes prior to 10:30 A.M. on
September 27, 2006 (the “ Time of Sale ”).
Promptly after the Time of Sale and in any event no later than the
second Business Day following the Time of Sale, the Company will
prepare and deliver to the Initial Purchasers a Final Offering
Memorandum (the “ Final Offering Memorandum ”),
which will consist of the Preliminary Offering Memorandum with such
changes therein as are required to reflect the information
contained in the Pricing Supplement;
(ii) The Preliminary Offering
Memorandum, the Final Offering Memorandum and any amendments or
supplements thereto did not and will not, as of their respective
dates, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided , however , that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by the Initial Purchasers
through Deutsche Bank Securities Inc. (the “
Representative ”) expressly for use
therein;
(iii) The Pricing Offering
Memorandum, as of the Time of Sale, did not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided , however , that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by the Initial Purchasers through the
Representative expressly for use therein; and
(iv) Each Company Supplemental
Disclosure Document (as defined in Section 12(a)) listed on
Schedule III hereto does not conflict with the information
contained in the Pricing Offering Memorandum or the Final Offering
Memorandum and each such Company Supplemental Disclosure Document,
as supplemented by and taken together with the Pricing Offering
Memorandum as of the Time of Sale, did not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided , however , that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by the Initial Purchasers through the
Representative expressly for use therein.
(b) Other than as set forth or
contemplated in the Pricing Offering Memorandum and the Final
Offering Memorandum, (i) neither the Company nor any of its
subsidiaries has sustained since the date of the latest audited
financial statements included in the Pricing Offering Memorandum
and the Final Offering Memorandum any material loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree and (ii) since
the respective dates as of which information is given in the
Pricing Offering Memorandum and the Final Offering Memorandum,
there has not been (1) any change in the capital stock or long
term debt of the Company or any of its subsidiaries (other than
stock option transactions upon award exercises or vesting of equity
awards pursuant to an employee benefit plan, normal debt payments
and any other such transactions in the ordinary course of business)
or (2) any material adverse change, or any development
involving a prospective material adverse change, in or affecting
the general affairs, management, financial position,
stockholders’ equity or results of operations of the Company
and its subsidiaries, taken as a whole, (any change or event
described in this subclause (2), a “ Material Adverse
Effect ”);
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(c) The Company and its subsidiaries
have good and marketable title to all personal property owned by
them, free and clear of all liens, encumbrances and defects except
such as would not have a Material Adverse Effect; and any real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and
enforceable leases, subleases or assigned leases with such
exceptions that would not have a Material Adverse
Effect;
(d) The Company and the Guarantors
have each been duly incorporated or organized and are validly
existing as corporations or limited liability companies in good
standing under the laws of their respective jurisdictions of
incorporation or formation, with power and authority (corporate and
other) to own or lease their properties and conduct their business
as described in the Pricing Offering Memorandum and the Final
Offering Memorandum, and have been duly qualified as foreign
corporations or limited liability companies for the transaction of
business and are in good standing under the laws of each other
jurisdiction in which they own or lease properties or conduct any
business so as to require such qualification except where the
failure to be so qualified or in good standing would not have a
Material Adverse Effect;
(e) As of June 30, 2006, the
Company had an authorized capitalization as set forth in the
Pricing Offering Memorandum and the Final Offering Memorandum, and
all of the issued shares of capital stock of the Company and the
Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and were not issued in violation of
any preemptive or similar rights; all of the outstanding shares of
capital stock of the Company and of each of the Subsidiaries will
be free and clear of all liens, encumbrances, equities and claims
or restrictions on transferability (other than those imposed by the
Act and the securities or “Blue Sky” laws of certain
jurisdictions) or voting; except as set forth in the Pricing
Offering Memorandum and the Final Offering Memorandum, there are no
(i) options, warrants or other rights to purchase,
(ii) agreements or other obligations to issue or
(iii) other rights to convert any obligation into, or exchange
any securities for, shares of capital stock of or ownership
interests in the Company or any of the Subsidiaries outstanding.
Except for the Subsidiaries or as disclosed in the Pricing Offering
Memorandum and the Final Offering Memorandum, the Company does not
own, directly or indirectly, any shares of capital stock or any
other equity or long-term debt securities or have any equity
interest in any firm, partnership, joint venture or other
entity;
(f) The Company has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. This Agreement and the consummation by the
Company of the transactions contemplated hereby have been duly and
validly authorized by the Company. This Agreement has been duly
executed and delivered by the Company;
(g) The Indenture to be dated as of
October 3, 2006 (the “ Indenture ”) among
the Company, the Guarantors and Wilmington Trust Company, as
Trustee (the “ Trustee ”) has been duly
authorized by the Company and each of the Guarantors and, when
executed and delivered by the Company, each of the Guarantors and
the Trustee, the Indenture will constitute a valid and legally
binding obligation of the Company and the Guarantors, enforceable
against each of them in accordance with its terms, subject, as to
enforcement, to bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors’ rights generally and to
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding in equity or at
law); and the Indenture will conform in all material respects to
the description thereof in the Pricing Offering Memorandum and the
Final Offering Memorandum and will be in substantially the form
previously delivered to you;
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(h) The Securities have been duly
authorized by the Company and, when executed, issued and delivered
pursuant to this Agreement and the Indenture and authenticated by
the Trustee, will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture under which they are to be issued, subject, as to
enforcement, to bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors’ rights generally and to
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding in equity or at
law); and the Securities will conform to the description thereof in
the Pricing Offering Memorandum and the Final Offering Memorandum
and will be in substantially the form previously delivered to
you;
(i) The Guarantees have been duly
authorized by each of the Guarantors and, when executed, issued and
delivered pursuant to this Agreement and the Indenture, will have
been duly executed, issued and delivered and will constitute valid
and legally binding obligations of each such Guarantor, entitled to
the benefits provided by the Indenture and enforceable against each
of them in accordance with their terms, subject, as to enforcement,
to bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights generally and to general
principles of equity and the discretion of the court before which
any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law); and
the Guarantees will conform to the description thereof in the
Pricing Offering Memorandum and the Final Offering Memorandum and
will be in substantially the form previously delivered to
you;
(j) The registration rights
agreement to be dated as of October 3, 2006, among the
Company, the Guarantors and the Initial Purchasers (the “
Registration Rights Agreement ”), has been duly
authorized by the Company and each of the Guarantors and, when
executed and delivered by the Company, the Guarantors and the
Initial Purchasers, will have been duly executed and delivered and,
assuming that it is a valid and legally binding obligation of the
Initial Purchasers, will constitute a valid and legally binding
obligation of the Company and each of the Guarantors, enforceable
against each of them in accordance with its terms, subject, as to
enforcement, to bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors’ rights generally and to
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding in equity or at
law); and the Registration Rights Agreement will conform to the
description thereof in the Pricing Offering Memorandum and the
Final Offering Memorandum and will be in substantially the form
previously delivered to you;
(k) The transactions contemplated by
the Registration Rights Agreement, including, without limitation,
the exchange of $1,000 principal amount of new notes, with terms
substantially identical to the Securities (the “ Exchange
Securities ”), for each $1,000 principal amount of the
Securities (the “ Exchange Offer ”), have been
approved by the Company. The Exchange Securities have been duly
authorized for issuance by the Company and, when issued and
delivered pursuant to the Indenture and authenticated by the
Trustee, will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations
of the Company, entitled to the benefits provided by the Indenture
and enforceable in accordance with their
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terms, subject, as to enforcement,
to bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights generally and to general
principles of equity and the discretion of the court before which
any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at
law);
(l) The guarantees of the
Company’s obligations under the Exchange Securities (the
“ Exchange Guarantees ”) to be offered in
exchange for the Guarantees in the Exchange Offer have been duly
authorized by each of the Guarantors and, when issued and delivered
pursuant to the Indenture, will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations
of each such Guarantor, entitled to the benefits provided by the
Indenture and enforceable against each of them in accordance with
their terms, subject, as to enforcement, to bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors’ rights
generally and to general principles of equity and the discretion of
the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(m) None of the transactions
contemplated by this Agreement (including, without limitation, the
use of the proceeds from the sale of the Securities) will violate
or result in a violation of Section 7 of the Exchange Act, or
any regulation promulgated thereunder, including, without
limitation, Regulations T, U, and X of the Board of Governors of
the Federal Reserve System;
(n) Prior to the date hereof,
neither the Company nor any of its affiliates has taken any action
which is designed to or which has constituted or which might have
been expected to cause or result in stabilization or manipulation,
under the Exchange Act, of the price of any security of the Company
or any Guarantor in connection with the offering of the
Securities;
(o) The issue and sale of the
Securities and the Guarantees and the compliance by the Company and
the Guarantors with all of the provisions of the Securities, the
Guarantees, the Indenture, the Registration Rights Agreement and
this Agreement and the consummation of the transactions herein and
therein contemplated will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the
articles of incorporation or organization or the by-laws or other
governing documents, as applicable, of the Company or any of the
Guarantors or (iii) result in any violation of any statute or
any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties except, in the case of
clauses (i) and (iii), for such conflicts, breaches,
violations or defaults as would not have a Material Adverse Effect;
and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Securities and the
Guarantees or the consummation by the Company and the Guarantors of
the transactions contemplated by this Agreement, the Securities,
the Guarantees, the Indenture or the Registration Rights Agreement,
except for (1) the filing of a registration statement by the
Company with the Commission pursuant to the United States
Securities Act of 1933, as amended (the “ Act
”), pursuant to Section 5(k) hereof, (2) such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue
Sky
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laws in connection with the purchase
and distribution of the Securities and the Guarantees by the
Initial Purchasers and (3) such consents, approvals,
authorizations, registrations or qualifications that either
(x) have been obtained and are in full force and effect as of
the date hereof or (y) are required to be obtained in
connection with the Credit Agreement;
(p) None of the Company or the
Subsidiaries has any liability for any prohibited transaction or
funding deficiency or any complete or partial withdrawal liability
with respect to any pension, profit sharing or other plan that is
subject to the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), to which the Company or any of the
Subsidiaries makes or ever has made a contribution and in which any
employee of the Company or of any Subsidiary is or has ever been a
participant. With respect to such plans, the Company and each
Subsidiary is in compliance in all material respects with all
applicable provisions of ERISA.
(q) Each of the Company and the
Subsidiaries carries insurance in such amounts and covering such
risks as they reasonably believe to be adequate for the conduct of
its business and the value of its properties.
(r) The Company and the Guarantors
have all requisite corporate power and authority to execute,
deliver and perform their respective obligations under the
Indenture, the Registration Rights Agreement, the Notes and the
Exchange Notes;
(s) Neither the Company nor any of
its subsidiaries is in violation of its articles of incorporation
or formation or its by-laws or other governing documents, as
applicable, in default in the performance or observance of any
material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or
any of its properties may be bound, except in the case of any
violation or default that would not have a Material Adverse
Effect;
(t) Other than as set forth in the
Pricing Offering Memorandum and the Final Offering Memorandum,
there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the current or future financial
position, stockholders’ equity or results of operations of
the Company and its subsidiaries, taken as a whole; and, to the
Company’s knowledge, no such proceedings are threatened by
governmental authorities or by others;
(u) When the Securities and the
Guarantees are issued and delivered pursuant to this Agreement,
neither the Securities nor the Guarantees will be of the same class
(within the meaning of Rule 144A under the Act) as securities which
are listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated
inter-dealer quotation system;
(v) The Company is subject to
Section 13 or 15(d) of the Exchange Act;
(w) The Company is not, and after
giving effect to the offering and sale of the Securities will not
be, an “investment company,” as such term is defined in
the United States Investment Company Act of 1940, as amended (the
“ Investment Company Act ”);
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(x) Neither the Company nor any
person acting on its behalf ( provided that no
representation or warranty is made as to actions of the Initial
Purchasers) has offered or sold the Securities by means of any
general solicitation or general advertising within the meaning of
Rule 502(c) under the Act or, with respect to Securities sold
outside the United States to non-U.S. persons (as defined in Rule
902 under the Act), by means of any directed selling efforts within
the meaning of Rule 902 under the Act and the Company and any
person acting on its behalf has complied with and will implement
the “offering restrictions” within the meaning of such
Rule 902;
(y) Within the preceding six months
neither the Company nor any other person acting on behalf of the
Company has offered or sold to any person any Securities, or any
securities of the same or a similar class as the Securities, other
than Securities offered or sold to the Initial Purchasers
hereunder. The Company will take reasonable precautions designed to
insure that any offer or sale, direct or indirect, in the United
States or to any U.S. person (as defined in Rule 902 under the Act)
of any Securities or any substantially similar security issued by
the Company, within six months subsequent to the date on which the
distribution of the Securities has been completed (as notified to
the Company by the Initial Purchasers), is made under restrictions
and other circumstances reasonably designed not to affect the
status of the offer and sale of the Securities in the United States
and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Act;
(z) KPMG LLP and Ernst &
Young LLP, who have certified certain financial statements of the
Company and its subsidiaries and of the Target, are independent
public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(aa) The Company maintains a system
of internal control over financial reporting (as such term is
defined in Rule 13a-15(f) of the Exchange Act) that complies with
the requirements of the Exchange Act and has been designed by the
Company’s principal executive officer and principal financial
officer, or under their supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. The
Company’s internal control over financial reporting is
effective and the Company is not aware of any material weaknesses
in its internal control over financial reporting;
(bb) Since the date of the latest
audited financial statements included in the Pricing Offering
Memorandum and the Final Offering Memorandum, there has been no
change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over
financial reporting; and
(cc) The Company maintains
disclosure controls and procedures (as such term is defined in Rule
13a-15(e) of the Exchange Act) that comply with the requirements of
the Exchange Act; such disclosure controls and procedures have been
designed to ensure that material information relating to the
Company and its subsidiaries is made known to the Company’s
principal executive officer and principal financial officer by
others within those entities; such disclosure controls and
procedures are effective.
2. Subject to the terms and
conditions herein set forth, the Company and the Guarantors agree
to issue and sell to the Initial Purchasers, and each of the
Initial Purchasers agrees to purchase from the Company and the
Guarantors, at a purchase price of 97.75% of the principal amount
thereof, the principal amount of Securities (and the Guarantees
thereof) set forth opposite the name of each Initial Purchaser in
Schedule II hereto.
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3. Upon the authorization by you of
the release of the Securities and the Guarantees, the Initial
Purchasers propose to offer the Securities and the Guarantees for
sale upon the terms and conditions set forth in this Agreement, the
Pricing Offering Memorandum and the Final Offering Memorandum and
each Initial Purchaser hereby represents and warrants to, and
agrees with the Company and the Guarantors that:
(a) It will offer and sell the
Securities only to: (i) persons who it reasonably believes are
“qualified institutional buyers” (“ QIBs
”) within the meaning of Rule 144A under the Act in
transactions meeting the requirements of Rule 144A and
(ii) through its selling agents, outside the United States, to
non-U.S. persons in reliance on Regulation S under the
Act;
(b) It is an Institutional
Accredited Investor; and
(c) It will not offer or sell the
Securities by any form of general solicitation or general
advertising, including but not limited to the methods described in
Rule 502(c) under the Act.
4. (a) The Securities to be
purchased by the Initial Purchasers hereunder will be represented
by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The
Depository Trust Company (“ DTC ”) or its
designated custodian. The Company will deliver the Securities to
Deutsche Bank Securities Inc., for the account of each Initial
Purchaser, against payment by or on behalf of such Initial
Purchaser of the purchase price therefor by wire transfer to the
Company in federal same day funds, by causing DTC to credit the
Securities to the account of Deutsche Bank Securities Inc. at DTC.
The Company will cause the certificates representing the Securities
to be made available to Deutsche Bank Securities Inc. for checking
at least twenty-four hours prior to the Time of Delivery (as
defined below) at the office of DTC or its designated custodian
(the “ Designated Office ”). The time and date
of such delivery and payment shall be 9:30 a.m., New York City
time, on October 3, 2006 or such other time and date as
Deutsche Bank Securities Inc. and the Company may agree upon in
writing. Such time and date are herein called the “ Time
of Delivery .”
(b) The documents to be delivered at
the Time of Delivery by or on behalf of the parties hereto pursuant
to Section 7 hereof, including the cross-receipt for the
Securities and any additional documents r
