IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
ERIC WINTON, solely in his capacity
as Seller Representative under the
Equity Purchase Agreement dated
December 20, 2024,
Plaintiff,
v. C.A. No. 2026-0138-LWW
THE NORTH HIGHLAND
COMPANY LLC,
Defendant.
MEMORANDUM OPINION
Date Submitted: August 20, 2026
Date Decided: September 18, 2026
Garrett B. Moritz & Adam D. Gold, ROSS ARONSTAM & MORITZ LLP,
Wilmington, Delaware; Pete Marketos, Tyler J. Bexley, Brett Rosenthal, Whitney Wendel & Will Hamilton, REESE MARKETOS LLP, Dallas, Texas; Counsel for Plaintiff Eric Winton, solely in his capacity as Seller Representative
T. Brad Davey, Mathew A. Golden, Heather S. Townsend & Wenjun Fan, POTTER ANDERSON & CORROON LLP, Wilmington, Delaware; Mitchell A. Karlan,
GIBSON, DUNN & CRUTCHER LLP, New York, New York; Counsel for
Defendant The North Highland Company LLC
WILL, Vice Chancellor
Earnout provisions bridge valuation gaps but can leave sellers vulnerable after
they cede operational control to the buyer. To protect their contingent upside, sellers
may negotiate procedural checks. The sellers here did just that.
The North Highland Company LLC acquired a technology consulting firm,
agreeing to an earnout based in part on gross profits from “Qualifying Projects.” The
governing purchase agreement established a classification process under which the
seller representative would notify North Highland of the potential Qualifying
Projects, and the parties then would mutually agree on their classification before
North Highland submitted a client proposal.
Post-closing, North Highland used its exclusive control over internal systems
to withhold information the seller representative needed to identify Qualifying
Projects, preventing him from participating in the bargained-for notification and
classification process. North Highland also unilaterally excluded projects based on
extra-contractual carve-outs. The seller representative now seeks to enforce the
bargained-for protective mechanism.
The implied covenant of good faith and fair dealing requires North Highland
to provide the limited information necessary to make the purchase agreement’s
notification and classification process operative. Without that information, the
contractual process is thwarted. The required information is, however, far more
limited than the plaintiff asserts. The purchase agreement’s plain text also governs
1
the meaning of Qualifying Projects, and North Highland may not use the mutualagreement requirement to inject unwritten exceptions into a negotiated definition.
Accordingly, judgment is entered in part for the plaintiff on his expedited claims.
I. BACKGROUND
Unless otherwise noted, the following facts were stipulated to by the parties
or proven by a preponderance of the evidence at trial.1
A. The Bridge
Plaintiff Eric Winton is a technology consultant.2 He became the Chief
Executive Officer of The Bridge Strategy & Technology Consulting, LLC—a
technology consulting firm—in May 2023.3 Winton was recruited to grow The
Bridge’s practice with the goal of an eventual liquidity event.4
1
See Joint Submission of Pre-trial Order (Dkt. 82) (“PTO”). Trial occurred over two days, during which three fact witnesses testified live. See Trial Trs. Vols. I and II (Dkts. 90-91). Trial testimony is cited as “[Name] Tr. __.” The trial record contains 213 joint exhibits and four deposition transcripts. Exhibits are cited by the numbers provided on the parties’ joint exhibit list as “JX __,” unless otherwise defined. See Joint Ex. List (Dkt. 71); Pl.’s Notice of Lodging (Dkt. 85). Deposition transcripts are cited as “[Name] Dep. __.” 2
Winton Tr. 8-9.
3
Id. at 12-13.
4
Id. at 13.
2
After Winton became CEO, he shifted The Bridge’s core business model from
contractor-based to employee-based and added new consulting practices.5 He also
led the acquisition of five companies to expand The Bridge’s client base.6
In early 2024, The Bridge engaged an investment bank to run a competitive
sale process.7 It received over twenty indications of interest that led to six letters of
intent—five from private equity firms and one from a strategic bidder, defendant
The North Highland Company LLC.8
B. The Letter of Intent
North Highland is the U.S. operating entity of a global change management
consulting firm.9 It pitched itself as a strategic buyer offering The Bridge growth
capital and a platform to become North Highland’s internal data and technology
arm.10 Eager to win the bid, North Highland’s Chief Executive Officer Alex
Bombeck made a “shut it down” offer to preempt competing bids.11
5
Id. at 14.
6
Id. at 16-17.
7
Id. at 18.
8
PTO ¶ 8.
9
Id. ¶¶ 9-10; Bombeck Tr. 471-72.
10
Winton Tr. 24.
11
Id. at 25-26.
3
On October 1, 2024, North Highland submitted a letter of intent (“LOI”) to
acquire The Bridge at an enterprise value of $180 million.12 The offer consisted of
$90 million in upfront cash, a $50 million contingent earnout, and $40 million in
rolled equity.13 The Bridge would become North Highland’s technology practice
and “sell[] into North Highland’s Fortune 500 customer base,” with Winton leading
the practice and reporting directly to Bombeck.14 The acquisition would “position
the combined company to gain market share . . . by cross selling [their]
complementary offerings.”15 Though The Bridge would operate as an independent
business unit, it would assume the North Highland brand.16
The parties negotiated an earnout structure to close the gap between their
respective valuations of The Bridge. Bombeck assured Winton that the earnout
targets would be a “layup.”17 On October 2, 2024, Winton countersigned the LOI.18
C. The Negotiations
After executing the LOI, the parties conducted due diligence and negotiated
an Equity Purchase Agreement (“EPA”). North Highland’s Chief Commercial
12
JX 2.
13
Id.; see also JX 3.
14
JX 2; see Winton Tr. 34, 37-38.
15
JX 2; see Winton Tr. 35.
16
Winton Tr. 38-39.
17
Id. at 30, 40-41.
18
JX 2 at 6; Winton Tr. 33.
4
Officer, Barbara Ray, led integration efforts.19 The parties anticipated that The
Bridge would cross-sell services to a subset of North Highland’s clients.20
On November 8, 2024, North Highland circulated a draft addendum to the
EPA outlining the earnout structure (the “Earnout Addendum”).21 The parties
executed the EPA on December 20, 2024.22 Winton also signed an employment
agreement to continue as an executive of The Bridge.23
D. The EPA
Under the EPA, The Bridge’s equity holders (the “Sellers”) exchanged their
interests for approximately $90 million in cash, $40 million in rolled equity, and an
uncapped earnout.24 Winton was appointed Seller Representative.25 The earnout
targeted $50 million in contingent payments across two years.26 To receive a payout,
The Bridge had to hit 80% of its $25 million annual “Gross Profit” target.27
19
Ray Tr. 338-39, 399.
20
JX 5 at 10; Ray Tr. 353-54.
21
JX 7.
22
JX 13 (“EPA”).
23
JX 14 at 3.
24
EPA § 2.8.
25
Id. § 2.7; see Winton Tr. 57-58.
26
See JX 2 at 1; Winton Tr. 60.
27
Winton Tr. 60; EPA Ex. D (“Earnout Addendum”) § 1.2.
5
The “Gross Profit” metric has four components: “Gross Revenue,” less “Cost
of Goods Sold” and an “Investment Adjustment,” plus “Cross Sale Gross Profit.”28
Gross Revenue captures revenue generated directly by The Bridge.29 Cross Sale
Gross Profit captures gross profit from North Highland’s operations derived from
(1) sales to The Bridge’s legacy clients, and (2) any “Qualifying Project.”30
The Earnout Addendum defines a “Qualifying Project” as “any new project
initiated by [North Highland] . . . that primarily (based on revenue) involves the
delivery of technology or data analytics services.”31 Because the Sellers ceded
operational control to North Highland, Winton viewed this provision as an essential
protective mechanism.32 It ensured that if North Highland sidelined The Bridge from
a technology or data project, the Sellers would still receive earnout credit.33
The Earnout Addendum sets out a procedure for classifying such projects.
Before classification, the Seller Representative “shall notify” North Highland of a
potential Qualifying Project, and the parties “shall mutually agree” on the
classification.34 This mutual agreement must occur “prior to the submission of any
28
Winton Tr. 63; Earnout Addendum § 1.2.
29
Earnout Addendum § 1.2.
30
Id.
31
Id.
32
Winton Tr. 72-74.
33
Id. at 74.
34
Earnout Addendum § 1.2.
6
[request for proposal (“RFP”)] during [North Highland’s] ‘Stage 3’ internal
process.”35 In practice, North Highland uses a staged intake process.36
Winton’s employment agreement aligned with this structure. It restricted
North Highland from exercising its operational discretion in a manner that would
“unreasonably interfere with [his] goal of achieving the Earnout.”37
E. Post-Closing Operations and the Pipeline
On January 7, 2025, after closing, leadership from North Highland and The
Bridge met.38 North Highland presented a plan limiting The Bridge’s cross-selling
efforts to six or eight specific accounts to achieve a $6 million “go-get” revenue
target.39 Winton countered by proposing a “strike team” to collaboratively pursue
strategic accounts.40
North Highland uses Salesforce to track customer opportunities through a
staged pipeline. Stages 0 through 2 involve ideation and validating a client problem.
During Stage 3—the critical sales activity phase—the deal team populates a “pricing
tool” with anticipated staffing levels, roles, hours, costs, and proposed rates. 41 This
35
Id.
36
Ray Tr. 345-50; see infra notes 41-43 and accompanying text (describing the stages). 37
JX 14 § 1(A).
38
Winton Tr. 86-87.
39
Bombeck Tr. 528; Ray Tr. 355-58.
40
JX 45; Ray Tr. 356-57.
41
Ray Tr. 345-46.
7
tool contains information relevant to anticipated revenue and provides the “first
objective set of information” indicating “what might compose that project.”42 At the
end of Stage 3, a formal proposal or statement of work is submitted to the client. 43
Winton received Salesforce access about two weeks after closing.44 Thirty to
forty opportunities pass through North Highland’s Stage 3 pipeline on a weekly
basis.45
F. The Earnout Dispute
Tensions soon mounted over the earnout’s administration. At a February 2025
managing directors retreat, North Highland’s leadership reprimanded Winton for
discussing the earnout.46 Bombeck further instructed North Highland’s managing
directors not to approach The Bridge without his clearance.47 Adding to the friction,
North Highland claimed that The Bridge would not receive earnout credit for
revenue generated by Bridge personnel staffed on North Highland accounts.48
42
Bombeck Tr. 509; Ray Tr. 396.
43
Ray Tr. 351.
44
Winton Tr. 256.
45
Ray Tr. 341.
46
Winton Tr. 95.
47
Id. at 96.
48
Id. at 94.
8
Concerned about potential misalignment, Winton drafted a “plain language”
memorandum summarizing his understanding of the Earnout Addendum.49 On
March 5, 2025, Winton walked Bombeck and Ray through the document on a video
call.50 The memo asserted that The Bridge “should have the opportunity to
participate, and receive earnout credit, in all projects that are primarily data and
technology, regardless of whether it was sourced by [North Highland] . . . or The
Bridge Unit.”51 Ray stopped Winton, admitting that she had not read the Earnout
Addendum and was learning its terms for the first time.52
Later that day, Bombeck emailed Winton and Ray. He wrote that although he
had gained a better understanding of Winton’s position, he believed the Earnout
Addendum was “open to interpretation and likely d[id] [not] effectively represent
the business practicality intended.”53 He instructed Winton and Ray to document
how the earnout should be “managed and measured.”54
49
JX 22; Winton Tr. 112-13.
50
JX 22; Winton Tr. 113-15.
51
JX 22 at 2.
52
Ray Tr. 362; Winton Tr. 116.
53
JX 24; Bombeck Tr. 498, 556-57 (testifying that his omission of the word “not” was a typographical error).
54
JX 24; see Bombeck Tr. 499.
9
G. The “Ways of Working” Document
In late March 2025, Ray circulated a “Ways of Working” document to Winton
to govern the parties’ operational interactions.55 The document outlined a series of
anticipated meetings to review potential tech and data project opportunities but
excluded certain North Highland clients and geographic regions from earnout
credit.56
Winton attended the ensuing review meetings but found they fell short of what
the Earnout Addendum required.57 Rather than evaluating the entire pipeline, North
Highland provided a curated list of opportunities it had predetermined were eligible
for cross-selling consideration.58 Yet, despite having some access to Salesforce,
Winton never formally identified a Qualifying Project or notified North Highland of
one during the meetings.59 Internally, Winton maintained to his legacy Bridge team
that he did not agree to North Highland’s extra-contractual carve-outs.60
Tensions came to a head during a quarterly all-hands call on April 15. Winton
announced to several hundred employees that The Bridge was “open for business”
55
JX 34; Ray Tr. 367.
56
JX 34 at 4; Ray Tr. 368-69.
57
Winton Tr. 138.
58
Id. at 283-84; Ray Tr. 371.
59
Winton Tr. 283-84.
60
JX 28; JX 35.
10
and encouraged anyone with an opportunity to contact The Bridge directly.61 The
next morning, Ray emailed the executive team “scolding” Winton.62 She stated that
the Earnout Addendum was “specific as to what is included and our need to agree
on the opportunity before moving forward,” and emphasized that she retained “the
decision rights on behalf of North Highland relative to what is in the cross-sell.”63
H. Winton’s Termination
On May 6, 2025, North Highland terminated Winton for cause.64 He was not
given a reason for the termination.65
On June 6, Winton emailed North Highland’s General Counsel to assert his
continued role as Seller Representative.66 He requested detailed monthly profit and
loss statements for The Bridge, along with current pipeline and closed/won reports
for North Highland projects tagged as “Data & Technology.”67
North Highland responded on June 27 by providing a curated pipeline report.68
The report excluded certain geographic regions and named accounts from earnout
61
Winton Tr. 142; Ray Tr. 380-81.
62
Winton Tr. 144.
63
JX 43.
64
JX 47.
65
Winton Tr. 148-52.
66
JX 49.
67
Id.; Winton Tr. 159-60.
68
JX 53.
11
eligibility.69 As Ray testified, this and subsequent reports only allowed Winton to
“determine what has already been determined to be qualified and primarily tech and
data” by North Highland.70 North Highland did not provide the underlying pricing
tools.71 After receiving the curated reports, Winton never notified North Highland
of a project he believed to be a Qualifying Project.72
In later correspondence, North Highland maintained that The Bridge must be
“meaningfully involved in the sale and delivery of [the] work” to receive earnout
credit.73 In December 2025, Winton’s counsel sent a demand letter requesting “realtime” Stage 3 pipeline access to perform his Seller Representative role.74
By the end of 2025, The Bridge had generated $50 million in revenue.75
I. This Litigation
On January 30, 2026, Winton filed this litigation against North Highland,
claiming breach of contract and seeking specific performance, money damages, and
declaratory relief.76 He sought expedition to compel North Highland to fulfill its
69
JX 58; JX 63.
70
Ray Tr. 459.
71
Id. at 461.
72
Winton Tr. 206.
73
JX 58.
74
JX 70.
75
Ray Tr. 413-14.
76
Pl.’s Verified Compl. for Breach of Contract and Specific Performance (Dkt. 1).
12
contractual obligations during the 2026 earnout period.77 I granted expedition in
part, bifurcating the action to resolve four forward-looking issues concerning the
2026 earnout process.78
A two-day trial on the expedited matters was held on May 19 and 20, 2026.79
On June 20, I entered a stipulated order staying proceedings at the parties’ request
and agreed to “defer issuing a ruling on the [e]xpedited [m]atters while the parties
engage in settlement discussions.”80 The order provided that “[i]f a party elects to
discontinue settlement discussions . . . or the stay otherwise expires, the parties
[would] promptly inform the Court by letter.”81 No such letter was filed. Instead,
on August 12, Winton filed a First Amended Verified Complaint.82
On August 20, the parties informed me that their settlement talks had failed in
early August and asked that I resume resolution of the expedited issues that had been
tried in May.83
77
See Pl.’s Mot. for Expedited Proceedings (Dkt. 1).
78
See Tr. of Feb. 9, 2026 Oral Arg. and Rulings of the Ct. on Pl.’s Mot. to Expedite (Dkt. 34) (“MTE Hr’g Tr.”); PTO ¶ 2.
79
See Judicial Action Form (Dkt. 88).
80
Stipulation and Order Temporarily Staying Proceedings to Facilitate Settlement Discussions (Dkt. 93) ¶ 5.
81
Id.
82
First Am. Verified Compl. (Dkt. 94).
83
Ltr. Submitting Joint Status Update (Dkt. 96).
13
II. ANALYSIS
Winton contends that North Highland breached the EPA and Earnout
Addendum, entitling him to specific performance of certain forward-looking rights
and declaratory relief. “[T]he elements of a breach of contract claim are: (1) a
contractual obligation; (2) a breach of that obligation by the defendant; and (3) a
resulting damage to the plaintiff.”84 Specific performance is an equitable remedy for
a breach of contract. A plaintiff must prove by clear and convincing evidence that
he has no adequate remedy at law and that “(1) a valid contract exists, (2) he is ready,
willing, and able to perform, and (3) that the balance of equities tips in favor of [the
plaintiff].”85 “[T]o obtain a declaratory judgment, the plaintiff bears the burden of
proving each element of his claim by a preponderance of the evidence. ‘Proof by a
preponderance of the evidence means proof that something is more likely than
not.’”86
Winton’s claims concern the fully integrated EPA and Earnout Addendum,
both of which are valid and enforceable contracts governed by Delaware law.87
Delaware courts interpret contracts “according to their plain, ordinary meaning.”88
84
H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129, 140 (Del. Ch. 2003).
85
Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1158 (Del. 2010).
86
Henry v. Phixios Hldgs., Inc., 2017 WL 2928034, at *7 (Del. Ch. July 10, 2017) (citation omitted); see 10 Del. C. § 6506.
87
EPA §§ 6.4, 6.11.
88
Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012).
14
In doing so, the court reviews the contract as a whole and “will give each provision
and term effect, so as not to render any part of the contract mere surplusage.”89
“Where the language of a contract is plain and unambiguous, its meaning should be
determined without reference to extrinsic facts or aids, and it must be enforced as
written.”90
A. The Earnout Structure and Qualifying Projects
The earnout is one component of “Transaction Consideration” as defined in
the EPA.91 The Earnout Addendum establishes a tiered formula for an earnout
payment keyed to Gross Profit thresholds. Gross Profit is calculated as Gross
Revenue minus Cost of Goods Sold and the Investment Adjustment, plus Cross Sale
Gross Profit.92
Cross Sale Gross Profit is the mechanism by which North Highland’s
operations—outside The Bridge business unit—contribute to the Sellers’ earnout. It
is defined as:
one hundred percent (100%) of the gross profit of [North
Highland] and its Subsidiaries (other than [The Bridge]) derived
from (i) the sale of products and services offered by [North
Highland] and its Subsidiaries (other than [The Bridge]) to any
89
In re Shorenstein Hays-Nederlander Theatres LLC Appeals, 213 A.3d 39, 56 (Del. 2019) (citation omitted).
90
Galantino v. Baffone, 46 A.3d 1076, 1081 n.9 (Del. 2012) (quoting 17A Am. Jur. 2d Contracts § 330).
91
EPA § 1.1 (defining “Transaction Consideration”).
92
Earnout Addendum § 1.2 (defining “Gross Profit”).
15
Company Client and (ii) any Qualifying Project, in each case,
during such Earnout Payment Period and calculated in accordance
with GAAP, as consistently and historically applied by [North
Highland]. For the avoidance of doubt, the Cross Sale Gross
Profit shall exclude any gross profit of [The Bridge] or otherwise
associated with revenue that is included in the calculation of
Gross Revenue.93
This definition sets out two paths to generating Cross Sale Gross Profit that
count toward the earnout. The first path captures gross profit derived from North
Highland or its subsidiaries (other than The Bridge) cross-selling products and
services to any “Company Client”—i.e., a client of The Bridge.94 The second path
captures gross profit from a Qualifying Project, as defined in the Earnout Addendum.
In either case, Cross Sale Gross Profit excludes The Bridge’s own gross profit and
gross profit associated with revenue already included in Gross Revenue. The
exclusion prevents double counting; it does not prohibit The Bridge from
participating in the same project.
Because the Sellers ceded operational control of The Bridge business unit at
closing, North Highland held significant control over the Sellers’ ability to obtain
the earnout. The Qualifying Project component of Cross Sale Gross Profit protected
the Sellers against North Highland preventing The Bridge from working on
93
Earnout Addendum § 1.2 (defining “Cross Sale Gross Profit”) (emphasis added). 94
Id. (defining “Company Client” and “Cross Sale Gross Profit”).
16
engagements that generated earnout-qualifying Gross Profit.95 The Earnout
Addendum both defines a Qualifying Project and outlines a procedural mechanism
for the Seller Representative to identify a Qualifying Project at a specific stage of
North Highland’s RFP process.96 The contours of the Qualifying Project definition
are at the center of the expedited issues.
B. The Expedited Issues
The parties tried four expedited issues: (1) whether North Highland must
provide the Seller Representative with access to its sales pipeline and pricing tools
to identify Qualifying Projects; (2) whether the definition of Qualifying Project is
limited to the single revenue-based criterion in the Earnout Addendum; (3) whether
the mutual-agreement requirement in the Qualifying Project definition prohibits
North Highland from exercising a veto based on extra-contractual criteria; and
(4) whether North Highland must provide separate 2026 business unit profit and loss
statements before delivery of the earnout statement.
1. Pipeline Access to Qualifying Projects
The first expedited issue is whether North Highland must grant the Seller
Representative contemporaneous access to its 2026 sales pipeline and pricing tools
sufficient to identify and notify North Highland of potential Qualifying Projects.
95
See Winton Tr. 72-73; Riggs Dep. 74-75.
96
Earnout Addendum § 1.2 (defining “Qualifying Project”).
17
The Earnout Addendum requires the Seller Representative, as a condition to
classification, to “notify” North Highland of any potential Qualifying Project so that
the parties may “mutually agree” on its classification “prior to the submission of any
RFP during [North Highland’s] ‘Stage 3’ internal process.”97 But the agreement does
not address how the Seller Representative is to access North Highland’s internal
systems and information to identify these projects.
Winton invokes the implied covenant of good faith and fair dealing to
challenge North Highland’s withholding of information needed to participate in that
process. He seeks an order of specific performance “requiring North Highland to
provide the Seller Representative, contemporaneously and before any Stage 3 RFP
submission to a customer,” categories of Salesforce and pricing-tool documents that
he obtained in discovery.98 North Highland counters that the Seller Representative
lacks information rights at this stage, pointing to Section 1.3 of the Earnout
Addendum, which grants him “reasonable access” to working papers after an earnout
statement is issued.99 North Highland also argues that the implied covenant cannot
supply a right to contemporaneous information since Winton failed to secure it at the
bargaining table.100
97
Id.
98
Pl.’s Corrected Opening Pre-trial Br. (Dkt. 73) (“Pl.’s Opening Br.”) 49; see PTO ¶ 62(a). 99
Earnout Addendum § 1.3(b).
100
Def.’s Pre-trial Answering Br. (Dkt. 74) (“Def.’s Answering Br.”) 37-40.
18
I conclude that the implied covenant of good faith and fair dealing prohibits
North Highland from arbitrarily withholding the data necessary for the Seller
Representative to participate in the contractual notification and classification
process, but not as broadly as Winton contends. The scope of this implied constraint
is narrow and does not include real-time pipeline access. Rather, to prevent the
frustration of the parties’ bargain, North Highland must periodically provide—
before any Stage 3 RFP submission—the Salesforce and pricing-tool data necessary
for the Seller Representative to determine whether a project is a Qualifying Project.
a. The Implied Covenant of Good Faith and Fair Dealing
The Earnout Addendum defines a “Qualifying Project” as:
any new project initiated by [North Highland] and its Subsidiaries
(other than [The Bridge]) that primarily (based on revenue)
involves the delivery of technology or data analytics services
provided, however, that, prior to any new project being classified
as a Qualifying Project, the Seller Representative shall notify
[North Highland] and its Subsidiaries of such project and the
Buyer and the Seller Representative shall mutually agree as to
whether such project constitutes a Qualifying Project prior to the
submission of any RFP during [North Highland’s] “Stage 3”
internal process.101
The proviso in this definition establishes a sequence of events. First, “[p]rior to” the
classification of a Qualifying Project, the Seller Representative “shall notify” North
Highland of “such project.”102 After the Seller Representative’s notification, the
101
Earnout Addendum § 1.2 (defining “Qualifying Project”) (emphasis added). 102
Id.
19
parties “shall mutually agree” on whether it constitutes a Qualifying Project before
North Highland submits any RFP for the project during its Stage 3 process.103
Winton asserts that the Earnout Addendum contains an implied constraint
prohibiting North Highland from withholding the data necessary for him to engage
in this process.
The implied covenant can function as a “limited ‘gap-filler’” that “enforces
the parties’ reasonable expectations in circumstances that they could not foresee and
did not address in their written agreement, but it may not be used to rewrite or
contradict express terms.”104 Applying it is a “cautious enterprise.”105 A court will
not rewrite a contract simply because a party later wishes it had negotiated a better
deal.106 But the court may “imply contract terms when the party asserting the
implied covenant proves that the other party has acted arbitrarily or unreasonably,
thereby frustrating the fruits of the bargain that the asserting party reasonably
expected.”107 The implied covenant also constrains the exercise of contractual
103
Id.
104
Johnson & Johnson v. Fortis Advisors LLC, 352 A.3d 229, 251 (Del. 2026). 105
Nemec v. Shrader, 991 A.2d 1120, 1125-26 (Del. 2010).
106
Id. at 1126.
107
Id.
20
discretion where necessary to preserve the parties’ reasonable expectations at
signing.108
Here, the implied constraint concerns North Highland’s control over
implementation of the agreed-upon notification and classification process. The
Earnout Addendum makes the Seller Representative’s notification a prerequisite to
classification. That process requires information about a project’s anticipated
services and revenue composition. North Highland cannot demand strict compliance
with this condition precedent while wielding its exclusive control over its systems
to arbitrarily withhold the sole means of effectuating it.
North Highland counters that the implied covenant is inapplicable because
Winton’s termination as an at-will employee—and the resulting loss of his
information access—were foreseeable.109 It asserts that the lack of an express
information right in the Earnout Addendum is an intentional omission, not a
contractual gap.110 For support, it cites the settled principle that the implied covenant
cannot supply contractual protections a party failed to secure at the bargaining
table.111
108
Johnson & Johnson, 352 A.3d at 253.
109
See Oxbow Carbon & Mins. Hldgs., Inc. v. Crestview-Oxbow Acq., LLC, 202 A.3d 482, 507 (Del. 2019) (declining to apply the implied covenant where the contract terms were clear and the events could have been anticipated).
110
Def.’s Answering Br. 38-40.
111
See, e.g., Winshall v. Viacom Int’l, Inc., 76 A.3d 808, 816 (Del. 2013).
21
North Highland’s arguments are misplaced and conflate Winton’s
employment with his separate role as Seller Representative. Winton is not claiming
a free-floating information right. He seeks information to satisfy the notification
condition and to participate in the agreed-upon Qualifying Project classification
process. The Earnout Addendum assigns that process to the Seller Representative.
The relevant inquiry is whether, at signing, the parties reasonably understood that
the agreed-upon classification process required North Highland to provide the
information necessary for the Seller Representative to participate, regardless of his
continued employment.
Under North Highland’s interpretation of the Earnout Addendum, the
carefully negotiated Qualifying Project definition and Stage 3 procedural check
would be rendered illusory unless North Highland chooses to provide information
necessary for Winton to participate.112 Although the implied covenant cannot rewrite
a contract term, it may constrain a party “from arbitrary or unreasonable conduct”
that prevents the counterparty “from receiving the fruits of the bargain.”113
Withholding the data necessary to identify potential Qualifying Projects blocks the
112
North Highland has declined to extend such access.
113
Nemec, 991 A.2d at 1128; see Johnson & Johnson, 352 A.3d at 258 n.145 (distinguishing an impermissible change to a regulatory requirement from an implied constraint on discretion that preserves bargained-for procedural protections (citing Dieckman v. Regency GP LP, 155 A.3d 358 (Del. 2017))); see also Osborn, 991 A.2d at 1159 (explaining that Delaware courts “will not read a contract to render a provision or term meaningless or illusory”).
22
Seller Representative from engaging in the very classification process the Earnout
Addendum contemplates.114
North Highland also argues that the court should not recognize an implied
obligation because the parties knew how to—and did—negotiate for express
information rights elsewhere in the EPA.115 It points to Earnout Addendum Section
1.3, which gives the Seller Representative “reasonable access” to working papers in
connection with his review of the earnout statement.116
This argument conflates distinct mechanisms. Section 1.3 addresses a
retrospective review after an earnout statement has been delivered to the Seller
Representative.117 Section 1.4(a) preserves North Highland’s authority to operate
the business.118 Neither provision addresses how the Seller Representative will
obtain information to classify projects under the Qualifying Project definition. Read
together, these provisions support finding a limited implied constraint that preserves
114
Cf. Riverbend Cmty., LLC v. Green Stone Eng’g, LLC, 55 A.3d 330, 334 (Del. 2012) (explaining that a court construing a Delaware contract must “give priority to the parties’ intentions as reflected in the four corners of the agreement” and “must construe the agreement as a whole, giving effect to all provisions therein”).
115
Def.’s Answering Br. 38-39.
116
See Earnout Addendum § 1.3.
117
Id.
118
Id. § 1.4(a).
23
the parties’ bargain without creating a general right to monitor North Highland’s
business.119
b. The Scope of the Implied Constraint
The implied covenant does not entitle the Seller Representative to unrestricted
pipeline access. It imposes only the minimum constraint necessary to protect the
parties’ bargain.120 Here, Winton is entitled only to the data required to determine
whether a project is a Qualifying Project so that he can notify North Highland and
engage in the mutual-agreement process.
Winton insists that he should receive the same universe of information North
Highland produced to him in discovery.121 This includes pipeline information for all
projects in Stages 0 to 3, pricing-tool information for projects proceeding from
Stages 2 to 3, and related Salesforce materials.122 But the scope of discovery was
119
This limited constraint does not alter the contractual allocation of risk. In Nemec v. Shrader, for example, the challenged redemption was authorized by the agreement’s terms. 991 A.2d at 1126-28. In Johnson & Johnson v. Fortis Advisors LLC, the proposed implied term would have substituted a different regulatory approval pathway for the one the parties selected. 352 A.3d at 253-58. Here, the constraint changes neither the substantive eligibility requirements nor the notification and mutual-agreement conditions. It prevents North Highland from arbitrarily undermining the process the parties adopted. 120
See Gerber v. Enter. Prods. Hldgs., LLC, 67 A.3d 400, 419 (Del. 2013), overruled on other grounds by Winshall, 76 A.3d 808 (explaining that the implied covenant contemplates “faithfulness to the scope, purpose, and terms of the parties’ contract”). That focus on scope requires the implied covenant to be measured against the contractual obligation at issue—not to expand the parties’ bargain beyond that obligation.
121
See Pl.’s Opening Br. 49.
122
PTO ¶ 62(a); see JX 78 at 6-7.
24
governed by the relevance standard applicable to his breach of contract claims.123
That standard has no bearing on the scope of his contractual right, which is governed
by the EPA and Earnout Addendum.
The Seller Representative is only entitled to the information necessary to
determine whether a project “primarily (based on revenue) involves the delivery of
technology or data analytics services.”124 He does not need every document
generated in connection with a project to make that assessment. Nor is he entitled
to contemporaneous access to North Highland’s systems. Instead, a periodic report
of the data necessary for the Seller Representative to make a Qualifying Project
determination before an RFP is submitted in Stage 3 is sufficient to uphold the
parties’ bargain.
c. North Highland’s Breach
Without pipeline visibility, the Seller Representative cannot notify North
Highland of a potential Qualifying Project. As discussed, the implied covenant
prohibits North Highland from unreasonably restricting the data necessary to satisfy
that notification condition.125 The record demonstrates that North Highland
123
See JX 205; see also Ct. Ch. R. 26.
124
Earnout Addendum § 1.2. The defendant’s arguments about the definition of Qualifying Project are addressed in the context of Issue 2, below. See infra Section II.B.2. 125
See supra Section II.B.1.a.
25
breached this implied constraint by depriving Winton of access to the data needed to
do so.
North Highland exploited its exclusive control over its internal systems to
frustrate the Qualifying Project notification process. It not only withheld pricing
tools, but also provided curated pipeline reports that omitted projects it unilaterally
deemed ineligible.126 Even for the projects it disclosed to Winton, the provided
pipeline reports were inadequate because they lacked information identifying
whether a project involved technology or data analytics.127 For instance, the
“Amount” field in the pipeline reports supplied the project’s top-line gross contract
value, which describes how much the project is worth, but obscured what was
actually being sold.128 The pricing tool, by contrast, generates the line-item
allocation necessary to perform the Earnout Addendum’s revenue-based
assessment.129
126
See Ray Tr. 461; id. at 459 (confirming the pipeline report allowed Winton only to “determine what has already been determined to be qualified and primarily tech and data” by North Highland); Winton Tr. 172-73.
127
See JX 63.
128
For example, if North Highland pitches a $1,000,000 project, the “Amount” column will list $1,000,000. But Winton has no way of knowing if that represents $900,000 in data analytics work (a Qualifying Project) or $900,000 in change management services with a $100,000 tech add-on (a non-Qualifying Project).
129
See, e.g., JX 81 (native).
26
The deprivation of this data irreparably harms the Sellers. Money damages
awarded after the 2026 earnout period closes cannot adequately remedy this harm.
Once a project passes Stage 3 without the Seller Representative’s involvement, the
opportunity for timely participation in the contractual process is lost. Although the
classification standard is objective, its application requires a contemporaneous
assessment of projected revenue and the assumptions underlying it. A retrospective
inquiry cannot reliably establish which projects the Seller Representative would
have brought forward, how the parties would have evaluated those projects, or what
outcome would have been reached. Indeed, the parties stipulated in Section 6.14 of
the EPA that a breach would cause “irreparable damage” and waived any defense
that a remedy at law would be adequate.130
d. Specific Performance
Winton has proven “by clear and convincing evidence” that he is “entitled to
specific performance” and “has no adequate legal remedy.”131 The Earnout
Addendum is valid. He stands ready to perform.132 North Highland is in breach.133
130
EPA § 6.14; see Martin Marietta Materials, Inc. v. Vulcan Materials Co., 68 A.3d 1208, 1227 (Del. 2012) (explaining that Delaware courts consistently enforce contractual stipulations of irreparable harm and waivers of the adequate-remedy-at-law defense, provided that the facts support a finding of irreparable harm).
131
Osborn, 991 A.2d at 1158; see supra note 85 and accompanying text (summarizing the elements required to obtain specific performance).
132
Winton Tr. 178-79.
133
See supra Section II.B.1.c.
27
Money damages are inadequate because they cannot reliably compensate for the lost
opportunity to participate in the contractual classification process before a project
passes Stage 3.134 Finally, the balance of the equities favors enforcement because
the burden to North Highland of providing limited reports and supplemental
disclosures is outweighed by the continuing deprivation of the Sellers’ bargained-for
procedural protection.
Winton seeks broad data access because the information he ostensibly needs
varies by project.135 But equity demands that this remedy be tailored to only the
minimum data necessary for the Seller Representative to participate in the
classification and mutual-agreement process. North Highland must provide the
pricing-tool output showing the revenue allocation between technology or data
analytics services and other services. It need not provide the complete pricing tool
or portions containing highly confidential information that are extraneous to the
Qualifying Project determination. A periodic reporting requirement also strikes the
134
Cf. Fortis Advisors, LLC v. Krafton, Inc., 354 A.3d 906, 953 n.435 (Del. Ch. 2026) (extending the contractual earnout period by the duration of the CEO’s wrongful ouster to restore the sellers’ opportunity to achieve the earnout and ensure that specific performance “is not illusory”).
135
See Winton Tr. 219.
28
appropriate balance. North Highland’s own proposed process contemplates
biweekly reporting, confirming that such a mechanism is administrable.136
North Highland must provide reports every two weeks identifying projects
entering or moving through Stage 3 for which an RFP has not yet been submitted.
The information must include the Salesforce fields necessary to identify the
project—such as Opportunity Name, Stage, Amount, Account, and comparable
identifying information. It must also include the corresponding pricing-tool output
showing the revenue allocation between technology or data analytics services and
other services for projects entering or moving through Stage 3. If a project will reach
the submission deadline before the next scheduled report, North Highland must
provide a supplemental disclosure sufficiently in advance to afford the Seller
Representative a meaningful opportunity to notify North Highland of the potential
Qualifying Project and participate in the mutual-agreement process. The biweekly
reporting schedule does not excuse compliance with this requirement.
The procedure must not, however, create unnecessary delay in North
Highland’s sales process. North Highland’s pipeline moves quickly: approximately
750 opportunities are in Stage 3 at any given time, 30 to 40 new opportunities enter
136
See Def.’s Mot. to Vacate Scheduling Order for Expedited Proceedings as Moot (Dkt. 40) Ex. 1 (offering certain information to the Seller Representative “[e]very two weeks”).
29
Stage 3 each week, and a project may move from Stage 3 to Stage 4 within hours.137
Given that pace, the Seller Representative cannot hold up North Highland’s process
by failing to respond promptly once information is delivered. The implementing
order should establish response deadlines for regular and supplemental disclosures,
address incomplete or materially revised disclosures, and provide a procedure for
time-sensitive projects.
2. The Definition of “Qualifying Project”
The second expedited issue is whether the definition of “Qualifying Project”
is governed solely by the revenue-based criterion in the Earnout Addendum, or
whether North Highland may apply extra-contractual carve-outs.138 Winton
contends that the contract’s plain text controls. I agree. The Earnout Addendum’s
substantive classification test is complete, unambiguous, and excludes the industrybased “cross-sell” limitations North Highland has applied. As such, extrinsic
evidence is irrelevant.139
The Qualifying Project definition in Section 1.2 of the Earnout Addendum has
two parts, followed by a procedural proviso. First, a project must be “new” and
137
See Ray Tr. 341-42.
138
PTO ¶ 62(b).
139
See Sunline Com. Carriers, Inc. v. CITGO Petroleum Corp., 206 A.3d 836, 846 (Del. 2019) (“‘When the contract is clear and unambiguous, we will give effect to the plainmeaning of the contract’s terms and provisions,’ without resort to extrinsic evidence.” (citation omitted)).
30
“initiated by [North Highland] and its Subsidiaries (other than [The Bridge]).”140
This language establishes the threshold eligibility for a Qualifying Project; neither
party debates its meaning.
Second, the definition supplies one substantive classification criterion: the
project “primarily (based on revenue) involves the delivery of technology or data
analytics services.”141 This language is clear and unambiguous. It imposes an
objective, revenue-based measure at the project’s inception. The Earnout Addendum
supplies no exceptions to this definition.
North Highland insists that Qualifying Projects “were intended to be projects
for which [The] Bridge was cross-selling services to certain North Highland
customers.”142 It relies on the defined term Cross Sale Gross Profit, arguing that the
term’s title contemplates cross-selling.143 That argument does not comport with the
term’s definition, which lacks any requirement that The Bridge participate in, sell,
staff, or perform a Qualifying Project for the resulting gross profit to count toward
the earnout. The definition also expressly excludes from Cross Sale Gross Profit
140
Earnout Addendum § 1.2.
141
Id. (defining “Qualifying Project”).
142
Def.’s Answering Br. 52.
143
See id. at 48-50; Earnout Addendum § 1.2 (defining “Cross Sale Gross Profit”).
31
“any gross profit of the Business Unit or otherwise associated with revenue that is
included in the calculation of Gross Revenue.”144
The structure of the definitions in the Earnout Addendum is consistent with
this reading. Cross Sale Gross Profit excludes “any gross profit of the Business
Unit” and gross profit associated with revenue already included in Gross Revenue.
These exclusions prevent double counting; they do not impose a requirement that
The Bridge participate in a Qualifying Project. Whether a project qualifies turns on
the express terms of the Qualifying Project definition, which contains no such
requirement.
North Highland separately invokes the Qualifying Project definition’s mutualagreement proviso to inject extra-contractual criteria.145 That argument fails. The
mutual-agreement clause is a procedural mechanism for applying the substantive
revenue-based test to live projects. It is not a means to keep projects from being
presented to the Seller Representative in the first place.146
Accordingly, Winton is entitled to a declaration that, subject to the definition’s
express requirements concerning a project’s initiation and the notification and
mutual-agreement process, classification of a Qualifying Project depends on whether
144
Earnout Addendum § 1.2.
145
See Def.’s Answering Br. 56-58.
146
The scope of the mutual-agreement requirement is addressed fully as Issue 3, below.
32
the project primarily, based on revenue, involves the delivery of technology or data
analytics services. The dispute is ripe, concerns a concrete controversy between
adverse parties regarding a contract’s meaning, and is capable of resolution by
declaration.147 North Highland’s carve-outs are foreclosed by the plain,
unambiguous text of the Earnout Addendum.
3. The Mutual-Agreement Requirement
The third expedited issue is whether the mutual-agreement clause in the
Qualifying Project definition operates as a procedural check or a substantive veto.148
The provision requires that the parties “mutually agree as to whether such project
constitutes a Qualifying Project prior to the submission of any RFP” in Stage 3.149
Winton asserts that the clause merely requires the parties to verify whether a project
meets the revenue-based criterion.150 North Highland responds that the provision
imposes no limitation on the criteria North Highland may consider, permitting it to
147
See 10 Del. C. § 6501; Stroud v. Milliken Enters., Inc., 552 A.2d 476, 479-80 (Del. 1989).
148
PTO ¶ 62(c).
149
Earnout Addendum § 1.2 (defining “Qualifying Project”) (emphasis added). 150
Pl.’s Opening Br. 42-43.
33
withhold agreement based on operational factors such as capacity, skill sets, and
business continuity.151
The text of the provision concerns whether a project “constitutes” a
Qualifying Project.152 The plain meaning of “constitute” is to make up, form, or
compose.153 The mutual-agreement step is thus a verification exercise in which the
parties apply the single, revenue-based criterion addressed above to the facts of a
given project. It is a procedural mechanism, not a license for North Highland to
withhold classification based on extra-contractual operational considerations.
North Highland maintains that this reading cannot be squared with Section
1.4(a) of the Earnout Addendum, which grants it the right to “own and operate the
Business Unit and the Company and its Subsidiaries in any way that [North
Highland] and its Affiliates deem appropriate, in their sole discretion,”
notwithstanding anything to the contrary therein.154 I disagree. Section 1.4(a)
governs whether and how North Highland operates its business—which projects to
pursue, staff, or continue. But once North Highland initiates a project that satisfies
151
Bombeck Tr. 506.
152
Earnout Addendum § 1.2 (defining “Qualifying Project”).
153
See “Constitute,” Merriam-Webster, www.merriam-webster.com/dictionary/constitute (last visited Sept. 8, 2026) (defining “constitute” as “make up, form, compose”); Sanyo Elec. Co., Ltd. v. Intel Corp., 2021 WL 747719, at *9 (Del. Ch. Feb. 26, 2021) (explaining that “constitute” is synonymous with “form, make up,” indicating equivalency between a subject and the category it purportedly satisfies).
154
Earnout Addendum § 1.4(a).
34
the Qualifying Project criterion, the process contemplated by Section 1.2 of the
Earnout Addendum is triggered. North Highland’s operational discretion is
undisturbed by this verification step. It simply cannot withhold its agreement based
on extra-contractual criteria.
North Highland further argues that Winton’s reading renders the mutualagreement clause itself superfluous.155 Not so. At Stage 3, a project has not yet
generated actual revenue.156 The mutual-agreement step serves the practical purpose
of requiring the parties to verify projected revenue composition and staffing
assumptions before an RFP is submitted.157 This reading gives the clause
independent effect without subsuming the definition it qualifies.
Winton is therefore entitled to a declaration that the Earnout Addendum
prohibits North Highland from withholding agreement based on extra-contractual
criteria.158
4. Separate Business Unit Records
The fourth expedited issue is whether North Highland must provide separate
2026 business unit profit and loss statements to permit real-time monitoring of the
155
Def.’s Answering Br. 51.
156
See Ray Dep. 89.
157
See id. at 255-56.
158
See supra note 147 and accompanying text (explaining that Winton has met the declaratory judgment standard).
35
earnout.159 Winton conceded at his deposition that he lacks an ongoing right to
access these materials before the delivery of the earnout statement, effectively
abandoning this claim.160 Recognizing this defect, he attempted to pivot on the eve
of trial to a claim regarding North Highland’s duty to maintain those records.161
This belated change is procedurally improper and prejudicial to North
Highland. I expedited a narrow claim concerning the provision of information—not
the maintenance of records. To permit Winton to unilaterally substitute an
unexpedited claim in a fast-moving proceeding would deprive North Highland of
fair notice and the opportunity to conduct targeted discovery.
Because Winton abandoned the expedited claim on this subject, and no claim
regarding the duty to maintain records was expedited, I deny the request for such
relief without prejudice to his ability to raise it during the non-expedited portion of
this case.
III. CONCLUSION
For the foregoing reasons, judgment is entered for Winton on the adjudicated,
expedited claims. Winton is entitled to specific performance requiring North
Highland to provide the Salesforce and pricing-tool data necessary to prevent the
159
See MTE Hr’g Tr. 34-35.
160
See Winton Dep. 74.
161
See PTO ¶ 62(d).
36
frustration of the contractual notification and classification process. He is also
entitled to declarations that the Qualifying Project classification is governed by the
Earnout Addendum’s revenue-based criterion, subject to the express initiation and
procedural requirements, and that North Highland may not withhold its agreement
based on extra-contractual criteria. Winton’s request for relief concerning separate
business unit records is denied without prejudice. The parties must confer on and
file a proposed final order implementing this decision within three business days,
unless the parties mutually request additional time.
37