EXHIBIT 2.1
-----------
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
by and among
XXXXX XXXX LASALLE INCORPORATED,
XXXXX LANG LASALLE TENANT REPRESENTATION, INC.,
and
STAUBACH HOLDINGS, INC.
dated
June 16, 2008
TABLE OF CONTENTS
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Page
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ARTICLE I THE MERGER; EFFECTIVE TIME; CLOSING . . . . . . . . . . . 2
Section 1.1 The Merger . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Effective Time . . . . . . . . . . . . . . . . . . 2
Section 1.3 Closing. . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4 Right to Revise Structure of Merger. . . . . . . . 2
ARTICLE II THE SURVIVING CORPORATION. . . . . . . . . . . . . . . . 2
Section 2.1 Certificate of Formation . . . . . . . . . . . . . 2
Section 2.2 Bylaws . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.3 Directors and Officers of the
Surviving Corporation. . . . . . . . . . . . . . . 3
ARTICLE III CONVERSION OF SECURITIES . . . . . . . . . . . . . . . . 3
Section 3.1 Conversion of Shares . . . . . . . . . . . . . . . 3
Section 3.2 Closing Consideration. . . . . . . . . . . . . . . 4
Section 3.3 Post-Closing Adjustment/Accounts Receivable. . . . 5
Section 3.4 Integration Costs. . . . . . . . . . . . . . . . . 9
Section 3.5 Deferred Payments. . . . . . . . . . . . . . . . . 9
Section 3.6 Earnout Payments . . . . . . . . . . . . . . . . . 13
Section 3.7 Earnout Statement. . . . . . . . . . . . . . . . . 14
Section 3.8 Appraisal Rights . . . . . . . . . . . . . . . . . 16
Section 3.9 Shareholder Election . . . . . . . . . . . . . . . 17
Section 3.10 Exchange of Certificates . . . . . . . . . . . . . 17
Section 3.11 Withholding Rights . . . . . . . . . . . . . . . . 20
Section 3.12 Early Termination. . . . . . . . . . . . . . . . . 20
Section 3.13 Payments . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . 21
Section 4.1 Organization . . . . . . . . . . . . . . . . . . . 21
Section 4.2 Subsidiaries and Affiliates. . . . . . . . . . . . 22
Section 4.3 Capitalization . . . . . . . . . . . . . . . . . . 23
Section 4.4 Authorization; Validity of Agreement;
Company Action . . . . . . . . . . . . . . . . . . 24
Section 4.5 Board Approvals. . . . . . . . . . . . . . . . . . 25
Section 4.6 Consents and Approvals; No Violations. . . . . . . 25
Section 4.7 Financial Statements . . . . . . . . . . . . . . . 25
Section 4.8 Absence of Certain Changes . . . . . . . . . . . . 26
Section 4.9 No Undisclosed Liabilities; Indebtedness . . . . . 26
Section 4.10 Litigation . . . . . . . . . . . . . . . . . . . . 27
Section 4.11 Employee Benefit Plans; ERISA. . . . . . . . . . . 27
Section 4.12 Taxes. . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.13 Contracts. . . . . . . . . . . . . . . . . . . . . 34
Section 4.14 Real and Personal Property . . . . . . . . . . . . 35
Section 4.15 Intellectual Property. . . . . . . . . . . . . . . 37
Section 4.16 Related Party Transactions . . . . . . . . . . . . 40
Section 4.17 Labor Matters. . . . . . . . . . . . . . . . . . . 40
Section 4.18 Compliance with Laws; Permits. . . . . . . . . . . 42
Section 4.19 Assets . . . . . . . . . . . . . . . . . . . . . . 42
Section 4.20 Significant Clients. . . . . . . . . . . . . . . . 43
Section 4.21 Environmental Matters. . . . . . . . . . . . . . . 43
Section 4.22 Insurance. . . . . . . . . . . . . . . . . . . . . 45
Section 4.23 Information Statement. . . . . . . . . . . . . . . 45
Section 4.24 Foreign Corrupt Practices. . . . . . . . . . . . . 45
Section 4.25 Customer Non-Discrimination. . . . . . . . . . . . 45
Section 4.26 Investment Funds . . . . . . . . . . . . . . . . . 46
Section 4.27 Government Contracts.. . . . . . . . . . . . . . . 47
Section 4.28 Opinion of Financial Advisor . . . . . . . . . . . 48
Section 4.29 Brokers. . . . . . . . . . . . . . . . . . . . . . 48
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB . 48
Section 5.1 Organization . . . . . . . . . . . . . . . . . . . 48
Section 5.2 Authorization; Validity of Agreement;
Necessary Action . . . . . . . . . . . . . . . . . 49
Section 5.3 Capitalization . . . . . . . . . . . . . . . . . . 49
Section 5.4 Consents and Approvals; No Violations. . . . . . . 49
Section 5.5 Brokers. . . . . . . . . . . . . . . . . . . . . . 49
Section 5.6 Financing. . . . . . . . . . . . . . . . . . . . . 50
Section 5.7 SEC Filings; Financial Statements. . . . . . . . . 50
Section 5.8 Tenant Rep Business. . . . . . . . . . . . . . . . 50
Section 5.9 Labor Matters. . . . . . . . . . . . . . . . . . . 50
Section 5.10 Significant Clients. . . . . . . . . . . . . . . . 50
ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS. . . . . . . . 51
Section 6.1 Conduct of Business of the Company . . . . . . . . 51
Section 6.2 No Solicitation. . . . . . . . . . . . . . . . . . 53
Section 6.3 Tax Matters. . . . . . . . . . . . . . . . . . . . 54
ARTICLE VII ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . 58
Section 7.1 Information Statement. . . . . . . . . . . . . . . 58
Section 7.2 Commercially Reasonable Efforts; Consents
and Approvals. . . . . . . . . . . . . . . . . . . 58
Section 7.3 Notification of Certain Matters. . . . . . . . . . 59
Section 7.4 Access; Confidentiality. . . . . . . . . . . . . . 59
Section 7.5 Publicity. . . . . . . . . . . . . . . . . . . . . 60
Section 7.6 Indemnification. . . . . . . . . . . . . . . . . . 60
Section 7.7 Takeover Laws. . . . . . . . . . . . . . . . . . . 60
Section 7.8 Interim Financial Statements; Financing. . . . . . 60
Section 7.9 Pre-Closing Transactions . . . . . . . . . . . . . 61
Section 7.10 Xxxxxxxx-Xxxxx Compliance. . . . . . . . . . . . . 62
Section 7.11 Certain Appointments . . . . . . . . . . . . . . . 62
Section 7.12 Stock Exchange Listing . . . . . . . . . . . . . . 63
Section 7.13 Certain Prohibited Activities. . . . . . . . . . . 63
Section 7.14 Registration Rights. . . . . . . . . . . . . . . . 63
Section 7.15 Severance. . . . . . . . . . . . . . . . . . . . . 66
ARTICLE VIII CONDITIONS . . . . . . . . . . . . . . . . . . . . . . 66
Section 8.1 Conditions to Each Party's Obligation
to Effect the Merger . . . . . . . . . . . . . . . 66
Section 8.2 Conditions to the Company's Obligation
to Effect the Merger . . . . . . . . . . . . . . . 67
Section 8.3 Conditions to Parent's and Merger Sub's
Obligations to Effect the Merger . . . . . . . . . 67
ARTICLE IX TERMINATION. . . . . . . . . . . . . . . . . . . . . . . 69
Section 9.1 Termination. . . . . . . . . . . . . . . . . . . . 69
Section 9.2 Effect of Termination. . . . . . . . . . . . . . . 70
ARTICLE X INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 70
Section 10.1 Indemnification. . . . . . . . . . . . . . . . . . 70
Section 10.2 Survival . . . . . . . . . . . . . . . . . . . . . 74
Section 10.3 Information; Waiver. . . . . . . . . . . . . . . . 75
Section 10.4 Set-Off Rights . . . . . . . . . . . . . . . . . . 75
Section 10.5 Recoupment . . . . . . . . . . . . . . . . . . . . 78
Section 10.6 Third Party Claims . . . . . . . . . . . . . . . . 78
Section 10.7 Treatment of Indemnification Payments. . . . . . . 79
Section 10.8 Advancement of Expenses. . . . . . . . . . . . . . 79
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ARTICLE XI MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . 80
Section 11.1 Shareholders' Representative . . . . . . . . . . . 80
Section 11.2 Amendment and Modification . . . . . . . . . . . . 81
Section 11.3 Company Disclosure Schedule. . . . . . . . . . . . 81
Section 11.4 Expenses . . . . . . . . . . . . . . . . . . . . . 82
Section 11.5 Notices. . . . . . . . . . . . . . . . . . . . . . 82
Section 11.6 Interpretation . . . . . . . . . . . . . . . . . . 83
Section 11.7 Jurisdiction . . . . . . . . . . . . . . . . . . . 83
Section 11.8 Service of Process . . . . . . . . . . . . . . . . 83
Section 11.9 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . 83
Section 11.10 Specific Performance . . . . . . . . . . . . . . . 83
Section 11.11 Counterparts . . . . . . . . . . . . . . . . . . . 83
Section 11.12 Entire Agreement; No Third-Party Beneficiaries . . 84
Section 11.13 Severability . . . . . . . . . . . . . . . . . . . 84
Section 11.14 Governing Law. . . . . . . . . . . . . . . . . . . 84
Section 11.15 Headings . . . . . . . . . . . . . . . . . . . . . 84
Section 11.16 Waivers. . . . . . . . . . . . . . . . . . . . . . 84
Section 11.17 Assignment . . . . . . . . . . . . . . . . . . . . 84
iii
INDEX OF DEFINED TERMS
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Not Part of this Agreement
Defined Term Section No.
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AAA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4(e)
Acquisition Proposal . . . . . . . . . . . . . . . . . . . . . . . . 6.2
Adjustment Date. . . . . . . . . . . . . . . . . . . . . . . . . .3.2(g)
Adverse Change of Control. . . . . . . . . . . . . . . . . . . . .3.5(o)
Advisers Act . . . . . . . . . . . . . . . . . . . . . . . . . . 4.26(a)
Aggregate Claimed Amount . . . . . . . . . . . . . . . . . . . . 10.4(f)
Agreed Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . .3.3(f)
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals
Americas Business. . . . . . . . . . . . . . . . . . . . Schedule 3.6(b)
Ancillary Agreements . . . . . . . . . . . . . . . . . . . . . . . . 4.4
Approved Estimated Balance Sheet . . . . . . . . . . . . . . . . .3.2(a)
Arbitral Tribunal. . . . . . . . . . . . . . . . . . . . . . . . 10.4(e)
Balance Sheet Resolution Period. . . . . . . . . . . . . . . . . .3.3(f)
Bankruptcy Default . . . . . . . . . . . . . . . . . . . . . . . .3.5(k)
Basket Amount. . . . . . . . . . . . . . . . . . . . . . . . .10.1(d)(i)
Business Dispositions. . . . . . . . . . . . . . . . . . . . . . . . 7.9
Cash Closing Consideration . . . . . . . . . . . . . . . . . . . .3.2(e)
Certificate of Merger. . . . . . . . . . . . . . . . . . . . . . . . 1.2
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10(d)
Claim Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4(b)
Claimed Amount . . . . . . . . . . . . . . . . . . . . . . . . . 10.4(b)
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3
Closing Accounts Receivable. . . . . . . . . . . . . . . . . . . .3.3(a)
Closing Adjustment Amount. . . . . . . . . . . . . . . . . . . 3.2(b)(i)
Closing Balance Sheet. . . . . . . . . . . . . . . . . . . . . . .3.3(b)
Closing Cash True-Up . . . . . . . . . . . . . . . . . . . . . . .3.3(e)
Closing Consideration Amount . . . . . . . . . . . . . . . . . . .3.2(c)
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Closing Date Liabilities . . . . . . . . . . . . . . . . . . . . .3.3(b)
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.11(b)(v)
Collected Accounts Receivable. . . . . . . . . . . . . . . . . . .3.3(c)
Collection Period. . . . . . . . . . . . . . . . . . . . . . . . .3.3(a)
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . .3.1(a)
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals
Company Agreements . . . . . . . . . . . . . . . . . . . . . . . . .4.13
Company Board of Directors . . . . . . . . . . . . . . . . . . .Recitals
Company Disclosure Schedule. . . . . . . . . . . . . . . . . . . . . .IV
Company Employees and Contractors. . . . . . . . . . . . . . . . .3.6(c)
Company Financial Advisor. . . . . . . . . . . . . . . . . . . . . .4.28
Company Group. . . . . . . . . . . . . . . . . . . . . . . . . . 4.12(i)
Company Material Adverse Change. . . . . . . . . . . . . . . . . .4.1(a)
Company Material Adverse Effect. . . . . . . . . . . . . . . . . .4.1(a)
Company Permits. . . . . . . . . . . . . . . . . . . . . . . . . 4.18(b)
Company Subsidiary . . . . . . . . . . . . . . . . . . . . . . . .4.2(a)
Company Transaction Expenses . . . . . . . . . . . . . . . . . . .3.2(d)
Confidentiality Agreement. . . . . . . . . . . . . . . . . . . . . . 7.4
Contest. . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3(b)(iii)
Contingent Issuance. . . . . . . . . . . . . . . . . . . . . . . .3.1(a)
Contribution Agreements. . . . . . . . . . . . . . . . . . . . . .3.1(a)
Copyrights . . . . . . . . . . . . . . . . . . . . . . . . . .4.15(a)(i)
Covered Losses . . . . . . . . . . . . . . . . . . . . . . . .10.1(d)(i)
Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . .3.5(d)
Defense Notice . . . . . . . . . . . . . . . . . . . . . . . . . 10.6(a)
Deferral Notice. . . . . . . . . . . . . . . . . . . . . . . . . 7.14(b)
Deferred Future Payment. . . . . . . . . . . . . . . . . . . . . . .3.12
Deferred Payments. . . . . . . . . . . . . . . . . . . . . . . . .3.5(c)
Dissenters Holdback. . . . . . . . . . . . . . . . . . . . . . . .3.2(c)
Dissenting Shares. . . . . . . . . . . . . . . . . . . . . . . . .3.8(a)
iv
Domain Names . . . . . . . . . . . . . . . . . . . . . . . . .4.15(a)(i)
Earnout Calculation Period . . . . . . . . . . . . . . . Schedule 3.6(b)
Earnout Date Adjustment. . . . . . . . . . . . . . . . . Schedule 3.6(b)
Earnout Payment. . . . . . . . . . . . . . . . . . . . . . . . . .3.6(b)
Earnout Payment Statement. . . . . . . . . . . . . . . . . . . . .3.7(a)
Earnout Statement. . . . . . . . . . . . . . . . . . . . . . . . .3.7(c)
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Electing Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9
Election Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9
Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . .4.2(a)
Environmental Claim. . . . . . . . . . . . . . . . . . . . . 4.21(a)(ii)
Environmental Laws . . . . . . . . . . . . . . . . . . . . . .4.21(a)(i)
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11(a)
ERISA Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . 4.11(a)
Established Loss . . . . . . . . . . . . . . . . . . . . . . . . 10.4(f)
Estimated Closing Date Liabilities . . . . . . . . . . . . . . . .3.2(a)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . .5.7(a)
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . 3.10(a)
Final Determination. . . . . . . . . . . . . . . . . . . . . . . 10.4(f)
Financial Statements . . . . . . . . . . . . . . . . . . . . . . .4.7(c)
Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8
FIRPTA Certificate . . . . . . . . . . . . . . . . . . . . . . . .8.3(j)
First Deferred Payment . . . . . . . . . . . . . . . . . . . . . .3.5(a)
First Receivables True-Up Period . . . . . . . . . . . . . . . . .3.3(c)
Floor Price. . . . . . . . . . . . . . . . . . . . . . . . . . . .3.2(g)
Foreign Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11(o)
Fully-Diluted Basis. . . . . . . . . . . . . . . . . . . . . . . .3.1(a)
Future Payments. . . . . . . . . . . . . . . . . . . . . . . . . .3.1(a)
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.2(a)
Government Contract. . . . . . . . . . . . . . . . . . . . . . . 4.13(o)
Governmental Entity. . . . . . . . . . . . . . . . . . . . . . . . . 4.6
Hazardous Substances . . . . . . . . . . . . . . . . . . . .4.21(a)(iii)
HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6
Included Other Assets. . . . . . . . . . . . . . . . . . . . . . .3.3(b)
Incurred and Budgeted Integration Costs. . . . . . . . . . . . . .3.4(a)
Indemnified Party. . . . . . . . . . . . . . . . . . . . . . . . 10.6(a)
Indemnifying Party . . . . . . . . . . . . . . . . . . . . . . . 10.6(a)
Information Statement. . . . . . . . . . . . . . . . . . . . . . . . 7.1
Integration Cost Adjustment. . . . . . . . . . . . . . . . . .3.2(b)(ii)
Integration Costs. . . . . . . . . . . . . . . . . . . . . . . . .3.4(b)
Integration Costs Refund . . . . . . . . . . . . . . . . . . . . .3.4(a)
Integration Costs Statement. . . . . . . . . . . . . . . . . . . .3.4(a)
Interest Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . .3.12
Investment Company Act . . . . . . . . . . . . . . . . . . . . . 4.26(a)
IP Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . 4.13(k)
IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.11(b)(v)
Last Fiscal Quarter. . . . . . . . . . . . . . . . . . . . . . . .3.3(a)
Leased Real Property . . . . . . . . . . . . . . . . . . . . . . 4.14(c)
License Terminations . . . . . . . . . . . . . . . . . . . . . . . . 7.9
Listed Company Agreements. . . . . . . . . . . . . . . . . . . . . .4.13
Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1(a)
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Merger Consideration . . . . . . . . . . . . . . . . . . . . . . .3.1(a)
Merger Sub . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals
Minimum Tenant Rep Business Revenue. . . . . . . . . . . Schedule 3.6(b)
Name Assignment and License Agreement. . . . . . . . . . . . . .Recitals
Name Assignment and License Amendment. . . . . . . . . . . . . .Recitals
Neutral Auditor. . . . . . . . . . . . . . . . . . . . . . . . . .3.3(f)
New York Courts. . . . . . . . . . . . . . . . . . . . . . . . . . .11.7
Non-Election Share . . . . . . . . . . . . . . . . . . . . . . . . . 3.9
Northeast. . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.7(b)
Northeast Audited Financial Statements . . . . . . . . . . . . . .4.7(b)
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.2(f)
Offset True-Up Period. . . . . . . . . . . . . . . . . . . . .3.3(d)(ii)
Owned Real Property. . . . . . . . . . . . . . . . . . . . . . . 4.14(b)
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals
Parent Adjustment Trading Price. . . . . . . . . . . . . . . . . .3.2(g)
v
Parent Closing Trading Price . . . . . . . . . . . . . . . . . . .3.2(f)
Parent Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . 5.3
Parent Indemnified Party . . . . . . . . . . . . . . . . . . . . 10.1(a)
Parent Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . 5.3
Parent Retention Costs . . . . . . . . . . . . . . . . . . . . . .3.4(b)
Parent SEC Filings . . . . . . . . . . . . . . . . . . . . . . . .5.7(a)
Pass Through Subsidiary. . . . . . . . . . . . . . . . . . . . . 4.12(u)
Patents. . . . . . . . . . . . . . . . . . . . . . . . . . . .4.15(a)(i)
Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4(g)
PBGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11(c)
Per Share Closing Consideration. . . . . . . . . . . . . . . . . .3.2(h)
Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . 4.14(a)
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.2(a)
Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11(a)
Post-Closing Tax Period. . . . . . . . . . . . . . . . . . . 6.3(b)(iii)
Pre-Closing Tax Period . . . . . . . . . . . . . . . . . . . 6.3(b)(iii)
Pre-Closing Transactions . . . . . . . . . . . . . . . . . . . . . . 7.9
Preliminary Estimated Balance Sheet. . . . . . . . . . . . . . . .3.2(a)
Private Funds. . . . . . . . . . . . . . . . . . . . . . . . . . 4.26(a)
Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.13(o)
Proprietary Software . . . . . . . . . . . . . . . . . . . . . . 4.15(d)
Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.14(a)
QSUB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.12(v)
Real Property Lease. . . . . . . . . . . . . . . . . . . . . . . 4.13(j)
Receivables Payment. . . . . . . . . . . . . . . . . . . . . . . .3.3(d)
Receivables Shortfall. . . . . . . . . . . . . . . . . . . . .3.3(d)(ii)
Receivables Statement. . . . . . . . . . . . . . . . . . . . . . .3.3(c)
Receivables True-Up Periods. . . . . . . . . . . . . . . . . . . .3.3(c)
Registrable Stock. . . . . . . . . . . . . . . . . . . . . . . . 7.14(a)
Registration Statement . . . . . . . . . . . . . . . . . . . . . 7.14(a)
Related Party. . . . . . . . . . . . . . . . . . . . . . . . . . . .4.16
Related Party Agreement. . . . . . . . . . . . . . . . . . . . . 4.13(h)
Required Financial Information . . . . . . . . . . . . . . . . . . . 7.8
Resolution Period. . . . . . . . . . . . . . . . . . . . . . . . .3.7(b)
Roll-Up Transactions . . . . . . . . . . . . . . . . . . . . . . . . 7.9
Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4(e)
SEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
Second Deferred Payment. . . . . . . . . . . . . . . . . . . . . .3.5(b)
Section 481 Adjustment . . . . . . . . . . . . . . . . . . . 10.1(c)(ii)
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . .5.7(a)
Settlement Agreement . . . . . . . . . . . . . . . . . . . . . . 10.4(f)
Shareholder Election Form and Agreement. . . . . . . . . . . . . . . 3.9
Shareholder Indemnified Parties. . . . . . . . . . . . . . . . . 10.1(b)
Shareholder Losses . . . . . . . . . . . . . . . . . . . . . .10.1(c)(i)
Shareholders Agreement . . . . . . . . . . . . . . . . . . . . . .4.3(b)
Shareholders' Representative . . . . . . . . . . . . . . . . . . 11.1(a)
Shareholders' Representative Member. . . . . . . . . . . . . . . 11.1(a)
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10(a)
Significant Clients. . . . . . . . . . . . . . . . . . . . . . . . .4.20
SOA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
Software . . . . . . . . . . . . . . . . . . . . . . . . . . .4.15(a)(i)
Staubach Audited Financial Statements. . . . . . . . . . . . . . .4.7(a)
Staubach Company . . . . . . . . . . . . . . . . . . . . . . . . .4.7(a)
Staubach IP. . . . . . . . . . . . . . . . . . . . . . . . . 4.15(a)(ii)
Stock Consideration. . . . . . . . . . . . . . . . . . . . . . . .3.2(f)
Straddle Contest . . . . . . . . . . . . . . . . . . . . . . 6.3(b)(iii)
Straddle Period. . . . . . . . . . . . . . . . . . . . . . . 6.3(b)(iii)
Subsequent Receivables True-Up Period. . . . . . . . . . . . . . .3.3(c)
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.2(a)
Surviving Corporation. . . . . . . . . . . . . . . . . . . . . . . . 1.1
Target Tenant Rep Business Revenue . . . . . . . . . . . Schedule 3.6(b)
Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.12(z)
Tax Claim. . . . . . . . . . . . . . . . . . . . . . . . . . .6.3(b)(ii)
Tax Losses . . . . . . . . . . . . . . . . . . . . . . . . . 10.1(c)(ii)
Tax Notice . . . . . . . . . . . . . . . . . . . . . . . . . .6.3(b)(ii)
Tax Return . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.12(z)
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.12(z)
vi
TBOC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals
Tenant Rep Base Revenue. . . . . . . . . . . . . . . . . Schedule 3.6(b)
Tenant Rep Business. . . . . . . . . . . . . . . . . . . Schedule 3.6(b)
Tenant Rep Business Revenue. . . . . . . . . . . . . . . Schedule 3.6(b)
Tenant Representative Significant Clients. . . . . . . . . . . . . .5.10
Third Deferred Payment . . . . . . . . . . . . . . . . . . . . . .3.5(c)
Third Party Claim. . . . . . . . . . . . . . . . . . . . . . . . 10.6(a)
Third Party Claim Notice . . . . . . . . . . . . . . . . . . . . 10.6(a)
Title IV Plans . . . . . . . . . . . . . . . . . . . . . . . . . 4.11(a)
Trade Secrets. . . . . . . . . . . . . . . . . . . . . . . . .4.15(a)(i)
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . .4.15(a)(i)
Undisputed Claim . . . . . . . . . . . . . . . . . . . . . . . . 10.4(c)
Voting Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . .4.3(b)
WARN Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.17(g)
Withheld Amount. . . . . . . . . . . . . . . . . . . . . . . . . 10.4(g)
vii
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated June 16, 2008,
by and among Xxxxx Xxxx LaSalle Incorporated, a Maryland corporation
("Parent"), Xxxxx Lang LaSalle Tenant Representation, Inc., a Texas
corporation and an indirect, wholly-owned subsidiary of Parent ("Merger
Sub") and Staubach Holdings, Inc., a Texas corporation (the "Company").
WHEREAS, the board of directors of the Company (the "Company Board of
Directors") has declared and determined that the Merger is advisable, fair
to and in the best interests of the shareholders of the Company, and the
Company Board of Directors has approved this Agreement and the transactions
contemplated hereby;
WHEREAS, this Agreement has been approved by the shareholders of the
Company in accordance with Sections 6.202 and 21.457 of the Texas Business
Organizations Code ("TBOC");
WHEREAS, Electing Holders (as defined herein) have specified a
sufficient number of Election Shares (as defined herein) such that the Per
Share Closing Consideration (as defined herein) payable with respect to all
Non-Election Shares in accordance with the terms of this Agreement may be
satisfied in full from the Cash Closing Consideration (as defined herein);
WHEREAS, the board of directors of each of Parent and Merger Sub has
approved this Agreement and the transactions contemplated hereby and this
Agreement has been approved by the sole shareholder of Merger Sub;
WHEREAS, concurrently with the execution of this Agreement, Parent
and each of the employees of the Company set forth on Section 8.3(i)(i) of
the Company Disclosure Schedule are entering into an employment agreement
with Parent or one of its affiliates contingent upon the consummation of
the transactions contemplated hereby; and
WHEREAS, it is a condition to the consummation of the transactions
contemplated by this Agreement that, Xxxxx X. Xxxxxxxx and Xxxxxxxx X.
Xxxxxxxx, on the one hand, and the Company and The Staubach Company, on the
other hand, will amend that certain Name Assignment and License Agreement
dated June 30, 2007 as amended by that certain First Amendment to Name
Assignment and License Agreement dated November 30, 2007 by and between
Xxxxx X. Xxxxxxxx, Xxxxxxxx X. Xxxxxxxx, the Company and The Staubach
Company (the "Name Assignment and License Agreement"), by entering into
that certain Second Amendment to Name Assignment and License Agreement (the
"Name Assignment and License Amendment") substantially in the form attached
hereto as Exhibit A.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
1
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
SECTION 1.1 THE MERGER. Subject to the terms and conditions of this
Agreement and in accordance with the TBOC, at the Effective Time, the
Company and Merger Sub shall consummate a merger (the "Merger") pursuant to
which (i) Merger Sub shall be merged with and into the Company and the
separate corporate existence of Merger Sub shall thereupon cease and (ii)
the Company shall be the surviving corporation in the Merger. The Merger
shall have the effects set forth in the TBOC. The corporation surviving
the Merger is sometimes hereinafter referred to as the "Surviving
Corporation."
SECTION 1.2 EFFECTIVE TIME. Subject to the terms and conditions of
this Agreement, Parent, Merger Sub and the Company shall cause an
appropriate certificate of merger (the "Certificate of Merger") to be
executed and filed on the date of the Closing with the Secretary of State
of the State of Texas as provided in the TBOC. The Merger shall become
effective on the date and time on which the Certificate of Merger has been
filed with the Secretary of State of the State of Texas, or such later date
or time as agreed upon by Parent and the Company and specified in the
Certificate of Merger, such time being hereinafter referred to as the
"Effective Time" and the date of the Effective Time as the "Closing Date."
SECTION 1.3 CLOSING. The closing of the Merger (the "Closing") will
take place (a) at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx at 10:00 a.m., Chicago time, on
July 2, 2008, or, if later, due to the failure of the satisfaction or
waiver of all of the conditions set forth in Article VIII to be satisfied
by such date, as soon as practicable after satisfaction or waiver of all of
the conditions set forth in Article VIII up to August 1, 2008; provided,
however, in the event the Closing does not occur on or before August 1,
2008, the Closing shall occur on August 31, 2008, subject to the
satisfaction or waiver of all of the conditions set forth in Article VIII
as of such date or (b) at such other place, time and date as Parent and the
Company may agree.
SECTION 1.4 RIGHT TO REVISE STRUCTURE OF MERGER. At Parent's
election subject to the Company's prior written approval, which shall not
be unreasonably withheld, conditioned or delayed, the Merger may
alternatively be structured so that another direct or indirect wholly-owned
Subsidiary of Parent is merged with and into the Company. In the event of
such an election by Parent and approval by the Company, the Company agrees
to execute such documentation as may be reasonably requested by Parent to
reflect such election.
ARTICLE II
THE SURVIVING CORPORATION
SECTION 2.1 CERTIFICATE OF FORMATION. The certificate of formation
of Merger Sub, as in effect immediately prior to the Effective Time, shall
be the certificate of formation of the Surviving Corporation, except as to
the name of the Surviving Corporation, which shall be Xxxxx Xxxx LaSalle
Americas Transactions, Inc.
SECTION 2.2 BYLAWS. The bylaws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the bylaws of the
Surviving Corporation, except as to the name of the Surviving Corporation,
which shall be Xxxxx Lang LaSalle Americas Transactions, Inc.
2
SECTION 2.3 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION.
The directors of Merger Sub immediately prior to the Effective Time shall,
from and after the Effective Time, be the directors of the Surviving
Corporation, and the officers of Merger Sub immediately prior to the
Effective Time shall, from and after the Effective Time, be the officers of
the Surviving Corporation, in each case until their respective successors
shall have been duly elected, designated and qualified, or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's certificate of formation and bylaws.
ARTICLE III
CONVERSION OF SECURITIES
SECTION 3.1 CONVERSION OF SHARES. At the Effective Time, by virtue
of the Merger and without any action on the part of shareholders of the
Company or Merger Sub:
(a) Each share of common stock, par value $0.01 per share, of
the Company (the "Common Stock") issued and outstanding immediately prior
to the Effective Time (other than any Dissenting Shares) shall be canceled
and shall be converted automatically into the right to receive, subject to
the terms and conditions of this Agreement, (i) the Per Share Closing
Consideration and (ii) a pro rata portion based on the total number of
shares of Common Stock outstanding on a Fully-Diluted Basis immediately
prior to the Effective Time of the Deferred Payments, any Earnout Payment
and any Receivables Payment (collectively, the "Future Payments;" the Per
Share Closing Consideration together with such pro rata portion of the
Future Payments, the "Merger Consideration"). The number of shares of
Common Stock outstanding on a "Fully-Diluted Basis" includes any shares of
Common Stock subject to the "Contingent Issuance" provisions in the
"Contribution Agreements" between the Company and various parties entered
into in connection with the Company's 2007 reorganization transaction and
the merger agreements between the Company and various parties entered into
in connection with the Roll-Up Transactions, with the number of such shares
to be determined by the Shareholders' Representative after the Closing.
Parent's sole obligation under this Agreement, is to pay the aggregate
Merger Consideration (as reduced pursuant to the terms of this Agreement)
to the Exchange Agent, the Shareholders' Representative or a paying agent
designated by the Shareholders' Representative in accordance with the
provisions of Section 3.10 of the Agreement. None of Parent, the Surviving
Corporation or any of their respective affiliates shall have any
liabilities or obligations with respect to the actual per share amount of
the Merger Consideration paid to any Person entitled to receive the Merger
Consideration, which subject to the terms of this Agreement, shall be
determined solely by the Shareholders' Representative.
(b) Each share of Common Stock held in the treasury of the Company
immediately prior to the Effective Time and each share of Common Stock
owned by Parent or any of its Subsidiaries or any Company Subsidiary
immediately prior to the Effective Time shall be canceled without any
conversion thereof, and no payment or distribution shall be made with
respect thereto.
(c) Each share of common stock of Merger Sub that is issued and
outstanding immediately prior to the Effective Time shall be converted into
and become one validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation, and all such shares of Surviving
Corporation common stock shall constitute the only outstanding shares of
the Surviving Corporation immediately after the Effective Time.
3
SECTION 3.2 CLOSING CONSIDERATION.
(a) The Company will cause to be delivered to Parent, three
(3) business days prior to Closing, (i) an estimated consolidated balance
sheet as of the Effective Time for the Company (the "Preliminary Estimated
Balance Sheet"), which shall be prepared in good faith and in conformity
with United States generally accepted accounting principles ("GAAP") and
shall include a schedule setting all liabilities reflected on such balance
sheet, including "deferred tax liabilities" (the "Estimated Closing Date
Liabilities") and (ii) a certificate executed by the chief financial
officer of the Company certifying that the Preliminary Estimated Balance
Sheet was prepared in accordance with clause (i) above. The Preliminary
Estimated Balance Sheet shall be subject to Parent's review and approval,
such approval not to be unreasonably withheld, conditioned or delayed. The
Preliminary Estimated Balance Sheet as so approved by Parent shall be the
"Approved Estimated Balance Sheet."
(b) Based on the amounts set forth on the Approved Estimated
Balance Sheet, the Closing Adjustment Amount shall be determined as
follows: the "Closing Adjustment Amount" shall mean an amount equal to (A)
the Estimated Closing Date Liabilities plus $10,000,000 minus (B) all
accounts receivable; provided that the Closing Adjustment Amount shall not
be less than zero.
(c) The "Closing Consideration Amount" shall mean an amount
equal to (A) $233,827,500 less, without duplication, (B) (i) the
Integration Cost Adjustment, if any, (ii) the Closing Adjustment Amount, if
any, (iii) the amount of all outstanding consolidated indebtedness of the
Company as of the Effective Time, (iv) the aggregate amount of all
outstanding Company Transaction Expenses, if any and (v) the aggregate
portion of the Closing Consideration Amount payable to holders of
Dissenting Shares (assuming for this purpose only that such holders were
not holders of Dissenting Shares) (the "Dissenters Holdback").
"Integration Cost Adjustment" shall mean an amount equal to $11,000,000.
(d) "Company Transaction Expenses" shall mean all fees, costs
and expenses (including all fees and expenses of counsel, accountants,
financial and other advisors) incurred by or on behalf of the Company or
any of its affiliates which is payable by the Company or any Company
Subsidiary in connection with this Agreement and the transactions
contemplated hereby to the extent not paid in full by the Company prior to
the Effective Time, but specifically excluding Integration Costs.
(e) The "Cash Closing Consideration" shall mean an amount in
cash equal to the Closing Consideration Amount minus $100,000,000.
(f) The "Stock Consideration" shall mean a number of shares
of Parent Common Stock equal to $100,000,000 divided by the Parent Closing
Trading Price (rounded down to the nearest whole share), subject to
adjustment as provided below. For purposes of this Agreement, the "Parent
Closing Trading Price" means the average of the reported closing sale
prices per share of Parent Common Stock on the New York Stock Exchange
("NYSE") as reported on the NYSE consolidated tape system for the five (5)
consecutive trading days ending on (and including) the trading day prior to
the Effective Time.
4
(g) The number of shares of Parent Common Stock constituting
the Stock Consideration is subject to adjustment as follows: if on the date
that is one (1) trading day prior to the effective date of the Registration
Statement contemplated by Section 7.14(a) (the "Adjustment Date"), the
average of the reported closing sales prices per share of Parent Common
Stock on the NYSE as reported on the NYSE consolidated tape system for the
five (5) consecutive trading days ending on (and including) the Adjustment
Date (the "Parent Adjustment Trading Price") (i) is greater than 110% of
the Parent Closing Trading Price, the Stock Consideration shall be a number
of shares of Parent Common Stock equal to $110,000,000 divided by the
Parent Adjustment Trading Price (rounded down to the nearest whole share)
or (ii) is less than the Parent Closing Trading Price, the Stock
Consideration shall be a number of shares of Parent Common Stock equal to
$100,000,000 divided by the Parent Adjustment Trading Price (rounded down
to the nearest whole share); provided, however, that in the event that that
Parent Adjustment Trading Price is less than 75% of the Parent Closing
Trading Price (the "Floor Price"), the Parent Adjustment Trading Price for
purposes of this clause (ii) shall be equal to the Floor Price. Parent may
elect to reduce all or any portion of the increase in number of shares of
Parent Common Stock otherwise required by Section 3.3(g)(ii) by paying, in
lieu of such increase, an amount in cash equal to the Parent Adjustment
Trading Price for each share (any such cash so paid, shall be deemed part
of the Stock Consideration). On the Adjustment Date, Parent shall deliver
a statement to the Shareholders' Representative and the Exchange Agent
specifying the number of shares of Parent Common Stock constituting the
Stock Consideration as determined in accordance with Sections 3.2(f) and
(g).
(h) The "Per Share Closing Consideration" shall mean:
(i) with respect to each Non-Election Share, an amount
payable in cash from the Cash Closing Consideration equal to a pro
rata portion (based on the number of shares of Common Stock
outstanding immediately prior to the Effective Time on a
Fully-Diluted Basis) of the Closing Consideration Amount; and
(ii) with respect to each Election Share, (A) an amount
payable in cash equal to a pro rata portion (based on the total
number of Election Shares) of the remaining portion of the Cash
Closing Consideration, if any, after payment from the Cash Closing
Consideration with respect to Non-Election Shares as provided above
and (B) an amount payable in Parent Common Stock equal to a pro rata
portion (based on the total number of Election Shares) of the Stock
Consideration.
SECTION 3.3 POST-CLOSING ADJUSTMENT/ACCOUNTS RECEIVABLE.
(a) During the period (the "Collection Period") commencing
with the Closing Date and ending on the last day of Parent's fiscal quarter
ending immediately prior to the third anniversary of the Closing Date (the
"Last Fiscal Quarter"), Parent shall, and shall cause the Surviving
Corporation to, use commercially reasonable efforts to collect the accounts
receivable of the Company as of the Effective Time (the "Closing Accounts
Receivable") consistent with Parent's practices for collection of its
accounts receivable. Any payment received by Parent or the Surviving
Corporation (i) at any time after the Closing and (ii) from a customer of
the Company after the Closing who was also a customer of the Company prior
to the Closing, shall be presumptively applied to the accounts receivable
which such customer specified in such payment; provided, however, that if
no amount is so specified, Parent shall inquire of such customer as to
which accounts receivable such amount is to be applied and such amount
shall be applied in accordance with such instructions. Neither Parent nor
the Surviving Corporation shall be obligated to refer any of the Closing
Accounts Receivable to a collection agency or to an attorney for
collection. Parent shall incur no liability for any collected (other than
5
to comply with the provisions of this Section 3.3) or uncollected Closing
Accounts Receivable; provided, however, that upon the written request of
the Shareholders' Representative, Parent shall cause any uncollected
Closing Accounts Receivable with respect to which the Surviving Corporation
determines not to collect in accordance with the Company's practices for
collection of its accounts receivable prior to the Effective Time to be
assigned (without recourse) to Shareholders' Representative's designee,
unless Parent agrees to treat such Closing Accounts Receivable as having
been collected pursuant to this Section 3.3. Following such assignment,
the Shareholders' Representative (or its designee) shall be solely
responsible for all costs and expenses incurred in connection with the
collection of such accounts receivable, and Parent shall have no
liabilities or obligations with respect thereto.
(b) On the date that is 75 days after the Closing Date,
Parent (with preparation assistance by Shareholders' Representative's
designee) shall deliver to the Shareholders' Representative (i) a
consolidated balance sheet of the Company as of the Effective Time (the
"Closing Balance Sheet"), which shall be prepared in good faith and in
conformity with GAAP and shall include separate schedules setting forth (A)
all Closing Accounts Receivable included on such balance sheet, (B)
Included Other Assets reflected on such balance sheet and (C) all
liabilities reflected on such balance sheet, including "deferred tax
liabilities" (the "Closing Date Liabilities") and (ii) a certificate
executed by an officer of Parent certifying that the Closing Balance Sheet
was prepared in accordance with clause (i) above. "Included Other Assets"
shall mean the sum of the items included on the Closing Balance Sheet in
the captions "prepaid expenses," "deposits" and "deferred tax assets"
provided that such assets shall only be "Included Other Assets" to the
extent Parent has been provided supporting documentation for such assets,
reasonably satisfactory to Parent.
(c) On the date that is 75 days after the Closing Date (the
period between such date and the Closing Date the "First Receivables
True-Up Period") and as soon as practicable, but not later than 15 calendar
days, following the end of each subsequent calendar month thereafter for
the first 12 months after the Closing and thereafter at the end of each of
Parent's fiscal quarters up to and including the Last Fiscal Quarter (each,
a "Subsequent Receivables True-Up Period" and, together with the First
Receivables True-Up Period, the "Receivables True-Up Periods"), Parent
shall prepare and deliver to the Shareholders' Representative a statement
(the "Receivables Statement") setting forth for the applicable Receivables
True-Up Period all amounts received with respect to the Closing Accounts
Receivable during such Receivables True-Up Period (the "Collected Accounts
Receivable").
(d) Subject to the terms and conditions of this Agreement,
Parent shall make any Receivables Payments in the following amounts and on
the following terms:
(i) if, based on the amounts set forth on the Closing
Balance Sheet and the Receivables Statement with respect to First
Receivables True-Up Period, the (A) sum of (1) the Collected Accounts
Receivable for such period, if any, (2) the Included Other Assets, if
any, (3) the Closing Cash True-Up, if any, and (4) the Closing
Adjustment Amount, if any, exceeds (B) the Closing Date Liabilities,
then
(1) with respect to the First Receivables True-Up
Period, the amount of such excess, subject to Section 10.4, shall be
payable, subject to Section 10.4, no later than five (5) business
days following delivery of the Receivables Statement for the First
Receivables True-Up Period; and
6
(2) with respect to each Subsequent Receivables
True-Up Period, an amount, subject to Section 10.4, equal to the
Collected Accounts Receivable during such period shall be payable,
subject to Section 10.4, no later than five (5) business days
following delivery of the Receivables Statement for such Subsequent
Receivables True-Up Period;
(ii) if, based on the amounts set forth on the Closing
Balance Sheet and the Receivables Statement with respect to the First
Receivables True-Up Period, the (A) the Closing Date Liabilities
exceed (B) the sum of (1) Collected Accounts Receivable for such
period, if any, (2) the Included Other Assets, if any, (3) the
Closing Cash True-Up, if any, and (4) the Closing Adjustment Amount,
if any (the amount of such excess being hereinafter referred to as
the "Receivables Shortfall"), then no payment shall be required in
connection with the Collected Accounts Receivable for such period or
any Subsequent Receivables True-up Period, unless and until, the
aggregate amount of Collected Accounts Receivable for all Subsequent
Receivables True-Up Periods exceeds the Receivables Shortfall, after
which the amount of any such Collected Accounts Receivable in excess
of the Receivables Shortfall, subject to Section 10.4, shall be
payable, subject to Section 10.4, no later than five (5) business
days following delivery of the Receivables Statement for the
Subsequent Receivables True-Up Period that first reflects such excess
and any Subsequent Receivables True-Up Period thereafter during the
Collection Period; provided, however, in the event that, as of the
end of the Receivables True-Up Period ending immediately prior to the
payment date of any Future Payment (the "Offset True-Up Period"), the
Receivables Shortfall exceeds the aggregate amount of Collected
Accounts Receivable for all Receivables True-Up Periods as of the
last day of the Offset True-Up Period, Parent shall be entitled to
withhold and set-off the amount of such excess against such Future
Payment; provided further, that (A) if the Receivables Shortfall is
fully offset by such Future Payment, then, with respect to each
Subsequent Receivables True-Up Period following the Offset True-Up
Period, an amount, subject to Section 10.4, equal to the Collected
Accounts Receivable during such period shall be payable, subject to
Section 10.4, no later than five (5) business days following delivery
of the Receivables Statement for such Subsequent Receivables True-Up
Period; and (B) if the Receivables Shortfall is not fully offset by
such Future Payment, then the unpaid amounts shall be deemed to be
the Receivables Shortfall subject to this Section 3.3(d)(ii). If as
of the Last Fiscal Quarter, a Closing Account Receivable has not been
collected and a commission associated with such Closing Account
Receivable was reflected as a Closing Date Liability on the Closing
Balance Sheet, the final Receivables Payment shall be increased by
the amount of such commission, but only to the extent such commission
has not been paid and neither Parent nor any of its affiliates has
any liability or obligation for such commission; and
(iii) an amount, subject to Section 10.4, equal to the
consolidated cash, cash equivalents and deposits in transit of the
Company, if any (net of any outstanding checks and other instruments
issued but not drawn) as of the Effective Time, such amount to be
paid as soon as practicable after Parent and the Company determine
such amount.
Any of the foregoing payments are hereinafter referred to as the
"Receivables Payment."
7
(e) "Closing Cash True-Up" shall mean the amount, if any,
equal to the aggregate amount of all payments received by the Company or
any Company Subsidiary prior to July 2, 2008 or, in the event the Closing
occurs on August 31, 2008, prior to August 31, 2008, in connection with
revenues which are not recognizable under GAAP until after the applicable
date; it being understood that such Closing Cash True-Up may only be a
negative number (with Parent's calculation of such amount subject to the
procedures in Section 3.3(f)).
(f) After receipt of the Closing Balance Sheet, the
Shareholders' Representative shall have 60 days to review the Closing
Balance Sheet. Parent shall give the Shareholders' Representative and its
agents and representatives (including accountants) full access to all
relevant books and records (excluding any materials prepared in connection
with any dispute or potential dispute regarding the Closing Balance Sheet)
and employees of Parent and its Subsidiaries and Parent's accountants and
work papers to the extent required to complete its review of the Closing
Balance Sheet (provided that the obligation to provide access to, and to
produce work papers of, accountants is limited to commercially reasonable
efforts and subject to the Shareholders' Representative providing such
indemnification and other documentation as such accountants may request).
Unless the Shareholders' Representative delivers written notice to Parent
on or prior to the 45th day after the Shareholders' Representative's
receipt of the Closing Balance Sheet specifying in reasonable detail all
disputed items and the basis therefor, the Shareholders' Representative
shall be deemed to have accepted and agreed to the Closing Balance Sheet.
If the Shareholders' Representative so notifies Parent of the Shareholders'
Representative's objection to the Closing Balance Sheet, Parent and the
Shareholders' Representative shall, within 45 days following the date of
such notice (the "Balance Sheet Resolution Period"), attempt to resolve
their differences and any resolution by them as to any disputed amounts
shall be final, binding and conclusive. If at the conclusion of the
Balance Sheet Resolution Period, there are amounts remaining in dispute,
then such amounts shall be submitted to Xxxxx Xxxxxxxx LLP or such other
nationally recognized accounting firm mutually agreed to by Parent and the
Shareholders' Representative (the "Neutral Auditor"). Parent and the
Shareholders' Representative agree to execute, if requested by the Neutral
Auditor, a reasonable engagement letter. All fees and expenses relating to
the work, if any, to be performed by the Neutral Auditor shall be the
responsibility of the non-prevailing party. If the Shareholders'
Representative is the non-prevailing party, then such fees and expenses
shall be deemed Established Losses for purposes of this Agreement. The
Neutral Auditor shall act as an arbitrator to determine, based solely on
presentations by Parent and the Shareholders' Representative, and not by
independent review, only those amounts still in dispute. The Neutral
Auditor's determination shall be made within 30 days of its engagement,
shall be set forth in a written statement delivered to Parent and the
Shareholders' Representative and shall be final, binding and conclusive.
If any amounts are referred to the Neutral Auditor, the term "Closing
Balance Sheet," as used in this Agreement, shall mean the definitive
Closing Balance Sheet resulting from the determinations made by the Neutral
Auditor in accordance with this section (in addition to those items
theretofore agreed to by Parent and the Shareholders' Representative) and
appropriate adjustments shall be made to the calculations in this Section
3.3 to reflect any differences between the definitive Closing Balance Sheet
and the Closing Balance Sheet delivered by Parent in accordance with
Section 3.3(b), with any amounts to be paid by Parent to be added to the
next Receivables Payment together with a notional amount equal to interest
on such amount at the interest rate applicable to revolving borrowings
under the Credit Agreement (the "Agreed Rate") for the period beginning on
the 75th day after the Closing Date and ending on the date such amount is
paid with such Receivables Payment.
8
SECTION 3.4 INTEGRATION COSTS.
(a) As soon as practicable following the second anniversary
of the Closing Date, Parent shall deliver to the Shareholders'
Representative a statement (the "Integration Costs Statement"), certified
by an officer of Parent, setting forth the Integration Costs incurred prior
to the second anniversary of the Closing Date and any Integration Costs
budgeted by Parent in good faith in accordance with its normal budgeting
process for incurrence following such date (collectively, the "Incurred and
Budgeted Integration Costs"). If, as reflected on the Integration Costs
Statement, 50% of the Incurred and Budgeted Integration Costs, subject to
the limitations in Section 3.4(b) below, is less than $11,000,000, then
such difference shall be the "Integration Costs Refund," which amount shall
increase the First Deferred Payment in accordance with Section 3.5(a).
(b) "Integration Costs" means all costs related to (i) the
integration of the Company's and Parent's respective businesses following
the Closing (or prior to the Closing with Parent's written consent) that
would not have been incurred but for the consummation of the transactions
contemplated hereby, including stay bonuses and severance payments for the
Company's legacy employees, information technology costs and occupancy
changes and (ii) the retention of Parent's legacy revenue professionals in
connection with the transactions contemplated hereby ("Parent Retention
Costs"), with all such Integration Costs to be borne equally by Parent, on
the one hand, and the former holders of the Shares, on the other hand;
provided that in no event shall the obligation of the former holders of the
Shares exceed $11,000,000 in the aggregate; provided further, that in no
event shall the former holders of the Shares be obligated for any Parent
Retention Costs in excess of $2,125,000 in the aggregate.
SECTION 3.5 DEFERRED PAYMENTS.
Subject to the terms and conditions of this Agreement, Parent shall
make the Deferred Payments in the following amounts and on the following
terms:
(a) The First Deferred Payment shall be payable, subject to
Sections 3.3(d)(ii) and 10.4, on the first business day of the 25th month
following the Closing Date; provided, however, if the Tenant Rep Business
Revenues for the 12 months ending one month prior to the 25th month
following the Closing Date are less than the Tenant Rep Base Revenue, then
such payment shall be payable, subject to Sections 3.3(d)(ii) and 10.4, on
the first business day of the 37th month following the Closing Date. The
"First Deferred Payment" means, subject to Sections 3.3(d)(ii) and 10.4, an
amount in cash equal to $77,942,500 plus the Integration Cost Refund, if
any.
(b) The Second Deferred Payment shall be payable, subject to
Sections 3.3(d)(ii) and 10.4, on the first business day of the 37th month
following the Closing Date; provided, however, if the Tenant Rep Business
Revenues for the 12 months ending one month prior to the 37th month
following the Closing Date are less than the Tenant Rep Base Revenue, then
such payment shall be payable, subject to Sections 3.3(d)(ii) and 10.4, on
the first business day of the 49th month following the Closing Date. The
"Second Deferred Payment" means, subject to Sections 3.3(d)(ii) and 10.4,
an amount in cash equal to $155,885,000.
(c) The Third Deferred Payment shall be payable, subject to
Sections 3.3(d)(ii) and 10.4, on the first business day of the 61st month
following the Closing Date. The "Third Deferred Payment" means, subject to
Sections 3.3(d)(ii) and 10.4, an amount in cash equal to $155,885,000.
The First Deferred Payment, Second Deferred Payment and Third
Deferred Payment are hereinafter referred to as the "Deferred Payments."
For the avoidance of doubt, Parent shall pay when due any non-disputed
amount of the Deferred Payments when due as set forth above.
9
(d) Notwithstanding the foregoing, upon the occurrence of any
default under Parent's Amended and Restated Multicurrency Credit Agreement
dated June 6, 2007 (or any credit agreement or other financing or
refinancing which replaces such credit agreement, in each case as the same
may be amended, supplemented, restated or modified from time to time in
compliance with this Agreement, the "Credit Agreement") which results in
the acceleration of indebtedness outstanding under the Credit Agreement
prior to its express maturity, any remaining Deferred Payments shall
become, subject to Sections 3.3(d)(ii) and 10.4, immediately due and
payable.
(e) If Parent fails to pay all or any portion of a Deferred Payment
when due hereunder in breach of this Agreement, (i) the amount not so paid
shall bear interest at the applicable "default rate" set forth in the
Credit Agreement for the period beginning on the date such amount was due
and payable and ending on the date such amount is paid and (ii) if such
Deferred Payment (together with accrued interest) is not paid in full on or
before the 270th day following the payment due date (or on or before the
135th day if there has been a prior Deferred Payment payment default which
was cured within the time period specified herein; or on or before the
180th day if the remaining Deferred Payment obligations have been
accelerated pursuant to Section 3.5(l), below), then (A) the
non-competition and non-solicitation covenants contained in any employment
or independent contractor agreement or other agreement or arrangement
entered into in connection with this Agreement between Parent (or one of
its Subsidiaries) and a shareholder of the Company who is a shareholder
immediately prior to the Effective Time shall terminate upon the
termination of the employee or independent contractor party to such
agreement, (B) the Name Assignment and License Agreement shall immediately
terminate and be of no further force or effect and (C) Section 3.12 shall
immediately terminate and be of no further effect with any payments
theretofore delayed pursuant to Section 3.12 to be paid within five (5)
business days after the termination of the applicable cure period. For the
avoidance of doubt, any payment required to be made pursuant to Section
10.4(h), including in connection with a Withheld Amount related to a
Deferred Payment, shall not be due and payable except to the extent
provided in Section 10.4(h), and Section 10.4(h) shall govern any interest
payment required to be paid in connection with such payment.
(f) If, by June 1, 2012, the final maturity of the loans under the
Credit Agreement has not been extended (including through a refinancing) to
a date not earlier than the first business day of the 61st month following
the Closing Date, then any remaining Deferred Payments shall become,
subject to Sections 3.3(d)(ii) and 10.4, due and payable on June 2, 2012.
The Credit Agreement shall not be amended or otherwise modified to change
the maturity of the indebtedness thereunder to a date prior to June 6, 2012
after the Closing Date.
(g) The Credit Agreement shall not, without the consent of the
Shareholders' Representative (not to be unreasonably withheld, conditioned
or delayed), be amended or otherwise modified to (i) permit a Total Funded
Debt to Adjusted EBITDA Ratio (as defined in the Credit Agreement) greater
than 3.75 to 1.00 or (ii) permit an Interest Coverage Ratio (as defined in
the Credit Agreement) less than 1.750 to 1.0. However, notwithstanding
anything to the contrary in the foregoing, but subject to Section 3.5(h)
below, Parent may make any of the modifications to the Credit Agreement
described in this Section 3.5(g) in order to cure or avoid an event of
default under the Credit Agreement so long as Parent shall pay to the
Shareholders' Representative on behalf of the former shareholders of the
Company a proportionate amount of any waiver fees, incremental interest or
other compensation paid to lenders under the Credit Agreement in connection
with such amendment or waiver. Such waiver fees, incremental interest and
other compensation paid to the Shareholders' Representative shall be deemed
proportionate if the amount paid to such lenders is multiplied by a
fraction, the numerator of which is the aggregate amount of remaining
Deferred Payments and the denominator of which is the total of the
outstanding loans and unfunded loan commitments under the Credit Agreement.
Nothing in this Agreement prohibits any prepayment of indebtedness under
the Credit Agreement.
10
(h) The Credit Agreement shall not, without the consent of the
Shareholders' Representative (to be granted or withheld in its sole
discretion), be amended or otherwise modified to (i) permit a Total Funded
Debt to Adjusted EBITDA Ratio (as defined in the Credit Agreement) greater
than 4.75 to 1.00 or (ii) permit an Interest Coverage Ratio (as defined in
the Credit Agreement) less than 1.3750 to 1.0 or (iii) permit Consolidated
Net Worth (as defined in the Credit Agreement) less than the sum of
$700,000,000 plus an amount equal to 50% of the cumulative positive
Consolidated Net Income (as defined in the Credit Agreement) earned in 2009
and any subsequent fiscal year completed thereafter (but without
subtraction for any negative Consolidated Net Income for any such fiscal
year).
(i) The Credit Agreement shall not, without the consent of the
Shareholders' Representative (not to be unreasonably withheld, conditioned
or delayed), be amended or otherwise modified to change the definition of
the terms "Total Funded Debt," "Adjusted EBITDA Ratio," "Interest Coverage
Ratio" or "Consolidated Net Worth" (or any of the terms used in the
definitions of such terms) if such change has a material adverse effect on
the Parent's ability to pay the Deferred Payments as they come due.
However, notwithstanding anything to the contrary in the foregoing, Parent
may make any of the amendments or modifications to the Credit Agreement
described in this Section 3.5(i) in connection with the amendment or
refinancing of the Credit Agreement in 2008. For all purposes of this
Agreement, (i) references to certain terms "as defined in the Credit
Agreement" shall mean such terms as defined in the Credit Agreement
excluding, and without giving effect to, the impact of non-cash or
non-recurring items and (ii) nothing in this Agreement shall restrict
Parent's ability to amend or modify any provision of the Credit Agreement
to exclude the impact of non-cash or non-recurring items.
(j) Parent shall not voluntarily reduce or terminate revolving
commitments under the Credit Agreement (other than in connection with a
refinancing or replacement thereof in accordance with the provisions of
this Section 3.5) unless the board of directors of Parent shall have
reasonably determined in good faith that adequate liquidity will be
available (including by virtue of access to debt and/or equity markets) to
satisfy all remaining Deferred Payments and Earnout Payments without such
revolving commitments.
(k) If a Bankruptcy Default occurs, then any remaining Deferred
Payments shall become, subject to Sections 3.3(d)(ii) and 10.4, immediately
due and payable. For purposes of the foregoing, "Bankruptcy Default" means
(x) the Parent or any Subsidiary thereof shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, or any analogous action is taken under any
other applicable law relating to bankruptcy or insolvency, (ii) fail to
pay, or admit in writing its inability to pay, its debts generally as they
become due, (iii) make an assignment for the benefit of creditors, (iv)
apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for
it or any substantial part of its property, (v) institute any proceeding
seeking to have entered against it an order for relief under the United
States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
within the time allowed therefor to file an answer or other pleading
denying the material allegations of any such proceeding filed against it,
(vi) take any corporate action (such as the passage by the board of
directors of a resolution) in furtherance of any matter described in parts
(i)-(v) above, or (vii) fail to contest in good faith any appointment or
proceeding described in the following clause (y), or (y) a custodian,
receiver, trustee, examiner, liquidator or similar official shall be
appointed for the Parent or any Subsidiary thereof or any substantial part
of any of their property, taken as a whole, or a proceeding described in
the foregoing clause (x) shall be instituted against the Parent or any
Subsidiary thereof, and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of sixty (60)
days.
11
(l) If any Event of Default (as defined in the Credit Agreement,
other than a Bankruptcy Default) occurs under the Credit Agreement and is
not cured or waived (including by virtue of a modification or refinancing
of the Credit Agreement) on or before the 180th day following the earlier
of the date that Parent is notified or otherwise becomes, or reasonably
should be, aware of such Event of Default, then any remaining Deferred
Payments shall become, subject to Sections 3.3(d)(ii) and 10.4, immediately
due and payable. Parent shall notify the Shareholders' Representative of
an Event of Default under the Credit Agreement promptly after Parent is
notified or otherwise becomes aware of such Event of Default.
(m) If collateral is granted as security for obligations under the
Credit Agreement, Parent shall make or cause to be made effective provision
whereby the remaining Deferred Payments will be secured by such lien, or a
lien of equal priority on the same collateral, equally and ratably with
such indebtedness under the Credit Agreement as long as any such Credit
Agreement indebtedness shall be so secured, it being agreed, however, that
all decisions relating to such lien, including the decision to release or
subordinate such lien, and the decision to foreclose or pursue other
remedies with respect to such lien, shall be reserved to the lenders under
the Credit Agreement and/or their collateral agent (to be made by them in
accordance with the terms of the Credit Agreement), and that the payees of
the remaining Deferred Payments shall have no rights to direct such
decisions.
(n) If any Person shall guarantee obligations under the Credit
Agreement, Parent shall make or cause to be made effective provision
whereby the remaining Deferred Payments will be guaranteed by such Person,
equally and ratably with such indebtedness under the Credit Agreement as
long as any such Credit Agreement indebtedness shall be so guaranteed, it
being agreed, however, that all decisions relating to such guarantee,
including the decision to release or subordinate such guarantee, and the
decision to pursue remedies with respect to such guarantee, shall be
reserved to the lenders under the Credit Agreement and/or their collateral
agent (to be made by them in accordance with the terms of the Credit
Agreement), and that the payees of the remaining Deferred Payments shall
have no rights to direct such decisions.
(o) If an Adverse Change of Control occurs, then any remaining
Deferred Payments shall, upon written notice delivered by the Shareholders'
Representative to Parent within 90 days after such Adverse Change of
Control, become, subject to Sections 3.3(d)(ii) and 10.4, immediately due
and payable. For purposes of the foregoing, an "Adverse Change of Control"
shall be deemed to occur if both (i) any Person or "group" (within the
meaning of Rules 13d-3 and 13d-5 under the Exchange Act) shall have
acquired beneficial ownership of more than 50% on a fully diluted basis of
the voting interest in Parent and (ii) in connection with (and within 90
days after) the event described in clause (i), the Parent's corporate debt
ratings issued by Xxxxx'x Investors Service, Inc. and Standard & Poor's
Ratings Group, Inc. are reduced to levels below both (A) the respective
ratings of such agencies in effect immediately after the Closing Date and
(B) the respective ratings of such agencies in effect immediately prior to
the event described in clause (i).
12
SECTION 3.6 EARNOUT PAYMENTS.
Subject to the terms and conditions of this Agreement, Parent shall
make the Earnout Payments in the following amounts and on the following
terms:
(a) Earnout Payments, if any, are payable as follows:
(i) The Earnout Payment, if any, for the Earnout
Calculation Period ending December 31, 2010 shall be paid in two
equal installments, with (A) the first such installment to be paid,
subject to Sections 3.3(d)(ii) and 10.4, as soon as practicable
following the date on which Parent's audited financial statements for
the fiscal year ending December 31, 2010 are available; provided that
in the event such first installment is not paid by March 15, 2011,
such amounts shall accrue interest at the Agreed Rate from such date
until the date such first installment is paid and (B) the second
installment to be paid, subject to Sections 3.3(d)(ii) and 10.4, not
later than January 2, 2012; and
(ii) The Earnout Payment, if any, for any subsequent
Earnout Calculation Period shall be paid, subject to Sections
3.3(d)(ii) and 10.4, as soon as practicable following the date on
which Parent's audited financial statements for the fiscal year
ending as of the end of each applicable earnout calculation period
are available, but in no event later than 30 days thereafter.
Notwithstanding the foregoing, in the event of an Earnout Date
Adjustment, any Earnout Payment shall not be due and payable until 75
days after the end of the calendar month in which the applicable
Earnout Calculation Period ended as a result of such Earnout Date
Adjustment (and no interest shall be due with respect thereto in the
case of Section 3.6(a)(i)(A) until such date).
If Parent fails to pay all or any portion of an Earnout Payment when
due hereunder in breach of this Agreement, the amount not so paid
shall bear interest at the Agreed Rate for the period beginning on
the date such amount was due and payable and ending on the date such
amount is paid. For the avoidance of doubt, (i) any payment required
to be made pursuant to Section 10.4(h), including in connection with
a Withheld Amount related to an Earnout Payment, shall not be due and
payable except to the extent provided in Section 10.4(h), and Section
10.4(h) shall govern any interest payment required to be paid in
connection with such payment and (ii) any payments required to be
made pursuant to 3.7(c) shall not be due and payable except to the
extent provided in Section 3.7(c), and Section 3.7(c) shall govern
any interest payment required to be paid in connection with such
payment. For the avoidance of doubt, Parent shall pay when due any
non-disputed amount of the Earnout Payment when due as set forth in
Section 3.6(a).
(b) "Earnout Payment" means, subject to Sections 3.3(d)(ii)
and 10.4, for any Earnout Calculation Period, an amount in cash, if any,
equal to (A) (x) $113,850,000 multiplied by (y) a fraction (which in no
event shall be greater than 1.0 or less than 0.0) equal to (1) the
numerator of which is the Tenant Rep Business Revenue for such Earnout
Calculation Period as set forth on the Earnout Statement for such period
minus the Minimum Tenant Rep Business Revenue for such Earnout Calculation
Period and (2) the denominator of which is the Target Tenant Rep Business
Revenue for such Earnout Calculation Period minus the Minimum Tenant Rep
Business Revenue for such Earnout Calculation Period minus (in the case of
any Earnout Calculation Period ended December 31, 2011 or December 31, 2012
(as such dates may be extended as a result of an Earnout Date Adjustment))
(B) the aggregate Earnout Payments earned (without giving effect to any
reduction in the amount actually paid with respect thereto in accordance
with Sections 3.3(d)(ii) or 10.4)), if any, in prior Earnout Calculation
Periods, calculated as set forth in Section 3.6(b) of the Company
Disclosure Schedule.
13
(c) During any Earnout Calculation Period, without the prior
written consent of the Shareholders' Representative (such consent not to be
unreasonably withheld, conditioned or delayed), Parent shall not, and shall
cause its Subsidiaries not to, solicit to hire or engage, or hire or
engage, any employee or independent contactor of the Surviving Corporation
or any of its Subsidiaries as of the Effective Time listed on Section
8.3(i)(i) or (ii) of the Company Disclosure Schedule or who otherwise
generates revenue from client engagements in the Tenant Rep Business
("Company Employees and Contractors"). For the avoidance of doubt, the
foregoing shall not in any way limit Parent's or any of its Subsidiaries'
internal or external communications regarding employment or independent
contractor opportunities as long as such communications are not
specifically targeted at Company Employees and Contractors. For purposes
of this Section 3.6(c), it is agreed and understood that the Shareholders'
Representative shall have reasonable grounds to withhold consent if the
employment or engagement of the subject person by Parent or a Subsidiary of
Parent for a position with Parent or any of its Subsidiaries that is not a
revenue generating position for the Tenant Rep Business would reasonably be
expected to adversely impact the achievement of the Earnout Payments.
(d) If (i) employees or independent contactors of Xxxxx Lang
LaSalle Americas, Inc. or its Subsidiaries who generate revenue from client
engagements relating to the Tenant Rep Business as of the Effective Time
move after the Effective Time to positions with Parent or one of its
Subsidiaries not related to the Tenant Rep Business and (ii) the revenues
lost from such persons has a material adverse impact on the achievement of
the Earnout Payments, upon the written request of the Shareholders'
Representative, the Shareholders' Representative and Parent shall discuss
in good faith equitable adjustments, if any, to the Earnout Payment targets
and/or minimums resulting from such lost revenue.
(e) If Parent sells all or a substantial portion of its
project development services or corporate capital markets businesses or
eliminates or makes other material adverse changes to its global delivery
platform during any Earnout Calculation Period, upon the written request of
the Shareholders' Representative, Parent and the Shareholders'
Representative shall discuss in good faith equitable adjustments, if any,
to the Earnout Payment targets and/or minimums resulting from such sale,
elimination or change. If the Shareholders' Representative and Parent are
unable to agree on the appropriate equitable adjustments, if any, to the
Earnout Payment targets and/or minimums within 45 days of delivery of the
Shareholders' Representative's written notice contemplated by the preceding
sentence, the matter shall be submitted to binding arbitration using the
same procedures specified in Section 10.4(e).
SECTION 3.7 EARNOUT STATEMENT.
(a) As soon as practicable following the date upon which
Parent's audited financial statements for the fiscal year ending as of the
end of each applicable earnout calculation period are available, but in no
event later than 30 days thereafter (or in the event of an Earnout Date
Adjustment, within 75 days after the end of the calendar month in which the
applicable Earnout Calculation Period ended as a result of such Earnout
Date Adjustment), Parent shall prepare and deliver to the Shareholders'
Representative a written statement setting forth the calculations set forth
in Section 3.6 (the "Earnout Statement").
14
(b) After receipt of the Earnout Statement, the Shareholders'
Representative shall have 60 days to review the Earnout Statement. Parent
shall give the Shareholders' Representative and its agents and
representatives (including accountants) full access to all relevant books
and records (excluding any materials prepared in connection with any
dispute or potential dispute regarding the Earnout Statement) and employees
of Parent and its Subsidiaries and Parent's accountants and work papers to
the extent required to complete its review of the Earnout Statement
(provided that the obligation to provide access to, and to produce work
papers of, accountants is limited to commercially reasonable efforts and
subject to the Shareholders' Representative providing such indemnification
and other documentation as such accountants may request). Unless the
Shareholders' Representative delivers written notice to Parent on or prior
to the 45th day after the Shareholders' Representative's receipt of the
Earnout Statement specifying in reasonable detail all disputed items and
the basis therefor, the Shareholders' Representative shall be deemed to
have accepted and agreed to the Earnout Statement. If the Shareholders'
Representative so notifies Parent of the Shareholders' Representative's
objection to the Earnout Statement, Parent and the Shareholders'
Representative shall, within 45 days following the date of such notice (the
"Resolution Period"), attempt to resolve their differences and any
resolution by them as to any disputed amounts shall be final, binding and
conclusive.
(c) If at the conclusion of the Resolution Period, there are
amounts remaining in dispute, then such amounts shall be submitted to the
Neutral Auditor. Parent and the Shareholders' Representative agree to
execute, if requested by the Neutral Auditor, a reasonable engagement
letter. All fees and expenses relating to the work, if any, to be
performed by the Neutral Auditor shall be the responsibility of the
non-prevailing party. If the Shareholders' Representative is the
non-prevailing party, then such fees and expenses shall be deemed
Established Losses for purposes of this Agreement. The Neutral Auditor
shall act as an arbitrator to determine, based solely on presentations by
Parent and the Shareholders' Representative, and not by independent review,
only those amounts still in dispute. The Neutral Auditor's determination
shall be made within 30 days of its engagement, shall be set forth in a
written statement delivered to Parent and the Shareholders' Representative
and shall be final, binding and conclusive. If any amounts are referred to
the Neutral Auditor, the term "Earnout Statement" as used in this
Agreement, shall mean the definitive Earnout Statement resulting from the
determinations made by the Neutral Auditor in accordance with this section
(in addition to those items theretofore agreed to by Parent and the
Shareholders' Representative) and appropriate adjustments shall be made to
the calculations in Section 3.6 to reflect any differences between the
definitive Earnout Statement and the Earnout Statement delivered by Parent
in accordance with 3.7(a), with any amounts to be paid by Parent to be as
follows:
(i) with respect to the Earnout Payment for the earnout
calculation period ending December 31, 2010 (as such date may be
extended as a result of an Earnout Date Adjustment), (A) 50% of such
amounts shall be paid as soon as practicable, but in no event later
than five (5) business days, after the determination of the
definitive Earnout Statement with respect to such earnout calculation
period, together with a notional amount equal to interest on such
amount at the Agreed Rate for the period beginning the date Parent
delivered the Earnout Statement for such period to the Shareholders'
Representative and ending on the date of payment pursuant to this
Section 3.7(c)(i) and (B) the payment made pursuant to Section
3.6(a)(i)(B) shall be calculated based upon the definitive Earnout
Statement; and
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(ii) with respect to the Earnout Payments for any
subsequent earnout calculation periods, such amounts shall be paid as
soon as practicable, but in no event later than five (5) business
days, after the determination of the definitive Earnout Statement
with respect to the applicable earnout calculation period, together
with a notional amount equal to interest on such amount at the Agreed
Rate for the period beginning the date Parent delivered the Earnout
Statement for such period to the Shareholders' Representative and
ending on from the date of payment made pursuant to Section
3.6(a)(ii).
(d) With respect the determination of Tenant Rep Business
Revenues solely for purposes of fixing the payment date for the First
Deferred Payment and the Second Deferred Payment, in each case as set forth
in the provisos of the first sentence of each of Sections 3.5(a) and
3.5(b), respectively, Parent shall provide the Shareholders' Representative
and its agents and representatives (including accountants) access as
described in Section 3.7(b). The Shareholders' Representative shall have
the right to submit any dispute with respect to such determination of date
of the First Deferred Payment and Second Deferred Payment to a Neutral
Arbitrator in the manner described in Section 3.7(c) and Parent's
obligation to make any such payments shall be deferred pending resolution
of such dispute.
SECTION 3.8 APPRAISAL RIGHTS.
(a) Notwithstanding anything in this Agreement to the
contrary, shares of Common Stock outstanding immediately prior to the
Effective Time and held by a holder who has not consented thereto in
writing and who has otherwise taken all of the steps required by
Subsection 10.356 of the TBOC to properly exercise and perfect such
shareholder's dissenter's rights (any such shares being referred to herein
as "Dissenting Shares") shall not be converted into a right to receive the
Merger Consideration and shall be entitled to those rights and remedies set
forth in Chapter 10, Subchapter H of the TBOC; provided, however, that in
the event that a shareholder of the Company fails to perfect, withdraws or
otherwise loses any such right or remedy granted by the TBOC, the shares of
Common Stock held by such shareholder shall be converted into and represent
only the right to receive the Merger Consideration, with any such holder's
Per Share Closing Consideration to be paid by Parent from the Dissenters
Holdback (to the extent taken into account in the calculation of the
Closing Consideration Amount).
(b) The Company shall give Parent prompt notice of any
written demands for appraisal, attempted withdrawals of such demands and
any other instruments served pursuant to the TBOC and received by the
Company relating to rights of appraisal. Prior to Closing, the Company,
and following Closing, the Shareholders' Representative shall have the
right to control all negotiations and proceedings with respect to demands
for appraisal under the TBOC; provided that Parent shall have the right to
participate in such negotiations and proceedings and the Shareholders'
Representative shall retain legal counsel in connection with such
negotiations and proceedings, at the sole cost and expense of the former
shareholders of the Company, reasonably satisfactory to Parent. The
Company shall not, except with the prior written consent of Parent, which
consent shall not be unreasonably withheld, conditioned or delayed, make
any payment with respect to, or settle or offer to settle any demands for
appraisal.
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SECTION 3.9 SHAREHOLDER ELECTION. As soon as practicable following
the date hereof, the Company shall mail to each holder of Shares as of the
date hereof (who has not heretofore received and completed such materials)
(i) the Parent information packet made available to the Company by Parent,
(ii) the Information Statement and (iii) the Shareholder Waiver, Agreement,
Representation and Election Form in substantially the form attached hereto
as Exhibit B (a "Shareholder Election Form and Agreement"). Each
Shareholder who submits to the Company an effective, properly completed
Shareholder Election Form and Agreement which is actually received by the
Company by 5:00 p.m., central time, on June 25, 2008 (or such later date
determined by the Company (not to be later than two (2) business days prior
to the Closing Date) with Parent's consent, such consent not to be
unreasonably, withheld, conditioned or delayed) is referred to herein as
an "Electing Holder." The Shareholder Election Form and Agreement shall,
among other things, (i) contain each Electing Holder's (A) waiver of the
rights and remedies set forth in Xxxxxxx 00, Xxxxxxxxxx X xx xxx XXXX, (X)
representation that it is an "accredited investor" within the meaning of
Regulation D under the Securities Act and other covenants, agreements and
acknowledgements related to compliance with Regulation D, (C) agreement to
be bound by covenants and agreements equivalent to those set forth in
Section 7.13 and (D) agreement to be bound by the covenants and agreements
set forth in Section 7.14 and (ii) permit each Electing Holder to
irrevocably specify the number of such holder's Shares with respect to
which such holder elects to receive all or any portion of the Per Share
Closing Consideration in shares of Parent Common Stock (the "Election
Shares"). Any Common Stock or other right to receive the Merger
Consideration that is not an Election Share is a "Non-Election Share."
Promptly upon receipt of each Shareholder Election Form and Agreement, the
Company shall deliver a copy of same to Parent. All questions as to the
timely receipt, effectiveness and proper completion of Shareholder Election
Forms and Agreements will be determined by Parent. None of Parent, the
Company or any other Person shall be under any obligation to notify any
Person of any defect in a Shareholder Election Form and Agreement.
Notwithstanding anything in this Agreement to the contrary, if Parent does
not reasonably believe that any Person who submitted a Shareholder Election
Form and Agreement is an "accredited investor" within the meaning of
Regulation D under the Securities Act, such person shall not be an Electing
Holder for purposes of this Agreement and any shares held by such Person
shall be Non-Election Shares.
SECTION 3.10 EXCHANGE OF CERTIFICATES.
(a) Prior to the Effective Time, Parent shall designate
Mellon Investor Services or other agent reasonably acceptable to the
Company (the "Exchange Agent") as agent for the holders of shares of
Common Stock (the "Shares") in connection with the Merger and to receive
the Per Share Closing Consideration to which holders of Shares shall become
entitled pursuant to Section 3.1. At or prior to the Effective Time,
Parent shall make available to the Exchange Agent the Cash Closing
Consideration and Stock Consideration (based on the Parent Closing Trading
Price). Such Cash Closing Consideration shall be invested by the Exchange
Agent in investment grade debt securities as directed by the Shareholders'
Representative, in his sole discretion, pending payment thereof by the
Exchange Agent to the holders of the Shares. Earnings thereon shall be the
sole and exclusive property of holders of Shares to be distributed in the
sole discretion of the Shareholders' Representative. Promptly upon Parent's
request, the Exchange Agent shall pay to Parent from the Cash Closing
Consideration the pro rata portion of such amount that otherwise would have
been payable to any holder of Dissenting Shares (assuming for this purpose
only that such holders were not holders of Dissenting Shares), but only if
such amount was not taken into account in the calculation of the Dissenters
Holdback. If there is an adjustment in the number of shares of Parent
Common Stock constituting the Stock Consideration as provided in Section
3.2(g), in the case of an increase in the number of shares, Parent shall
make the additional shares of Parent Common Stock available to the Exchange
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Agent, and in the case of a decrease in the number of shares, the Exchange
Agent, shall cancel or otherwise follow Parent's instructions with respect
to such excess shares, in each case, pursuant to Parent's statement as to
the number of shares of Parent Common Stock constituting the Stock
Consideration contemplated by Section 3.2(g).
(b) In connection with any payment to be made with respect to
the Future Payments or any payments pursuant to Section 10.4 (any such
payments pursuant to Section 10.4 to be paid pro rata to the holders of
shares entitled to receive Merger Consideration in accordance with the
terms of this Agreement), Parent shall pay the Shareholders' Representative
or a paying agent designated by the Shareholders' Representative the amount
required to make such payment pursuant to the terms of this Agreement for
distribution to the holders of Shares entitled to receive the Merger
Consideration in accordance with the terms of this Agreement.
(c) Parent shall have no liability with respect to any
payment made pursuant to this Agreement from and after the time that Parent
makes such payment to the Exchange Agent, the Shareholders' Representative
or any paying agent designated by the Shareholders' Representative in
accordance with the terms of this Agreement; provided, that Parent shall
approve in writing each Person to whom Parent Common Stock is issued
pursuant to this Agreement, not with respect to the amount of such issuance
(for which the Shareholders' Representative shall be solely responsible),
but to confirm that such Person is an Electing Holder.
(d) Unless sent prior to the Effective Time, promptly after
the Effective Time, Parent shall instruct the Exchange Agent to mail to
each holder of record of Shares whose Shares were converted pursuant to
Section 3.1 into the right to receive the Merger Consideration (i) a letter
of transmittal, which shall specify that delivery shall be effected, and
risk of loss and title to the Shares shall pass, only upon delivery to the
Exchange Agent of the certificates evidencing ownership thereof (the
"Certificates)" and which shall contain the agreement and acknowledgment of
the holder of such Certificates that such holder approves the terms and
conditions of this Agreement, including the provisions of Sections 3.10,
3.12, 10.4 and 10.5 and the appointment of the Shareholders' Representative
in accordance with the terms of this Agreement and (ii) instructions for
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation (or
compliance with Section 3.10(i) below) to the Exchange Agent together with
such letter of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration
for each Share formerly represented by such Certificate, and the
Certificate so surrendered shall forthwith be cancelled. Until surrendered
as contemplated by this Section 3.10, each Certificate shall be deemed from
and after the Effective Time to represent only the right to receive the
Merger Consideration. Notwithstanding anything herein to the contrary, the
Shareholders' Representative may delay payments to such times and make such
payments in such amounts as it may determine, in its reasonable discretion,
including delaying any portion of the Per Share Closing Consideration until
the Contingent Issuance has been finally determined; provided, however,
that no portion of the Stock Consideration shall be payable to any person
other than Electing Holders and no payment may alter the amount of Merger
Consideration to which any holder is entitled pursuant to the terms of this
Agreement as of the Effective Time.
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(e) No shares of Parent Common Stock shall be distributed in
respect of the Stock Consideration until after the close of business on the
Adjustment Date, and each certificate representing shares of Parent Common
Stock so issued shall be stamped or otherwise imprinted with a legend
substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES. THE SHARES MAY NOT BE SOLD,
MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE A
SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES."
(f) No dividends or other distributions with respect to
shares of Parent Common Stock issued in the Merger shall be paid to any
Electing Holder until such shares have actually been issued to such
Electing Holder in accordance with this Section 3.10, at which time such
dividends or other distributions shall be paid.
(g) No certificates or scrip representing fractional shares
of Parent Common Stock shall be issued pursuant to this Agreement. In lieu
of such fractional share interests, Parent shall pay an amount in cash
equal to the product obtained by multiplying (i) the fractional share
interest to which such holder (after taking into account all Shares held by
such Person) would otherwise be entitled by (ii) the Parent Closing Trading
Price.
(h) At the Effective Time, the share records of the Company
shall be closed and thereafter there shall be no further registration of
transfers of shares of Common Stock on the records of the Company. From
and after the Effective Time, the holders of certificates evidencing
ownership of shares of Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares,
except as otherwise provided for in this Agreement or by applicable law.
If, after the Effective Time, any certificates are presented to the
Surviving Corporation for any reason, they shall be cancelled and exchanged
as provided in this Article III. Except as expressly provided herein, no
interest shall be paid on any amount to be paid pursuant to this
Article III.
(i) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required
by Parent, the posting by such Person of a bond in such amount as Parent
may reasonably direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will pay
the Per Share Closing Consideration, and, subject to the terms of this
Agreement, Parent will pay Future Payments and any payments pursuant to
Section 10.4 in respect of, and in exchange for, such lost, stolen or
destroyed Certificate pursuant to this Agreement.
(j) At any time following one year after the Effective Time,
the Surviving Corporation shall be entitled to require the Exchange Agent
to deliver to it any Parent Common Stock or funds (including any interest
received with respect thereto) made available to the Exchange Agent and not
disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look only to the Surviving Corporation only as general
creditors thereof with respect to its Per Share Closing Consideration,
without any interest thereon. Notwithstanding anything to the contrary
herein, neither the Surviving Corporation, the Exchange Agent nor the
Shareholders' Representative shall be liable to any holder of a Certificate
for any Merger Consideration delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
19
(k) The right to receive Future Payments under this Agreement
shall not be evidenced by a certificate or other instrument and shall not
be assignable or otherwise transferable by holders thereof (except by will
or by the operation of the laws of descent after the death of a natural
holder thereof, or pursuant to the valid direction of a court of competent
jurisdiction, including pursuant to a domestic relations order, true and
complete copies of which have been made available to Parent). Any payments
made with respect to the Future Payments shall be made only to each holder
of Shares that surrendered its Certificates, or as otherwise provided in
Section 3.10(i), with respect to such Shares in accordance with this
Section 3.10 by check to the address for delivery of its Per Share Closing
Consideration set forth on the letter of transmittal provided by such
holder in connection with the surrender of its Certificates.
SECTION 3.11 WITHHOLDING RIGHTS. The Surviving Corporation, Parent
or the Exchange Agent, as the case may be, shall be entitled to deduct and
withhold from the consideration otherwise payable to any Person pursuant to
this Article III or otherwise such amounts as it is required to deduct and
withhold with respect to the making of such payment under any provision of
federal, state, local or foreign tax law. Any amounts so deducted and
withheld shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares in respect of which such deduction and
withholding was made.
SECTION 3.12 EARLY TERMINATION. Notwithstanding anything to the
contrary in this Agreement, in the event that any former holder of Shares
voluntarily terminates his or her employment or independent contractor
relationship with Parent and its Subsidiaries after the Closing but prior
to any Future Payment, all Future Payments payable after the date of such
termination will become due and payable to such person on the fifth
anniversary of the dates otherwise set forth in Sections 3.3, 3.4, 3.5, 3.6
and 10.4 (each such payment, a "Deferred Future Payment"); provided,
however, that this Section 3.12 shall not apply to any former holder of
Shares who (i) retires after the age of 62 and is bound by the terms of a
"noncompete" with respect to Parent or one of its Subsidiaries and is not
otherwise in breach of such terms, (ii) is terminated without "cause" or
terminates for "good reason," (iii) dies or becomes disabled or (iv) is
otherwise set forth on Section 3.12 of the Company Disclosure Schedule.
Any Deferred Future Payment shall accrue compound interest at a rate equal
to the Interest Rate from the date such Deferred Future Payment would
otherwise have been paid as a Future Payment until the date such Deferred
Future Payment is actually paid. For purposes of this Section 3.12, the
term "Interest Rate" means the sum of the following rates determined at the
close of the first business day on or after the date a Deferred Future
Payment would otherwise have been payable as a Future Payment: (a) the
annual five (5)-year U.S. dollar swap rate as quoted on Bloomberg's
interest rate swap page; (b) the annual rate of Parent's borrowing spread
pursuant to the Credit Agreement; and (c) 0.25%. Further, for purposes of
this Section 3.12, the terms "good reason", "disabled" and "cause" shall
have the following meanings ascribed to them (i) if such Person is party to
an employment or consulting agreement with Parent or one of its
Subsidiaries, the meaning set forth in such employment or consulting
agreement or (ii) if such Person is not party to an employment or
consulting agreement with Parent and its Subsidiaries, the meaning set
forth on Section 3.12 of the Company Disclosure Schedule.
SECTION 3.13 PAYMENTS. Whenever this Article III refers to a
payment of Merger Consideration to be made by Parent, such payment shall be
made by the sole shareholder of the Surviving Corporation, and Parent shall
cause such sole shareholder to make such payment.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in a schedule prepared and signed by the Company
and delivered to Parent prior to the execution of this Agreement (the
"Company Disclosure Schedule"), the Company represents and warrants to
Parent and Merger Sub as set forth below. Each exception set forth in the
Company Disclosure Schedule and each other response to this Agreement set
forth in the Company Disclosure Schedule shall be identified by reference
to, or be grouped under a heading referring to, a specific individual
section, subsection, paragraph or subparagraph of this Agreement and shall
relate only to such section, subsection, paragraph or subparagraph, as
applicable, except to the extent that one portion of the Company Disclosure
Schedule specifically refers to another portion thereof by cross reference,
and the applicability of the cross-referenced portion to such other portion
is readily apparent on the face of such cross-referenced portion. Any
statement qualified as to the "knowledge of the Company or any Company
Subsidiary," or what is known to the Company or any Company Subsidiary
shall be limited to the knowledge, after reasonable inquiry, of the persons
set forth on Section 8.3(i)(i) of the Company Disclosure Schedule.
SECTION 4.1 ORGANIZATION.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas and has
full corporate power and authority to own, lease and operate its properties
and to carry on its business as it is now being conducted. The Company is
duly qualified or licensed to do business and in good standing in each
jurisdiction where the Company's ownership or leasing of property or the
conduct of its business makes such qualification or licensing necessary,
except where the failure to be so qualified or licensed would not,
individually or in the aggregate, reasonably be expected to result in a
Company Material Adverse Effect. Each such jurisdiction is listed in
Section 4.1 of the Company Disclosure Schedule. As used in this Agreement,
"Company Material Adverse Change" or "Company Material Adverse Effect"
means any change, event, effect or circumstance, as the case may be, that,
individually or in the aggregate, is materially adverse to (y) the
business, operations, properties, condition (financial or otherwise),
results of operations, prospects, assets or liabilities of the Company and
the Company Subsidiaries, taken as a whole, or (z) the Company's ability to
consummate each of the transactions contemplated hereby or the transactions
contemplated by any Ancillary Agreement; provided, however, that in no
event shall any of the following be a Company Material Adverse Effect, or
be taken into account in the determination of whether a Company Material
Adverse Effect or Company Material Adverse Change has occurred, in each
case, for purposes of clause (y) above: (A) any change resulting from
conditions affecting any of the industries or markets in which the Company
and the Company Subsidiaries operate; (B) changes in accounting
requirements or principles; (C) any change, including the termination by
employees or contractors to the Company or Company Subsidiaries of their
relationships therewith, resulting from the announcement or pendency of the
transactions contemplated by this Agreement; or (D) any natural disaster,
sabotage, military action or war (whether or not declared) or any
escalation or worsening thereof, but only to the extent such change,
natural disaster, sabotage, military action or war (whether or not
declared) or any escalation or worsening thereof, does not, in the case of
clauses (A), (B) or (D), affect the Company and the Company Subsidiaries in
a disproportionate manner.
21
(b) True and complete copies of the certificate of formation
and bylaws of the Company, as amended to date, have been made available to
Parent. The Company is not in violation of any provision of its certificate
of formation or bylaws. The minute books of the Company contain accurate
and complete records, in all material respects, of all meetings of, and
corporate actions taken by, the shareholders and directors of the Company,
and any committees thereof, and no meeting of the shareholders or board of
directors of the Company, or any committee thereof, has been held for which
minutes have not been prepared and are not contained in such minute books.
True and complete copies of all minute books, except with respect to
minutes specifically relating to this Agreement and the transactions
contemplated hereby, and all stock record books of the Company have been
made available to Parent.
SECTION 4.2 SUBSIDIARIES AND AFFILIATES.
(a) Section 4.2(a) of the Company Disclosure Schedule sets
forth the name, jurisdiction of incorporation or organization and
authorized and outstanding capital of each Company Subsidiary. Other than
with respect to the Company Subsidiaries, and except as set forth in
Section 4.2(a) of the Company Disclosure Schedule, the Company does not
own, directly or indirectly, any capital stock or other equity securities
of any Person or have any direct or indirect ownership interest in any
business. Except as set forth in Section 4.2(a) of the Company Disclosure
Schedule, all of the outstanding capital stock (or similar equity
interests) of each Company Subsidiary is (or are) owned directly or
indirectly by the Company free and clear of all liens, charges, security
interests, options, claims, mortgages, pledges, or other encumbrances and
restrictions of any nature whatsoever, other than those created by
securities laws generally ("Encumbrances"), and is (or are) validly issued,
fully paid and nonassessable and have not been issued in violation of any
pre-emptive or similar rights, and there are no outstanding options, rights
or agreements of any kind relating to the issuance, sale or transfer of any
capital stock (or similar equity interests) of any such Company Subsidiary.
As used in this Agreement, the term "Company Subsidiary" means each Person
which is a Subsidiary of the Company; provided that, for the avoidance of
doubt, the term Company Subsidiary shall also refer to a Person during the
periods prior to when such Person became a Company Subsidiary; the term
"Person" means a natural person, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Entity or other
entity or organization; and the term "Subsidiary" means, with respect to
any party, any Person, of which (i) at least a majority of the securities
or other interests having by their terms ordinary voting power to elect a
majority of the board of directors or others performing similar functions
with respect to such organization or entity is directly or indirectly owned
or controlled by such party or by any one or more of its Subsidiaries, or
by such party and one or more of its Subsidiaries or (ii) such party or any
other Subsidiary of such party is a general partner or managing member,
including, with respect to the Company, the Private Funds.
(b) Each Company Subsidiary (i) is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, (ii) has full power and authority to own,
lease and operate its properties and to carry on its business as it is now
being conducted or currently proposed to be conducted, and (iii) is duly
qualified or licensed to do business as a foreign Person and in good
standing in each jurisdiction where such Company Subsidiary's ownership or
leasing of property or the conduct of its business makes such qualification
or license necessary, except where the failure to be so qualified or
licensed would not, individually or in the aggregate, reasonably be
expected to result in a Company Material Adverse Effect. Each such
jurisdiction is listed in Section 4.2(b) of the Company Disclosure
Schedule.
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(c) True and complete copies of the current certificate of
formation and bylaws or similar organizational documents of each Company
Subsidiary have been made available to Parent. No Company Subsidiary is in
violation of any provision of its certificate of formation, bylaws or
similar organizational documents. Since July 1, 2007, or such later time
as the respective Company Subsidiary became a Company Subsidiary, the
minute books of each Company Subsidiary contain accurate and complete
records, in all material respects, of all meetings of, and corporate
actions taken by, the shareholders and directors (or equivalent), and any
committees thereof, of such Company Subsidiary and no meeting of the
shareholders or board of directors (or equivalent), or any committee
thereof, of such Company Subsidiary has been held for which minutes have
not been prepared and are not contained in such minute books. True and
complete copies of all existing minute books and stock record books of each
Company Subsidiary, including minutes and stock records relating to periods
prior to July 1, 2007, have been made available to Parent on the site where
such minute books and stock record books are located.
SECTION 4.3 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, of which 20,045,091 shares of Common
Stock are issued and outstanding as of June 13, 2008. Schedule 4.3(a) of
the Company Disclosure Schedule sets forth as of the date hereof the name
and address of each record holder of such shares of Common Stock and the
number of shares owned of record by each such holder as of the date hereof.
(b) All of the outstanding shares of the Common Stock are
duly authorized, validly issued, fully paid and non-assessable and have not
been issued in violation of any pre-emptive or similar rights. All
issuances, sales and repurchases by the Company or any Company Subsidiary
of their respective shares of capital stock have been effected in
compliance in all material respects with all applicable laws, including
applicable federal and state securities laws. No indebtedness of the
Company or any Company Subsidiary having general voting rights (or
convertible into securities having such rights) ("Voting Debt") has been
issued or is outstanding. Except as set forth in Section 4.3(b) of the
Company Disclosure Schedule or as provided by that certain Shareholders
Agreement among the Company and its shareholders, dated as of June 30, 2007
(the "Shareholders Agreement"), (i) there are no existing options,
warrants, calls, pre-emptive rights, subscriptions or other rights,
agreements, arrangements, understandings or commitments of any kind
relating to the issued or unissued capital stock of, or other equity
interests in, the Company or any Company Subsidiary obligating the Company
or any Company Subsidiary to issue, transfer, register or sell or cause to
be issued, transferred, registered or sold any shares of capital stock or
Voting Debt of, or other equity interest in, the Company or any Company
Subsidiary or securities convertible into or exchangeable for such shares
or equity interests, or obligating the Company or any Company Subsidiary to
grant, extend or enter into any such option, warrant, call, subscription or
other right, agreement, arrangement or commitment, and (ii) there are no
agreements, arrangements, understandings or commitments of the Company or
any Company Subsidiary to repurchase, redeem or otherwise acquire any
shares of Common Stock or any of the capital stock of or other equity
interests in any Company Subsidiary or any other entity or to provide funds
to make any investment (in the form of a loan, capital contribution or
otherwise) in any Company Subsidiary or any other Person or that give any
Person the right to receive any economic benefit or right similar to or
derived from the economic benefits and rights accruing to any holders of
shares of Common Stock or any of the capital stock of or other equity
interests in any Company Subsidiary.
23
(c) Except for the Shareholders Agreement or as set forth in
Section 4.3(c) of the Company Disclosure Schedule, there are no voting
trusts or other agreements, arrangements or understandings to which the
Company or any Company Subsidiary is a party, or of which the Company is
otherwise aware, with respect to the voting of the capital stock of or
other equity interests in the Company or any of the Company Subsidiaries.
(d) Except as set forth in Section 4.3(d) of the Company Disclosure
Schedule, all dividends or distributions on securities of the Company or
any Company Subsidiary that have been declared or authorized have been paid
in full.
(e) From and after the Closing, the Company will have no
liabilities or obligations of any kind with respect to the Contingent
Issuance, including any liability or obligation to issue any shares of
Common Stock. The cash dividend to be paid by the Company to holders of
Common Stock after the date hereof and prior to the Effective Time shall
satisfy in full any obligation on the part of the Company to pay any
dividends on its Common Stock pursuant to Article VIII, Section 1 of its
bylaws or otherwise, and from and after the Effective Time the Surviving
Corporation shall have no obligation to pay any dividends or make any other
distributions to any person who held Common Stock prior to the Effective
Time.
SECTION 4.4 AUTHORIZATION; VALIDITY OF AGREEMENT; COMPANY ACTION.
The Company has the requisite corporate power and authority to execute and
deliver this Agreement and each of the agreements and instruments
contemplated by this Agreement, including the Name Assignment and License
Agreement (collectively, the "Ancillary Agreements") to which it is a party
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by the Company of this Agreement, the
Ancillary Agreements to which it is a party and the consummation by the
Company of the transactions contemplated hereby and thereby have been duly
and validly authorized by the Company Board of Directors; the shareholders
of the Company have approved the Merger, this Agreement and the
transactions contemplated hereby by action by written consent in accordance
with Sections 6.202 and 21.457 of the TBOC and such consent has not been
amended, rescinded or modified; and no other corporate proceedings on the
part of the Company are necessary to authorize the execution and delivery
by the Company of this Agreement, the Ancillary Agreements to which it is a
party and the consummation by it of the transactions contemplated hereby
and thereby. Prior to the Effective Time, the changes to the broker-splits
provided for in the agreements contemplated by Section 8.3(i) or as set
forth on Section 4.4 of the Company Disclosure Schedule will have been
approved by all requisite board, committee, officer or other action on the
part of the Company or any Company Subsidiary. Each of this Agreement and
the Ancillary Agreements to which it is a party executed by the Company
contemporaneously herewith has been, and each of the Ancillary Agreements
to be executed by the Company after the date hereof will be, duly and
validly executed and delivered by the Company and, assuming the due and
valid authorization, execution and delivery hereof and thereof by Parent
and Merger Sub and the other parties party to each Ancillary Agreement, is,
or in the case of any Ancillary Agreement to be executed after the date
hereof, will be, a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
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SECTION 4.5 BOARD APPROVALS. The Company Board of Directors, at a
meeting duly called and held, has (i) determined that this Agreement, the
Ancillary Agreements and the transactions contemplated hereby and thereby,
including the Merger, are advisable, fair to and in the best interests of
the shareholders of the Company, (ii) duly and validly approved this
Agreement, the Ancillary Agreements, the Merger and the other transactions
contemplated hereby and thereby and taken all corporate action required to
be taken by the Company Board of Directors to authorize the consummation of
the transactions contemplated hereby and thereby and (iii) resolved to
submit this Agreement to shareholders of the Company and recommend that the
shareholders of the Company approve this Agreement and the Merger and the
other transactions contemplated hereby, and none of the aforesaid actions
by the Company Board of Directors has been amended, rescinded or modified.
Xxxxx X. Xxxxxxxx has approved this Agreement, the Ancillary Agreements and
the transactions contemplated hereby and thereby to the extent required by
the Shareholders Agreement. Neither Subsection 21.606 of the TBOC nor any
other state takeover statute or similar statute or regulation in any
jurisdiction in which the Company or any Company Subsidiary does business
is applicable to the transactions contemplated hereby.
SECTION 4.6 CONSENTS AND APPROVALS; NO VIOLATIONS. None of the
execution, delivery or performance of this Agreement or any Ancillary
Agreement by the Company, the consummation by the Company of the
transactions contemplated hereby or thereby or compliance by the Company
with any of the provisions of this Agreement or any Ancillary Agreement
will (i) conflict with or result in any breach of any provision of the
certificate of formation, the bylaws or similar organizational documents of
the Company or any Company Subsidiary, or the Shareholders Agreement, (ii)
require any material filing by the Company or any Company Subsidiary with,
or material permit, authorization, consent or approval of, any federal,
state, local or foreign government or other political subdivision thereof
or any entity, body, regulatory or administrative authority, agency,
commission, court, tribunal or judicial body exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government (a "Governmental Entity") (except for (A) the
filing of the Certificate of Merger pursuant to the TBOC and (B) any
filings as may be required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act")), (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, or result in the creation
of any Encumbrance on the assets and properties of the Company or any
Company Subsidiary under, any of the terms, conditions or provisions of any
Listed Company Agreement or (iv) violate or conflict with or result in a
breach of or default under any material order, writ, injunction, decree,
statute, rule or regulation applicable to the Company, any Company
Subsidiary or any of their respective properties or assets.
SECTION 4.7 FINANCIAL STATEMENTS.
(a) The Company has made available to Parent the audited
consolidated balance sheets of The Staubach Company ("Staubach Company")
and its consolidated Subsidiaries as of June 30, 2007, 2006 and 2005 and
the related statements of operations and cash flows for the fiscal year,
then ended (including the related notes and independent auditors report
thereon) (the "Staubach Audited Financial Statements"). The Staubach
Audited Financial Statements (i) have been prepared from, are in accordance
with and accurately reflect the books and records of Staubach Company and
its consolidated Subsidiaries, (ii) were prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and (iii) fairly present the consolidated
financial position and the consolidated results of operations and cash
flows of Staubach Company and its consolidated Subsidiaries as of the times
and for the periods referred to therein. The reserves reflected in the
Staubach Audited Financial Statements are appropriate and reasonable and
have been calculated in a consistent manner.
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(b) The Company has made available to Parent the audited
consolidated balance sheets of The Staubach Company - Northeast, Inc.
("Northeast") and its consolidated Subsidiaries as of June 30, 2007, 2006
and 2005 and the related statements of operations and cash flows for the
fiscal year, then ended (including the related notes and independent
auditors report thereon) (the "Northeast Audited Financial Statements").
The Northeast Audited Financial Statements (i) have been prepared from, are
in accordance with and accurately reflect the books and records of
Northeast and its consolidated Subsidiaries, (ii) were prepared in
accordance with GAAP applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and (iii) fairly
present the consolidated financial position and the consolidated results of
operations and cash flows of Northeast and its consolidated Subsidiaries as
of the times and for the periods referred to therein. The reserves
reflected in the Northeast Audited Financial Statements are appropriate and
reasonable and have been calculated in a consistent manner.
(c) The Company has made available to Parent the unaudited
balance sheet of the Company and its consolidated Subsidiaries as of March
31, 2008 and the related statement of operations for the nine (9) months
ended March 31, 2008 (the "Financial Statements"). The Financial
Statements (i) have been prepared from, are in accordance with and
accurately reflect the books and records of the Company and its
consolidated Subsidiaries, (ii) were prepared on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
(iii) fairly present the consolidated financial position and the
consolidated results of operations of the Company and its consolidated
Subsidiaries as of the times and for the periods referred to therein. The
reserves reflected in the Financial Statements are appropriate and
reasonable and have been calculated in a consistent manner. The accounting
books and records of the Company and its Subsidiaries (i) are complete and
correct in all material respects; (ii) are current in a manner consistent
with past practice; and (iii) have recorded therein all the properties,
assets and liabilities of the Company and the Company Subsidiaries (except
where the failure to so record would not violate GAAP).
SECTION 4.8 ABSENCE OF CERTAIN CHANGES. Except as set forth in
Section 4.8 of the Company Disclosure Schedule, since June 30, 2007, (i)
each of the Company and each Company Subsidiary has conducted its
respective business only in the ordinary course of business consistent with
past practice and (ii) neither the Company nor any Company Subsidiary has
suffered any Company Material Adverse Change or become aware of any
circumstances that may, individually or in the aggregate, cause the Company
or any Company Subsidiary to suffer any Company Material Adverse Change in
the foreseeable future.
SECTION 4.9 NO UNDISCLOSED LIABILITIES; INDEBTEDNESS. Except (i) as
adequately and expressly reflected and reserved for in the Financial
Statements or as reflected on the Closing Balance Sheet and (ii) as set
forth in Section 4.9 of the Company Disclosure Schedule, neither the
Company nor any Company Subsidiary has incurred any liabilities or
obligations of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise to the extent required to be
disclosed or reflected on or reserved against in the consolidated balance
sheets of the Company and its consolidated Subsidiaries in accordance with
GAAP, or knows of any valid basis for the assertion of any such
liabilities, except for liabilities and obligations that would not,
individually or in the aggregate, reasonably be expected to result in a
Company Material Adverse Effect.
26
SECTION 4.10 LITIGATION. Except as set forth in Section 4.10 of the
Company Disclosure Schedule:
(a) there is no material action, suit, charge, complaint,
claim, litigation, arbitration or other proceeding (including, alternative
dispute resolution proceeding) or investigation pending or, to the
knowledge of the Company or any Company Subsidiary, threatened, against,
affecting or naming as a party thereto (A) the Company or any Company
Subsidiary or any of their respective properties, assets or businesses or
(B) (i) to the knowledge of the Company or any Company Subsidiary, any of
the Company's or any Company Subsidiary's current or former directors or
officers or any other Person who may be entitled to indemnification by the
Company or any Company Subsidiary in connection therewith, and (ii) to the
knowledge of the Company or any Company Subsidiary, no Person has overtly
threatened a valid basis for any such suit, charge, complaint, claim,
action, litigation, arbitration, proceeding or investigation; and
(b) there is no outstanding or, to the knowledge of the Company or any
Company Subsidiary, threatened, order, judgment, injunction, award or
decree of any Governmental Entity against, affecting or naming as a party
subject thereto (i) the Company, any Company Subsidiary or any of their
respective properties, assets or businesses or (ii) to the knowledge of the
Company or any Company Subsidiary, any of the Company's or any Company
Subsidiary's current or former directors or officers or any other Person
who may be entitled to indemnification by the Company or any Company
Subsidiary in connection therewith.
(b) there is no outstanding or, to the knowledge of the
Company or any Company Subsidiary, threatened, order, judgment, injunction,
award or decree of any Governmental Entity against, affecting or naming as
a party subject thereto (i) the Company, any Company Subsidiary or any of
their respective properties, assets or businesses or (ii) to the knowledge
of the Company or any Company Subsidiary, any of the Company's or any
Company Subsidiary's current or former directors or officers or any other
Person who may be entitled to indemnification by the Company or any Company
Subsidiary in connection therewith.
SECTION 4.11 EMPLOYEE BENEFIT PLANS; ERISA.
(a) Section 4.11(a) of the Company Disclosure Schedule
contains a true and complete list of each deferred compensation and each
bonus or other incentive compensation, stock purchase, stock option and
other equity compensation plan, program, agreement or arrangement; each
severance or termination pay, medical, surgical, hospitalization, life
insurance and other "welfare" plan, fund or program (within the meaning of
section 3(1) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")); each profit-sharing, stock bonus or other "pension"
plan, fund or program (within the meaning of section 3(2) of ERISA); each
employment, independent contractor, termination or severance agreement; and
each other employee benefit plan, fund, program, agreement or arrangement;
in each case, that is sponsored, maintained or contributed to or required
to be contributed to by the Company or by any trade or business, whether or
not incorporated, that together with the Company would be deemed a "single
employer" within the meaning of section 4001(b) of ERISA (an "ERISA
Affiliate"), or to which the Company or an ERISA Affiliate is party or in
respect of which they may have any liability, whether written or oral (the
"Plans"). Section 4.11(a) of the Company Disclosure Schedule identifies
each of the Plans that is subject to section 302 or Title IV of ERISA or
section 412 of the Code (the "Title IV Plans"). Neither the Company, any
Company Subsidiary nor any ERISA Affiliate has any commitment or formal
plan, whether legally binding or not, to create any additional Plan or
modify or change any existing Plan that would affect any employee or
independent contractor or former employee or independent contractor of the
Company or any Company Subsidiary.
(b) With respect to each Plan, the Company has made available
to Parent true and complete copies of each of the following documents:
(i) a copy of the Plan and any amendments thereto (or
if the Plan is not a written Plan, a description thereof);
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(ii) a copy of the two most recent annual reports or
Form 5500 and actuarial reports, if required under ERISA, and the
most recent report prepared with respect thereto in accordance with
Statements of Financial Accounting Standards Nos. 87 and 106, if any;
(iii) a copy of the most recent summary, including any
summary plan description required under ERISA with respect thereto as
well as any formal or informal communication to employees under or in
respect of any Plan;
(iv) if the Plan is funded through a trust or any third
party funding vehicle, a copy of the trust or other funding agreement
and the most recent financial statements thereof, if any; and
(v) the most recent opinion, notification or
determination letter as well as any other material correspondence
received from the Internal Revenue Service (the "IRS") subsequent to
the date of such opinion, notification or determination letter with
respect to each Plan intended to qualify under section 401 of the
Internal Revenue Code of 1986, as amended (the "Code").
(c) No liability under Title IV or section 302 of ERISA has
been incurred by the Company or any ERISA Affiliate that has not been
satisfied in full, and no condition exists that presents a material risk to
the Company or any ERISA Affiliate of incurring any such liability, other
than liability for premiums due the Pension Benefit Guaranty Corporation
("PBGC") (which premiums have been paid when due). Insofar as the
representation made in this Section 4.11(c) applies to sections 4064, 4069
or 4204 of Title IV of ERISA, it is made with respect to any employee
benefit plan, program, agreement or arrangement subject to Title IV of
ERISA to which the Company or any ERISA Affiliate made, or was required to
make, contributions during the five (5) year period ending on the last day
of the most recent plan year ended prior to the Closing.
(d) The PBGC has not instituted proceedings to terminate any
Title IV Plan and no condition exists that presents a material risk that
such proceedings will be instituted. With respect to each Title IV Plan,
the present value of accrued benefits under such plan, based upon the
actuarial assumptions used for funding purposes in the most recent
actuarial report prepared by such plan's actuary with respect to such plan
did not exceed, as of its latest valuation date, the then current value of
the assets of such plan allocable to such accrued benefits. No Title IV
Plan or any trust established thereunder has incurred any "accumulated
funding deficiency" (as defined in section 302 of ERISA and section 412 of
the Code), whether or not waived, as of the last day of the most recent
fiscal year of each Title IV Plan ended prior to the Closing.
(e) All contributions required to be made with respect to any
Plan on or prior to the Closing have been timely made or are reflected in
the Financial Statements. There has been no amendment to, written
interpretation of or announcement (whether or not written) by the Company
or any Company Subsidiary relating to, or change in employee participation
or coverage under, any Plan that would increase materially the expense of
maintaining such Plan above the level or expense incurred in respect
thereof for the most recent fiscal year ended prior to the date hereof.
(f) No Plan is a "multiemployer plan," as defined in section
3(37) or 4001(a)(3) of ERISA, nor is any Title IV Plan a plan described in
section 4063(a) of ERISA.
(g) Neither the Company or any Company Subsidiary, any Plan,
any trust created thereunder, nor, to the knowledge of the Company or any
Company Subsidiary, any trustee or administrator thereof has engaged in a
transaction in connection with which the Company or any Company Subsidiary,
any Plan, any such trust, or any trustee or administrator thereof, or any
party dealing with any Plan or any such trust could be subject to either a
civil penalty assessed pursuant to section 409 or 502(i) of ERISA or a Tax
imposed pursuant to section 4975 or 4976 of the Code.
28
(h) Each Plan has been operated and administered in all
material respects in accordance with its terms and applicable law,
including ERISA and the Code.
(i) Each Plan intended to be "qualified" within the meaning
of section 401(a) of the Code and any trust maintained thereunder intended
to be exempt from taxation under section 501(a) of the Code is entitled to
rely on an IRS opinion, notification or determination letter as to such
qualification and exemption. Each Plan intended to satisfy the
requirements of section 501(c)(9) of the Code has satisfied such
requirements in all material respects.
(j) Except as set forth in Section 4.11(j) of the Company
Disclosure Schedule, no Plan provides medical, surgical, hospitalization,
death or similar benefits (whether or not insured) for employees or
independent contractors or former employees or independent contractors of
the Company or any Company Subsidiary for periods extending beyond their
retirement or other termination of service, other than (i) coverage
mandated by applicable law or (ii) benefits the full cost of which is borne
by the current or former employee (or his or her beneficiary) or current or
former independent contractor. No condition exists that would prevent the
Company or any Company Subsidiary from amending or terminating any Plan
providing health or medical benefits in respect of any active or retired
employee of the Company or any Company Subsidiary.
(k) No amounts payable under the Plans will fail to be
deductible for federal income tax purposes by virtue of sections 162(a)(1),
162(m) or 280G of the Code or result in the imposition of a Tax under
section 409A of the Code.
(l) The consummation of the transactions contemplated by this
Agreement will not, either alone or in combination with another event, (i)
entitle any current or former employee or independent contractor or officer
of the Company or any ERISA Affiliate to severance pay, unemployment
compensation or any other payment or (ii) accelerate the time of payment or
vesting, or increase the amount of compensation due any such employee or
officer.
(m) There has been no material failure of a Plan that is a
group health plan (as defined in section 5000(b)(1) of the Code) to meet
the requirements of section 4980B(f) of the Code with respect to a
qualified beneficiary (as defined in section 4980B(g) of the Code).
Neither the Company nor any Company Subsidiary has contributed to a
nonconforming group health plan (as defined in section 5000(c) of the Code)
and no ERISA Affiliate of the Company or any Company Subsidiary has
incurred a Tax under section 5000(e) of the Code which is or could become a
liability of the Company or a Company Subsidiary.
(n) There are no pending, or to the knowledge of the Company
or any Company Subsidiary, threatened or anticipated claims by or on behalf
of any Plan, by any employee or beneficiary covered under any such Plan, or
otherwise involving any such Plan (other than routine claims for benefits).
(o) All contributions required to be made by the Company or
any Company Subsidiary with respect to all Foreign Plans have been timely
made. Each Foreign Plan is, and has been, maintained in substantial
compliance with its terms and with the requirements of any and all
applicable laws and has been maintained, where required, in good standing
with the applicable Governmental Entity. The fair market value of the
assets of each funded Foreign Plan, the liability of each insurer for any
Foreign Plan funded through insurance or the book reserve established for
any plan, together with any accrued contributions, is sufficient to procure
or provide for the accrued benefit obligations, as of the Closing, with
respect to all current and former participants in such Foreign Plan.
Neither the Company nor any Company Subsidiary has incurred any obligation
29
in connection with the termination of or withdrawal from any Foreign Plan.
For purposes hereof, the term "Foreign Plan" shall mean any plan, program,
policy, arrangement or agreement maintained or contributed to or by, or
entered into with the Company or any Company Subsidiary with respect to
employees (or former employees) employed outside the United States.
(p) No "leased employees," as that term is defined in section
414(n) of the Code, perform services for the Company or any ERISA
Affiliate. Neither the Company nor any ERISA Affiliate has used the
services of workers provided by third party contract labor suppliers,
temporary employees, such leased employees or individuals who have provided
services as independent contractors to an extent that would reasonably be
expected to result in the disqualification of any Plan or the imposition of
penalties or excise taxes with respect to any Plan by the Internal Revenue
Service, the Department of Labor, or any other Governmental Entity.
(q) With respect to each arrangement maintained at or before
June 30, 2007, for the benefit of any current or former employee or
independent contractor of the Company or any Company Subsidiary or
predecessor thereof that would be a Plan but for the fact that it is not
currently in effect, neither the Company nor any Company Subsidiary has any
ongoing liability with respect to such arrangement, such arrangement was
terminated in accordance with its terms and applicable laws, and Section
4.11(q) of the Company Disclosure Schedule sets forth, for each such
arrangement in effect at any time on or after June 30, 2006, the name of
such arrangement, its sponsor, the type of benefits it provided, and the
manner of its termination.
SECTION 4.12 TAXES. Except as set forth in Section 4.12 of the
Company Disclosure Schedule:
(a) The Company and each Company Subsidiary has duly and
timely filed (or there has been duly and timely filed on its behalf),
including extensions, all Tax Returns required to be filed by it, and all
such Tax Returns are true and complete in all material respects, and (ii)
all Taxes or estimated payments of Taxes for which the Company or any
Company Subsidiary is or may be liable (whether or not shown on any Tax
Return) in respect of periods ending on or before the Closing Date have
been timely paid, will be timely paid or have been provided for on the
Financial Statements in accordance with GAAP. With respect to any period
(or portion thereof) through the Closing Date for which Tax Returns have
not yet been filed, or for which Taxes are not yet due or owing, the
Company and each Company Subsidiary has established due and sufficient
reserves for the payments of such Taxes in accordance with GAAP, and such
current reserves through the Closing Date are duly and fully reflected in
the Financial Statements.
(b) No deficiencies or adjustments for Taxes have been
claimed, proposed or assessed, or to the knowledge of the Company or any
Company Subsidiary, threatened by any taxing or other Governmental Entity
against the Company or any Company Subsidiary that has not been resolved,
and none of the Company or any Company Subsidiary has received any notice,
or otherwise has any knowledge, of any potential claim, proposal or
assessment against the Company or any Company Subsidiary for any such
deficiency or adjustment for Taxes. There are no pending or, to the
knowledge of the Company or any Company Subsidiary, threatened audits,
investigations, claims or other proceedings for or relating to any
liability in respect of Taxes, and there are no matters under discussion
with respect to Taxes between the Company or any Company Subsidiary, on the
one hand, and any Governmental Entity, on the other hand, that are likely
to result in such a claim or proceeding, or an additional liability of the
Company or any Company Subsidiary for Taxes.
(c) No closing agreement pursuant to Section 7121 of the Code
(or any predecessor provision) or any similar provision of any state, local
or foreign law has been entered into by or with respect to the Company or
any Company Subsidiary.
30
(d) Neither the Company nor any Company Subsidiary has agreed
to or is required to make any adjustment pursuant to Section 481(a) of the
Code by reason of any change in method of accounting. Neither the Company
nor any Company Subsidiary has any application pending with any taxing
authority requesting permission for any change in method of accounting.
The IRS has not proposed any such adjustment or change in method of
accounting.
(e) There are no liens for Taxes upon any property or assets
of the Company or any Company Subsidiary, except for liens for Taxes not
yet due and payable or for which adequate reserves have been provided for
on the Financial Statements.
(f) The Company and each Company Subsidiary is, and has been,
in compliance with all applicable laws, rules and regulations relating to
the payment and withholding of Taxes (including withholding of Taxes
pursuant to Sections 1441 and 1442 of the Code or similar provisions under
any state, local or foreign laws) and has duly and timely withheld,
collected, deposited and paid all Taxes required to have been withheld,
collected, deposited or paid under such applicable laws, rules and
regulations.
(g) No claim has ever been made to the Company or any Company
Subsidiary by an authority in a jurisdiction where the Company or Company
Subsidiary has not filed Tax Returns that the Company or such Company
Subsidiary is or may be subject to Tax by that jurisdiction.
(h) There are no outstanding consents, agreements, grants or
requests for the extension or waiver of any statutes of limitations
applicable to any Taxes for which the Company or any Company Subsidiary is
or may be liable.
(i) The Company, as the common parent of an affiliated group
of corporations (as defined in Section 1504 of the Code) consisting solely
of the Company and the current Company Subsidiaries that are corporations
(the "Company Group"), will file its initial consolidated return for United
States federal income Tax purposes on behalf of itself and all Company
Subsidiaries that are corporations that are "includable corporations"
(within the meaning of Section 1504(b) of the Code) for the period July 1,
2007 through June 30, 2008, and neither the Company nor any Company
Subsidiary (i) has been a member of an affiliated group filing a
consolidated federal Tax Return (or similar state or local filing group)
other than the Company Group or (ii) has any liability for Taxes of any
person (other than a member of the Company Group) under Treasury
Regulations Section 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or otherwise.
(j) There are no deferred "intercompany items" (within the
meaning of Treasury Regulations Section 1.1502-13) with respect to
transactions among members of the Company Group, and no member of the
Company Group has an "excess loss account" within the meaning of Treasury
Regulations Section 1.1502-19 with respect to the stock of another member
of such group.
(k) No power of attorney that is currently in force has been
granted with respect to the Company or any Company Subsidiary with respect
to any matters relating to Taxes.
(l) Neither the Company nor any Company Subsidiary is, and
during the five-year period ending on the Closing Date has been, a "United
States Real Property Holding Corporation," as such term is defined in
Section 897(c) of the Code or the Treasury Regulations thereunder, and no
withholding of federal income Tax will be required under Section 1445 in
connection with the transactions contemplated by this Agreement.
31
(m) Neither the Company nor any Company Subsidiary has
received a ruling from any taxing authority or signed an agreement with
respect thereto.
(n) Other than this Agreement, neither the Company nor any
Company Subsidiary is a party to, is bound by, or has any obligation under
any Tax allocation, Tax indemnification or Tax sharing agreement or
arrangement of any kind, whether written or verbal, or any similar
contract.
(o) Neither the Company nor any Company Subsidiary is a party
to or otherwise subject to any arrangement (i) having the effect of or
giving rise to the recognition of a deduction or loss before the Effective
Time, and a corresponding recognition of taxable income or gain after the
Effective Time, or (ii) that would reasonably be expected to have the
effect of or give rise to the recognition of taxable income or gain by the
Company or any Company Subsidiary after the Effective Time without the
receipt of or entitlement to a corresponding amount of cash.
(p) Other than with respect to prior years' Tax Returns that
have already been filed, neither the Company nor any Company Subsidiary has
requested any extension of time within which to file any Tax Return.
(q) The Company and the Company Subsidiaries have not
distributed to their stockholders stock of a controlled corporation, or had
their stock distributed by another company, in a transaction purported or
intended to be governed in whole or in part by Sections 355 or 361 of the
Code, nor has any such entity been a party to a transaction purported or
intended to be governed in whole or in part by Sections 332, 351 or 368 of
the Code.
(r) Neither the Company nor any Company Subsidiary has
entered into any transaction that (i) is the same or substantially similar
to any transaction that the IRS has determined to be a reportable
transaction (as described in Treasury Regulations Section 1.6011-4 (a) and
(c)(4) (or any successor provisions)) in a notice, regulation or other form
of published guidance, (ii) was required to be registered as a "tax
shelter" under Section 6111 of the Code and the Treasury Regulations
promulgated thereunder, or (iii) for which a list is required to be
maintained under Section 6112 of the Code and Treasury Regulations
promulgated thereunder.
(s) No indebtedness of the Company or any Company Subsidiary
consists of "corporate acquisition indebtedness" within the meaning of
Section 279 of the Code.
(t) Neither the Company nor any Company Subsidiary has
entered into any sale leaseback or leveraged lease transaction that fails
to satisfy the requirements of Revenue Procedure 75-21 or Revenue Procedure
2001-28 (or similar provisions of foreign law) or any safe harbor lease
transaction. None of the Company's property nor any Company Subsidiaries'
property is tax-exempt use property within the meaning of Section 168(h) of
the Code.
(u) To the knowledge of the Company, any Company Subsidiary
that is classified for Tax purposes as a partnership, grantor trust, or
disregarded entity (a "Pass Through Subsidiary") has been taxed as a
partnership, grantor trust, or disregarded entity at all times since the
date on which such entity was formed. Each Pass Through Subsidiary has
filed all elections, certificates, or other documents that are necessary to
obtain and maintain its status as a partnership, grantor trust, or
disregarded entity, as the case may be. Any such election, certificate, or
other document was duly and timely filed, and no such election,
certificate, or other document has been amended, revoked, or otherwise
withdrawn.
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(v) Except as set forth in Section 4.12(v) of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary has
ever been an S corporation (within the meaning of Section 1361(a)(1) of the
Code) or a qualified subchapter S subsidiary (within the meaning of Section
1361(b)(3) of the Code). Each Company Subsidiary that is listed in Section
4.12(v) of the Company Disclosure Schedule as having been an S corporation
or a qualified subchapter S subsidiary ("QSUB") has, for all taxable years
or periods during which it filed tax returns as an S corporation or QSUB,
as the case may be, (i) qualified as an S Corporation or QSUB, as the case
may be, within the meaning of Section 1361 of the Code and all comparable
provisions of applicable state or local Tax laws, (ii) duly and timely
filed all elections, certificates, or other documents that were necessary
to obtain and maintain its status as an S corporation or QSUB, as the case
may be, (iii) did not amend, revoke, or otherwise withdraw any such
election, certificate, or other document that was necessary to obtain and
maintain its status as an S corporation or QSUB, as the case may be, and
(iv) did not incur or become subject to any liability for Tax under
Sections 1374 or 1375 of the Code with respect to any such taxable year or
period.
(w) All material elections with respect to Taxes affecting
the Company or any Company Subsidiary have been disclosed or attached to
the Tax Returns of the Company and any Company Subsidiary.
(x) To the knowledge of the Company or any Company
Subsidiary, no issue has been raised in any examination by any Governmental
Entity, which if known to the IRS or any other Governmental Entity, would
constitute grounds for the assessment of any Tax liability with respect to
periods that have not been audited, or that are currently under audit, by
the IRS or such other Governmental Entity.
(y) All transactions that would give rise to an
understatement of the United States federal income tax liability of the
Company or any Company Subsidiary within the meaning of Section 6662(d) of
the Code are adequately disclosed on Tax Returns in accordance with Section
6662(d)(2)(B) of the Code.
(z) Any related party transactions conducted by the Company
or any Company Subsidiary have been on an arms-length basis in accordance
with Section 482 of the Code and related Treasury Regulations.
"Tax" or "Taxes" shall mean any and all taxes, charges, fees, duties,
levies or other assessments of any kind whatsoever, however denominated,
imposed by law, which taxes shall include, but not be limited to all net
income, gross income, gross receipts, excise, alternative minimum, add-on
minimum, windfall profit, paid up capital, capital stock, greenmail, stamp,
custom, duty, real or personal property, natural resources, ad valorem,
value added, sales, employee or other withholding, estimated, social
security, employment, unemployment, occupation, use, service, service use,
license, net worth, payroll, franchise, environmental (including taxes
under Section 59A of the Code), severance, transfer, recording, escheat,
registration, documentation, workers' compensation, impact, hospital,
health, disability or other taxes, whether computed on a separate,
consolidated, unitary, combined, affiliated or any other basis, and any
interest, penalties, fees, charges, assessments, duties, tariffs, imposts
or additions to tax attributable thereto. "Tax Return" shall include any
report, return, document, declaration, statement, election or other filing,
including a schedule, statement or certificate and any amendment to any of
the foregoing filed or required to be filed in connection with the
determination, assessment, or collection of any Tax or the administration
of any laws, regulations or administrative requirements relating to any
Tax.
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SECTION 4.13 CONTRACTS. Section 4.13 of the Company Disclosure
Schedule lists (other than agreements of the type specified in Section
4.13(g)(ii), which need not be listed) as of the date hereof, each note,
bond, mortgage, lien, indenture, lease, license, contract, agreement,
statement of work, purchase order, arrangement or understanding or other
instrument or obligation to which the Company or any Company Subsidiary is
a party or by which any of them or any of their respective properties or
assets may be bound (the "Company Agreements") of the following types (such
Company Agreements, whether or not listed on Section 4.13 of the Company
Disclosure Schedule, being referred to hereinafter as the "Listed Company
Agreements"):
(a) any lease of, or agreement to purchase or sell, any
capital assets accounted for as such by the Company or any Company
Subsidiary, which individually involves payments in excess of $250,000;
(b) any management, consulting, employment, personal service,
independent contractor, agency or other contracts or contracts providing
for employment or rendition of personal services and which (i) are in
writing or oral and create other than an at will relationship; or (ii)
provide for any profit sharing, severance, retirement or similar
compensation in excess of $100,000 for personal services, other than any of
the forgoing that will terminate at or prior to the Effective Time without
any further liabilities or obligations on the part of the Company or any of
its affiliates;
(c) any property management or facilities management
agreement or other agreement pursuant to which the Company or any Company
Subsidiary provides any facilities services;
(d) any agreement or note evidencing any indebtedness or any
guaranty of performance of another Person or creating any Encumbrance;
(e) any power of attorney (whether revocable or irrevocable)
given to any Person by the Company or any Company Subsidiary that is in
force;
(f) any agreement which purports to limit in any respect the
manner in which, or the localities in which, the Company, any Company
Subsidiary or any other entity is entitled to conduct all or any portion of
its business;
(g) (i) any partnership, joint venture, strategic alliance or
similar arrangement and (ii) any agreement with a client that operates as
an exclusive, preferred, or master agreement for the provision of
transaction services, for more than one transaction, in a particular
market, region, or the country, which provides for or results in revenue in
excess of $200,000;
(h) any agreement or arrangement with any Related Party of
the Company or any Company Subsidiary required to be listed on Schedule
4.16 of the Company Disclosure Schedule (a "Related Party Agreement");
(i) any agreement by which the Company or any Company
Subsidiary indemnifies or holds harmless any other Person other than client
agreements entered into in the ordinary course of business consistent with
past practice;
(j) any lease of real property (including all amendments,
modifications and supplements thereto) (a "Real Property Lease");
34
(k) any agreement pursuant to which the Company or a Company
Subsidiary (i) is granted or obtains any right to use or register any
material Intellectual Property, but excluding any standard form click wrap
or shrink wrap agreement with respect to "off-the-shelf" software, (ii) is
restricted in its right to use or register any Intellectual Property, or
(iii) permits any other Person to use or register, any Intellectual
Property, including license agreements, settlement agreements, coexistence
agreements and covenants not to xxx ("IP Agreements");
(l) any agreement involving the acquisition, merger or
purchase of the assets constituting a business;
(m) any design and construction consulting services, economic
development or other agreement pursuant to which the Company or any Company
Subsidiary provides any consulting or development services which involve
over $200,000 of revenue; and
(n) any other agreement which involves annual payments to or
from the Company and the Company Subsidiaries of an amount in excess of
$200,000 and which cannot be terminated without a penalty or requiring more
than 60 days' prior notice; and
(o) any Company Agreement with a Governmental Entity (each, a
"Government Contract") or any outstanding quotation, bid, proposal, or
application that if accepted or awarded, would lead to a Company Agreement
with a Governmental Entity (each, a "Proposal").
Except with respect to Listed Company Agreements described in Section
4.13(g)(ii), true and complete copies of the written Listed Company
Agreements and descriptions of oral Listed Company Agreements, if any,
including in each case any amendment or supplement thereto, have been made
available to Parent. Each of the Listed Company Agreements (other than the
Listed Company Agreements described in Section 4.13(g)(ii)) is, and to the
knowledge of the Company or any Company Subsidiary, each of the Listed
Company Agreements described in Section 4.13(g)(ii) is, in full force and
effect and constitutes the legal and binding obligation of the Company
and/or the Company Subsidiaries party thereto and, to the knowledge of the
Company or any Company Subsidiary, constitutes the legal and binding
obligation of the other parties thereto. There are no existing material
breaches or defaults by the Company or any Company Subsidiary or, to the
knowledge of the Company or any Company Subsidiary, any other party to a
Listed Company Agreement under any Listed Company Agreement and, to the
knowledge of the Company or any Company Subsidiary, no event has occurred
which, with the passage of time or the giving of notice or both, could
reasonably be expected to constitute such a breach or default.
SECTION 4.14 REAL AND PERSONAL PROPERTY.
(a) Except as disclosed in Section 4.14(a) of the Company
Disclosure Schedule, each of the Company and the Company Subsidiaries has
good and indefeasible title to, or valid leasehold interests in, all its
properties and assets, free and clear of, and not subordinate to, any and
all Encumbrances other than (i) liens securing Taxes and other ordinary
course governmental obligations which are not yet due and payable, may be
paid without penalty or are being contested in good faith through
appropriate proceedings, (ii) mechanics', carriers', workmen's,
warehousemen's, repairmen's or other similar liens arising in the ordinary
course of business from amounts that are not yet due and payable and that
would not, individually or collectively, materially detract from the use or
value of the property subject thereto or collectively would not reasonably
be expected to result in a Company Material Adverse Effect or that are
being contested in good faith, with bond, in appropriate proceedings, (iii)
liens arising under any original purchase price conditional sales contracts
with third parties, (iv) easements, rights-of-way, covenants, restrictions
and other similar encumbrances incurred in the ordinary course of business
that, in the aggregate, are not material in amount and that do not, in any
35
case, materially detract from the use or value of the property subject
thereto, (v) any liens set forth in any applicable lease agreement with
respect thereto and (vi) other minor imperfections of title, restrictions
or encumbrances not related to indebtedness, if any, which do not
materially impair the ownership, operation or continued use of the specific
asset to which they relate (collectively, the "Permitted Encumbrances").
(b) Except as set forth on Section 4.14(b) of the Company
Disclosure Schedule, there are no past or present, and to the Company's
knowledge threatened, claims, actions, causes of action, investigations or
notices, whether written or oral, related in any way whatsoever to the
ownership, operation, use, possession, leasing, or management of, or
investment in, any real property that the Company or any of the Company
Subsidiaries owns or has owned (or is deemed to own or have owned)
(collectively, the "Owned Real Property"), and the Company and Company
Subsidiaries have no retained, assumed, or contingent liability of any kind
related to such Owned Real Property.
(c) Section 4.14(c) of the Company Disclosure Schedule sets
forth a true and complete list of all real property leased or subleased by
the Company or any Company Subsidiary pursuant to a Real Property Lease
(collectively, the "Leased Real Property ). Each of the Company and the
Company Subsidiaries enjoys peaceful and undisturbed possession under all
Real Property Leases and there are no material disputes or oral agreements
in effect as to such Real Property Leases. Except as disclosed on Section
4.14(c) of the Company Disclosure Schedule, no landlord under any Real
Property Lease has any claims pending, or to the knowledge of the Company
or any Company Subsidiary, threatened, against the Company or any Company
Subsidiary as a tenant thereunder. Neither the Company nor any Company
Subsidiary is a party to any lease, assignment or similar arrangement under
which the Company or any Company Subsidiary is a lessor, sublessor,
assignor or otherwise makes available for use by any third party any
portion of the Leased Real Property, except as set forth on Section 4.14(c)
of the Company Disclosure Schedule.
(d) The Company and the Company Subsidiaries have made
available to Parent true and complete copies of the Real Property Leases
(including all amendments, modifications and supplements thereto).
(e) To the knowledge of the Company or any Company
Subsidiary, the obligations of the Company or the Company Subsidiaries, as
applicable, with regard to all applicable easements, covenants, and
restrictions encumbering the Leased Real Property have been and are being
performed in a proper and timely manner by the Company and the Company
Subsidiaries. Except as set forth on 4.14(e) of the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary is currently in
default under any agreement, order, judgment or decree relating to the
Leased Real Property, and no conditions or circumstances exist which, with
the giving of notice or passage of time, would constitute a default or
breach with respect to the foregoing.
(f) The Company and the Company Subsidiaries have obtained,
and currently maintain, all appropriate certificates of occupancy,
licenses, permits, and approvals to use and operate the Leased Real
Property in the manner in which the Leased Real Property is currently being
used and operated and neither the Company nor any Company Subsidiary has
received notice of any threatened suspension, modification or cancellation
of such certificates of occupancy, licenses, permits, and approvals.
36
SECTION 4.15 INTELLECTUAL PROPERTY.
(a) As used herein, the following terms have the following
meanings:
(i) "Intellectual Property" means any and all
intellectual property including all: (i) trademarks, service marks,
trade names, trade dress, designs, logos, slogans, and other source
or business identifiers, together with goodwill connected therewith
or symbolized thereby, and registrations and applications for any of
the foregoing (collectively, "Trademarks"); (ii) Internet domain
names (collectively, "Domain Names"); (iii) issued patents, pending
patent applications and patent disclosures and any divisions,
continuations, continuations-in-part, reissues, re-examinations and
extensions thereof (collectively, "Patents"); (iv) copyrights
(including copyrights in Software, databases, compilations, and
websites), and mask work rights, including registrations,
applications and renewals for any of the foregoing (collectively,
"Copyrights"); (v) proprietary rights in and to computer programs and
software (whether in source code, object code, or other form) and in
and to copies and tangible embodiments thereof (in whatever form or
medium) (collectively, "Software"); (vi) trade secrets and
confidential business information and know how (collectively, "Trade
Secrets"), and (vii) the right to use the names, likenesses and
personal information of natural persons.
(ii) "Staubach IP" means the following Intellectual
Property used in connection with the Tenant Rep Business and the
other businesses of the Company and The Staubach Company and/or the
Company Subsidiaries acquired by Parent as a result of the Merger:
(i) the trademarks and service marks set forth on Schedule 1 to the
Name Assignment and License Amendment; (ii) the common law rights in
the marks currently using the name "Staubach" whether alone, in
composite form or any formatives thereof; (iii) the trade names set
forth on Schedule 2 to the Name Assignment and License Amendment;
(iv) the Domain Names set forth on Schedule 3 to the Name Assignment
and License Amendment; (v) all trademarks, service marks, trade
dress, logos, designs, trade names, and corporate names using the
name, "Staubach," whether alone or in combination with other terms or
symbols, together with all translations, adaptations, derivations,
and combinations thereof, and including all goodwill associated
therewith, and all applications, registrations, and renewals thereof;
and (vi) Xxxxx X. Xxxxxxxx'x name and likeness.
(b) Section 4.15(b) of the Company Disclosure Schedule sets
forth a true and complete list of all of the following domestic and/or
foreign intellectual property owned by the Company and/or one of the
Company Subsidiaries, as indicated: (i) Patents, (ii) registered and
applied for trademarks and service marks, (iii) Domain Names currently used
in the Tenant Rep Business and the other businesses of the Company and The
Staubach Company and the other Company Subsidiaries acquired by Parent as a
result of the Merger, and Domain Names that will be transferred to the
entity to which certain dispositions are to be made pursuant to Section
7.9, together which comprise all of the Domain Names owned by the Company
and/or one of the Company Subsidiaries; and (iv) registered and applied-for
Copyrights. The Company or one of the Company Subsidiaries is the sole
owner of each item of Intellectual Property listed on Section 4.15(b) of
the Company Disclosure Schedule and currently is listed in the records of
the appropriate domestic or foreign agency as the sole owner of record for
each application and registration listed on Section 4.15(b) of the Company
Disclosure Schedule.
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(c) Section 4.15(c) of the Company Disclosure Schedule sets
forth a true and complete list of all of the following domestic and/or
foreign intellectual property owned by Xxxxx X. Xxxxxxxx and Xxxxxxxx X.
Xxxxxxxx, individually or jointly: (i) registered and applied for
trademarks and service marks, (ii) Domain Names currently used in the
Tenant Rep Business and/or the other businesses of the Company and The
Staubach Company and the other Company Subsidiaries acquired by Parent as a
result of the Merger. Xxxxx X. Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx,
individually or jointly, are the sole owners of each item listed on Section
4.15(c) of the Company Disclosure Schedule. Each item listed on Section
4.15(c) of the Company Disclosure Schedule is either listed (to the extent
permitted by law with respect to the Domain Names having a foreign country
code listed on Section 4.15(c) of the Company Disclosure Schedule), or is
in the process of being listed, in the records of the appropriate domestic
or foreign agency showing Xxxxx X. Xxxxxxxx, individually, or Xxxxx X.
Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx, jointly, as owner(s) of record.
(d) Section 4.15(d) of the Company Disclosure Schedule sets
forth a true and complete list of (i) all material Software which is owned
by the Company or any Company Subsidiary ("Proprietary Software") and (ii)
all material Software which is licensed, leased or otherwise used by the
Company or any Company Subsidiary in their respective business.
(e) Except as set forth in Section 4.15(e) of the Company
Disclosure Schedule:
(i) The Company and each Company Subsidiary owns, or
possesses rights to use, all material Intellectual Property owned by
the Company or used in the Company's or any Company Subsidiary's
business as currently conducted, free and clear of all Encumbrances,
and, except pursuant to the IP Agreements, the Company and Company
Subsidiaries have not granted any rights to such Intellectual
Property to any Person;
(ii) Xxxxx X. Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx,
individually or jointly, own the Staubach IP, free and clear of all
Encumbrances; neither Xxxxx X. Xxxxxxxx or Xxxxxxxx X. Xxxxxxxx, nor
the Company and Company Subsidiaries, have granted any rights to any
Staubach IP to any Person except, as to the Company and the Company
Subsidiaries, pursuant to the IP Agreements and, as to Xxxxx X.
Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx, pursuant to the Name Assignment
and License Agreement and as set forth in Section 2.3 of the Second
Amendment to the Name Assignment and License Agreement;
(iii) Subject to Section 6.1(p), (A) all required filings
and fees necessary to maintain Intellectual Property items set forth
on Sections 4.15(b) and 4.15(c) of the Company Disclosure Schedule in
full force and effect have been timely made or paid, as applicable,
and (B) the items of Intellectual Property set forth in Sections
4.15(b) and 4.15(c) of the Company Disclosure Schedule are
subsisting, unexpired, and, to the knowledge of the Company and
Company Subsidiaries, valid and enforceable;
(iv) No claims are pending or, to the knowledge of the
Company or any Company Subsidiary, threatened by any Person against
the Company or any Company Subsidiary, challenging the Company's or
any Company Subsidiary's rights to own or use any Intellectual
Property, or the validity or enforceability of any Intellectual
Property, and neither the Company nor any Company Subsidiary has
knowledge of any valid basis for such a claim;
(v) No claims are pending or, to the knowledge of the
Company or any Company Subsidiary, threatened by any Person against
Xxxxx X. Xxxxxxxx, Xxxxxxxx X. Xxxxxxxx, the Company, or any Company
Subsidiary, challenging their respective rights to own or use any
Staubach IP, or the validity or enforceability of any Staubach IP,
and neither the Company nor any Company Subsidiary has knowledge of
any valid basis for such claim;
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(vi) To the knowledge of the Company or any Company
Subsidiary, the conduct of the Tenant Rep Business as currently
conducted and in the conduct of the other businesses of the Company
and The Staubach Company and the other Company Subsidiaries acquired
by Parent as a result of the Merger as such businesses are currently
conducted, does not infringe, misappropriate or otherwise violate any
valid Intellectual Property rights of any Person;
(vii) To the knowledge of the Company or any Company
Subsidiary, no Person is infringing, misappropriating or otherwise
violating any material Intellectual Property owned or used by the
Company or any Company Subsidiary (including the Staubach IP); and no
such claims have been asserted or threatened against any Person by
the Company or a Company Subsidiary, or by Xxxxx X. Xxxxxxxx or
Xxxxxxxx X. Xxxxxxxx, which remain unresolved;
(viii) Reasonable measures have been taken by the Company
and the Company Subsidiaries to protect the confidentiality of their
respective material Trade Secrets; to the knowledge of the Company or
any Company Subsidiary, no material Trade Secret of the Company or
any Company Subsidiary has been disclosed to any third party other
than pursuant to a written nondisclosure agreement or an IP
Agreement;
(ix) The Company and the Company Subsidiaries are, and
have been, in compliance with all applicable laws, rules, and
regulations, and their own, policies, and procedures, relating to
privacy, data protection, and the collection and use of personal
information except as would not, individually or in the aggregate,
reasonably be expected to result in a Company Material Adverse
Effect. No claims are pending or, to the knowledge of the Company or
any Company Subsidiary, threatened against the Company or any Company
Subsidiary, alleging a violation of any Person's privacy, personal
information, or data rights, and the consummation of the transactions
contemplated by this Agreement will not result in any such violation.
The Company and the Company Subsidiaries have taken reasonable
measures to ensure that such information is protected against
unauthorized access, use, modification, or other misuse;
(x) The consummation of the transactions contemplated
hereby or by any Ancillary Agreement will not result in the loss or
impairment of or payment of any additional amounts with respect to
the Company's or any Company Subsidiary's rights to own, use, or hold
for use any Intellectual Property other than the amounts payable
pursuant to the Name Assignment and License Agreement; and
(xi) No former or present shareholder, officer or
director or employee of the Company or any Company Subsidiary,
including Xxxxx X. Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx and no affiliate
of the Company or any Company Subsidiary which will, prior or upon
the Closing Date become unaffiliated with the Company or any Company
Subsidiary, will, after giving effect to the transactions
contemplated hereby or by any Ancillary Agreement, retain any rights
to use any of the Intellectual Property owned by the Company or any
Company Subsidiary except pursuant to the transition services
agreement contemplated by Section 7.9 and the Intellectual Property
to be transferred to Staubach Retail Services, Inc. pursuant to
Section 4.8 and to the entity to which certain dispositions are to be
made pursuant to Section 7.9.
39
SECTION 4.16 RELATED PARTY TRANSACTIONS. Except as set forth on
Section 4.16 of the Company Disclosure Schedule, as of the Effective Time,
any agreement (other than (a) agreements in respect to travel and expense
account reimbursement in the ordinary course of business consistent with
past practice, (b) employment, independent contractor or compensation
arrangements, (c) confidentiality agreements, whether entered into in
connection with this Agreement or otherwise and (d) the various
Contribution Agreements entered into in connection with the Company's 2007
reorganization transaction) between Company or any Company Subsidiary, on
the one hand, and any current or former (to the extent there exist any
obligations of the Company or any Company Subsidiary continuing after the
Effective Time) shareholders, directors, officers or employees of the
Company or any Company Subsidiary and any members of the immediate family,
affiliates or, to the knowledge of the Company and any Company Subsidiary,
associates, of any of the foregoing (each, a "Related Party"), on the other
hand, shall be terminated and of no force and effect. Except as set forth
in Section 4.16 of the Company Disclosure Schedule, no person set forth on
Section 8.3(i)(i) of the Company Disclosure Schedule (or any members of the
immediate family, affiliates or associates of such person) owns, directly
or indirectly, any interest in (excepting not more than one percent (1%)
stock holdings for investment purposes in securities of publicly-held and
traded companies) or is an officer, director, employee or consultant of any
Person that is a competitor, lessor, lessee, customer or supplier of the
Company or any Company Subsidiary; and no Related Party has any interest in
any property, real or personal, tangible or intangible of the Company or
any Company Subsidiary.
SECTION 4.17 LABOR MATTERS. Except as set forth in Section 4.17 of
the Company Disclosure Schedule:
(a) There are no grievances, or arbitrations pending, or, to
the knowledge of the Company or any Company Subsidiary, threatened, between
the Company or any Company Subsidiary, on the one hand, and any of their
respective current or former employees or labor organizations representing
such employees, on the other hand. No labor union, group of employees, or
other employee organization or representative of the foregoing has sought
to organize employees of the Company or any Company Subsidiary, nor has any
question concerning representation existed involving such employees.
Neither the Company nor any Company Subsidiary is a party to or bound by
any collective bargaining agreements, memoranda of understanding, work
rules or practices or any other agreements or arrangements with a labor
union, organization, association or works council. To the knowledge of the
Company or any Company Subsidiary, there are no labor union organizing
activities involving any employees of the Company or any Company
Subsidiary.
(b) There are no written personnel policies, rules or
procedures applicable to employees of the Company or any Company Subsidiary
other than those listed on Section 4.17(b) of the Disclosure Schedule, true
and complete copies of which have been made available to Parent.
(c) The Company and all Company Subsidiaries are, and have
been, in compliance in all material respects with all applicable laws
respecting employment and employment practices, including all laws
respecting terms and conditions of employment, classification of employees
for purposes of entitlement to overtime pay, health and safety, wages and
hours, immigration, employment discrimination, disability rights or
benefits, equal opportunity, plant closures and layoffs, affirmative
action, workers' compensation, labor relations, employee leave issues and
unemployment insurance.
(d) Neither the Company nor any Company Subsidiary nor any of
their respective employees, agents or representatives is or has engaged in
an unfair labor practice as defined in the National Labor Relations Act or
similar foreign law, and there is no unfair labor practice charge,
complaint or other allegation of labor law violation against the Company or
any Company Subsidiary pending before the National Labor Relations Board or
any other Governmental Entity.
40
(e) There has been no and there is no actual or threatened
labor dispute, strike, slowdown, work stoppage or lockout and, to the
knowledge of the Company or any Company Subsidiary, no such action is
threatened against or affecting the Company or any Company Subsidiary.
(f) Neither the Company nor any Company Subsidiary has
received notice of any actual or threatened suit, charge, complaint, claim,
action, litigation, arbitration, or proceeding against the Company or any
Company Subsidiary with respect to current or former employees, applicants
for employment, or classes of the foregoing pending before the Equal
Employment Opportunity Commission or any other Governmental Entity or in
any other forum regarding an unlawful employment practice, breach of any
express or implied contract of employment, any law or regulation governing
employment or the termination thereof or other discriminatory, wrongful or
tortuous conduct in connection with the employment relationship.
(g) Since the enactment of the Worker Adjustment and
Retraining Notification Act (the "WARN Act"), (i) neither the Company nor
any Company Subsidiary has effectuated a "plant closing" (as defined in the
WARN Act) affecting any site of employment or one or more facilities or
operating units within any site of employment or facility, (ii) there has
not occurred a "mass layoff" (as defined in the WARN Act) affecting any
site of employment or facility of either the Company or any Company
Subsidiary, (iii) neither the Company nor any Company Subsidiary has
engaged in layoffs or employment terminations sufficient in number to
trigger application of the WARN Act or any similar state, local or foreign
law or regulation, (iv) no employee of the Company or any Company
Subsidiary has suffered an "employment loss" (as defined in the WARN Act or
any similar state, local or foreign law) during the six-month period prior
to the date of this Agreement and (v) neither the Company nor any Company
Subsidiary have any outstanding liabilities pursuant to the WARN Act or any
other similar state, local or foreign law.
(h) The Company and/or one or more Company Subsidiary is a
"contractor" or "subcontractor" (as defined by Executive Order 11246), and
the Company and the Company Subsidiaries are in compliance in all material
respects with any obligations under Executive Order 11246, including the
maintenance of an affirmative action plan.
(i) Neither the Company nor any Company Subsidiary is
delinquent in any payments to any employees or former employees for any
services or amounts required to be reimbursed or otherwise paid.
(j) To the knowledge of the Company or any Company
Subsidiary, no employee or independent contractor of the Company or any
Company Subsidiary, is in violation of any (i) term of any employment
agreement, nondisclosure agreement or non-competition agreement with any
former employer or entity for which such person served as an independent
contractor, or (ii) common law nondisclosure obligation, restrictive
covenant or other obligation or fiduciary duty or other legal duty under
any law for the benefit of any former employer or entity for which such
employee served as an independent contractor, in each of clause (i) and
(ii), relating to (x) the right of any such employee or independent
contractor to be employed or retained by the Company or any Company
Subsidiary or (y) the knowledge or use of trade secrets or proprietary
information in the course of such employment or relationship with a
Company.
(k) As of the date hereof, to the knowledge of the Company or
any Company Subsidiary, no current officer, employee, sales representative
or independent contractor of any of the Company or any Company Subsidiary
with an annual compensation or payment in excess of $500,000 has given
notice of termination of his or her employment or services, whether on
account of the transactions contemplated by this Agreement or for any other
reason.
41
(l) The Company and each Company Subsidiary has at all times
(i) properly classified, under applicable law, each of its employees as
employees, and each of its independent contractors as independent
contractors, and has treated each person classified by it as an employee or
independent contractor consistently with such status and (ii) there is no
proceeding pending or to the knowledge of Company or any Company
Subsidiary, threatened against the Company or any Company Subsidiary
challenging the classification of any person as an employee or an
independent contractor, including any claim for unpaid benefits, for or on
behalf of, any such person. To the knowledge of the Company or any Company
Subsidiary, neither the Company nor any Company Subsidiary is liable for
any arrears of wages or other payments or any penalty relating to the
classification of individuals as independent contractors or employees.
(m) Section 4.17(m) of the Company Disclosure Schedule
contains a true and complete list, as of the date hereof and as of the
Closing Date, of all Persons who perform services for the Company or any
Company Subsidiary and identifies for each such Person: (i) their job title
and classification as an employee or independent contractor; (ii) their
date of hire or engagement; and (iii) whether such Person is active or
inactive.
SECTION 4.18 COMPLIANCE WITH LAWS; PERMITS.
(a) Except as set forth in Section 4.18(a) of the Company
Disclosure Schedule or which would not, individually or in the aggregate,
reasonably be expected to result in a Company Material Adverse Effect, (i)
the Company and the Company Subsidiaries have complied in a timely manner,
with all laws, rules and regulations, ordinances, judgments, decrees,
orders, writs and injunctions of all Governmental Entities which affect the
business, properties or assets of the Company and the Company Subsidiaries
and (ii) no notice, charge, claim, action or assertion has been received by
the Company or any Company Subsidiary or has been filed, commenced or, to
the knowledge of the Company or any Company Subsidiary, threatened against
the Company or any Company Subsidiary alleging any violation of any of the
foregoing, including, without limitation, as required by any Government
Contract or Proposal.
(b) The Company and each Company Subsidiary is and has been
in possession of all material franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates,
approvals and orders from Governmental Entities (collectively, the "Company
Permits"), that are necessary to own, lease and operate its properties and
to carry on its business as owned, leased, operated or carried on as of the
date of this Agreement. The Company Permits are in full force and effect,
and there is no action, proceeding or investigation pending or, to the
knowledge of the Company or any Company Subsidiary, threatened regarding
suspension or cancellation of the Company Permits. Section 4.18(b) of the
Company Disclosure Schedule contains a true and complete list of each
broker of record of the Company or any Company Subsidiary and the
jurisdictions in which such broker is registered.
SECTION 4.19 ASSETS.
(a) The assets and properties of the Company and the Company
Subsidiaries, considered as a whole, constitute, and as of the Effective
Time and after giving effect to the consummation of the Business
Dispositions, will constitute, all of the assets and properties which are
necessary to conduct the business and operations of the Company and the
Company Subsidiaries as presently conducted.
42
(b) Section 4.19(b) of the Company Disclosure Schedule sets
forth a complete listing of all bank accounts opened in the name of the
Company or any of its Subsidiaries. Prior to the Closing Date, the Company
shall provide to Parent a complete listing of all bank accounts maintained
in the name of the Company, including, but not limited to (a) the name and
address of each bank in which the Company has an account or safe deposit
box, (b) account numbers, authorization limits and names of all people
authorized to draw thereon or to have access thereto, (c) the purpose,
current use of said accounts, (d) any banking software, internet access via
banking portals or other modes of bank account access used for all said
accounts and (e) the name of each person, corporation, firm association or
business organization, entity or enterprise holding a general or special
power of attorney from the Company and a summary of the terms thereof.
SECTION 4.20 SIGNIFICANT CLIENTS. Section 4.20 of the Company
Disclosure Schedule sets forth (a) the names of the twenty largest clients
for each of the Tenant Rep Business and the Company's design and
construction consulting business, as measured by combined revenue
("Significant Clients"), of the Company and Company Subsidiaries during the
9-month period ended March 31, 2008 and (b) on a combined basis, the total
revenue received in such period from each such Significant Client. Except
as set forth in Section 4.20 of the Company Disclosure Schedule, no
Significant Client as of the date hereof, (i) has ceased, or indicated to
the Company or any Company Subsidiary that it shall cease, to use the
services of the Company or any Company Subsidiary, (ii) has made any claim
against the Company or any Company Subsidiary or (iii) has sought, or is
seeking, to renegotiate the terms of any contract under which the Company
or any Company Subsidiary is providing services to such Significant Client,
including in each case after the consummation of the transactions
contemplated hereby or by any Ancillary Agreement. True and complete
copies of all such dispute or termination notices (or a written description
of any oral dispute or termination notice) shall have been made available
to Parent.
SECTION 4.21 ENVIRONMENTAL MATTERS.
(a) The following terms shall have the following meanings for
the purposes of this Agreement:
(i) "Environmental Laws" shall mean all federal, state
and local laws, regulations, rules and ordinances relating to
pollution or protection of the environment or human health and
safety, including laws, regulations, rules and ordinances relating to
the emission, discharge, disposal, release or threatened release of
Hazardous Substances into the environment or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, release, transport or handling of Hazardous Substances; all
laws and regulations with regard to record-keeping, notification,
disclosure and reporting requirements respecting Hazardous
Substances; all laws relating to endangered or threatened species of
fish, wildlife and plants and the management or use of natural
resources; and common law to the extent it relates to or applies to
exposure to or impact of Hazardous Substances on persons or property.
(ii) "Environmental Claim" shall mean any claim, action,
cause of action, investigation or notice (written or oral) by any
person or entity alleging potential liability (including potential
liability for investigatory costs, cleanup costs, governmental
response costs, natural resource damages, property damages, personal
injuries or penalties) arising out of, based on or resulting from (a)
the presence, or release into the environment, of any Hazardous
Substance or (b) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.
43
(iii) "Hazardous Substances" means all substances defined
as Hazardous Substances, Oils, Pollutants or Contaminants in the
National Oil and Hazardous Substances Pollution Contingency Plan, 40
C.F.R. Subsection 300.5, toxic mold, or defined as such by, or
regulated as such under, any Environmental Law.
(b) Except as set forth in Section 4.21(b) of the Company
Disclosure Schedule:
(i) The Company, each Company Subsidiary and the
operations conducted at each property owned, leased, managed, or
otherwise operated by the Company or any Company Subsidiary are, and
have been, in compliance in all material respects with all applicable
Environmental Laws, which compliance includes, but is not limited to,
the possession of all permits and governmental authorizations
required under applicable Environmental Laws, and compliance with the
terms and conditions thereof. Neither the Company nor any Company
Subsidiary has received any communication (written or oral), whether
from a Governmental Entity, citizens group, employee or otherwise,
that alleges that the Company, any Company Subsidiary or the
operations conducted at each property owned, leased, managed, or
otherwise operated by the Company or any Company Subsidiary are not
in such material compliance, and, to the knowledge of the Company or
any Company Subsidiary, there are no circumstances that may prevent
or interfere with such full compliance in the future. All permits
and other governmental authorizations currently held by the Company
or any Company Subsidiary pursuant to the Environmental Laws are
identified in Section 4.21(b) of the Company Disclosure Schedule.
(ii) There is no Environmental Claim pending or
threatened: (x) against the Company or any of the Company
Subsidiaries or, to the knowledge of the Company or any Company
Subsidiary, against any person or entity whose liability for any
Environmental Claim the Company or any of the Company Subsidiaries
has or may have retained or assumed either contractually or by
operation of law or (y) involving the operations conducted at any
property owned, leased, managed, or otherwise operated by the Company
or any Company Subsidiary.
(iii) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including the
release, emission, discharge, presence or disposal of any Hazardous
Substance that could reasonably be expected to form the basis of any
Environmental Claim against the Company or any of the Company
Subsidiaries or, to the knowledge of the Company or any Company
Subsidiary, against any person or entity whose liability for any
Environmental Claim the Company or any of the Company Subsidiaries
has or may have retained or assumed either contractually or by
operation of law.
(iv) The Company has made available to Parent all
reports, assessments, investigations, studies, analytical results,
audits, tests, sampling results and monitoring data relating to (1)
the discharge, disposal, arrangement for disposal, release or
threatened release of Hazardous Substances by the Company or any
Company Subsidiary or affecting any properties currently or formerly
owned, leased, managed or otherwise operated by the Company or any
Company Subsidiary of the Company or any Company Subsidiary, (2) any
Environmental Claim against the Company, any Company Subsidiary, or
any property currently or formerly owned, leased, managed or
otherwise operated by the Company or any Company Subsidiary or (3)
otherwise relating to the Company's or any Company Subsidiaries'
liability under or compliance with Environmental Laws, in each case,
that are material and in the Company's or a Company Subsidiaries'
possession or control.
44
SECTION 4.22 INSURANCE. Section 4.22 of the Company Disclosure
Schedule contains an accurate and complete list of all material policies of
fire, liability, workmen's compensation and other forms of insurance owned
or held by the Company and each Company Subsidiary. All such policies are
in full force and effect, all premiums payable under such policies have
been paid in a manner such that the policies continue to be in force, the
Company and the Company Subsidiaries are otherwise in, and have been in,
material compliance with the terms and conditions of all such policies and
no notice of cancellation or termination has been received with respect to
any such policy. Such policies are sufficient for compliance with all
requirements of law and of all agreements to which the Company or any
Company Subsidiary is a party; are valid, outstanding and enforceable
policies; provide adequate insurance coverage for the assets and operations
of the Company and each Company Subsidiary consistent with the Company's
past practice; will remain in full force and effect through the respective
termination dates of such policies without the payment of additional
premiums; and will not in any way be affected by, or terminate or lapse by
reason of, the transactions contemplated hereby or by any Ancillary
Agreement. To the knowledge of the Company or any Company Subsidiary,
there has been no threatened termination of, premium increase with respect
to or material alteration of coverage under, any such policy.
SECTION 4.23 INFORMATION STATEMENT. The Information Statement will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances under which they
were made, not misleading.
SECTION 4.24 FOREIGN CORRUPT PRACTICES. Neither the Company, nor
any Company Subsidiary, nor any of their respective directors, officers,
agents, employees or any other Persons acting on their behalf has, in
connection with the operation of their respective businesses, (a) used any
corporate or other funds for unlawful contributions, payments, gifts or
entertainment, or made any unlawful expenditures relating to political
activity to government officials, candidates or members of political
parties or organizations, or established or maintained any unlawful or
unrecorded funds in violation of Section 104 of the Foreign Corrupt
Practices Act of 1977, as amended, or any other similar applicable foreign,
federal or state law or (b) paid, accepted or received any unlawful
contributions, payments, expenditures or gifts.
SECTION 4.25 CUSTOMER NON-DISCRIMINATION. The Company, any Company
Subsidiary and each Person acting as an agent of the Company or any Company
Subsidiary, is, and has been, in material compliance with all federal,
state and local laws, statutes and regulations having the purpose or effect
of prohibiting unlawful discrimination against customers or potential
customers and, neither the Company nor any Company Subsidiary have received
any complaints from any Person or Governmental Entity that the Company, or
any Company Subsidiary or any Person acting as an agent of the Company or
any Company Subsidiary has engaged in any unlawful discrimination. There
is no litigation pending or, to the knowledge of the Company or any Company
Subsidiary, threatened by any customers, potential customers or others
against the Company or any Company Subsidiary relating to alleged unlawful
discrimination or harassment and neither the Company, nor any Company
Subsidiary, or any other Person is investigating any such allegation.
45
SECTION 4.26 INVESTMENT FUNDS.
(a) The Company and each Company Subsidiary has not at any
time (i) sponsored any collective investment vehicles required to be
registered as an investment company under the Investment Company Act of
1940, as amended (the "Investment Company Act"), (ii) except as relates to
Top Gun Fund, I. L.P. and Staubach Realty Partners, I. L.P. or with respect
to the funds as set forth in Section 4.26 of the Company Disclosure
Schedule (collectively, the "Private Funds"), acted as an "investment
adviser" (within the meaning of the Investment Advisers Act of 1940, as
amended (the "Advisers Act") or any analogous foreign law) or performed any
activities related or incidental thereto to or through (A) any investment
company registered, or required to be registered, under the Investment
Company Act, (B) any issuer or other Person that would be an investment
company (within the meaning of the Investment Company Act) but for the
exclusions from such definition contained in Section 3(c)(1), Section
3(c)(7), 3(c)(5)(C), the final clause of Section 3(c)(3) or the third or
fourth clauses of Section 3(c)(11) of the Investment Company Act, or (C)
any issuer or other Person that is required to be registered under the laws
of the appropriate securities regulatory authority in the jurisdiction in
which the issuer is domiciled (other than the United States or the states
thereof), which is or holds itself out as engaged primarily in the business
of investing, reinvesting or trading in securities.
(b) As to each Private Fund, there has been in full force and
effect an investment advisory agreement at all times that any of the
Company or Company Subsidiaries (or any predecessor of the Company or
Company Subsidiaries) were performing such services for such Private Fund,
and each such investment advisory agreement pursuant to which any of the
Company or Company Subsidiaries has received compensation respecting its
activities in connection with any of the Private Funds was duly approved in
accordance with all applicable laws (as applicable to such Private Fund).
(c) The private placement memorandum or other offering
document (as applicable) of each Private Fund complied in all material
respects with all applicable laws, and did not contain any untrue statement
of a material fact, or omit to state a material fact required to be stated
therein or necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading, in each such
case at all such times as any such private placement memorandum or other
applicable offering document was delivered or required to be delivered to
investors or potential investors in such Private Fund. Since their initial
offering, the shares or other ownership interests of each of the Private
Funds have been offered for sale pursuant to, and in compliance with, a
private placement or similar exemption from registration under the
securities laws of each jurisdiction in which they have been sold or
offered for sale and in all cases, without any public offering.
(d) Each of the investments made by a Private Fund has been
made in all material respects in accordance with its investment policies
and restrictions set forth in its private placement memorandum (or other
applicable offering document) and the applicable investment advisory
agreement in effect at the time the investments were made and has been held
in accordance in all material respects with its respective investment
policies and restrictions, to the extent applicable and in effect at the
time such investments were held.
(e) None of the Company or Company Subsidiaries or any Person
who is an "affiliated person" (as defined in the Investment Company Act) or
any other "interested person" of any of the Company or Company Subsidiaries
(as defined in the Investment Company Act), receives or is entitled to
receive any compensation directly or indirectly from any of the Private
Funds or their security holders for other than bona fide investment
advisory, administrative or other services.
46
(f) All material notifications to local regulatory and other
bodies required by applicable laws have been made to permit such activities
as are carried out by the Private Funds and all material authorizations,
licenses, consents and approvals required by applicable laws have been
obtained in relation to the Private Funds.
SECTION 4.27 GOVERNMENT CONTRACTS.
(a) All representations and certifications executed,
acknowledged or set forth in or pertaining to Government Contracts or
Proposals were true and accurate, and in the case of those involving cost
or pricing data, were current, accurate and complete when made, and the
Company and any Company Subsidiary, as applicable, has complied in all
material respects with all such representations and certifications to the
extent they impose ongoing obligations.
(b) Neither the Company nor any Company Subsidiary, nor to
the knowledge of the Company or any Company Subsidiary, any of their
respective directors, officers or employees is or has been suspended or
debarred from doing business with any Governmental Entity, or has been
declared nonresponsible or ineligible for contracting with any Governmental
Entity. There are no circumstances that would warrant (x) the institution
of suspension or debarment proceedings against the Company or any Company
Subsidiary, (y) criminal or civil fraud or other criminal or civil
proceedings against the Company, any Company Subsidiary or any of the
officers, directors or employees of the Company or any Company Subsidiary,
or (z) a determination of nonresponsibility or ineligibility of the Company
or any Company Subsidiary in the future.
(c) Neither the Company nor any Company Subsidiary, nor to
the knowledge of the Company or any Company Subsidiary, any of their
respective current or former directors, officers, employees or any agents
is or has been under administrative, civil (including, but not limited to,
claims made under the False Claims Act) or criminal investigation,
indictment or writ of information, audit or internal investigation or has
pled guilty to or been convicted of any felony, or any offense related to
commission of fraud or a criminal offense (or had a civil judgment rendered
against them comparable thereto) with respect to any alleged irregularity,
misstatement or omission arising under or relating to any Government
Contract or Proposal.
(d) There exists no written notice of any outstanding claims,
written notice of any requests for equitable adjustments or written notice
of any outstanding disputes, or any written notice challenging, questioning
or disallowing any material cost against the Company or any Company
Subsidiary by any Governmental Entity, or any prime contractor,
subcontractor, vendor or other third party, arising under or relating to
any Government Contract. Neither the Company nor any Company Subsidiary has
any interest in any pending or potential claim against any Governmental
Entity or any prime contractor, higher or lower tier subcontractor or
vendor arising under or relating to any Government Contract or Proposal.
(e) Neither the Company nor any Company Subsidiary has, with
respect to any Government Contract, received a cure notice or show cause
notice advising the Company or any Company Subsidiary that it was in
default or would, if it failed to take remedial action, be in default under
such Government Contract. No termination for convenience, termination for
default, cure notice or show cause notice has ever been issued, is
currently in effect, has been issued and remains unresolved, or is
expected, with respect to any Government Contract.
47
(f) Other than routine contract audits (including, without
limitation, with respect to security clearances and obligations) by the
Government Entities, neither the Company nor any Company Subsidiary has
been audited by any Governmental Entity and, to the knowledge of the
Company and the Company Subsidiaries, no such audit is underway or
threatened. Neither the Company nor any Company Subsidiaries has conducted
or initiated any internal investigation (other than inquiries made in the
ordinary course of business) or made any voluntary disclosure to any
Governmental Entity arising under or relating to a Government Contract or
Proposal or any law applicable thereto. Except as set forth in Section
4.27(f) of the Company Disclosure Schedule, no audit has resulted in an
adverse finding with respect to any alleged material irregularity,
misstatement or fraudulent omission relating to a Government Contract or
Proposal.
SECTION 4.28 OPINION OF FINANCIAL ADVISOR. The Company Board of
Directors has received the written opinion, dated as of June 16, 2008, of
X.X. Xxxxxx Securities Inc., financial advisor to the Company (the "Company
Financial Advisor"), to the effect that, as of such date, the Merger
Consideration is fair to the Company's shareholders from a financial point
of view, and a true and complete copy of such opinion has been delivered to
Parent and Merger Sub. The Company has been authorized by the Company
Financial Advisor to include such opinion in its entirety in the
Information Statement.
SECTION 4.29 BROKERS. No broker, investment banker, financial
advisor or other person, other than the Company Financial Advisor, the fees
and expenses of which will be paid by the Company, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission
in connection with the transactions contemplated hereby or by any Ancillary
Agreement based upon arrangements made by or on behalf of Company. True
and complete copies of all agreements between the Company and the Company
Financial Advisor have been delivered to Parent and Merger Sub.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company as follows
(any statement qualified as to the "knowledge of Parent" or what is known
to Parent shall be limited to the knowledge, after reasonable inquiry, of
the persons set forth on Schedule V attached hereto):
SECTION 5.1 ORGANIZATION. Each of Parent and Merger Sub is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has full corporate power and
authority to own, lease and operate its properties and to carry on its
business as is now being conducted. Each of Parent and Merger Sub is duly
qualified or licensed to do business and in good standing in each
jurisdiction where its ownership or leasing of property or the conduct of
its business makes such qualification or licensing necessary, except where
the failure to be so qualified or licensed would not, individually or in
the aggregate, impair in any material respect the ability of each of Parent
and Merger Sub, as the case may be, to perform its obligations under this
Agreement, or prevent or materially delay the consummation of any of the
transactions contemplated hereby.
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SECTION 5.2 AUTHORIZATION; VALIDITY OF AGREEMENT; NECESSARY ACTION.
Each of Parent and Merger Sub has full corporate power and authority to
execute and deliver this Agreement and each Ancillary Agreement to which it
is a party and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance by Parent and Merger Sub
of this Agreement and each Ancillary Agreement to which it is a party and
the consummation of the transactions contemplated hereby and thereby have
been duly authorized by the boards of directors of each of Parent and
Merger Sub; as the sole shareholder of Merger Sub, Parent has approved the
Merger and this Agreement; and no other corporate authority or approval on
the part of Parent or Merger Sub is necessary to authorize the execution
and delivery by Parent and Merger Sub of this Agreement and the
consummation of the transactions contemplated hereby and thereby. Each of
this Agreement and the Ancillary Agreements to which they are a party
executed contemporaneously herewith has been, and each of the Ancillary
Agreements to be executed after the date hereof will be, duly and validly
executed and delivered by Parent and Merger Sub and, assuming due and valid
authorization, execution and delivery hereof and thereof by the Company and
the other parties to each Ancillary Agreement, is, or in the case of any
Ancillary Agreements to be executed after the date hereof, will be, a valid
and binding obligation of each of Parent and Merger Sub enforceable against
each of them in accordance with its terms, except that (i) such enforcement
may be subject to applicable bankruptcy, insolvency or other similar laws,
now or hereafter in effect, affecting creditors' rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
SECTION 5.3 CAPITALIZATION. The authorized capital stock of Parent
consists of 100,000,000 shares of common stock, par value $.01 per share
("Parent Common Stock"), and 10,000,000 shares of preferred stock, par
value $.01 per share ("Parent Preferred Stock"). As of May 31, 2008,
31,898,742 shares of Parent Common Stock are issued and outstanding and no
shares of Parent Preferred Stock are issued and outstanding. All of the
outstanding shares of the Parent Common Stock are duly authorized, validly
issued, fully paid and non-assessable and have not been issued in violation
of any pre-emptive or similar rights. The shares of Parent Common Stock to
be delivered in connection with the transactions contemplated hereby will
be duly authorized, validly issued, fully paid and non-assessable. A
sufficient number of shares have been reserved by Parent's board of
directors to provide for such issuance.
SECTION 5.4 CONSENTS AND APPROVALS; NO VIOLATIONS. None of the
execution, delivery or performance of this Agreement or any Ancillary
Agreement by Parent or Merger Sub, the consummation by Parent or Merger Sub
of the transactions contemplated hereby or thereby, or compliance by Parent
or Merger Sub with any of the provisions hereof will (a) conflict with or
result in any breach of any provision of the certificate of incorporation
(or equivalent) or bylaws of Parent or Merger Sub, (b) require any material
filing by Parent or Merger Sub with, or permit, authorization, consent or
approval of, any Governmental Entity (except for (A) the filing of the
Certificate of Merger pursuant to the TBOC and (B) any filings as may be
required under the HSR Act), or (c) violate any material order, writ,
injunction, decree, statute, rule or regulation applicable to Parent, any
of its Subsidiaries, or any of their properties or assets, except in the
case of clause (b) or (c) such violations, breaches or defaults which would
not, individually or in the aggregate, impair in any material respect the
ability of each of Parent and Merger Sub to perform its obligations under
this Agreement, as the case may be, or prevent or materially delay the
consummation of any the transactions contemplated hereby.
SECTION 5.5 BROKERS. No broker, investment banker, financial
advisor or other Person, other than Xxxxxx Xxxxxxx & Co. Incorporated, the
fees and expenses of which will be paid by Parent, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission
in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of Parent or Merger Sub.
49
SECTION 5.6 FINANCING. As of the Closing, subject to the
availability of financing on the amount and terms provided in the Credit
Agreement, Parent will have, together with cash on hand, sufficient funds
available to consummate the transactions contemplated by this Agreement.
SECTION 5.7 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Parent has filed all registration statements,
prospectuses, forms, reports and documents required to be filed by it under
the Securities Act of 1933, as amended (the "Securities Act"), or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the
case may be, during the past three (3) years (collectively, the "Parent SEC
Filings"). Each Parent SEC Filing (a) as of its date complied in all
material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (b) did not, at the time they were
filed, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the Parent SEC Filings was
prepared in accordance with GAAP applied (except as may be indicated in the
notes thereto and, in the case of unaudited quarterly financial statements,
as permitted by Form 10-Q under the Exchange Act) on a consistent basis
throughout the periods indicated (except as may be indicated in the notes
thereto), and each presented fairly, in all material respects, the
consolidated financial position of Parent as of the respective dates
thereof and for the respective periods indicated therein (subject, in the
case of unaudited statements, to normal and recurring year-end
adjustments).
(c) Since Parent's quarterly report on Form 10-Q for the
quarter ended March 31, 2008, neither Parent nor any of its Subsidiaries
has incurred any material liabilities or obligations (whether direct,
indirect, accrued or contingent), except for liabilities or obligations (a)
incurred in the ordinary course of business and consistent with past
practice or in connection with this Agreement and the transactions
contemplated hereby, (b) disclosed, shown, accrued or reserved against in
the Parent SEC Filings, or (c) that would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on
Parent's ability to make all payments required pursuant to this Agreement.
SECTION 5.8 TENANT REP BUSINESS. Parent has made available to the
Company a statement of revenues for the Tenant Rep Business for the fiscal
year ended December 31, 2007 and the three (3) months ended March 31, 2008,
which has been prepared in accordance with GAAP from the books and records
of Parent and its Subsidiaries.
SECTION 5.9 LABOR MATTERS. As of the date hereof, to the knowledge
of Parent, no current officer, employee or sales representative of the
Tenant Rep Business with an annual cash compensation or payment in excess
of $500,000 has given notice of termination of his or her employment or
services, whether on account of the transactions contemplated by this
Agreement or for any other reason.
SECTION 5.10 SIGNIFICANT CLIENTS. Schedule 5.10(a) sets forth (a)
the names of the 20 largest clients of the Tenant Rep Business ("Tenant Rep
Significant Clients"), during the year ended December 31, 2007 and the
3-month period ended March 31, 2008 and (b) the total revenue received in
such periods from each such Tenant Representative Significant Client.
Except as set forth on Schedule 5.10(b), no Tenant Rep Significant Client
as of the date hereof, (i) has ceased, or indicated to Parent or any of its
Subsidiaries that it shall cease, to use the services of the Tenant Rep
Business, (ii) has made any claim against the Americas Business with
respect to the Tenant Rep Business or (iii) has sought, or is seeking, to
renegotiate the terms of any contract under which the Americas Business is
50
providing Tenant Rep Business services to such Tenant Rep Significant
Client, including in each case after the consummation of the transactions
contemplated hereby or by any Ancillary Agreement. True and complete
copies of all such dispute or termination notices (or a written description
of any oral dispute or termination notice) shall have been made available
to the Company.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 6.1 CONDUCT OF BUSINESS OF THE COMPANY. From and after the
date of this Agreement and prior to the Effective Time or the earlier
termination of this Agreement, and except (i) with the prior written
consent of Parent (which consent shall not be unreasonably withheld,
conditioned or delayed), or (ii) as set forth in Section 6.1 of the Company
Disclosure Schedule or as otherwise expressly contemplated by this
Agreement, the Company shall, and shall cause each of the Company
Subsidiaries to (i) conduct its business in the ordinary and usual course
consistent with past practices and (ii) use commercially reasonable efforts
to maintain intact its business organization and to preserve its
relationships with its employees, customers, clients, suppliers,
consultants, independent contractors and others having business dealings
with it. Without limiting the generality of the foregoing, except as set
forth in Section 6.1 of the Company Disclosure Schedule, the Company agrees
that between the date of this Agreement and the Effective Time or the
earlier termination of this Agreement the Company shall not, and shall not
permit any of the Company Subsidiaries to, directly or indirectly, without
the prior written consent of Parent (which consent shall not be
unreasonably withheld, conditioned or delayed):
(a) (i) issue, sell, transfer, dispose of, encumber or pledge
any shares of capital stock of the Company or any capital stock of any
Company Subsidiary, other than (A) issuances of Common Stock for cash or
services rendered to directors, employees or independent contractors of the
Company or any Company Subsidiary, which issuances are completed prior to
the Effective Time and (B) the registering of transfers of Common Stock
pursuant to transfers of Common Stock by shareholders of the Company in
accordance with the Shareholders Agreement; (ii) amend its certificate of
formation or bylaws or similar organizational documents; or (iii) split,
combine, sub-divide or reclassify any outstanding shares of its capital
stock;
(b) (i) declare, set aside or pay any dividend or other
distribution payable in cash, stock or property with respect to its capital
stock other than (A) cash dividends by a Company Subsidiary to the Company
or another Company Subsidiary paid in full prior to the Effective Time and
(B) cash dividends by the Company to holders of Common Stock paid in full
prior to the Effective Time; or (ii) issue, sell, transfer, dispose of,
encumber or pledge any securities convertible into or exchangeable for, or
options, warrants or rights of any kind to acquire, any shares of capital
stock of the Company or any Company Subsidiary;
(c) (i) acquire, sell, lease or dispose of any tangible
assets having a value of $200,000 or more, individually or in the
aggregate, except in the ordinary course of business consistent with past
practice; (ii) acquire, sell, lease or sublease any real property or any
interest therein, except as expressly permitted in accordance with Section
6.1(g) herein below and except in the ordinary course of business
consistent with past practice; (iii) license, assign, grant to any other
Person, or otherwise transfer or dispose of, or acquire, any rights in or
to any Intellectual Property except in the ordinary course of business
consistent with past practice; (iv) acquire (by merger, consolidation or
acquisition of stock or assets or otherwise) any corporation, partnership
51
or other business organization or division thereof or any equity interest
therein; or (v) enter into any commitment or transaction involving the
payment to or from the Company or any Company Subsidiary of more than
$200,000, individually or in the aggregate; other than agreements and
engagements with clients and employees and independent contractors in the
ordinary course of business consistent with past practice;
(d) (i) except to the extent required by applicable law or
any agreement or arrangement in effect as of the date hereof, change the
compensation or benefits payable or to become payable to any of its
officers, directors, employees or independent contractors (other than
increases in wages in the ordinary course of business consistent with past
practice to employees who are not executive officers, directors or
affiliates and payments of bonuses paid prior to the Effective Time); (ii)
other than at Parent's request, enter into or amend any employment,
severance, consulting, termination or other agreement or employee benefit
plan; or (iii) make any loans to any of its officers, directors, employees
or affiliates or change its existing borrowing or lending arrangements for
or on behalf of any of such persons pursuant to an employee benefit plan or
otherwise;
(e) terminate the services of person identified on Section
8.3(i)(i) or (ii) of the Company Disclosure Schedule, unless the Company
Board of Directors determines, in consultation with Parent, that such
action is in the best interests of the Company;
(f) (i) pay or arrange for payment of any pension, retirement
allowance or other employee benefit pursuant to any existing plan,
agreement or arrangement to any officer, director, employee, independent
contractor or affiliate or pay or make any arrangement for payment to any
officers, directors, employees, independent contractors or affiliates of
the Company of any amount relating to unused vacation days, except payments
and accruals required under the terms of the Plan or made in the ordinary
course of business consistent with past practice; (ii) adopt, grant, issue
or accelerate payments or benefits pursuant to any pension, profit-sharing,
extra compensation, incentive, deferred compensation, stock purchase, stock
option, stock appreciation right, group insurance, severance pay,
retirement or other employee benefit plan, agreement or arrangement, but
specifically excluding any bonus plan agreement or arrangement with respect
to bonuses to be paid prior to the Effective Time, or any employment,
consulting or independent contractor agreement with or for the benefit of
any director, officer, employee, or independent contractor, whether past or
present; or (iii) amend in any material respect any such existing plan,
agreement or arrangement in a manner inconsistent with the foregoing except
for amendments required by the IRS or otherwise required by law;
(g) (i) in any material respect, modify, amend or terminate
any of the Listed Company Agreements; (ii) waive, release or assign any
material rights or claims under any of the Listed Company Agreements; or
(iii) enter into any contracts, agreements, arrangements or understandings
that would be required to be set forth in Section 4.13 of the Company
Disclosure Schedule, in each case, other than in the ordinary course of
business consistent with past practice;
(h) permit any material insurance policy naming it as a
beneficiary or a loss payee to be cancelled or terminated without prior
notice to Parent;
(i) (i) incur or assume any long-term indebtedness for
borrowed money or any short-term indebtedness for borrowed money; (ii)
assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of any
other Person other than any Company Subsidiary; (iii) make any loans,
advances or capital contributions to, or investments in, any other Person,
other than a Company Subsidiary and other than advances to employees and
52
independent contractors for travel and other expenses in the ordinary
course of business consistent with past practice; or (iv) mortgage or
pledge any of its assets, tangible or intangible, or create any Encumbrance
of any kind with respect to any such assets, other than Permitted
Encumbrances in the ordinary course of business consistent with past
practice;
(j) enter into or modify any collective bargaining agreement
or similar agreement or any successor collective bargaining agreement to
any collective bargaining agreement;
(k) change any of the financial accounting methods used by it
except for such changes required by GAAP;
(l) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any Company Subsidiary (other than,
with respect to the Company, the Merger);
(m) (i) settle any action, suit, claim, charge, litigation,
arbitration or other proceeding, which settlement involves any action other
than the payment of cash (including any restrictions on the operations of
the business of the Company or any Company Subsidiary) or relates to any
litigation or claim by any shareholder of the Company or (ii) enter into
any consent decree, injunction or other similar restraint or form of any
action, suit, litigation, arbitration or other proceeding;
(n) take, or agree in writing or otherwise to take, any
action that would or is reasonably likely to result in any of the
conditions set forth in Article VIII not being satisfied, or would make any
representation or warranty of the Company contained herein inaccurate in
any material respect at or prior to the Effective Time, or that would
impair the ability of the Company to consummate the Merger in accordance
with the terms hereof or delay such consummation;
(o) make any capital expenditure which is not in all material
respects in accordance with the annual budget for the fiscal year 2008, a
true and complete copy of which has been made available to Parent, or
otherwise consistent with past practices;
(p) (i) allow any Intellectual Property owned by the Company
or any Company Subsidiary to lapse or become abandoned, cancelled,
dedicated to the public or unenforceable except in the ordinary course of
business consistent with past practice, (ii) cease the use of any
Trademarks owned by the Company or any Company Subsidiary or fail to
maintain the level of quality of the goods or services associated with such
Trademarks, or (iii) terminate or allow to lapse any rights to use
Intellectual Property under any IP Agreement; or
(q) enter into any agreement, contract, commitment or
arrangement to do any of the foregoing, or authorize, recommend, propose or
announce an intention to do any of the foregoing.
SECTION 6.2 NO SOLICITATION. The Company agrees that it shall
immediately cease and cause to be terminated all existing discussions,
negotiations and communications with any Persons with respect to any
Acquisition Proposal. From the date of this Agreement until the earlier of
termination of this Agreement or the Effective Time, the Company shall not
and shall not authorize or permit any of its officers, directors,
employees, investment bankers, attorneys, accountants, affiliates or other
agents to directly or indirectly (i) initiate, solicit, encourage, or take
any action to facilitate the making of, any offer or proposal which
constitutes or which may be reasonably likely to lead to an Acquisition
Proposal, (ii) enter into any agreement with respect to any Acquisition
Proposal, or (iii) in the event of an unsolicited Acquisition Proposal,
engage in any negotiations or discussions with, or provide any information
53
or data to, any Person (other than Parent or any of its affiliates or
representatives) relating to any Acquisition Proposal. As used in this
Agreement, "Acquisition Proposal" means any tender or exchange offer
involving the Company, any proposal for a merger, consolidation or other
business combination involving the Company, or any proposal or offer to
acquire in any manner an equity interest in, or a portion of the business
or assets (other than purchases or sales of inventory in ordinary course of
business, acquisitions by the Company of Common Stock as contemplated by
Sections 4.2, 4.3, Article 5 and Article 6 of the Shareholders Agreement,
the Pre-Closing Transactions and issuances of shares of Common Stock to
employees, directors and contractors of the Company and any Company
Subsidiary) of, the Company or any Company Subsidiary, any proposal or
offer with respect to any recapitalization or restructuring with respect to
the Company or any Company Subsidiary or any proposal or offer with respect
to any other transaction similar to any of the foregoing with respect to
the Company or any Company Subsidiary, other than the Merger and the other
transactions contemplated by this Agreement. The Company shall promptly
notify Parent after receipt of any Acquisition Proposal or any inquiries
indicating that any Person is considering making or wishes to make an
Acquisition Proposal, identifying such Person and the terms thereof.
SECTION 6.3 TAX MATTERS.
(a) PRE-CLOSING TAX RETURNS.
(i) The Company shall prepare and file, or shall cause
to be prepared and filed, all Tax Returns that include the Company or
any Company Subsidiary for all Pre-Closing Tax Periods that end on or
before the Closing Date and are required to be filed on or before the
Closing Date. The Company shall provide a copy of each such Tax
Return filed after the date of this Agreement to Parent as soon as
practicable prior to the filing thereof in order to give Parent the
opportunity to review such Tax Returns prior to filing.
(ii) The Shareholders' Representative shall, at its own
cost and expense, prepare and file, or shall cause to be prepared and
filed, all Tax Returns that include the Company or any Company
Subsidiary for all Pre-Closing Tax Periods that end on or before the
Closing Date and are required to be filed after the Closing Date.
The Shareholders' Representative shall provide a copy of each such
Tax Return no later than 30 days prior to the filing due date of each
such Tax Return (including any extensions that the Shareholders'
Representative has timely filed for) in order to give Parent the
opportunity to review and comment on such Tax Return prior to filing.
For the avoidance of doubt, Parent's review of Tax Returns described
in this Section 6.3(a)(ii) and comments, or lack thereof, on such Tax
Returns do not constitute legal or tax advice, and Parent is entitled
to seek indemnification under Article X hereof with respect to such
Tax Returns. Tax Returns described in this Section 6.3(a)(ii) shall
be signed (i) by Xxxxxxx Xxxxxx, and (ii) in the event that Xxxxxxx
Xxxxxx is no longer employed by the Company at the time of the
signing of any such Tax Return, then by the designee of the
Shareholders' Representative, which designee shall be an officer of
the Company. None of the transactions contemplated under this
Agreement is intended to be subject to Treasury Regulations Section
1.1502-76(b)(1)(ii)(B) (next day rule).
(iii) All Tax Returns referred to in this Section 6.3(a)
shall be prepared in a manner consistent with this Agreement and, to
the extent not inconsistent with this Agreement, prior years' Tax
Returns, using, to the extent permitted by law, methods, conventions
and elections consistent with those previously used by or with
respect to the Company and any Company Subsidiary.
54
(b) COOPERATION AND CONTESTS.
(i) COOPERATION. The Shareholders' Representative, on
the one hand, and Parent and the Company, on the other hand, shall
cooperate fully, as and to the extent reasonably requested by the
other party, in connection with the completion and filing of all Tax
Returns and any audit or other proceeding with respect to Taxes.
Such cooperation shall include the retention and (upon the other
party's request) the provision of records and information that are
reasonably relevant to any such audit or other proceeding and making
representatives available on a mutually convenient basis to provide
additional information and explanation of any material made available
hereunder.
(ii) NOTICE. After the Closing, Parent shall notify the
Shareholders' Representative in writing (a "Tax Notice") of any
demand or claim received by Parent or the Company from any tax
authority or any other party relating to Taxes of the Company or any
Company Subsidiary (a "Tax Claim") for which indemnification may be
sought under Article X of this Agreement within thirty (30) days of
the receipt of such Tax Claim by Parent or the Company; provided,
however, that a failure to give such Tax Notice will not affect the
rights of Parent or the Surviving Corporation to indemnification
under Article X unless, or except to the extent that, such failure
precludes the Shareholders' Representative from contesting such Tax
Claim. Such Tax Notice shall contain factual information (to the
extent known) describing the Tax Claim in reasonable detail and shall
include copies of any notice or other document received from any Tax
authority in respect of any such Tax Claim.
(iii) CONTROL. The Shareholders' Representative shall
have the right, but not the obligation, to control, at its own
expense, the conduct, prosecution and defense of any audit or other
proceeding (a "Contest") relating to a Tax Claim for which
indemnification may be sought under Article X of this Agreement;
provided, however, that: (i) the Shareholders' Representative shall
not be entitled to control the conduct of any Contest unless it
provides Parent with notice of its intent to exercise its right to
control such Contest within fifteen (15) days of receiving the
related Tax Notice and acknowledges in writing that Parent and the
Surviving Corporation are entitled to be indemnified for such Taxes
under Article X of this Agreement, and (ii) Parent may participate
(at its own cost and expense) in any such Contest. Notwithstanding
any other provision of this Agreement, Parent shall, at its own
expense, control: (i) any Contest pertaining to any taxable year or
period beginning after the Closing Date (a "Post-Closing Tax
Period"), (ii) any Contest relating or pertaining to amounts together
with the Aggregate Claimed Amount and Established Losses that would
exceed the limit set forth in Section 10.1(g), and (iii) any Contest,
the resolution of which would affect the Tax liability of the Company
or any Company Subsidiary for any Post-Closing Tax Period, including,
without limitation, any Contest concerning Tax Returns filed by the
Company or any Company Subsidiary with respect to a Pre-Closing Tax
Period, and shall not settle or contest any such Contest without the
consent of the Shareholders' Representative, which consent shall not
be unreasonably withheld, conditioned or delayed. In the event that
a Contest involves a Straddle Period (a "Straddle Contest") and the
Shareholders' Representative elects to control such Straddle Contest,
the parties shall endeavor to cause the Straddle Contest proceeding
to be separated into two or more separate proceedings, each of which
involves exclusively (i) Contests applicable to Pre-Closing Tax
Periods, which shall be controlled by Shareholders' Representative,
and (ii) Contests applicable to all other taxable periods, which
shall be controlled by Parent. In the event that such separation
cannot, after diligent efforts, be achieved, Parent shall control the
Straddle Contest; provided, however, that Parent shall not settle,
compromise and/or concede such Contest without the consent of the
Shareholders' Representative, which consent shall not be unreasonably
55
withheld, conditioned or delayed. To the extent the Shareholders'
Representative controls all or a portion of any Contest or Straddle
Contest, the Shareholders' Representative shall keep Parent informed
regarding the status of such Contest or Straddle Contest. Except as
otherwise provided for in this Section 6.3(b), Parent shall control
the conduct, prosecution and defense of all other Contests and shall
have the exclusive right to settle or contest any such Contest
without the consent of the Shareholders' Representative; provided,
however, that if Parent is entitled to indemnification under Article
X hereof with respect to such Contest, Parent shall not settle such
Contest without the consent of the Shareholders' Representative,
which shall not be unreasonably withheld, conditioned, or delayed.
As used herein, (i) the term "Straddle Period" means a taxable period
that begins before the Closing Date and ends after the Closing Date,
and (ii) the term "Pre-Closing Tax Period" means any taxable period
that ends on or prior to the Closing Date and that portion of a
Straddle Period that ends on or prior to the Closing Date.
(iv) PARENT'S CONSENT. With respect to a Contest or Straddle
Contest that is described in paragraph (iii) of this Section 6.3(b)
and that the Shareholders' Representative controls, the ability of
the Shareholders' Representative to settle, compromise and/or concede
any such Contest or Straddle Contest shall be subject to Parent's
written consent, not to be unreasonably withheld, conditioned or
delayed, if the proposed settlement, compromise or concession of the
Shareholders' Representative would adversely affect a Tax liability
of Parent, the Company, or any Company Subsidiary for any taxable
period that ends after the Closing Date; provided, however, if Parent
does not provide the Shareholders' Representative with such written
consent, and the Shareholders' Representative agrees to provide
indemnification to Parent pursuant to Article X with respect to the
amount that the Shareholders' Representative was willing to pay the
Tax authority and the Tax authority was willing to accept to settle
the Contest or Straddle Contest, Parent shall receive such
indemnification pursuant to Article X and release any further right
to indemnification with respect to the Tax Claim that was the subject
of such proposed settlement, and Parent shall assume control over the
conduct of the related Contest or Straddle Contest and shall have all
rights to make decisions, settle, compromise, and/or concede such
Contest or Straddle Contest.
(c) CERTIFICATES. Parent, the Company and the Shareholders'
Representative shall, upon request, use their commercially reasonable
efforts to obtain any certificate or other document from any Governmental
Entity or any other Person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed (including with respect to the
transactions contemplated by this Agreement or the Ancillary Agreements).
(d) INFORMATION REPORTING. Parent and the Shareholders'
Representative agree, upon request, to provide one another with all
information that the requesting party may be required to report under
Section 6043A of the Code or Treasury Regulations promulgated thereunder.
(e) TAX SHARING AGREEMENTS. Notwithstanding anything in any
other agreement to the contrary, all Tax allocation or Tax sharing
agreements or arrangements of any kind to which the Company and any Company
Subsidiary is a payor on or prior to the Closing Date (other than this
Agreement) shall cease and terminate as of the Closing Date.
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(f) CERTAIN COVENANTS. From and after the date of this
Agreement and prior to the Effective Time or the earlier termination of
this Agreement, the Company shall not, and shall not permit any of the
Company Subsidiaries to, directly or indirectly, without providing at least
ten (10) days' notice to Parent, amend any Tax Return, make any Tax
election or change any Tax election already made, adopt any Tax accounting
method, change any Tax accounting method, enter into any closing agreement
or settle any material claim or material assessment relating to Taxes or
consent to any claim or assessment relating to Taxes or any waiver of the
statute of limitations for any such claim or assessment. With respect to
any Pre-Closing Tax Period and except as otherwise required by law, neither
Parent, the Company, nor any Company Subsidiary shall, without the prior
written consent of the Shareholders' Representative, make or change any
election, file or cause the amendment of a Tax Return, change an annual
accounting period, adopt or change any accounting method, or take any other
similar action relating to the filing of any Tax Return relating to the
Company or the Company Subsidiaries. Parent agrees that it will not take a
position, and will not permit the Company or the Company Subsidiaries to
take a position, on any Tax Return for a Post-Closing Tax Period that is
inconsistent with the Company's reporting of the Company's 2007
reorganization transaction, including the exchange offer and other
transactions related to the formation of the Company and the issuance of
securities of the Company in connection therewith, including issuance of
the Contingent Issuance on its 2007 and its short period 2008 federal
income Tax Return ending at the Closing Date.
(g) TAX REFUNDS. Any refund of Taxes of the Company or the
Company Subsidiaries (including any interest with respect thereto)
attributable to any Pre-Closing Tax Period or the portion of a Straddle
Period that ends on the Closing Date shall be the property of the
shareholders of the Company in existence immediately prior to the Effective
Time, and the amount of any such Tax Refund, shall be paid promptly to the
Shareholders' Representative and, if received by Parent, the Company or a
Company Subsidiary, shall be payable promptly to the Shareholders'
Representative. In the event that the Company or the Company Subsidiaries
are entitled by law to a refund of Taxes attributable to any Pre-Closing
Tax Period or the portion of a Straddle Period that ends on the Closing
Date, Parent agrees to cooperate with the Shareholders' Representative to
file or cause to be filed, at the expense of the Shareholders'
Representative, an amended Tax Return or refund claim relating to such Tax
refund. To the extent that any Tax benefit resulting from an amended Tax
Return or claim for Tax refund of the Company or a Company Subsidiary
attributable to any Pre-Closing Tax Period or the portion of a Straddle
Period that ends on the Closing Date is carried forward to a Post-Closing
Tax Period, Parent agrees that as such Tax benefit is actually realized in
a Post Closing Period, Parent will promptly remit the cash equivalent of
such realized Tax benefit to the Shareholders' Representative.
Notwithstanding the previous sentence, the cash equivalent of a Tax benefit
referred to in this Section 6.3(g) shall not be due from Parent to the
Shareholders' Representative if such Tax benefit was taken into account in
determining the Closing Consideration Amount or Receivables Payment.
(h) SECTION 338 ELECTION. Parent covenants not to make or
cause to be made (and Parent covenants that the sole shareholder of Merger
Sub will not make or cause to be made) any election or deemed election
under Section 338 of the Code (or any analogous or similar rules in any
relevant domestic or foreign Tax jurisdiction) with respect to the
acquisition of the Company and any Company Subsidiary.
(i) NO REPRESENTATION OR WARRANTY. Parent and Merger Sub
make no representation or warrant to any shareholders of the Company
concerning (i) the tax treatment of the Company's 2007 reorganization
transaction or (ii) the transactions contemplated by, or payments made
under, this Agreement.
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(j) TAX TREATMENT OF MERGER CONSIDERATION. Except as
otherwise required by the Code, the parties hereby acknowledge and agree
that (i) the right to the Future Payments shall be treated as deferred
payment consideration issued solely in exchange for the Common Stock issued
and outstanding immediately prior to the Closing and any rights to receive
Common Stock outstanding immediately prior to the Closing and (ii) no
portion of the Merger Consideration shall be treated as compensation, and
no party hereto shall take any action or filing position inconsistent with
this provision. Further, the parties hereby acknowledge and agree for Tax
purposes that the Merger Sub will be disregarded in the Merger and that the
Merger will be treated as a purchase by the sole shareholder of the Merger
Sub of the Common Stock owned by the Shareholders immediately before the
Closing in exchange for the Merger Consideration, which will be paid by the
sole shareholder of Merger Sub. Parent covenants that Merger Sub, as a
newly incorporated entity formed to consummate the Merger, will conduct no
operations other than related to the Merger.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.1 INFORMATION STATEMENT. As promptly as practicable after
the date hereof, in consultation with Parent, the Company shall prepare an
information statement (together with any supplements or amendments thereto,
the "Information Statement") relating to the Merger, which shall contain
the notices required pursuant to the TBOC in connection with the Merger and
otherwise comply with all applicable laws, and cause the Information
Statement to be mailed to its shareholders.
SECTION 7.2 COMMERCIALLY REASONABLE EFFORTS; CONSENTS AND APPROVALS.
(a) Subject to the terms and conditions of this Agreement,
each of the Company, Parent and Merger Sub agree to use commercially
reasonable efforts to take, or cause to be taken, all other actions and to
do, or cause to be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated hereby. Each of the Company, Parent and Merger Sub agree to
execute and deliver such other documents, certificates, agreements and
other writings and to take such other actions as may be reasonably
necessary or desirable to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements.
(b) Each of Parent, Merger Sub and the Company shall take
reasonable actions necessary to comply promptly with all legal requirements
which may be imposed on it with respect to this Agreement and the
transactions contemplated hereby (which actions shall include, furnishing
all information required under the HSR Act or any comparable laws of
foreign jurisdictions and in connection with approvals of, filings with,
and inquiries or requests from, any Governmental Entity); shall promptly
cooperate with and furnish information to each other or their counsel in
connection with any such requirements imposed upon any of them or any of
their Subsidiaries in connection with this Agreement and the transactions
contemplated hereby; and shall not take any action that would reasonably be
expected to materially delay the obtaining of, or result in not obtaining,
any permission, approval or consent from any Governmental Entity necessary
to be obtained prior to Closing. Each of the Company, Parent and Merger
Sub shall, and shall cause its respective Subsidiaries to, take
commercially reasonable actions necessary to obtain (and shall cooperate
with each other in obtaining) any consent, authorization, order or approval
of, or any exemption by, any Governmental Entity or other public or private
third party required to be obtained or made by Parent, Merger Sub, the
Company or any of their respective Subsidiaries in connection with the
transactions contemplated hereby or the taking of any action contemplated
thereby or by this Agreement. Notwithstanding the foregoing, or any other
covenant herein contained, in connection with the receipt of any necessary
approvals under the HSR Act or any comparable laws of foreign
jurisdictions, neither Parent nor the Company shall be required to (i)
58
divest or hold separate or otherwise take or commit to take any action that
limits Parent's or the Company's freedom of action with respect to, or
their ability to retain, the Company or any portions thereof or any of the
businesses, product lines, properties or assets of the Company or Parent or
(ii) in the event any action or proceeding is instituted (or threatened to
be instituted) by a Governmental Entity challenging the transactions
contemplated hereby, contest or resist any such action or proceeding,
including any administrative or judicial action, or have vacated, lifted,
reversed or overturned any order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents, delays or
restricts consummation of the transactions contemplated hereby.
(c) Prior to the Closing, each of the Company and Parent
shall promptly consult with the other with respect to, provide any
necessary information with respect to, and provide the other (or its
counsel) copies of, all filings made by such party with any Governmental
Entity or any other information supplied by such party to a Governmental
Entity in connection with this Agreement and the transactions contemplated
hereby. Each of the Company and Parent shall promptly inform the other of
any communication from any Governmental Entity regarding any of the
transactions contemplated hereby unless otherwise prohibited by law. If
either the Company or Parent or any of their respective affiliates receives
a request for additional information or documentary material from any such
Governmental Entity with respect to the transactions contemplated hereby,
then such party shall endeavor in good faith to make, or cause to be made,
as soon as reasonably practicable and after consultation with the other
party, an appropriate response in compliance with such request. To the
extent that transfers, amendments or modifications of permits (including
environmental permits) are required as a result of the execution of this
Agreement or consummation of the transactions contemplated hereby, the
Company shall use commercially reasonable efforts to effect such transfers,
amendments or modifications.
SECTION 7.3 NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to Parent and Parent shall give prompt notice to the Company
of (a) the occurrence or non-occurrence of any event the occurrence or
non-occurrence of which would be reasonably likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate as of the date hereof or as of the Closing Date, (b) any
litigation or investigation commenced or, to its knowledge, threatened
against, relating to or otherwise involving Parent or Merger Sub or the
Company or any of the Company Subsidiaries, as the case may be, that
relates to the consummation of the transactions contemplated by this
Agreement and (c) any failure of the Company, Merger Sub or Parent, as the
case may be, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder; provided, however, that
the delivery of any notice pursuant to this Section 7.3 shall not limit or
otherwise affect the remedies available hereunder to the party receiving
such notice or the representations or warranties of the parties or the
conditions to the obligations of the parties hereto.
SECTION 7.4 ACCESS; CONFIDENTIALITY. From the date hereof until the
Effective Time, upon reasonable notice and subject to the terms of the
Confidentiality Agreement, dated as April 24, 2006, between Parent and the
Company (the "Confidentiality Agreement"), the Company shall (and shall
cause each Company Subsidiary to) afford the officers, employees,
accountants, counsel, financing sources and other representatives of Parent
and Merger Sub, reasonable access during normal business hours to all of
its employees, properties, books, contracts, commitments and records
(including Tax Returns). During the period from the date hereof until the
Effective Time, the Company shall (and shall cause each of the Company
Subsidiaries to) furnish promptly to Parent and Merger Sub (a) a copy of
each report or other document provided to the shareholders of the Company
and (b) all other information concerning its business, properties and
personnel as Parent or Merger Sub may reasonably request, to the extent in
the possession or under the control of the Company or any Company
Subsidiary. All obligations of Parent and its representatives under the
Confidentiality Agreement shall terminate at the Effective Time.
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SECTION 7.5 PUBLICITY. Except as may be required by law or the rules
and regulations of any national security exchange, from the date hereof
through and including the Closing Date, none of the parties hereto, nor any
of their respective affiliates, shall issue any press release or make any
public statement with respect to the transactions contemplated by this
Agreement without the prior approval of the other parties.
SECTION 7.6 INDEMNIFICATION.
(a) Parent agrees that all rights to indemnification for acts
or omissions occurring prior to the Effective Time now existing in favor of
the current or former directors of the Company as provided in its
certificate of formation or bylaws shall survive the Merger and shall
continue in full force and effect in accordance with their terms for a
period of six (6) years following the Effective Time. In addition, for a
period of six (6) years after the Effective Time, the Surviving Corporation
shall indemnify and hold harmless all individuals who at any time prior to
the Effective Time were directors or officers of the Company to the maximum
extent permitted by applicable law for any acts or omission occurring at or
prior to the Effective Time, and the Surviving Corporation shall advance
periodically and promptly upon a request therefor to such individual his or
her legal and other expenses, subject to the provision by such individual
of an undertaking to reimburse the amounts so advanced in the event of a
determination that such individual is not entitled thereto.
(b) Prior to the Effective Time, (i) the Company may
purchase, at its sole cost and expense, a fully prepaid "tail" policy
providing substantially equivalent benefits as the Company's current
directors' and officers' liability insurance and (ii) the Company shall
purchase, with the costs thereof to be an Integration Cost, a fully prepaid
"tail" policy (reasonably acceptable to Parent) providing substantially
equivalent benefits as the Company's current errors and omissions liability
insurance with respect to matters arising on or before the Effective Time.
The Surviving Corporation shall use commercially reasonable efforts to
cause any such policy so purchased to be maintained in full force and
effect for its full term; provided, however, that neither the Surviving
Corporation nor any of its affiliates shall be required to incur any costs
or expenses or otherwise have any liability in connection with such policy
or claims made thereunder.
(c) The obligations under this Section 7.6 shall not be
terminated or modified in such a manner as to adversely affect any
indemnitee to whom this Section 7.6 applies without the consent of such
affected indemnitee (it being expressly agreed that the indemnitees to whom
this Section applies shall be third party beneficiaries of this
Section 7.6).
SECTION 7.7 TAKEOVER LAWS. If any "fair price," "moratorium,"
"control share acquisition" or other form of anti-takeover statute or
regulation shall become applicable to any of the transactions contemplated
hereby or to the Company, then the Company and the Company Board of
Directors shall take all action necessary to ensure that the transactions
contemplated hereby may be consummated as promptly as practicable on the
terms contemplated by this Agreement and otherwise to minimize the effect
of such statute or regulation on the Merger and the other transactions
contemplated hereby.
SECTION 7.8 INTERIM FINANCIAL STATEMENTS; FINANCING. During the
period prior to the Effective Time, the Company shall provide to Parent
consolidated monthly financial statements within 30 calendar days following
the end of each fiscal month. Further, the Company shall use, and shall
cause the Company Subsidiaries and their respective representatives to use
commercially reasonable efforts to cooperate and assist Parent with respect
to Parent's financing in connection with the transactions contemplated
hereby and by the Ancillary Agreements (the "Financing") and in connection
with Section 7.14. The Company agrees to provide, and shall cause the
Company Subsidiaries and its and their respective officers, employees,
consultants and advisors, including legal and accounting, to provide on a
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timely basis, reasonable cooperation in connection with the foregoing as
may be reasonably requested by Parent, including (i) participation in
meetings, presentations, road shows, due diligence sessions and sessions
with rating agencies; (ii) assisting with the preparation of materials for
rating agency presentations, offering documents, private placement
memoranda, bank information memoranda, prospectuses, business projections
and similar documents required in connection with the Financing; (iii)
using commercially reasonable efforts to cause its independent accountants
to provide assistance and cooperation to Parent, including participating in
accounting due diligence sessions, providing consent to Parent to use their
audit reports relating to the Company and providing any necessary "comfort
letters"; (iv) executing and delivering definitive financing documents,
including pledge and security documents or other certificates, legal
opinions or documents as may be reasonably requested by Parent (including
certificates of the chief financial officer of the Company or any Company
Subsidiary with respect to solvency matters) and otherwise reasonably
facilitating the pledging of collateral; provided that no obligation of the
Company or any of the Company Subsidiaries under any such agreement,
document or pledge shall be effective until the Effective Time; (v) using
commercially reasonable efforts to obtain title insurance reasonably
requested by Parent; (vi) as promptly as practicable, use commercially
reasonable efforts to furnish to Parent and its Financing sources with all
financial and other pertinent information regarding the Company reasonably
requested by Parent including all financial statements and data of the type
required by Regulation S-X and Regulation S-K, including audits thereof to
the extent so required (which audits shall be unqualified), and the other
accounting rules and regulations of the SEC (the "Required Financial
Information"); (viii) taking all actions reasonably necessary to (A) permit
the prospective lenders involved in the Financing to evaluate the Company's
current assets, cash management and accounting systems, policies and
procedures relating thereto for the purpose of establishing collateral
arrangements and (B) establish bank and other accounts and blocked account
agreements and lock box arrangements in connection with the foregoing;
provided that no right of any lender, nor obligation of the Company or any
of the Company Subsidiaries, thereunder shall be effective until the
Effective Time; (ix) entering into one or more credit or other agreements
on terms satisfactory to Parent in connection with the Financing
immediately prior to the Effective Time; provided that no obligation of the
Company or any of the Company Subsidiaries under such credit or other
agreement shall be effective until the Effective Time; (x) procuring the
release of liens and pay- off letters related to any indebtedness of the
Company or any Company Subsidiary to be repaid in connection with the
transactions contemplated hereby or that have otherwise been repaid; and
(xi) taking all corporate actions, subject to the occurrence of the
Effective Time, reasonably requested by Parent to permit the consummation
of the Financing and the direct borrowing or incurrence of all of the
proceeds of the Financing; provided that neither the Company nor any of its
Subsidiaries shall be required to pay any commitment fee or similar fee or
incur any liability with respect to the Financing prior to the Effective
Time. The Company hereby consents to the use of its and the Company
Subsidiaries' logos as may be reasonably necessary in connection with the
Financing; provided that such logos are used solely in a manner that is not
intended to nor reasonably likely to harm or disparage the Company or any
of the Company Subsidiaries or the reputation or goodwill of the Company or
any of the Company Subsidiaries and its or their marks.
SECTION 7.9 PRE-CLOSING TRANSACTIONS. The Company shall use
commercially reasonable efforts to, prior to the Closing Date, consummate
(i) the disposition of the Private Funds (and the general partners
thereof), the equity interests in Staubach Retail Services, Inc. and the
licenses held by Staubach Retail Services, Inc. and Cypress Equities, LLC
(collectively, the "Business Dispositions") in the manner as described on
Section 7.9 of the Company Disclosure Schedule, (ii) the reorganizations
with respect to The Staubach Company - San Diego, Inc. and Staubach Great
Lakes Inc. (collectively, the "Roll-Up Transactions") pursuant to the
transaction agreements substantially in the forms set forth as Exhibits C
and D, respectively, (iii) the termination of the existing licenses held by
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Corporacion Mexicana de Inmuebles, S.A. de C.V. and its subsidiaries;
Staubach Western Canada Corp., RGM Holdings Inc. and Xxxxxx Xxxxxx; and
Xxxxxxxx Eastern Canada, Inc. and Xxxx Xxxxxxxxx, pursuant to the
termination notices substantially in the forms set forth as Exhibits E, F
and G, respectively (collectively, the "License Terminations") and (iv) the
transactions referenced in Section 7.9(A) of the Company Disclosure
Schedule (the "Other Pre-Closing Transaction" and together with the License
Terminations, Business Dispositions and the Roll-Up Transactions, the
"Pre-Closing Transactions") (it being understood that Parent may not assert
a failure of the condition set forth in Section 8.3(g) due to the failure
of the Other Pre-Closing Transaction to be consummated at or prior to the
Closing if the failure to consummate the Other Pre-Closing Transaction was
caused by the failure by a Subsidiary of Parent to comply in all material
respects with its obligations with respect to such transaction as described
on Section 7.9(A) of the Company Disclosure Schedule). The Company shall
keep Parent informed on a regular basis concerning material developments in
the Pre-Closing Transactions and the means by which such transactions are
to be effected. As part of the Business Dispositions, Parent and the
Company shall use commercially reasonable efforts to provide for a
transition services agreement to be entered into at Closing by the
Surviving Corporation for the provision of certain transition services (to
be mutually agreed upon by Parent and the Company) to Staubach Retail
Services, Inc. and Cypress Equities, LLC. Also as part of the Pre-Closing
Transactions, Parent and the Company shall use commercially reasonable
efforts to provide for a transition services agreement to be entered into
at Closing by the Surviving Corporation for the provision of certain
transition services (to be mutually agreed upon by Parent and the Company)
to Columbus Realty. Except as set forth in any such transition services
agreements, the Company agrees that after the Effective Time, none of
Parent, the Surviving Corporation or any of their respective Subsidiaries
will have any obligations or liabilities under any license agreement
between the Company or any Company Subsidiary, on the one hand, and
Staubach Retail Services, Inc., Cypress Equities, LLC or their respective
Subsidiaries, on the other hand. For the avoidance of doubt, nothing in
this Section 7.9 shall limit or expand the indemnity provided in Article X.
SECTION 7.10 XXXXXXXX-XXXXX COMPLIANCE. The Company shall, and
shall cause the Company Subsidiaries and its and their respective
representatives, to take all actions that Parent reasonably may deem
necessary or appropriate, including to permit representatives of Parent to
meet from time to time with the representatives of the Company and the
Company Subsidiaries responsible for the financial statements and the
internal controls of the Company and the Company Subsidiaries, to enable
Parent, immediately following the Closing, to satisfy its obligations under
Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations promulgated by the United States Securities and Exchange
Commission (the "SEC") pursuant thereto (the "SOA") and the other
requirements of the SOA with respect to the Company and the Company
Subsidiaries, including establishing and maintaining adequate disclosure
controls and procedures and internal controls over financial reporting as
such terms are defined in the SOA. Any out of pocket expenses incurred by
the Company or the Company Subsidiaries, at the request of Parent, in
connection with the foregoing shall be Integration Costs.
SECTION 7.11 CERTAIN APPOINTMENTS. As of the Effective Time, Parent
shall cause Xxxxx X. Xxxxxxxx to be appointed to the board of directors of
Parent. Thereafter, unless Xxxxx X. Xxxxxxxx'x employment with Parent or
one of its Subsidiaries is terminated by Parent without "cause," by Xxxxx
X. Xxxxxxxx for "good reason" or due to Xxxxx X. Xxxxxxxx'x "disability"
(as such terms are defined in Xxxxx X. Xxxxxxxx'x employment agreement with
Parent or one of its Subsidiaries) and as long as Xxxxx X. Xxxxxxxx
complies with Parent's policies and guidelines applicable to all members of
its board of directors, Parent shall cause Xxxxx X. Xxxxxxxx to be included
in the slate of persons nominated to serve as directors on Parent's board
of directors during any Earnout Calculation Period. Upon any termination
of Xxxxx X. Xxxxxxxx'x employment with Parent or one of its Subsidiaries by
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Parent with "cause," by Xxxxx X. Xxxxxxxx without "good reason" or due to
"disability," Xxxxx X. Xxxxxxxx shall promptly resign from the board of
directors. As of the Effective Time, Parent shall cause Xxxx X. X'Xxxxx
and Xxxx X. Xxxxx to be appointed to the Americas Executive Committee, and
while such persons are employed by Parent or one of its Subsidiaries, they
shall continue to serve on such committee (or its successor) during any
Earnout Calculation Period. For the avoidance of doubt, the sole and
exclusive remedy for any breach of this Section 7.11 by Parent shall be
specific performance in accordance with Section 11.10, and in no event
shall Parent have any liabilities for Losses arising from any breach of
this Section 7.11.
SECTION 7.12 STOCK EXCHANGE LISTING. Parent shall use its
reasonable best efforts to cause the shares of Parent Common Stock to be
issued as Stock Consideration to be approved for listing on the NYSE,
subject to official notice of issuance.
SECTION 7.13 CERTAIN PROHIBITED ACTIVITIES. The Company shall not,
and shall cause each Company Subsidiary not to, directly or indirectly,
without the prior written consent of Parent, (i) sell, offer to sell,
contract or agree to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of
the Exchange Act, and the rules and regulations of the SEC promulgated
thereunder with respect to any Parent Common Stock or securities
convertible into or exchangeable or exercisable for Parent Common Stock, or
warrants or other rights to purchase Parent Common Stock or any such
securities, (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership
of Parent Common Stock or any securities convertible into or exchangeable
or exercisable for Parent Common Stock, or warrants or other rights to
purchase Parent Common Stock or any such securities, whether any such
transaction is to be settled by delivery of Parent Common Stock or such
other securities, in cash or otherwise or (iii) publicly announce an
intention to, or solicit or encourage any other Person to, effect any
transaction specified in clause (i) or (ii) above.
SECTION 7.14 REGISTRATION RIGHTS.
(a) Parent shall (i) as soon as practicable after the Closing
Date, but in no event before the second trading day after Parent's earnings
release for the period ended June 30, 2008 (subject to receipt of the
Required Financial Information), file with the SEC a registration statement
under the Securities Act on Form S-3 (or any successor short form
registration involving a similar amount of disclosure; or if then
ineligible to use any such form, then any other available form of
registration statement) for a public offering of the shares of Parent
Common Stock received by the Electing Holders in the Merger (the
"Registrable Stock") to be made on a continuous basis pursuant to Rule 415
of the Securities Act (the "Registration Statement") and, unless such
Registration Statement is automatically effective upon filing, use
commercially reasonable efforts to cause the Registration Statement to
become effective as soon as practicable after filing and (ii) use
commercially reasonable efforts to cause the Registration Statement to
remain effective until the earlier of (A) the date when all Registrable
Stock covered by the Registration Statement has been sold or (B) 180 days
after the Registration Statement is declared effective and (iii) to prepare
and file with the SEC any required amendments and supplements to the
Registration Statement and the prospectus (including any prospectus
supplement) used in connection therewith ("Prospectus"). Notwithstanding
the foregoing, Parent shall have no obligation to register or to maintain
the effectiveness of the Registration Statement after the Registrable Stock
first becomes eligible for sale pursuant to Rule 144. In connection with
the foregoing, the Company shall take all actions contemplated by
Section 7.8 whether such actions are required to be taken before or after
the Effective Time.
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(b) (i) Upon the issuance by the SEC of a stop order suspending
the effectiveness of the Registration Statement or the initiation of
proceedings with respect to the Registration Statement under Section 8(d)
or 8(e) of the Securities Act or (ii) if the Registration Statement shall
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, or any Prospectus forming a part of the
Registration Statement shall contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (including, in any such case, as a result of the
non-availability of financial statements, (A) (1) in the case of clause
(ii) above, Parent shall as promptly as practicable prepare and file a post
effective amendment to such Registration Statement or a supplement to the
related Prospectus so that such Registration Statement does not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and such Prospectus does not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Stock being sold thereunder, and in the case of a post
effective amendment to the Registration Statement, use commercially
reasonable efforts to cause it to be declared effective as promptly as is
reasonably practicable and (2) in the case of clause (i) above, use
commercially reasonable efforts to cause such stop order to be lifted, and
(B) give notice to the Electing Holders that the availability of such
Registration Statement is suspended (a "Deferral Notice") and, upon receipt
of any Deferral Notice, each Electing Holder agrees that it shall not sell
any Registrable Stock pursuant to the Registration Statement until such
Electing Holder receives copies of the supplemented or amended Prospectus
provided for in clause (A) above and/or is notified of the effectiveness of
the post-effective amendment to the Registration Statement provided for in
clause (A) above, or until it is advised in writing by Parent that the
Prospectus may be used.
(c) In connection with the performance of its obligations
under this Section 7.14, Parent shall pay all registration fees under the
Securities Act, all printing expenses and all fees and disbursements of
Parent's legal counsel, Parent's independent registered public accounting
firm and any other persons retained by Parent, and any other expenses
incurred by Parent. Each Electing Holder shall pay any discounts,
commissions and transfer taxes, if any, attributable to the sale of
Registrable Stock and any other expenses incurred by it.
(d) Indemnity.
(i) Parent agrees to indemnify each Electing Holder
against any and all loss, liability, claim and damage arising out of
any untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto) or the omission therefrom of a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under
which they were made, not misleading or arising out of any untrue
statement of a material fact included in any Prospectus (or any
amendment or supplement thereto) or the omission therefrom of a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading; provided, however, that this indemnity shall not apply to
any loss, liability, claim or damage to the extent arising out of any
untrue statement or omission made in reliance upon and in conformity
with information furnished to Parent in writing by or on behalf of an
Electing Holder for use in the Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement
thereto).
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(ii) Each Electing Holder agrees to indemnify Parent,
and each person, if any, who controls Parent within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all loss, liability, claim and damage described
in the indemnity contained in subsection Section 7.14(d)(i) but only
with respect to untrue statements or omissions made in the
Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto) in reliance upon and in
conformity with information furnished in writing to Parent by or on
behalf of such Electing Holder for use in the Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto).
(iii) Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any
action or proceeding commenced against it in respect of which
indemnity may be sought under this Section 7.14, but failure to so
notify an indemnifying party shall not relieve such indemnifying
party from any liability Section 7.14, except to the extent the
indemnifying party demonstrates that its defense of such action is
actually and materially prejudiced thereby. In case any such action
shall be brought against any indemnified party, the indemnifying
party shall be entitled to participate therein and, to the extent
that it shall wish to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election
so to assume the defense thereof, such indemnifying party shall not
be liable to such indemnified party under this Section 7.14 for any
legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with
the defense thereof, unless the indemnifying party has failed or is
failing to vigorously defend such claim, provided, however, that the
indemnifying party shall not, in connection with any one such action
or proceeding or separate but substantially similar actions or
proceedings arising out of the same general allegations, be liable
for the fees and expenses of more than one separate firm of attorneys
at any time for all indemnified persons. No indemnifying party
shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution is
sought under this Section 7.14(d) (whether or not the indemnified
parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of
such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party. No
indemnified party shall, without the prior written consent of the
indemnifying party, effect any settlement of any commenced or
threatened litigation, investigation, proceeding or claim in respect
of which any indemnification is sought under this Section 7.14(d).
(iv) If the indemnification provided for in Section
7.14(d) from the indemnifying party is unavailable to an indemnified
party hereunder in respect of any losses, claims, damages or
liabilities referred to in Section 7.14(d), the indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages, liabilities or expenses, in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified party in connection with the
actions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
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(v) The obligations of Parent and each Electing Holder
under this Section 7.14(d) shall survive the completion of any
offering of Registrable Stock pursuant to any Registration Statement.
(e) Each Electing Holder (i) shall furnish to Parent such
information regarding themselves, their relationship to Parent and its
affiliates, their beneficial ownership of common stock of Parent, the
Registrable Stock held by them, and the intended method of disposition, if
any, of such securities as is required to be included under the Securities
Act in the Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto), (ii) shall comply with
the prospectus delivery requirements under the Securities Act in connection
with the sale or other distribution of Registrable Stock pursuant to the
Registration Statement, (iii) shall report to Parent all sales or other
distributions of Registrable Stock pursuant to the Registration Statement
and (iv) agrees to be bound by Sections 11.7, 11.8, 11.9, 11.13, and 11.14
as if it were a party to this Agreement. The inclusion of any Electing
Holder's Registrable Stock in the Registration Statement is subject to the
receipt of the information specified in Section 7.14(e)(i).
(f) The rights of any Electing Holder under this Section 7.14
with respect to any Registrable Stock are not transferable or assignable.
SECTION 7.15 SEVERANCE. With respect to employees of the Company or
any Company Subsidiary immediately prior to the Effective Time who will be
terminated upon the Effective Time (or after the Effective Time as
mutually agreed by Parent and the Company prior to the Effective Time) in
connection with the consummation of the transactions contemplated by this
Agreement and whose severance cost is an Integration Cost, Parent shall
cause the Surviving Corporation to honor the Company's ordinary course
severance practices and arrangements consistent with the Company's past
practices as of the date hereof, and such severance shall be in lieu of
Parent's or its affiliate's severance plans or arrangements or any other
benefit plan of Parent or its affiliates that would result in duplication
of benefits. Without limiting the generality of Section 11.12, no
provision of this Section 7.15 shall create any third party beneficiary
rights in any individual or any beneficiary of any such individual.
ARTICLE VIII
CONDITIONS
SECTION 8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each of the Company, Parent and
Merger Sub to effect the Merger shall be subject to the satisfaction or
waiver, where permissible, at or prior to the Effective Time, of each of
the following conditions:
(a) No statute, law, rule or regulation shall be in effect or
have been enacted or promulgated by any Governmental Entity which prohibits
the consummation of the Merger, and there shall be no order or injunction
of a court of competent jurisdiction in effect prohibiting consummation of
the Merger; and
(b) The applicable waiting period (and any extension thereof)
under the HSR Act shall have expired or been terminated.
(c) The shares of Parent Common Stock to be issued as Stock
Consideration shall have been approved for listing on the NYSE, subject to
official notice of issuance.
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SECTION 8.2 CONDITIONS TO THE COMPANY'S OBLIGATION TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger is subject to
satisfaction or waiver (to the extent permitted by applicable law) at or
prior to the Effective Time of each of the following conditions:
(a) The representations and warranties of Parent and Merger
Sub set forth herein (i) that are qualified as to "materiality" shall be
true and correct both when made and at and as of the Effective Time, as if
made at and as of such time (except to the extent such representations and
warranties are expressly made as of an earlier date, in which case as of
such date), and (ii) that are not qualified as to "materiality" shall be
true and correct both when made and at and as of the Effective Time, as if
made at and as of such time (except to the extent expressly made as of an
earlier date, in which case as of such date) in all material respects.
(b) Parent and Merger Sub shall have performed in all
material respects all obligations required to be performed by them at or
prior to the Effective Time under this Agreement.
(c) The Company shall have received a certificate, dated as
of the Effective Time, signed by an officer of Parent, to the effect that
the conditions set forth in Section 8.2(a) and Section 8.2(b) have been
satisfied.
(d) Since March 31, 2008, there shall not have occurred any
change, event, occurrence, development or circumstance which, individually
or in the aggregate, has had, or would reasonably be expected to have, a
material adverse effect on the ability of Parent to make all payments
required pursuant to this Agreement.
SECTION 8.3 CONDITIONS TO PARENT'S AND MERGER SUB'S OBLIGATIONS TO
EFFECT THE MERGER. The obligation of each of Parent and Merger Sub to
effect the Merger is subject to satisfaction or waiver (to the extent
permitted by applicable law) at or prior to the Effective Time of each of
the following conditions:
(a) The representations and warranties of the Company set
forth herein (i) that are qualified as to "materiality," "Company Material
Adverse Effect" or "Company Material Adverse Change" shall be true and
correct both when made and at and as of the Effective Time, as if made at
and as of such time (except to the extent such representations and
warranties are expressly made as of an earlier date, in which case as of
such date), and (ii) that are not qualified as to "materiality," "Company
Material Adverse Effect" or "Company Material Adverse Change" shall be true
and correct both when made and at and as of the Effective Time, as if made
at and as of such time (except to the extent expressly made as of an
earlier date, in which case as of such date) in all material respects.
(b) The Company shall have performed in all material respects
all obligations required to be performed by it at or prior to the Effective
Time under this Agreement.
(c) Parent shall have received a certificate, dated as of the
Effective Time, signed by the chief executive officer of the Company, to
the effect that the conditions set forth in Section 8.3(a) and Section
8.3(b) have been satisfied.
(d) There shall not be pending any action or proceeding by
any Governmental Entity seeking (i) to make illegal, to delay materially or
otherwise directly or indirectly to restrain or prohibit the consummation
of the Merger or the other transactions contemplated by this Agreement or
to obtain any damages or other remedy in connection with the Merger or the
transactions contemplated by this Agreement, (ii) to restrain or prohibit
Parent's (including its affiliates') ownership or operation of all or any
portion of the business or assets of the Surviving Corporation or the
Company, or to compel Parent or any of its affiliates to dispose of or hold
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separate all or any portion of the business or assets of the Surviving
Corporation or the Company or (iii) to impose or confirm limitations on the
ability of Parent or any of its affiliates to effectively control the
business or operations of the Surviving Corporation or the Company, and no
court, arbitrator or Governmental Entity shall have issued any judgment,
order, decree or injunction, and there shall not be any statute, rule or
regulation, that is likely, directly or indirectly, to result in any of the
consequences referred to in the preceding clauses (i) through (iii).
(e) Since the date of this Agreement, there shall not have
occurred any change, event, occurrence, development or circumstance which,
individually or in the aggregate, has had, or would reasonably be expected
to have, a Company Material Adverse Effect.
(f) [Reserved]
(g) Each of the Pre-Closing Transactions shall have been
consummated in accordance with Section 7.9.
(h) Each of the parties thereto shall have executed and
delivered the Name Assignment and License Amendment, and such agreement
shall be in full force and effect and all the parties thereto shall be in
compliance in all material respects with the terms thereof.
(i) (i) The employment agreements between each individual set
forth on Section 8.3(i)(i) of the Company Disclosure Schedule shall be in
full force and effect, and such individuals shall not have terminated or
otherwise repudiated such agreement and (ii) not less than 85% of the
individuals set forth on Section 8.3(i)(ii) of the Company Disclosure
Schedule shall have entered into an employment agreement with Parent (or
one of its Affiliates) substantially in the form attached to such schedule.
(j) The Company shall have provided to Parent a duly executed
certificate, substantially in the form of Exhibit H attached hereto, to the
effect that Parent and Merger Sub are not required to withhold under
Section 1445 of the Code from any of the consideration to be paid hereunder
(a "FIRPTA Certificate"). Notwithstanding any provision of this Agreement
to the contrary, if Parent does not receive a FIRPTA Certificate prior to
Closing, Parent may waive the condition to Closing set forth in this
Section 8.3(j) and withhold from consideration payable hereunder in
accordance with the requirements of Section 1445 of the Code.
(k) The Company shall have delivered to Parent the opinion of
Gardere Xxxxx Xxxxxx LLP, special counsel to the Company, covering the
matters set forth on Exhibit I and otherwise in a form and substance
reasonably satisfactory to Parent (such opinion to provide that Parent's
financing sources may rely on such opinion as if the opinion were addressed
to them).
(l) Electing Holders shall have specified a sufficient number
of Election Shares such that the Per Share Closing Consideration payable to
all Non-Election Shares in accordance with the terms of this Agreement may
be satisfied in full from the Cash Closing Consideration.
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ARTICLE IX
TERMINATION
SECTION 9.1 TERMINATION. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time
(notwithstanding the approval of the Merger and adoption of this Agreement
by the shareholders of the Company):
(a) by the mutual written consent of Parent and the Company;
(b) by either Parent or the Company if:
(i) a statute, law, rule or regulation shall have been
enacted or promulgated by any Governmental Entity which prohibits the
consummation of the Merger, or there shall be an order or injunction
of a court of competent jurisdiction in effect prohibiting
consummation of the Merger, and such order or injunction shall have
become final and nonappealable; or
(ii) the Merger shall not have been consummated by
July 31, 2008; PROVIDED, HOWEVER, that in the event that the Federal
Trade Commission or Department of Justice issues a "second request"
in connection with any review of the transactions contemplated by
this Agreement under the HSR Act, such date shall be extended until
September 1, 2008; PROVIDED, FURTHER, HOWEVER, that the right to
terminate this Agreement pursuant to this Section 9.1(b)(ii) shall
not be available to any party whose failure to fulfill any of its
obligations under this Agreement results in the failure of the Merger
to occur on or before such date;
(c) by Parent if:
(i) any representation or warranty of the Company set
forth herein (i) that is qualified as to "materiality," "Company
Material Adverse Effect" or "Company Material Adverse Change" shall
not be true and correct both when made and at and as of the date of
termination, as if made at and as of such time (except to the extent
such representations and warranties are expressly made as of an
earlier date, in which case as of such date), or (ii) that is not
qualified as to "materiality," "Company Material Adverse Effect" or
"Company Material Adverse Change" shall not be true and correct both
when made and at and as of the date of termination, as if made at and
as of such time (except to the extent such representations and
warranties are expressly made as of an earlier date, in which case as
of such date), in each case, in any material respect; PROVIDED that
such failure to be true and correct is not cured, or is incapable of
being cured, within 60 days after the receipt by the Company of
written notice of such failure; or
(ii) the Company shall have failed to perform in any
material respect any obligation required to be performed by it at or
prior to the Effective Time under this Agreement, which failure to
perform has not been cured within 60 days following receipt by the
Company of notice of such failure to perform from Parent or Merger
Sub;
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(d) by the Company if:
(i) any representation or warranty of Parent or Merger
Sub set forth herein (i) that is qualified as to "materiality" shall
not be true and correct both when made and at and as of the date of
termination, as if made at and as of such time (except to the extent
such representations and warranties are expressly made as of an
earlier date, in which case as of such date), or (ii) that is not
qualified as to "materiality" shall not be true and correct both when
made and at and as of the date of termination, as if made at and as
of such time (except to the extent such representations and
warranties are expressly made as of an earlier date, in which case as
of such date), in each case, in any material respect; provided that
such failure to be true and correct is not cured, or is incapable of
being cured, within 60 days after the receipt by Parent of written
notice of such failure; or
(ii) Parent or Merger Sub shall have failed to perform
in any material respect any obligation required to be performed by it
at or prior to the Effective Time under this Agreement, which failure
to perform has not been cured within 60 days following receipt by
Parent of notice of such failure to perform from the Company.
SECTION 9.2 EFFECT OF TERMINATION. In the event of the termination
of this Agreement as provided in Section 9.1, written notice thereof shall
forthwith be given to the other party or parties, and this Agreement shall
forthwith become null and void (except for this Section 9.2 and Article XI
which shall survive such termination) and there shall be no liability on
the part of Parent, Merger Sub or the Company, except (i) as set forth in
this Section 9.2, and (ii) nothing herein shall relieve any party from
liability for any breach of this Agreement. The Confidentiality Agreement
shall survive any termination of this Agreement.
ARTICLE X
INDEMNIFICATION
SECTION 10.1 INDEMNIFICATION.
(a) From and after the Effective Time, Parent and the
Surviving Corporation and their respective officers, directors, agents and
affiliates (each a "Parent Indemnified Party") shall be entitled to be
indemnified, defended and held harmless as provided in Article X from and
against any and all losses, liabilities, damages, deficiencies, claims,
Taxes, costs and expenses (collectively, "Losses") that they may suffer,
sustain, incur or become subject to arising out of, in connection with or
due to, directly or indirectly, (i) any inaccuracy of any representation or
breach of any warranty of the Company contained in Article IV of this
Agreement without giving effect to any "materiality," "Company Material
Adverse Effect," "Company Material Adverse Change" or similar qualifier
contained therein; (ii) any pre-Closing breach by the Company of any of its
covenants and agreements contained in this Agreement; (iii) Tax Losses;
(iv) any action, suit, charge, complaint, claim, litigation, arbitration or
other proceeding (including, alternative dispute resolution) or
investigation pending or, to the knowledge of the Company or any Company
Subsidiary, threatened prior to the Effective Time, against, affecting or
naming as a party thereto (A) the Company or any Company Subsidiary or any
of their respective properties, assets or businesses or (B) any of the
Company's or any Company Subsidiary's current or former directors or
officers or any other Person who may be entitled to indemnification by the
Company or any Company Subsidiary in connection therewith, all of which are
set forth on Section 10.1(a)(iv) of the Company Disclosure Schedule as of
the date hereof and any other item that would be set forth on such schedule
if such schedule were updated as of the Effective Time; (v) this Agreement,
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the Ancillary Agreements, or the transactions contemplated hereby or
thereby, including (A) any action or claim by any shareholder or former
shareholder of the Company in connection therewith and (B) the exercise of
any dissenters' rights under Chapter 10, Subchapter H of the TBOC by any
holders of Common Stock (but in the case of clause (B) only to the extent
such Losses exceed the Dissenters Holdback); (vi) the Company's 2007
reorganization transaction, including the exchange offer and other
transactions related to the formation of the Company and the issuance of
securities of company in connection therewith, including compliance with
applicable securities laws and any liabilities or obligations with respect
to the Contingent Issuance; (vii) (A) the Persons or businesses subject to
the Business Dispositions, the Roll-Up Transactions, the License
Terminations or the Other Pre-Closing Transaction, including the business,
operations and licensees of such Persons or businesses, (B) the Pre-Closing
Transactions and(C) the items identified on Section 10.1(a)(vii) of the
Company Disclosure Schedule; and (viii) the exercise of any "guarantee of
value" or equivalent right provided by the Company or any Company
Subsidiary with respect to any services provided by the Company or a
Company Subsidiary prior to the Effective Time.
(b) From and after the Effective Time, the former
shareholders of the Company (the "Shareholder Indemnified Parties") shall
be entitled to be indemnified and held harmless as provided in Article X
for any Shareholder Losses that they may suffer, sustain, incur or become
subject to, arising out of, in connection with or due to, directly or
indirectly, (i) any inaccuracy of any representation or any breach of any
warranty of Parent or Merger Sub contained in Article V of this Agreement
without giving effect to any "materiality" or similar qualifier contained
therein (except with respect to Section 5.7(c), in which case any
"materiality" or similar qualifier contained therein shall be given
effect), (ii) any pre-Closing breach by Parent or Merger Sub of their
respective covenants and agreements contained in this Agreement or (iii)
any failure by Parent to pay an amount required to be paid by Parent
pursuant to Article III in breach of this Agreement.
(c) Certain Definitions.
(i) The term "Losses" shall include interest,
penalties, fees and reasonable professional fees and expenses
incurred in connection with any of the foregoing and in investigating
and seeking indemnification pursuant to this Article X and all
amounts paid or payable pursuant to Section 7.6(a). For all purposes
of this Article X, "Losses" shall be net of (i) any insurance
recoveries actually paid to the Parent Indemnified Party under any
insurance policy maintained by the Company or any Company Subsidiary
prior to the Effective Time in connection with the facts giving rise
to the right of indemnification under Article X of this Agreement (if
requested by the Shareholders' Representative, Parent agrees to use
commercially reasonable efforts to seek coverage, at the sole cost
and expense of the Shareholders' Representative, for any Losses for
which coverage may be available under an insurance policy maintained
by the Company or any Company Subsidiary prior to the Effective
Time); provided, however, the amount of such recovery shall be
reduced by any costs and expenses incurred in obtaining such recovery
(to the extent not otherwise reimbursed by the Shareholders'
Representative as provided above) and by the amount of any increase
in insurance premiums resulting from making the claim giving rise to
such recovery and (ii) any Tax benefits actually realized (either by
cash refund of a Tax or an actual reduction of Taxes shown to be due
on a Tax Return), as reduced by the amount of any Tax detriments
actually realized (either by reduction of a cash refund or increase
71
in Taxes shown to be due on a Tax Return), by the Indemnified Party
during, after, or prior to the tax period in which the
indemnification payment is made in connection with the accrual,
incurrence or payment of any such Losses. The term "Shareholder
Losses" means, in the case of indemnification pursuant to Section
10.1(b)(i) or (ii), "Losses," and in the case of indemnification
pursuant to Section 10.1(b)(iii), the amount Parent was required to
pay pursuant to Article III of this Agreement that Parent did not pay
in breach of this Agreement plus reasonable professional fees and
expenses incurred in seeking indemnification pursuant to this
Article X.
(ii) The term "Tax Losses" shall mean: (1) Taxes imposed
on or with respect to the Company or any Company Subsidiary with
respect to a Pre-Closing Tax Period; (2) Taxes imposed on any Parent
Indemnified Party (including the loss of any Tax benefits or Tax
attributes) as a result of a breach (x) of any representation or
warranty set forth in Sections 4.11(g), (i), (k), (m) and 4.12 (in
each case construed as if they were not qualified by the terms
"knowledge," "material" or materiality or similar language, if any,
and without reduction for items set forth in the Company Disclosure
Schedule to this Agreement) or (y) of any covenant contained in
Section 6.3; (3) Taxes of any member of an affiliated, consolidated,
combined, unitary or similar group of which the Company or any
Company Subsidiary (or any predecessor of the Company or any Company
Subsidiary) is or was a member on or prior to the Closing Date,
including pursuant to Treasury Regulations Section 1.1502-6 or any
analogous or similar laws; (4) Taxes for which the Company or any
Company Subsidiary is liable as a transferee or successor, which
Taxes relate to an event or transaction occurring on or before the
Closing Date (other than Taxes attributable to actions taken by
Parent out of the ordinary course of business following the Closing
on the Closing Date); (5) Taxes or other payments in respect of Taxes
owed by a Person other than the Parent, the Company, or a Company
Subsidiary required to be made to any party after the Closing Date by
the Company or any Company Subsidiary pursuant to a contract (other
than this Agreement), including any Tax sharing, indemnity, or
allocation agreement (whether or not written), that was entered into
on or before the Closing Date (other than Taxes attributable to
actions taken by Parent out of the ordinary course of business
following the Closing on the Closing Date); (6) all applicable sales,
transfer, recording, deed, stamp and other similar Taxes, including
any real property transfer or gains Taxes (if any), resulting from
the consummation of the transactions contemplated by this Agreement;
and (7) the amount of any Taxes payable by the Company or any Company
Subsidiary in any Post-Closing Tax Period, or the portion of a
Straddle Period that ends after the Closing Date, to the extent such
Taxes relate to any adjustment to such entity's items of income,
gain, loss, deduction, or credit made pursuant to Section 481 of the
Code or any corresponding provision of foreign, state, or local law
as a result of an action or event that occurred on or before the
Closing Date (the "Section 481 Adjustment"). Notwithstanding any
other provision of this Agreement, solely for purposes of determining
the amount of any Tax Loss attributable to a Section 481 Adjustment,
the amount of such Section 481 Adjustment shall be treated as the
only item of income or gain earned by the Company or Company
Subsidiary, as the case may be, in the taxable year or portion
thereof to which such Section 481 Adjustment relates.
Notwithstanding any other provision of this Agreement, a Tax Loss
shall be reduced to the extent of the amount of such Tax, if any,
taken into account in determining the Closing Consideration Amount or
Receivables Payment.
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(iii) APPORTIONMENT. In order to apportion
appropriately any Taxes (other than Taxes described in clause (6) of
the definition of "Tax Losses") relating to any taxable year or
period that includes a Straddle Period, the parties hereto shall, to
the extent permitted under applicable law, (x) elect with the
relevant Governmental Entity to treat, for all purposes, the Closing
Date as the last day of the taxable year or period of the Company or
any Company Subsidiary and (y) elect the "closing of the books"
method of accounting with respect to allocations between taxable
periods ending on the Closing Date and any taxable periods ending
after the Closing Date. The portion of a Straddle Period ending on
the Closing Date shall be treated as a short taxable year and a
Pre-Closing Tax Period for purposes of Section 10.1(c). In any case
where applicable law does not permit the Company or any Company
Subsidiary to treat the Closing Date as the last day of the taxable
year or period of such Company or Company Subsidiary with respect to
Taxes that are payable with respect to a Straddle Period, the amount
of any Taxes for the portion of such Straddle Period ending on the
Closing Date shall:
(1) in the case of Taxes that are either (a)
based upon or related to income or receipts or (b) imposed in
connection with any sale or other transfer or assignment of property
(real or personal, tangible or intangible) be determined based on an
interim closing of the books as of the end of business on the Closing
Date (except that, solely for purposes of determining the marginal
tax rate applicable to income or receipts during such period in a
jurisdiction in which such tax rate depends upon the level of income
or receipts, annualized income or receipts shall be taken into
account, if appropriate, for an equitable sharing of such Taxes), and
(2) in the case of all other Taxes not described
in subparagraph (1) above (including those imposed on a periodic
basis or measured by the level of any item), be deemed to be the
amount of such Taxes for the entire period (or, in the case of such
Taxes determined on an arrears basis, the amount of such Taxes for
the immediately preceding period) multiplied by a fraction, the
numerator of which is the number of calendar days in the Straddle
Period ending on and including the Closing Date and the denominator
of which is the number of calendar days in the entire relevant
period.
For the avoidance of doubt, any Taxes described in clause (6) of the
definition of Tax Losses shall not be subject to apportionment as described
above, and Parent shall be entitled to indemnification with respect to the
full amount of such Taxes.
(d) No indemnification shall be available under Section
10.1(a)(i) or 10.1(b)(i):
(i) unless and until (A) all Losses incurred by all
Parent Indemnified Parties or Shareholder Indemnified Parties, as
applicable, with respect to any particular single matter,
circumstance, event or occurrence or related group of matters,
circumstances, events or occurrences exceed $20,000 ("Covered
Losses") and (B) the aggregate amount of all such Covered Losses
exceeds $4,000,000 (the "Basket Amount"), in which case,
indemnification shall be available for all Covered Losses, in excess
of the Basket Amount; or
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(ii) for Losses in excess of $155,885,000, in the
aggregate;
PROVIDED that none of the foregoing limitations shall apply to any
breach of the representations and warranties contained in Sections
4.1, 4.3, 4.4, 5.1 or 5.2 hereof or any fraudulent breach of any
representation or warranty; PROVIDED FURTHER, that the limitations
set forth in Section 10.1(d)(i) shall not apply to the first $500,000
of Losses resulting from any breach of the representations and
warranties contained in Section 4.11 hereof, it being understood that
all such Losses in excess of $500,000 shall be subject to the
foregoing limitations.
(e) No indemnification shall be available under Section
10.1(a)(ii), (v), (vi) or (viii) or 10.1(b)(ii) unless and until all the
aggregate amount of all Losses incurred by all Parent Indemnified Parties
or Shareholder Indemnified Parties, as applicable, with respect to the
matters covered thereby exceeds $1,000,000, in which case, indemnification
shall be available for all Losses, in excess of such amount.
(f) No indemnification shall be available under Section
10.1(a)(ii), (iv) (v), (vi) or (viii) or 10.1(b)(ii) for Losses in excess
of $124,708,000, in the aggregate.
(g) No indemnification shall be available under Section
10.1(a)(iii) or (vii) for Losses in excess of the total amount of the
Future Payments, in the aggregate (without giving effect to any reduction
in the amount paid with respect thereto in accordance with Sections
3.3(d)(ii) or 10.4).
(h) Except (i) in the case of fraud, (ii) as provided in
Sections 3.3(c), 3.7 or 7.14 or (iii) with respect to claims for specific
performance or other equitable remedies, from and after the Effective Time,
the remedies set forth in this Article X shall be the sole and exclusive
remedies by Parent or the shareholders of the Company for any inaccuracy of
any representation or breach of any warranty, covenant or agreement by
Parent, Merger Sub or the Company contained in this Agreement.
(i) Notwithstanding anything to the contrary contained
herein, from and after the Effective Time, in no event shall Parent have
any obligation to make aggregate payments to the former shareholders of the
Company pursuant to Article III with respect to the Future Payments, in
respect of Losses pursuant to this Article X or otherwise in excess of the
total amount of the Future Payments.
SECTION 10.2 SURVIVAL.
(a) The representations and warranties of the parties
contained in this Agreement shall survive the Effective Time and shall
expire on the date that is 30 months after the Effective Time; provided,
however, that (i) the representations and warranties set forth in Sections
4.11, 4.12 and 4.17(l) shall survive until the date that is 90 days after
the expiration of the applicable statute of limitations (as such period may
be extended by tolling or waiver); (ii) the representations and warranties
set forth in Sections 4.1, 4.3, 4.4, 5.1 and 5.2 shall survive until the
expiration of the applicable statute of limitations (as such period may be
extended by tolling or waiver); and (iii) if, at any time prior to
expiration of the applicable representation and warranty, written notice is
delivered to the Shareholders' Representative, in the case of a claim by
the Parent Indemnified Parties, or to Parent, in the case of a claim by the
Shareholder Indemnified Parties, alleging the existence of an inaccuracy in
or a breach of such representation and warranty and asserting a claim for
recovery under Article X based on such alleged inaccuracy or breach, then
the representation or warranty underlying the claim asserted in such notice
shall survive until such time as such claim is fully and finally resolved.
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(b) A Parent Indemnified Party's right to indemnification
pursuant to Section 10.1(a)(ii), (iv), (v), (vi) or (viii) and a
Shareholder Indemnified Party's right to indemnification pursuant to
Section 10.1(b)(ii) shall expire on the date that is 30 months after the
Effective Time; PROVIDED, HOWEVER, if, at any time prior to expiration of
such right, written notice is delivered to the Shareholders'
Representative, in the case of a claim by a Parent Indemnified Party, or to
Parent, in the case of a claim by a Shareholder Indemnified Party,
asserting a claim for recovery under Section 10.1(a)(ii), (iv), (v), (vi)
or (viii) or 10.1(b)(ii), as applicable, then the indemnification rights
thereunder shall survive until such time as such claim is fully and finally
resolved.
(c) A Parent Indemnified Party's right to indemnification
pursuant to Section 10.1(a)(iii) and a Shareholder Indemnified Party's
right to indemnification pursuant to Section 10.1(b)(iii) shall expire on
the date that is 90 days after the expiration of the applicable statute of
limitations (as such period may be extended by tolling or waiver);
provided, however, if, at any time prior to expiration of such right,
written notice is delivered to the Shareholders' Representative, in the
case of a claim by a Parent Indemnified Party, or to Parent, in the case of
a claim by a Shareholder Indemnified Party, asserting a claim for recovery
under Section 10.1(a)(iii) or 10.1(b)(iii), as applicable, then the
indemnification rights thereunder shall survive until such time as such
claim is fully and finally resolved.
(d) A Parent Indemnified Party's right to indemnification
pursuant to Section 10.1(a)(vii) shall expire on the date that is 36 months
after the Effective Time; provided, however, if, at any time prior to
expiration of such right, written notice is delivered to the Shareholders'
Representative, asserting a claim for recovery under Section 10.1(a)(vii),
then the indemnification rights thereunder shall survive until such time as
such claim is fully and finally resolved.
SECTION 10.3 INFORMATION; WAIVER. The right to indemnification
based on representations, warranties, covenants and obligations in this
Agreement will not be affected by any investigation conducted with respect
to, or any knowledge acquired (or capable of being acquired) at any time,
whether before or after the execution and delivery of this Agreement or the
Effective Time, with respect to the accuracy or inaccuracy of or compliance
with, any such representation, warranty, covenant or obligation. The
waiver of any condition based on the accuracy of any representation or
warranty, or on the performance of or compliance with any covenant or
obligation, will not affect the right to indemnification based on such
representations, warranties, covenants and obligations.
SECTION 10.4 SET-OFF RIGHTS.
(a) Parent shall have the right to withhold and set-off
against any Future Payment, the amount of any claim for indemnification or
payment of Losses pursuant to Section 10.1(a) in accordance with this
Section 10.4. In addition, Parent shall also be entitled to the right to
recoup the Merger Consideration paid to any shareholder in accordance with
Section 10.5, but only to the extent the amount of the remaining Deferred
Payments minus (i) the Aggregate Claimed Amount then outstanding, if any,
and (ii) the aggregate amount of Established Losses that have not been
satisfied in full, if any, is not in excess of the amount sought to be
recouped.
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(b) Parent shall exercise its set-off and withholding rights
by delivering written notice to the Shareholders' Representative (the
"Claim Notice"). The Claim Notice shall set forth in reasonable detail
with respect to the claim asserted thereby, to the extent known by Parent,
(i) the facts and circumstances giving rise to such claim and (ii) the
amount of Losses actually suffered or incurred and a good faith estimate of
the amount of Losses expected to be suffered or incurred (to the extent
then estimable by Parent) in connection with such claim (the aggregate of
such amounts, the "Claimed Amount"). Parent may, in good faith, increase
the Claimed Amount in connection with any claim by delivering another Claim
Notice with respect thereto.
(c) The Shareholders' Representative shall have 30 days after
receipt of a Claim Notice to dispute all or any portion of the Claimed
Amount set forth in the Claim Notice by delivering a written notice of
dispute to Parent. If Parent does not receive timely notice of such
dispute, the Claimed Amount set forth in such Claim Notice shall be deemed
established and conclusive for all purposes and shall not be subject to
appeal or other proceedings disputing the right to indemnification with
respect to such claim or the Claimed Amount with respect thereto (an
"Undisputed Claim").
(d) If the Shareholder's Representative delivers timely
notice of a dispute with respect to all or any portion of a Claimed Amount
as provided in Section 10.4(c) and the Shareholders' Representative and
Parent are unable to resolve the dispute within 30 days of the delivery of
such notice of dispute, at the request of either the Shareholders'
Representative or Parent, the dispute shall be submitted to binding
arbitration as the sole and exclusive method of resolving such dispute.
(e) If, as set forth in Section 10.4(d), any dispute is
submitted to binding arbitration, the arbitration shall be conducted (i) by
a single arbitrator agreed upon by the Shareholders' Representative and
Parent within fifteen days of the receipt by respondent of a copy of the
demand for arbitration, or (ii) in the absence of such timely agreement, by
three arbitrators one appointed by each of the Shareholders' Representative
and Parent within thirty days of the receipt by respondent of a copy of the
demand for arbitration and the third appointed by the two party appointed
arbitrators within fifteen days of the appointment of the second
arbitrator, or in default of such timely appointment, by the American
Arbitration Association ("AAA") in accordance with the AAA's Commercial
Arbitration Rules (the "Rules"), (the arbitrator agreed upon in accordance
with clause (i) or the three arbitrators appointed in accordance with
clause (ii) being referred to herein as the "Arbitral Tribunal"). The
arbitration shall be conducted and administered by the AAA in accordance
with the Rules then in effect and the following provisions:
(i) In the event of any conflict between the Rules and
the provisions of this Agreement, the provisions of this Agreement
shall prevail and be controlling.
(ii) The arbitration shall be held and the award shall
be rendered in New York, New York.
(iii) Not later than 30 days after the conclusion of the
arbitration hearing (or as soon thereafter as practicable), the
Arbitral Tribunal shall prepare and distribute to the parties a
writing setting forth the arbitral award and the findings of fact and
conclusions of law on which it is based. Any award rendered by the
Arbitral Tribunal shall be final, conclusive and binding upon the
parties and judgment thereon may be entered and enforced in any court
of competent jurisdiction.
(iv) The Arbitral Tribunal shall have no power or
authority, under the Rules or otherwise, to (i) modify or disregard
any provision of this Agreement or (ii) address or resolve any issue
not submitted by the parties.
76
(v) In connection with any arbitration proceeding
pursuant to this Agreement, the fees and costs of the AAA and the
Arbitral Tribunal, the costs and expenses of obtaining the facility
where the arbitration hearing is held, and such other costs and
expenses as the Arbitral Tribunal may determine to be directly
related to the conduct of the arbitration shall be the responsibility
of the non-prevailing party. If the Shareholders' Representative is
the non-prevailing party, then such fees and expenses shall be deemed
Established Losses for purposes of this Agreement.
(vi) By agreeing to arbitration, the parties do not
intend to deprive any New York Court of its jurisdiction to issue a
pre-arbitral injunction to maintain the status quo or prevent
irreparable harm, a pre-arbitral attachment or other order in aid of
arbitration proceedings. Without prejudice to such provisional
remedies as may be available under the jurisdiction of a national
court, the Arbitral Tribunal shall have full authority to grant
provisional remedies or order the parties to request that a court
modify or vacate any temporary or preliminary relief issued by a such
court, and to award damages for the failure of any party to respect
the Arbitral Tribunal's orders to that effect.
(f) The full amount of each Claimed Amount shall remain a
Claimed Amount except to the extent (i) such amount is an Undisputed Claim,
(ii) Parent and the Shareholders' Representative enter into a written
agreement to reduce the amount of the Claimed Amount in connection with the
settlement of any claim for indemnification with respect thereto (a
"Settlement Agreement"), (iii) an Arbitral Tribunal has finally determined
that a Parent Indemnified Party is entitled to all or any portion of the
Claimed Amount (a "Final Determination") or (iv) an Arbitral Tribunal has
finally determined that a Parent Indemnified Party is not entitled to all
or any portion of the Claimed Amount. The aggregate amount of all Claimed
Amounts outstanding is referred to as the "Aggregate Claimed Amount." The
amount of any Losses finally established pursuant to a Settlement
Agreement, an Undisputed Claim or Final Determination is referred to as an
"Established Loss."
(g) The amount of each Future Payment shall be reduced by the
sum of (i) the Aggregate Claimed Amount, if any, plus (ii) the aggregate
amount of Established Losses that have not been satisfied in full by a
reduction in a prior Future Payment, in each case, as of the date such
Future Payment was otherwise due to have been paid pursuant to this
Agreement (the "Payment Date"). The amount by which a Future Payment is
reduced as a result of the Aggregate Claimed Amount as of a Payment Date is
referred to as the "Withheld Amount."
(h) If at any time the aggregate amount of Withheld Amounts
exceeds the sum of (1) the Aggregate Claimed Amount, plus (2) the aggregate
amount of Established Losses that have not been not been satisfied in full
by a reduction in a prior Future Payment, in each case, as of such time,
Parent shall pay an amount in cash equal to such excess (and, if such
excess results from a final determination from an Arbitral Tribunal that a
Parent Indemnified Party is not entitled to all or any portion of a Claimed
Amount, a notional amount equal to interest on the amount of such excess at
the Agreed Rate for the period beginning on the most recent date on which a
Future Payment was paid or payable and amounts were withheld from such
payment and ending on the date such excess amount is paid) in accordance
with Section 3.10(b).
77
SECTION 10.5 RECOUPMENT. The shareholders of the Company, by
approving this Agreement and the transactions contemplated hereby or
accepting any Merger Consideration, hereby acknowledge and agree that the
Merger Consideration is intended to be an amount net of any Losses
recoverable by the Parent Indemnified Parties hereunder under Section
10.1(a)(i) (with respect to any breach of the representations and
warranties contained in Sections 4.1, 4.3 or 4.4 or any fraudulent breach
of any representation or warranty) or Section 10.1(a)(iii) or (vii). The
Merger Consideration shall be reduced by, and Parent shall be entitled to
recoup therefrom, an amount equal to any such Losses. Accordingly, the
right of any shareholder of the Company to receive any Merger Consideration
is subject to the right of Parent to recoup such Losses from such
shareholder to the full extent of the Merger Consideration received by such
shareholder. By accepting any Merger Consideration, each such shareholder
is accepting the provisions of this Agreement, including this Article X
that reduce the net amount that is ultimately payable as Merger
Consideration, and acceptance by any such shareholder of benefits pursuant
to this Agreement binds such shareholder to this Section 10.5 and entitles
Parent to recovery on account of any such Losses as provided herein. For
the avoidance of doubt, for purposes of recouping any Losses from a
shareholder of the Company who received Parent Common Stock pursuant to
this Section 10.5, the value of each such share of Common Stock received by
such holder shall be deemed equal to the Parent Closing Trading Price (or
Parent Adjustment Trading Price or Floor Price, if applicable), and any
Losses so recouped from such a shareholder shall be paid by such
shareholder in cash or shares of Parent Common Stock (up to the number of
shares issued to such person pursuant to this Agreement).
SECTION 10.6 THIRD PARTY CLAIMS.
(a) In the event that any written claim or demand is received
for which indemnification will be sought under this Article X in respect of
any claim or any action or proceeding by any Person who is not a party to
this Agreement or an affiliate of a party to this Agreement or is asserting
a claim in respect of the rights of a party to this Agreement or an
affiliate of a party to this Agreement or is or was a shareholder of the
Company at or prior to the Effective Time or is asserting a claim in
respect of the rights of Person who is or was a shareholder of the Company
at or prior to the Effective Time (a "Third Party Claim"), Parent, in the
case of such a written claim or demand received by a Parent Indemnified
Party, shall promptly notify the Shareholders' Representative, and the
Shareholders' Representative, in the case of such written claim or demand
received by the Shareholder Indemnified Parties, shall promptly notify
Parent (the person seeking such indemnification (the "Indemnified Party"),
of such Third Party Claim (a "Third Party Claim Notice"). Subject to
Section 6.3(b) and Section 10.6(d), Parent, in the case of a Third Party
Claim Notice submitted to Parent by the Shareholders' Representative, and
the Shareholders' Representative on the behalf of such former shareholders
of the Company in the case of a Third Party Claim Notice submitted to the
Shareholders' Representative by Parent (the recipient of a Third Party
Claim Notice, the "Indemnifying Party") shall have the right, upon delivery
of written notice to the Indemnified Party (the "Defense Notice") within
ten (10) days after receipt of the Third Party Claim Notice, which Defense
Notice shall specify the counsel the Indemnifying Party will appoint to
defend such claim, to conduct at its expense the defense against such
claim; PROVIDED, that the Indemnifying Party acknowledges in writing and
without qualification the right of the Indemnified Party to be indemnified
for all Losses incurred in connection with such Third Party Claim. The
Indemnified Party shall be entitled to be indemnified for the reasonable
fees and expenses of counsel employed by the Indemnified Party for any
period during which the Indemnifying Party has not assumed the defense of
any such Third Party Claim in accordance with this Section 10.6(a).
Notwithstanding the foregoing, the failure to promptly notify the
Indemnifying Party of a Third Party Claim shall not relieve the
Indemnifying Party of any liability that it may have to the Indemnified
Party, except to the extent the Indemnifying Party demonstrates that the
defense of such action is actually and materially prejudiced thereby.
78
(b) In the event that the Indemnifying Party does deliver a
Defense Notice and thereby elects to conduct the defense of the subject
claim, the Indemnifying Party shall have the right to conduct such defense,
including asserting affirmative defenses available to the Surviving
Corporation or its Subsidiaries, subject to Section 10.6(d)(iii) below.
The Indemnified Party will cooperate with and make available to the
Indemnifying Party such assistance and materials as the Indemnifying Party
may reasonably request, all at the expense of the Indemnifying Party, and
the Indemnified Party shall have the right at its expense to participate in
the defense assisted by counsel of its own choosing. The Indemnified Party
shall not settle any Third Party Claim for which indemnification is sought
without consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned or delayed.
(c) No Indemnifying Party shall consent to the entry of any
judgment or enter into any settlement without the prior written consent of
the Parent Indemnified Party, which consent shall not be unreasonably
withheld, conditioned or delayed.
(d) The Indemnifying Party shall not be entitled to control
any Third Party Claim if (i) such claim for indemnification is with respect
to a criminal proceeding, action, indictment, allegation or investigation,
(ii) the Indemnified Party has been advised by counsel that a reasonable
likelihood exists of a conflict of interest between the Indemnifying Party
and the Indemnified Party or its affiliates, (iii) the Indemnifying Party
has failed or is failing to vigorously prosecute or defend such claim, (iv)
such claim seeks an injunction or other equitable relief against the
Indemnified Party or any of its affiliates, (v) in the case where the
Indemnified Party is a Parent Indemnified Party, such claim would
materially interfere with or materially and adversely affect the business,
reputation, operations or assets of the Parent Indemnified Party or any of
its affiliates or (vi) in the case where the Indemnified Party is a Parent
Indemnified Party, the amount of damages reasonably anticipated to result
from such claim, together with the Aggregate Claimed Amount and Established
Losses, would exceed the applicable indemnification limitations set forth
in Sections 10.1(d)(ii), 10.1(f) or 10.1(g).
SECTION 10.7 TREATMENT OF INDEMNIFICATION PAYMENTS. Any
indemnification payments made pursuant to this Article X shall be treated
as adjustments to the Merger Consideration for all income Tax purposes. If
a Parent Indemnified Party has any rights against a third party pursuant to
a Contribution Agreement in connection with a claim for indemnity pursuant
to this Article X, upon the written request of the Shareholders'
Representative, the Surviving Corporation shall assign, to the extent
assignable in accordance with the terms of the applicable Contribution
Agreement (without recourse and only to the extent of such indemnity
payment) such rights to the Shareholders' Representative on behalf of the
former shareholders of the Company.
SECTION 10.8 ADVANCEMENT OF EXPENSES. With respect to any claim by
Parent for indemnification pursuant to this Article X, Parent shall
advance, as incurred and promptly following the request of the
Shareholders' Representative, all costs of investigation and defense that
are incurred by the Shareholders' Representative or his representatives in
connection therewith, provided, that the amount so advanced shall not
exceed the lesser of (i) $2,000,000 or (ii) the amount of remaining
Deferred Payments minus (A) the Aggregate Claimed Amount then outstanding,
if any, and (B) the aggregate amount of Established Losses that have not
been satisfied in full. Any such amounts so advanced shall be deemed to be
Established Losses under this Article X.
79
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 SHAREHOLDERS' REPRESENTATIVE.
(a) The shareholders of the Company, by approving this
Agreement and the transactions contemplated hereby or accepting any Merger
Consideration, hereby irrevocably appoint Xxxxx X. Xxxxxxxx, Xxxxxxx X.
X'Xxxxx and Xxxx X. Xxxxx (each, a "Shareholders' Representative Member"
and collectively, the "Shareholders' Representative") as their agent and
attorney-in-fact for all purposes under this Agreement with full and
exclusive power and authority to bind such shareholders with regard to all
matters arising under and pursuant to this Agreement and the transactions
contemplated hereby, including for purposes of Article X and Sections 3.3,
3.4, 3.5, 3.6, 3.7, 3.8, 3.10, 3.11, 6.3 and 11.2 or otherwise relating to
the rights to receive payments hereunder and consent to the taking by the
Shareholders' Representative of any and all actions and the making of any
decisions in connection with or related to the foregoing; provided that
only the act of a majority of Shareholders' Representative Members shall be
binding and determinative as the act of the Shareholders' Representative.
By its execution below, the Shareholders' Representative hereby accepts its
appointment as the Shareholders' Representative for purposes of this
Agreement. Parent shall be entitled to deal exclusively with the
Shareholders' Representative on all matters arising under and pursuant to
this Agreement and the transactions contemplated hereby and shall be
entitled to rely on any and all action taken or not taken by the
Shareholders' Representative without independent investigation and
notwithstanding any knowledge of any dispute or disagreement among the
shareholders of the Company or the Shareholders' Representative Members.
If any of the Shareholders' Representative Members shall die, become
disabled or otherwise be unable to fulfill his or her responsibilities as
agent and attorney-in-fact of the Company shareholders, then the remaining
Shareholders' Representative Members shall, within ten (10) days after a
request by Parent, appoint a successor Shareholders' Representative Member
reasonably satisfactory to Parent. If there are no remaining Shareholders'
Representative Members or the remaining Shareholders' Representative
Members fail to designate a successor Shareholders' Representative Member
within ten (10) days after Parent's request as provided above, then Parent
may appoint a Shareholders' Representative. Any such successor shall
become the "Shareholders' Representative" for purposes of this Agreement.
(b) Shareholders' Representative shall be authorized to act
on behalf of each shareholder of the Company for all purposes of this
Agreement with the full and exclusive power and authority to represent and
bind such shareholder with respect to all matters arising under and
pursuant to this Agreement and the transactions contemplated hereby
(including the taking by the Shareholders' Representative of any and all
actions, asserting any rights and the making of any decisions required or
permitted to be taken) on such shareholder's behalf, including (i) to
consummate the transactions contemplated herein, (ii) to pay all previously
unpaid expenses incurred by the Company in connection with the negotiation
and performance of this Agreement (whether incurred on or after the date
hereof), (iii) to determine any amounts paid or payable with respect to,
and pay from the aggregate Merger Consideration, any amounts due in
connection with the Contingent Issuance and to disburse any funds received
hereunder to such shareholder and each other shareholder, (iv) to execute
such further instruments of assignment as Parent shall reasonably request,
(v) to execute and deliver on behalf of any shareholder any waiver hereto,
(vi) to take all other actions to be taken by or on behalf of the
shareholders in connection herewith, (vii) to withhold funds to pay
shareholder expenses and obligations related to this Agreement, (viii)
execute and deliver any consent or waiver contemplated hereby, including
under Section 3.5, and (ix) to do each and every act and exercise any and
all rights which the Company or the shareholders are permitted or required
to do or exercise under this Agreement.
80
(c) As part of the power and authority granted under this
Section 11.1 and not in limitation, the Shareholders' Representative is
authorized to (i) bring, defend and/or resolve any claim made pursuant to
Article X or other disputes under this Agreement or relating to the
transactions contemplated hereby, (ii) to agree to, negotiate, enter into
settlements and compromises of, to bring suit or seek arbitration and to
comply with orders of courts and awards of arbitrators with respect to such
claims, and (iii) to take all actions necessary in the judgment of the
Shareholders' Representative for the accomplishment of the foregoing.
(d) Neither the Shareholders' Representative nor any agent employed by him
shall incur any liability to any shareholder by virtue of the failure or
refusal of the Shareholders' Representative for any reason to consummate
the transactions contemplated hereby or relating to the performance of its
other duties hereunder, except for actions or omissions constituting fraud,
gross negligence or intentional misconduct.
(d) Neither the Shareholders' Representative nor any agent
employed by him shall incur any liability to any shareholder by virtue of
the failure or refusal of the Shareholders' Representative for any reason
to consummate the transactions contemplated hereby or relating to the
performance of its other duties hereunder, except for actions or omissions
constituting fraud, gross negligence or intential misconduct.
SECTION 11.2 AMENDMENT AND MODIFICATION. This Agreement may be
amended, modified and supplemented in any and all respects by written
agreement of Parent, Merger Sub and the Company, but, no amendment shall be
made which by law requires further approval by the shareholders of the
Company without obtaining such further approval PROVIDED, HOWEVER, that
after the Effective Time, the Agreement may be amended, modified or
supplemented in any and all respects by written agreement between Parent
and the Shareholders' Representative, but no such amendment may increase
the liability of any former shareholder of the Company hereunder, without
the consent of such former shareholder.
SECTION 11.3 COMPANY DISCLOSURE SCHEDULE. The information in the
Company Disclosure Schedule constitutes (a) exceptions or qualifications to
representations, warranties, covenants and obligations of the Company as
set forth in this Agreement or (b) descriptions or lists of assets and
liabilities and other items referred to in this Agreement. The Company
Disclosure Schedule shall not be construed as indicating that any disclosed
information is required to be disclosed, and no disclosure shall be
construed as an admission that such information is material to, or required
to be disclosed by, the Company. Capitalized terms used in the Company
Disclosure Schedule that are not defined therein shall have the meaning
given them in this Agreement. From time to time prior to the Closing, the
Company will promptly amend and supplement the sections of the Company
Disclosure Schedule under Article IV with respect to any matter, condition
or occurrence (i) existing as of the date of this Agreement that was
required to be set forth or described therein but which was not so set
forth or described or (ii) hereafter arising which, if existing or
occurring as of the date of this Agreement, would have been required to be
set forth or described therein; PROVIDED, HOWEVER, that no such amendment
or supplement shall have any effect for the purpose of determining the
satisfaction by Company of the conditions set forth in Article VIII or
indemnification under Article X; PROVIDED, FURTHER, HOWEVER, that the
Parent Indemnified Parties shall not be entitled to be indemnified pursuant
to Section 10.1(a)(i) for the first $500,000 of Losses arising out of, in
connection with or due to any such matter, condition or occurrence unless
such matter, condition or occurrence was known to the Company or any
Company Subsidiary as of the date of this Agreement (in which case the
foregoing limitation shall not apply). In addition, sections of the
Company Disclosure Schedules under the provisions of this Agreement other
than Article IV may be amended and supplemented as mutually agreed to in
writing by Parent and the Company.
81
SECTION 11.4 EXPENSES. All fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such fees, costs and expenses. Prior
to the Closing, the Company shall use commercially reasonable efforts to
deliver to Parent copies of final invoices for all amounts owed by the
Company or any of its affiliates to all third-party service providers,
including counsel, accountants, and financial and other advisors, which
constitute unpaid Company Transaction Expenses.
SECTION 11.5 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (which is confirmed) or sent by a nationally
recognized overnight courier service, such as Federal Express (providing
proof of delivery), to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
Xxxxx Xxxx LaSalle Incorporated
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Xxxxxxx X. Xxxxxx, Xx., Esq.
and
if to the Company, to:
Staubach Holdings, Inc.
c/o The Staubach Company
00000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxxxx, General Counsel
with a copy to:
Gardere Xxxxx Xxxxxx LLP
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq.
(b) if to the Shareholders' Representative:
To the address set forth below the Shareholders'
Representative's name on the signature page hereto.
82
SECTION 11.6 INTERPRETATION. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this
Agreement unless otherwise indicated. Whenever the words "include",
"includes" or "including" are used in this Agreement they shall be deemed
to be followed by the words "without limitation." As used in this
Agreement, the terms "affiliates" and "associates" shall have the meanings
set forth in Rule 12b-2 of the Exchange Act and "made available" shall mean
as posted in the Company's electronic data room (xxxxx://xxxxxxxx.
xxxxxxxxxx.xxx/XX?xx000000&xxx0000000000&xx0) prior to the date hereof or
as otherwise provided to Parent in writing prior to the date hereof. The
words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and
vice versa. The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.
SECTION 11.7 JURISDICTION. Except as provided in Sections 3.3(f),
3.7(c) and 10.4(e), each of the parties hereby expressly and irrevocably
submits to the exclusive personal jurisdiction of the United States
District Court for the Southern District of New York and to the
jurisdiction of any other competent court of the State of New York sitting
in the Borough of Manhattan of The City of New York (collectively, the "New
York Courts"), preserving, however, all rights of removal to such federal
court under 28 U.S.C. Section 1441, in connection with all disputes arising
out of or in connection with this Agreement or the transactions
contemplated hereby and agrees not to commence any litigation relating
thereto except in such courts. Each such party hereby waives the right to
any other jurisdiction or venue for any litigation arising out of or in
connection with this Agreement or the transactions contemplated hereby to
which any of them may be entitled by reason of its present or future
domicile. Notwithstanding the foregoing, each such party agrees that each
of the other parties shall have the right to bring any action or proceeding
for enforcement of a judgment entered by the New York Courts in any other
court or jurisdiction.
SECTION 11.8 SERVICE OF PROCESS. Each of the parties hereby
irrevocably consents to the service of process outside the territorial
jurisdiction of the courts referred to in Section 11.7 in any such action
or proceeding by mailing copies thereof by registered United States mail,
postage prepaid, return receipt requested, to its address as specified in
or pursuant to Section 11.5. However, the foregoing shall not limit the
right of a party to effect service of process on the other party by any
other legally available method.
SECTION 11.9 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
SECTION 11.10 SPECIFIC PERFORMANCE. Each of Parent, Merger Sub and
the Company acknowledges and agrees that in the event of any breach of this
Agreement, each non-breaching party would be irreparably and immediately
harmed and could not be made whole by monetary damages. It is accordingly
agreed that the parties hereto (a) will waive, in any action for specific
performance, the defense of adequacy of a remedy at law and (b) shall be
entitled, in addition to any other remedy to which they may be entitled at
law or in equity, to compel specific performance of this Agreement.
SECTION 11.11 COUNTERPARTS. This Agreement may be executed manually
or by facsimile by the parties hereto, in any number of counterparts, each
of which shall be considered one and the same agreement and shall become
effective when a counterpart hereof shall have been signed by each of the
parties and delivered to the other parties.
83
SECTION 11.12 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement, the Confidentiality Agreement and the documents referred to
herein and delivered in connection with this Agreement:
(a) constitute the entire agreement among the parties with
respect to the subject matter hereof and thereof and supersede all other
prior agreements and understandings, both written and oral, including that
certain Letter of Intent, by and between Parent and the Company, dated as
of April 1, 2008, among the parties or any of them with respect to the
subject matter hereof and thereof (provided that the provisions of this
Agreement shall supersede any conflicting provisions of the Confidentiality
Agreement), and
(b) except as provided in Article X and Section 11.1, are not
intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder.
SECTION 11.13 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by rule of law
or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic
or legal substance of the transactions contemplated hereby is not affected
in any manner adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
SECTION 11.14 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Illinois without
giving effect to the principles of conflicts of law thereof (other than
with respect to matters governed by the TBOC, with respect to which such
law shall apply).
SECTION 11.15 HEADINGS. Headings of the Articles and Sections of
this Agreement, the Table of Contents and the Index of Defined Terms are
for the convenience of the parties only, and shall be given no substantive
or interpretative effect whatsoever.
SECTION 11.16 WAIVERS. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party or
parties entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure.
SECTION 11.17 ASSIGNMENT. This Agreement shall not be assigned by
any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties, except that (i)
Merger Sub may assign any or all of its rights, interests and obligations
hereunder to Parent, one or more direct or indirect wholly-owned
Subsidiaries of Parent, or a combination thereof and (ii) Parent and Merger
Sub may assign any or all of its rights hereunder, but not its obligations
hereunder to any of its financing sources. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and
be enforceable by the parties and permitted assigns.
84
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
STAUBACH HOLDINGS, INC.
By /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Executive Chairman
XXXXX XXXX LASALLE TENANT
REPRESENTATION, INC.
By /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
XXXXX LANG LASALLE INCORPORATED
By /s/ Xxxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: COO and CFO
SHAREHOLDERS' REPRESENTATIVE
By /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
c/o The Staubach Company
00000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
By /s/ Xxxxxxx X. X'Xxxxx
------------------------------
Name: Xxxxxxx X. X'Xxxxx
c/o The Staubach Company
00000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
By /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
c/o The Staubach Company
00000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Index of schedules and exhibits*
STAUBACH HOLDINGS, INC. DISCLOSURE SCHEDULE
Schedule 3.6(b) Earnout Payment Calculations
Schedule 3.12 Early-Terminated Employees
Schedule 4.1 Company Qualifications
Schedule 4.2(a) Company Subsidiaries and Affiliates
Schedule 4.2(b) Company Subsidiary Foreign Qualifications
and Licenses
Schedule 4.3(a) Company Shareholders
Schedule 4.3(b) Restrictions and/or Obligations
of the Common Stock, Capital Stock or Equity
Interests of the Company and Company Subsidiaries
Schedule 4.3(c) Company or Company Subsidiary Voting Trust
Agreements
Schedule 4.3(d) Dividends
Schedule 4.4 Changes to the Broker-Splits
Schedule 4.6 Consents and Approvals; No Violations
Schedule 4.8 Absence of Certain Changes
Schedule 4.9 Company Liabilities, Indebtedness or Obligations
Schedule 4.10 Litigation
Schedule 4.11(a) Employee Benefit Plans; ERISA
Schedule 4.11(j) Plans Extending Beyond an Employee's Retirement
or Other Termination of Service
Schedule 4.11(q) Plans Terminated Between June 30, 2006 and
December 31, 2007
Schedule 4.12 Taxes
Schedule 4.13 Listed Company Agreements
Schedule 4.14(a) Encumbrances on Real and Personal Property
Schedule 4.14(b) Purchase and Sale Agreement Liabilities
Schedule 4.14(c) Leased Real Property
Schedule 4.14(e) Defaults Relating to Leased Real Property
Schedule 4.15(b) Domestic and/or Foreign (i) Patents, (ii)
registered and applied-for trademarks and service
marks, (iii) Domain Names and (iv) registered and
applied for Copyrights owned by the Company
Schedule 4.15(c) RTS/MHS Trademarks and Domain Names
Schedule 4.15(d) Proprietary Software
Schedule 4.15(e) Issues Relating to Intellectual Property
Schedule 4.16 Related Party Transactions
Schedule 4.17 Labor Matters
Schedule 4.17(b) Company or Company Subsidiary Personnel Policies,
Rules or Procedures
Schedule 4.17(m) All Persons Who Performed Services for the Company
or any Company Subsidiary
Schedule 4.18(a) Compliance with Laws; Permits
Schedule 4.18(b) Company Permits
Schedule 4.19(b) Company and Company Subsidiary Bank Accounts
Schedule 4.20 Significant Clients
Schedule 4.21(b) Environmental Issues
Schedule 4.22 Company or Company Subsidiary-Owned Insurance
Policies/Self-Insured Risks
Schedule 4.26 Investment Funds
Schedule 4.27(f) Government Contracts
Schedule 6.1 Conduct of Business of the Company and Company
Subsidiaries
Schedule 7.9 Pre-Closing Activities
Schedule 7.9(a) Pre-Closing Activities
Schedule 8.3(i)(i) Company Employees
Schedule 8.3(i)(ii) Employment Agreements with Parent or its Affiliates
Schedule 10.1(a)(iv) Indemnified Parties
Schedule 10.1(a)(vii) Indemnity Items
Index of schedules and exhibits - 1
XXXXX XXXX LASALLE INCORPORATED DISCLOSURE SCHEDULE
Schedule V Knowledge Persons
Schedule 5.10 Tenant Rep Significant Clients
EXHIBITS
Exhibit A Form of Amendment to Name Assignment and
License Agreement
Exhibit B Shareholder Election Form and Agreement
Exhibit C Form of Staubach Company - San Diego, Inc.
Roll-Up Agreement
Exhibit D Form of Staubach Company Great Lakes Inc.
Roll-Up Agreement
Exhibit E Form of License Termination for Corporacion
Mexicana de Inmuebles, S.A. de C.V. and
its subsidiaries
Exhibit F Form of License Termination for Staubach
Western Canada Corp., RGM Holdings Inc. and
Xxxxxx Xxxxxx
Exhibit G Form of License Termination for Staubach
Eastern Canada, Inc. and Xxxx Xxxxxxxxx
Exhibit H Form of FIRPTA Certificate
Exhibit I Form of Opinions of Gardere
* Exhibits and schedules to the Agreement and Plan of Merger are not
being filed herewith. The Registrant undertakes to furnish
supplementally a copy of any omitted exhibit or schedule to the
Commission upon request, pursuant to Item 601(b)(2) of Regulation
S-K.
Index of schedules and exhibits - 2
