PURCHASE AGREEMENT
by and among
LASALLE PARTNERS INCORPORATED
and
LEND LEASE CORPORATION LIMITED,
and the subsidiaries of Lend Lease Corporation Limited named herein
dated August 31, 1998
TABLE OF CONTENTS
-----------------
PAGE
ARTICLE I PURCHASE AND SALE OF SHARES . . . . . . . . . . . . . . .3
Section 1.1 Purchase and Sale of the Worldwide Shares . . .3
Section 1.1A Purchase and Sale of Compass Australia Shares .3
Section 1.2 Purchase Price. . . . . . . . . . . . . . . . .3
Section 1.3 Closing . . . . . . . . . . . . . . . . . . . .6
Section 1.4 Deliveries by Sellers and the Companies . . . .7
Section 1.5 Deliveries by Buyer . . . . . . . . . . . . . .8
Section 1.6 Earnout Payment . . . . . . . . . . . . . . . .8
ARTICLE II PRE-CLOSING TRANSACTIONS. . . . . . . . . . . . . . . . 17
Section 2.1 Retransfer of Foreign Intangible Property Rights17
Section 2.2 Compass M&L Share Purchase. . . . . . . . . . 18
Section 2.3 Intercompany and Intracompany Accounts. . . . 18
Section 2.4 Name Change . . . . . . . . . . . . . . . . . 18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . . 19
Section 3.1 Ownership of Shares . . . . . . . . . . . . . 19
Section 3.2 Corporate Organization. . . . . . . . . . . . 19
Section 3.3 Capitalization of the Companies . . . . . . . 19
Section 3.4 Subsidiaries and Affiliates . . . . . . . . . 20
Section 3.5 Authorization . . . . . . . . . . . . . . . . 20
Section 3.6 No Violation. . . . . . . . . . . . . . . . . 21
Section 3.7 Unaudited Financial Statements. . . . . . . . 21
Section 3.7A Audited Financial Statements. . . . . . . . . 21
Section 3.8 No Undisclosed Liabilities. . . . . . . . . . 22
Section 3.9 Absence of Certain Changes. . . . . . . . . . 23
Section 3.10 Real Property . . . . . . . . . . . . . . . . 24
Section 3.11 Intangible Property Rights. . . . . . . . . . 26
Section 3.12 Personal Property Leases. . . . . . . . . . . 28
Section 3.13 Certain Contracts . . . . . . . . . . . . . . 29
Section 3.14 Accounts Receivable . . . . . . . . . . . . . 30
Section 3.15 Licenses and Other Authorizations . . . . . . 31
Section 3.16 [Intentionally Omitted] . . . . . . . . . . . 31
Section 3.17 Clients . . . . . . . . . . . . . . . . . . . 31
PAGE
Section 3.18 Operation of the Businesses . . . . . . . . . 32
Section 3.19 Insurance . . . . . . . . . . . . . . . . . . 33
Section 3.20 Labor Relations . . . . . . . . . . . . . . . 33
Section 3.21 Employee Benefit Plans. . . . . . . . . . . . 34
Section 3.21A Superannuation and Other Benefits Funds . . . 38
Section 3.22 Litigation. . . . . . . . . . . . . . . . . . 39
Section 3.23 Consents and Approvals. . . . . . . . . . . . 40
Section 3.24 Compliance with Law . . . . . . . . . . . . . 40
Section 3.25 Taxes . . . . . . . . . . . . . . . . . . . . 40
Section 3.26 Environmental Matters . . . . . . . . . . . . 45
Section 3.27 Personnel . . . . . . . . . . . . . . . . . . 47
Section 3.28 Equitable Transactions. . . . . . . . . . . . 48
Section 3.29 Non-Solicitation. . . . . . . . . . . . . . . 48
Section 3.30 Joint Ventures. . . . . . . . . . . . . . . . 48
Section 3.31 Disclosure. . . . . . . . . . . . . . . . . . 48
Section 3.32 Brokers and Finders . . . . . . . . . . . . . 49
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . 49
Section 4.1 Corporate Organization. . . . . . . . . . . . 49
Section 4.2 Authorization.. . . . . . . . . . . . . . . . 49
Section 4.3 No Violation. . . . . . . . . . . . . . . . . 49
Section 4.4 Litigation. . . . . . . . . . . . . . . . . . 50
Section 4.5 Consents and Approvals. . . . . . . . . . . . 50
Section 4.6 Brokers and Finders . . . . . . . . . . . . . 50
Section 4.7 Financing . . . . . . . . . . . . . . . . . . 50
ARTICLE V COVENANTS OF SELLERS AND THE COMPANIES. . . . . . . . . 51
Section 5.1 Operation of the Companies and the
Australian Business . . . . . . . . . . . . 51
Section 5.2 Access. . . . . . . . . . . . . . . . . . . . 54
Section 5.3 Consents. . . . . . . . . . . . . . . . . . . 55
Section 5.4 Performance . . . . . . . . . . . . . . . . . 55
Section 5.5 WARN Act. . . . . . . . . . . . . . . . . . . 55
Section 5.6 Updating of Information . . . . . . . . . . . 56
Section 5.7 Singapore Operations. . . . . . . . . . . . . 56
Section 5.8 Due and Payable Accounts Receivable . . . . . 57
Section 5.9 Xxxxxx Xxxxx Properties . . . . . . . . . . . 57
PAGE
Section 5.10 ERISA Accounts. . . . . . . . . . . . . . . . 58
Section 5.11 Sale of Investment Advisory Business. . . . . 58
Section 5.12 Retail EBITDA . . . . . . . . . . . . . . . . 61
ARTICLE VI COVENANTS OF BUYER. . . . . . . . . . . . . . . . . . . 62
Section 6.1 Consents. . . . . . . . . . . . . . . . . . . 62
Section 6.2 Representations and Warranties. . . . . . . . 62
Section 6.3 Performance . . . . . . . . . . . . . . . . . 62
Section 6.4 Updating of Information . . . . . . . . . . . 62
Section 6.5 WARN Act. . . . . . . . . . . . . . . . . . . 63
Section 6.6 Access. . . . . . . . . . . . . . . . . . . . 63
Section 6.7 SAS70 Opinion . . . . . . . . . . . . . . . . 63
Section 6.8 Sale of Property Management Business. . . . . 64
ARTICLE VII CONDITIONS TO OBLIGATIONS OF BUYER TO EFFECT THE WORLDWIDE
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.1 Representations and Warranties Correct. . . . 67
Section 7.2 Performance; No Default . . . . . . . . . . . 67
Section 7.3 Delivery of Certificate . . . . . . . . . . . 68
Section 7.4 Opinion of Counsel to Sellers and the Companies68
Section 7.5 Good Standing Certificates. . . . . . . . . . 68
Section 7.6 Governmental Filings and Consents;
Third Party Consents. . . . . . . . . . . . 68
Section 7.7 Birmann Consent . . . . . . . . . . . . . . . 68
Section 7.8 No Injunction . . . . . . . . . . . . . . . . 69
Section 7.9 HSR Act Waiting Periods . . . . . . . . . . . 69
Section 7.10 No Material Adverse Change. . . . . . . . . . 69
Section 7.11 Due Diligence Review. . . . . . . . . . . . . 69
Section 7.12 Strategic Alliance Agreement. . . . . . . . . 69
Section 7.13 Transition Services Agreement . . . . . . . . 69
Section 7.14 Compass Colorado. . . . . . . . . . . . . . . 69
Section 7.15 ERISA Subcontract . . . . . . . . . . . . . . 69
Section 7.16 Financial Statements. . . . . . . . . . . . . 70
Section 7.17 Financing . . . . . . . . . . . . . . . . . . 70
PAGE
ARTICLE VII-A CONDITIONS TO OBLIGATIONS OF BUYER TO EFFECT THE
AUSTRALIA CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 7A.1 Representations and Warranties Correct. . . . 70
Section 7A.2 Performance; No Default . . . . . . . . . . . 70
Section 7A.3 Delivery of Certificate . . . . . . . . . . . 71
Section 7A.4 Opinion of Counsel to Sellers and the Companies71
Section 7A.5 Governmental Filings and Consents;
Third Party Consents . . . . . . . . . . . . 71
Section 7A.6 No Injunction . . . . . . . . . . . . . . . . 71
Section 7A.7 FIRB Approval.. . . . . . . . . . . . . . . . 71
Section 7A.8 No Material Adverse Change. . . . . . . . . . 72
Section 7A.9 Due Diligence Review. . . . . . . . . . . . . 72
Section 0X.00 Xxxxxxxxxx Transfer Agreement . . . . . . . . 72
Section 0X.00 Xxxxxxxxxx Management Contracts. . . . . . . 72
ARTICLE VIIICONDITIONS TO OBLIGATIONS OF SELLERS TO EFFECT THE WORLDWIDE
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 8.1 Representations and Warranties Correct. . . . 73
Section 8.2 Performance; No Default . . . . . . . . . . . 73
Section 8.3 Delivery of Certificate . . . . . . . . . . . 73
Section 8.4 Opinion of Counsel to Buyer . . . . . . . . . 73
Section 8.5 Good Standing Certificate . . . . . . . . . . 73
Section 8.6 Governmental Filings and Consents;
Third Party Consents. . . . . . . . . . . . 73
Section 8.7 No Injunction . . . . . . . . . . . . . . . . 74
Section 8.8 HSR Act Waiting Periods . . . . . . . . . . . 74
Section 8.9 ERISA Subcontract . . . . . . . . . . . . . . 74
ARTICLE VIII-A CONDITIONS TO OBLIGATIONS OF SELLERS TO EFFECT THE
AUSTRALIA CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8A.1 Representations and Warranties Correct. . . . 74
Section 8A.2 Performance; No Default . . . . . . . . . . . 75
Section 8A.3 Delivery of Certificate . . . . . . . . . . . 75
Section 8A.4 Opinion of Counsel to Buyers. . . . . . . . . 75
Section 8A.5 No Injunction . . . . . . . . . . . . . . . . 75
PAGE
ARTICLE IX TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . 75
Section 9.1 Consolidated Subsidiaries;
Compliance by Lend Lease (US) . . . . . . . 75
Section 9.2 Section 338 Elections and Forms . . . . . . . 76
Section 9.3 Preparation of Forms. . . . . . . . . . . . . 76
Section 9.4 Allocation. . . . . . . . . . . . . . . . . . 76
Section 9.5 Taxable Periods Ending On or Before
the Closing Dates . . . . . . . . . . . . . 77
Section 9.6 Taxable Periods Commencing After
the Closing Dates . . . . . . . . . . . . . 77
Section 9.7 Taxable Periods Commencing On or Before the
Closing Dates and Ending After the Closing Dates77
Section 9.8 Refunds or Credits. . . . . . . . . . . . . . 78
Section 9.9 Contests. . . . . . . . . . . . . . . . . . . 79
Section 9.10 Resolution of Disagreements between Seller
and Buyer . . . . . . . . . . . . . . . . . 80
Section 9.11 Transfer Taxes. . . . . . . . . . . . . . . . 80
Section 9.12 Tax Cooperation . . . . . . . . . . . . . . . 80
Section 9.13 Survival of Indemnification . . . . . . . . . 80
Section 9.14 Certain Definitions . . . . . . . . . . . . . 80
ARTICLE X EMPLOYEE BENEFIT MATTERS. . . . . . . . . . . . . . . . 81
Section 10.1 Employee Benefit Matters. . . . . . . . . . . 81
ARTICLE XI TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . 81
Section 11.1 Termination of Agreement. . . . . . . . . . . 81
Section 11.2 Effect of Termination . . . . . . . . . . . . 82
ARTICLE XII SURVIVAL AND INDEMNIFICATION. . . . . . . . . . . . . . 82
Section 12.1 Survival of Representations,
Warranties and Covenants. . . . . . . . . . 82
Section 12.2 Indemnification by Buyer. . . . . . . . . . . 83
Section 12.3 Indemnification by Sellers. . . . . . . . . . 83
Section 12.4 Claims for Indemnification. . . . . . . . . . 84
Section 12.5 Remedies Cumulative . . . . . . . . . . . . . 86
PAGE
ARTICLE XIIIMISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 86
Section 13.1 Confidentiality . . . . . . . . . . . . . . . 86
Section 13.2 Non-Competition . . . . . . . . . . . . . . . 88
Section 13.3 Arbitration . . . . . . . . . . . . . . . . . 91
Section 13.4 Further Efforts . . . . . . . . . . . . . . . 92
Section 13.5 Expenses. . . . . . . . . . . . . . . . . . . 93
Section 13.6 Press Releases and Announcements. . . . . . . 94
Section 13.7 Entire Agreement. . . . . . . . . . . . . . . 94
Section 13.8 Amendment, Extension and Waiver . . . . . . . 94
Section 13.9 Headings. . . . . . . . . . . . . . . . . . . 94
Section 13.10 Notices . . . . . . . . . . . . . . . . . . . 94
Section 13.11 Negotiations with Third Parties . . . . . . . 97
Section 13.12 Assignment. . . . . . . . . . . . . . . . . . 97
Section 13.13 Applicable Law. . . . . . . . . . . . . . . . 97
Section 13.14 Jurisdiction. . . . . . . . . . . . . . . . . 97
Section 13.15 Service of Process. . . . . . . . . . . . . . 98
Section 13.16 Consent of Third Parties. . . . . . . . . . . 98
Section 13.17 Words in Singular and Plural Form . . . . . . 99
Section 13.18 WAIVER OF JURY TRIAL. . . . . . . . . . . . . 99
Section 13.19 Counterparts. . . . . . . . . . . . . . . . . 99
ARTICLE XIV CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . 99
EXHIBIT INDEX
Exhibit A Form of Australian Transfer Agreement
Exhibit B [Reserved]
Exhibit C Form of Compass M&L Foreign Intangible Sale Agreement
Exhibit D Form of ERE Retail Foreign Intangible Sale Agreement
Exhibit E Form of Opinion of Counsel to Sellers
Exhibit F Form of Strategic Alliance Agreement
Exhibit G Form of Transition Services Agreement
Exhibit H [Reserved]
Exhibit I Employee Benefit Matters
Exhibit J Form of Opinion of Counsel to Buyer
Exhibit K Purchase Price Allocation
INDEX OF DEFINED TERMS
----------------------
Defined in
Terms Section
----- ----------
1936 Act. . . . . . . . . . . . . . . . . . . . . 3.25(n)(iii)(A)
1997 Act. . . . . . . . . . . . . . . . . . . . . 3.25(n)(iv)(A)
1997 Compass M&L Intangible Sale Agreement. . . . 2.1(i)
1997 ERE Retail Intangible Sale Agreement . . . . 2.1(ii)
1998 Compass M&L Foreign Intangible Sale Agreement2.1(i)
1998 ERE Retail Foreign Intangible Sale Agreement 2.1(ii)
AAA . . . . . . . . . . . . . . . . . . . . . . . 13.3(a)
Accounts Receivable . . . . . . . . . . . . . . . Article XIV
Advisory Purchase Notice. . . . . . . . . . . . . 5.11(e)
Advisory Purchase Offer . . . . . . . . . . . . . 5.11(e)
Advisory Sale Transaction . . . . . . . . . . . . 5.11(a)
Affiliate or Affiliates . . . . . . . . . . . . . Article XIV
Agreement . . . . . . . . . . . . . . . . . . . . Preamble
Alternative Assignment. . . . . . . . . . . . . . 1.6(i)
Ancillary Agreements. . . . . . . . . . . . . . . Article XIV
Annual Equitable Revenue. . . . . . . . . . . . . 1.6(h)(i)
Associate . . . . . . . . . . . . . . . . . . . . Article XIV
Audited Financial Statements. . . . . . . . . . . 3.7A
Australia Closing . . . . . . . . . . . . . . . . 1.3
Australia Closing Date. . . . . . . . . . . . . . 1.3
Australia Closing Payment . . . . . . . . . . . . 1.2(a)
Australia Closing Payment Adjustment. . . . . . . 1.2(b)
Australian Assets . . . . . . . . . . . . . . . . 3.18(a)
Australian Business . . . . . . . . . . . . . . . Preamble
Australian Business Transfer. . . . . . . . . . . Preamble
Australian Transfer Agreement . . . . . . . . . . Preamble
Authority . . . . . . . . . . . . . . . . . . . . 3.6(c)
Birmann . . . . . . . . . . . . . . . . . . . . . 7.7
Business Day. . . . . . . . . . . . . . . . . . . Article XIV
Buyer . . . . . . . . . . . . . . . . . . . . . . Preamble
Buyer Disclosure Schedule . . . . . . . . . . . . 4.3(b)
Buyer Inferior Proposal . . . . . . . . . . . . . 5.11(g)
Defined in
Terms Section
----- ----------
Buyer Look Back Payment . . . . . . . . . . . . . 1.6(f)(ii)
Buyer Matching Offer. . . . . . . . . . . . . . . 5.11(f)
Buyer Matching Offer Decline Notice . . . . . . . 5.11(g)
Buyer Matching Offer Negotiation Period . . . . . 5.11(g)
Buyer Matching Period . . . . . . . . . . . . . . 5.11(f)
Buyer Offer . . . . . . . . . . . . . . . . . . . 5.11(c)
Buyer Offer Decline Date. . . . . . . . . . . . . 5.11(d)
Buyer Offer Negotiation Period. . . . . . . . . . 5.11(d)
Buyer Offer Period. . . . . . . . . . . . . . . . 5.11(c)
Buyer Offer Rejection Date. . . . . . . . . . . . 5.11(d)
Buyer Offer Term. . . . . . . . . . . . . . . . . 5.11(c)
Claim . . . . . . . . . . . . . . . . . . . . . . 13.3(a)
Closings. . . . . . . . . . . . . . . . . . . . . 1.3
Closing Balance Sheets. . . . . . . . . . . . . . 1.2(c)(ii)
Closing Payments. . . . . . . . . . . . . . . . . 1.2(a)
Closing Payment Adjustments . . . . . . . . . . . 1.2(b)
Closing Payment Due Date. . . . . . . . . . . . . 1.2(f)
Closing Period. . . . . . . . . . . . . . . . . . 9.7
Closing Statements. . . . . . . . . . . . . . . . 1.2(c)(ii)
Closing Statements Objection. . . . . . . . . . . 1.2(d)
Closing Statements Resolution Period. . . . . . . 1.2(d)
Closing Working Capital Amounts . . . . . . . . . 1.2(c)(ii)
Code. . . . . . . . . . . . . . . . . . . . . . . Article XIV
Commitment Letters. . . . . . . . . . . . . . . . 4.7
Company or Companies. . . . . . . . . . . . . . . Preamble
Company 1997 Unaudited Balance Sheet. . . . . . . 3.7(i)
Company Audited Financial Statements. . . . . . . 3.7A
Company Audited Interim Financial Statements. . . 3.7A
Company Interim Balance Sheet . . . . . . . . . . 3.7(ii)
Company Interim Financial Statements. . . . . . . 3.7(ii)
Company Subsidiary or Company Subsidiaries. . . . 1.4(b)
Company Unaudited Financial Statements. . . . . . 3.7(i)
Compass Australia . . . . . . . . . . . . . . . . Preamble
Compass Australia Closing Balance Sheet . . . . . 1.2(c)(ii)
Compass Australia Common Shares . . . . . . . . . Preamble
Compass Australia Estimated Closing Balance Sheet 1.2(b)
Defined in
Terms Section
----- ----------
Compass Business Assets . . . . . . . . . . . . . 3.18(c)
Compass Businesses. . . . . . . . . . . . . . . . Preamble
Compass Cayman. . . . . . . . . . . . . . . . . . Preamble
Compass Cayman Common Shares. . . . . . . . . . . Preamble
Compass Colorado. . . . . . . . . . . . . . . . . 2.2
Compass M&L . . . . . . . . . . . . . . . . . . . Preamble
Compass M&L Common Stock. . . . . . . . . . . . . Preamble
Compass UK. . . . . . . . . . . . . . . . . . . . Preamble
Compass UK Common Shares. . . . . . . . . . . . . Preamble
Competitive Business. . . . . . . . . . . . . . . 13.2(b)(iii)
Computer Programs . . . . . . . . . . . . . . . . Article XIV
Confidential Information. . . . . . . . . . . . . 13.1(b)
Consent . . . . . . . . . . . . . . . . . . . . . Article XIV
Consolidated Return . . . . . . . . . . . . . . . Article XIV
Continuing Affiliate. . . . . . . . . . . . . . . Article XIV
Contract or Contracts . . . . . . . . . . . . . . Article XIV
Copyrights. . . . . . . . . . . . . . . . . . . . Article XIV
CRR provisions. . . . . . . . . . . . . . . . . . 3.25(n)(vii)(A)(4)
Default Rate. . . . . . . . . . . . . . . . . . . Article XIV
Demised Premises. . . . . . . . . . . . . . . . . 3.10(b)
Doubtful Accounts . . . . . . . . . . . . . . . . 1.6(j)
Doubtful Accounts Payment . . . . . . . . . . . . 1.6(j)
Doubtful Accounts Statement . . . . . . . . . . . 1.6(j)
Earnout Maximum . . . . . . . . . . . . . . . . . 1.6(h)(ii)
Earnout Multiplier. . . . . . . . . . . . . . . . 1.6(h)(iii)
Earnout Payment . . . . . . . . . . . . . . . . . 1.6(h)(iv)
Earnout Payment Period. . . . . . . . . . . . . . 1.6(a)
Earnout Payment Statement . . . . . . . . . . . . 1.6(a)
Earnout Payment Statement Objection . . . . . . . 1.6(b)
Earnout Revenue . . . . . . . . . . . . . . . . . 1.6(h)(v)
EBITDA. . . . . . . . . . . . . . . . . . . . . . Article XIV
Environmental Claim . . . . . . . . . . . . . . . 3.26(e)(i)
Environmental Laws. . . . . . . . . . . . . . . . 3.26(e)(ii)
Equitable . . . . . . . . . . . . . . . . . . . . 3.28
Equitable Related Entities. . . . . . . . . . . . 1.6(h)(vi)
ERE Retail. . . . . . . . . . . . . . . . . . . . Preamble
Defined in
Terms Section
----- ----------
ERE Retail Common Stock . . . . . . . . . . . . . Preamble
ERISA . . . . . . . . . . . . . . . . . . . . . . 3.21(a)
ERISA Affiliate . . . . . . . . . . . . . . . . . 3.21(a)
ERISA Contracts . . . . . . . . . . . . . . . . . 5.10
Estimated Closing Balance Sheets. . . . . . . . . 1.2(b)
Estimated Working Capital Amounts . . . . . . . . 1.2(b)
Expiration Date . . . . . . . . . . . . . . . . . 12.1(c)
FATA. . . . . . . . . . . . . . . . . . . . . . . 3.23(ii)
Final Closing Balance Sheets. . . . . . . . . . . 1.2(d)
Final Earnout Payment Due Date. . . . . . . . . . 1.6(g)
Final Earnout Payment Statement . . . . . . . . . 1.6(b)
Final Look Back Payment Statement . . . . . . . . 1.6(e)
Final Working Capital Amounts . . . . . . . . . . 1.2(d)
Financial Statements. . . . . . . . . . . . . . . 3.7(ii)
FIRB. . . . . . . . . . . . . . . . . . . . . . . 3.23(ii)
Fiscal Year . . . . . . . . . . . . . . . . . . . Article XIV
Five-Year Average Earnout Revenue . . . . . . . . 1.6(h)(vii)
Five-Year Average Equitable Revenue . . . . . . . 1.6(h)(viii)
Five-Year Equitable Revenue Shortfall . . . . . . 1.6(h)(ix)
Foreign Intangible Sale Agreements. . . . . . . . 2.1(ii)
GAAP. . . . . . . . . . . . . . . . . . . . . . . Article XIV
HSR Act . . . . . . . . . . . . . . . . . . . . . 3.23(i)
Illinois Courts . . . . . . . . . . . . . . . . . 13.14
Income Tax or Income Taxes. . . . . . . . . . . . Article XIV
Indemnified Party . . . . . . . . . . . . . . . . 12.4(b)
Indemnifying Party. . . . . . . . . . . . . . . . 12.4(b)
Independent Fiduciary . . . . . . . . . . . . . . 5.10
Initial Earnout Payment Due Date. . . . . . . . . 1.6(d)
Initial Transfer Tax. . . . . . . . . . . . . . . 9.11(a)
Intangible Property Rights. . . . . . . . . . . . Article XIV
Interest Rate . . . . . . . . . . . . . . . . . . Article XIV
Investment Advisory Business. . . . . . . . . . . 5.11(a)
IRS . . . . . . . . . . . . . . . . . . . . . . . Article XIV
Xxxxxx Xxxxx. . . . . . . . . . . . . . . . . . . 5.9
Xxxxxx Xxxxx Letter Agreement . . . . . . . . . . 5.9
Xxxxxx Xxxxx Properties . . . . . . . . . . . . . 1.6(h)(v)
Defined in
Terms Section
----- ----------
Knowledge . . . . . . . . . . . . . . . . . . . . Article XIV
LaSalle . . . . . . . . . . . . . . . . . . . . . Preamble
LaSalle Bona Fide Purchase Transaction. . . . . . 6.8(g)
LaSalle Restricted Acquiror . . . . . . . . . . . 6.8(b)
LaSalle Sale Notice . . . . . . . . . . . . . . . 6.8(b)
LaSalle Third Party Management and Leasing Sale Transaction6.8(d)
Law . . . . . . . . . . . . . . . . . . . . . . . 3.6(c)
Leased Real Property. . . . . . . . . . . . . . . 3.10(b)
Lend Lease . . . . . . . . . . . . . . . . . . . Preamble
Lend Lease Bona Fide Purchase Transaction . . . . 5.11(g)
Lend Lease Controlled Property. . . . . . . . . . Article XIV
Lend Lease Europe . . . . . . . . . . . . . . . . Preamble
Lend Lease Inferior Proposal. . . . . . . . . . . 6.8(g)
Lend Lease International. . . . . . . . . . . . . Preamble
Lend Lease Look Back Payment. . . . . . . . . . . 1.6(f)(i)
Lend Lease Matching Offer . . . . . . . . . . . . 6.8(f)
Lend Lease Matching Offer Decline Notice. . . . . 6.8(g)
Lend Lease Matching Offer Negotiation Period. . . 6.8(g)
Lend Lease Matching Period. . . . . . . . . . . . 6.8(f)
Lend Lease Offer. . . . . . . . . . . . . . . . . 6.8(c)
Lend Lease Offer Decline Notice . . . . . . . . . 6.8(d)
Lend Lease Offer Negotiation Period . . . . . . . 6.8(d)
Lend Lease Offer Period . . . . . . . . . . . . . 6.8(c)
Lend Lease Offer Rejection Date . . . . . . . . . 6.8(d)
Lend Lease Offer Term . . . . . . . . . . . . . . 6.8(c)
Lend Lease Restricted Acquiror. . . . . . . . . . 5.11(b)
Lend Lease Sale Notice. . . . . . . . . . . . . . 5.11(b)
Lend Lease Third Party Advisory Sale Transaction. 5.11(d)
Lend Lease (US) . . . . . . . . . . . . . . . . . 9.1
Lend Lease (US) Services. . . . . . . . . . . . . Preamble
Liabilities . . . . . . . . . . . . . . . . . . . Article XIV
Licenses. . . . . . . . . . . . . . . . . . . . . 3.15
Liens . . . . . . . . . . . . . . . . . . . . . . Article XIV
Limited Sale Restriction Period . . . . . . . . . 5.11(b)
Listed Agreements . . . . . . . . . . . . . . . . 3.13(a)
LLPMA . . . . . . . . . . . . . . . . . . . . . . Preamble
Defined in
Terms Section
----- ----------
LLPMA's Fund. . . . . . . . . . . . . . . . . . . 3.21A(a)
LLREI . . . . . . . . . . . . . . . . . . . . . . Preamble
Look Back Payment Statement . . . . . . . . . . . 1.6(e)
Look Back Period. . . . . . . . . . . . . . . . . 1.6(e)
Loss or Losses. . . . . . . . . . . . . . . . . . 12.2
LPI Australia . . . . . . . . . . . . . . . . . . Preamble
Managed Properties. . . . . . . . . . . . . . . . 3.26(a)
Management and Leasing Purchase Notice. . . . . . 6.8(e)
Management and Leasing Purchase Offer . . . . . . 6.8(e)
Management and Leasing Sale Transaction . . . . . 6.8(a)
Material Adverse Effect . . . . . . . . . . . . . Article XIV
Materials of Environmental Concern. . . . . . . . 3.26(e)(iii)
Minimum Claim . . . . . . . . . . . . . . . . . . 12.4(a)
Modified Aggregate Deemed Sale Price. . . . . . . 9.4
Neutral Auditor . . . . . . . . . . . . . . . . . 1.2(e)
Notice. . . . . . . . . . . . . . . . . . . . . . 1.2(e)
Offered Assignment. . . . . . . . . . . . . . . . 1.6(i)
Patent Rights . . . . . . . . . . . . . . . . . . Article XIV
PBGC. . . . . . . . . . . . . . . . . . . . . . . 3.21(c)
PPF . . . . . . . . . . . . . . . . . . . . . . . 1.6(h)(vi)
Permitted Liens . . . . . . . . . . . . . . . . . Article XIV
Person. . . . . . . . . . . . . . . . . . . . . . Article XIV
Personal Property Leases. . . . . . . . . . . . . 3.12
Personal Rights . . . . . . . . . . . . . . . . . Article XIV
Plans . . . . . . . . . . . . . . . . . . . . . . 3.21(a)
Pre-Closing Period. . . . . . . . . . . . . . . . 9.7
Prohibiting Factor. . . . . . . . . . . . . . . . 1.6(i)
Project Management. . . . . . . . . . . . . . . . Article XXX
XXX 00-00 . . . . . . . . . . . . . . . . . . . . 5.10
Purchase Price. . . . . . . . . . . . . . . . . . 1.2(a)
Qualifying Investment Fund. . . . . . . . . . . . 13.2(b)(i)
Real Property Leases. . . . . . . . . . . . . . . 3.10(b)
Recalculated Earnout Payment. . . . . . . . . . . 1.6(j)
Recalculated Look Back Payment. . . . . . . . . . 1.6(j)
Recalculated Look Back Payment Due Date . . . . . 1.6(j)
Rejected Assignment . . . . . . . . . . . . . . . 1.6(i)
Defined in
Terms Section
----- ----------
Related to the Australian Business or Related to the
Compass Businesses . . . . . . . . . . . . . . Article XIV
Resolution Period . . . . . . . . . . . . . . . . 1.6(b)
Retail Development Services . . . . . . . . . . . Article XIV
Retail EBITDA Payment . . . . . . . . . . . . . . 5.12
Retail EBITDA Payment Date. . . . . . . . . . . . 5.12
Retail EBITDA Statement . . . . . . . . . . . . . 5.12
Retail Services Revenue . . . . . . . . . . . . . 5.12
Sale Restriction Period . . . . . . . . . . . . . 5.11(a)
Sale Transaction. . . . . . . . . . . . . . . . . 13.11(i,ii)
Section 338 Forms . . . . . . . . . . . . . . . . 9.14(a)
Section 338(h)(10) Election . . . . . . . . . . . 9.14(b)
Seller or Sellers . . . . . . . . . . . . . . . . Preamble
Shares. . . . . . . . . . . . . . . . . . . . . . Preamble
Significant Client. . . . . . . . . . . . . . . . 3.17(a)(i)
Singapore Business. . . . . . . . . . . . . . . . 5.7
Stock Transfer Tax. . . . . . . . . . . . . . . . 9.11(b)
Subsidiary or Subsidiaries . . . . . . . . . . . Article XIV
Tax or Taxes. . . . . . . . . . . . . . . . . . . Article XIV
Tax Auditor . . . . . . . . . . . . . . . . . . . 9.10
Tax Laws. . . . . . . . . . . . . . . . . . . . . 9.14(c)
Tax Return or Tax Returns . . . . . . . . . . . . Article XIV
Technology. . . . . . . . . . . . . . . . . . . . Article XIV
Third Payment Management and Leasing Purchase Price6.8(e)
Third Party Purchase Price. . . . . . . . . . . . 5.11(e)
Three-Year Average Earnout Revenue. . . . . . . . 1.6(h)(x)
Three-Year Average Equitable Revenue. . . . . . . 1.6(h)(xi)
Three-Year Equitable Revenue Shortfall. . . . . . 1.6(h)(xii)
Title IV Plans. . . . . . . . . . . . . . . . . . 3.21(a)
Trademarks. . . . . . . . . . . . . . . . . . . . Article XIV
Transaction Expenses. . . . . . . . . . . . . . . 13.5(a)
Treasurer . . . . . . . . . . . . . . . . . . . . 7A.7
TYGPM . . . . . . . . . . . . . . . . . . . . . . Preamble
TYGPM Common Stock. . . . . . . . . . . . . . . . Preamble
Uncollected Receivable. . . . . . . . . . . . . . 5.8
U.S. Company or U.S. Companies. . . . . . . . . . 3.25(m)
Defined in
Terms Section
----- ----------
WARN. . . . . . . . . . . . . . . . . . . . . . . 3.20(k)
Working Capital . . . . . . . . . . . . . . . . . Article XIV
Worldwide Closing . . . . . . . . . . . . . . . . 1.3
Worldwide Closing Balance Sheets. . . . . . . . . 1.2(c)
Worldwide Closing Date. . . . . . . . . . . . . . 1.3
Worldwide Closing Payment . . . . . . . . . . . . 1.2(a)
Worldwide Closing Payment Adjustment. . . . . . . 1.2(b)
Worldwide Company or Worldwide Companies. . . . . Preamble
Worldwide Estimated Closing Balance Sheets. . . . 1.2(b)
Worldwide Shares. . . . . . . . . . . . . . . . . Preamble
INDEX TO THE COMPANY DISCLOSURE SCHEDULE
----------------------------------------
Earnout Payment . . . . . . . . . . . . . . .Section 1.6(h)(v)(1)
Earnout Payment . . . . . . . . . . . . . . .Section 1.6(h)(v)(1)(A)
Earnout Payment . . . . . . . . . . . . . . .Section 1.6(h)(v)(2)
Earnout Payment . . . . . . . . . . . . . . .Section 1.6(h)(v)(3)
Intercompany and Intracompany Accounts. . . .Section 2.3
Corporate Organization. . . . . . . . . . . .Section 3.2
Capitalization of the Companies . . . . . . .Section 3.3
Subsidiaries and Affiliates . . . . . . . . .Section 3.4
No Violation. . . . . . . . . . . . . . . . .Section 3.6
Unaudited Financial Statements . . . . . . .Section 3.7
No Undisclosed Liabilities. . . . . . . . . .Section 3.8(c)
Absence of Certain Changes. . . . . . . . . .Section 3.9
Real Property Leases. . . . . . . . . . . . .Section 3.10(b)
Intangible Property Rights. . . . . . . . . .Section 3.11(a)
Intangible Property Rights. . . . . . . . . .Section 3.11(b)
Intangible Property Rights. . . . . . . . . .Section 3.11(c)
Intangible Property Rights. . . . . . . . . .Section 3.11(d)(1)
Intangible Property Rights. . . . . . . . . .Section 3.11(d)(2)
Intangible Property Rights. . . . . . . . . .Section 3.11(e)
Intangible Property Rights. . . . . . . . . .Section 3.11(f)
Intangible Property Rights. . . . . . . . . .Section 3.11(g)
Intangible Property Rights. . . . . . . . . .Section 3.11(h)
Personal Property Leases. . . . . . . . . . .Section 3.12
Certain Contracts . . . . . . . . . . . . . .Section 3.13(a)
Certain Contracts . . . . . . . . . . . . . .Section 3.13(b)
Accounts Receivable . . . . . . . . . . . . .Section 3.14(a)
Accounts Receivable . . . . . . . . . . . . .Section 3.14(b)
Licenses and Other Authorizations . . . . . .Section 3.15
Clients . . . . . . . . . . . . . . . . . . .Section 3.17(a)(i)
Clients . . . . . . . . . . . . . . . . . . .Section 3.17(a)(ii)
Clients . . . . . . . . . . . . . . . . . . .Section 3.17(b)
Operation of the Business . . . . . . . . . .Section 3.18(a)
Operation of the Business . . . . . . . . . .Section 3.18(c)
Insurance . . . . . . . . . . . . . . . . . .Section 3.19
Labor Relations . . . . . . . . . . . . . . .Section 3.20
Employee Benefit Plans. . . . . . . . . . . .Section 3.21(a)
Employee Benefit Plans. . . . . . . . . . . .Section 3.21(l)
Employee Benefit Plans. . . . . . . . . . . .Section 3.21(m)
Litigation. . . . . . . . . . . . . . . . . .Section 3.22
Consents and Approvals. . . . . . . . . . . .Section 3.23
Taxes . . . . . . . . . . . . . . . . . . . .Section 3.25
Environmental Matters . . . . . . . . . . . .Section 3.26(a)
Environmental Matters . . . . . . . . . . . .Section 3.26(b)
Environmental Matters . . . . . . . . . . . .Section 3.26(c)
Environmental Matters . . . . . . . . . . . .Section 3.26(d)
Personnel . . . . . . . . . . . . . . . . . .Section 3.27
Brokers and Finders . . . . . . . . . . . . .Section 3.32
Operation of the Companies
and the Australian Business . . . . . . . .Section 5.1
Xxxxxx Xxxxx Properties . . . . . . . . . . .Section 5.9
Xxxxxx Xxxxx Properties . . . . . . . . . . .Section 5.9(b)
Sale of Investment Advisory Business. . . . .Section 5.11
Due Diligence Review. . . . . . . . . . . . .Section 7.11
Due Diligence Review. . . . . . . . . . . . .Section 7A.9
Australian Management Contracts . . . . . . .Section 7A.11(a)
Australian Management Contracts . . . . . . .Section 7A.11(b)
Knowledge Definition. . . . . . . . . . . . .Section 14(a)
Working Capital Definition. . . . . . . . . .Section 14(b)
INDEX TO BUYER DISCLOSURE SCHEDULE
----------------------------------
No Violation. . . . . . . . . . . . . . . . .Section 4.3
Litigation. . . . . . . . . . . . . . . . . .Section 4.4
Consents and Approvals. . . . . . . . . . . .Section 4.5
Brokers and Finders . . . . . . . . . . . . .Section 4.6
Sale of Property Management Business. . . . .Section 6.8
PURCHASE AGREEMENT
------------------
PURCHASE AGREEMENT, dated as of August 31, 1998 (this
"Agreement"), by and among: (i) LaSalle Partners Incorporated, a Maryland
corporation ("LaSalle"), and LPI (Australia) Holdings Pty Limited (ACN 084
042 473), a corporation organized under the laws of the Australia Capital
Territory ("LPI Australia" and, together with LaSalle "Buyer"); (ii) Lend
Lease Corporation Limited (ACN 000 226 228), a corporation organized under
the laws of New South Wales ("Lend Lease"), Lend Lease Property Management
(Australia) Pty Limited (ACN 000 000 000), a corporation organized under
the laws of New South Wales ("LLPMA"), Lend Lease Europe Ltd., a
corporation organized under the laws of the United Kingdom ("Lend Lease
Europe"), Lend Lease International Pty Limited (ACN 000 489 109), a
corporation organized under the laws of New South Wales ("Lend Lease
International"), Lend Lease (US) Services, Inc., a Delaware corporation
("Lend Lease (US) Services"), and Lend Lease Real Estate Investments, Inc.,
a Delaware corporation ("LLREI"), each, a "Seller" and, together, the
"Sellers"); and (iii) Compass Management and Leasing (UK), Ltd., a
corporation organized under the laws of the United Kingdom ("Compass UK"),
Compass Cayman, a Cayman Islands corporation ("Compass Cayman"), Compass
Management and Leasing, Inc., a Delaware corporation ("Compass M&L"), ERE
Yarmouth Retail, Inc., a Delaware corporation ("ERE Retail"), and The
Yarmouth Group Property Management, Inc., a Delaware corporation ("TYGPM")
(each a "Worldwide Company" and, collectively, the "Worldwide Companies"),
and Compass Management and Leasing (Australia) Pty Limited (ACN 082291898),
a corporation organized under the laws of the Australian Capital Territory
("Compass Australia") (each Worldwide Company and Compass Australia, a
"Company" and, collectively, the "Companies").
WHEREAS, Compass UK has a capitalization consisting of 100
ordinary shares, par value Pound/Sterling 1.00 per share ("Compass UK
Common Shares"), of which two shares are issued and outstanding and owned
by Lend Lease Europe;
WHEREAS, Compass Cayman has a capitalization consisting of 1000
ordinary shares, par value US $1.00 per share ("Compass Cayman Common
Shares"), of which 100 shares are issued and outstanding and owned by Lend
Lease International;
WHEREAS, Compass M&L has a capitalization consisting of 1000
shares of common stock, par value US $1.00 per share ("Compass M&L Common
Stock"), of which 1000 shares are issued and outstanding and owned by Lend
Lease (US) Services;
WHEREAS, ERE Retail has a capitalization consisting of 1000
shares of common stock, par value US $1.00 per share ("ERE Retail Common
Stock"), of which 1000 shares are issued and outstanding and owned by
LLREI;
WHEREAS, TYGPM has a capitalization consisting of 1000 shares
of common stock, par value US $1.00 per share ("TYGPM Common Stock" and,
collectively with the Compass UK Common Shares, the Compass Cayman Common
Shares, the Compass M&L Common Stock and the ERE Retail Common Stock, the
"Worldwide Shares"), of which 1000 shares are issued and outstanding and
owned by Lend Lease (US) Services;
WHEREAS, Compass Australia has a capitalization consisting of
12 ordinary shares ("Compass Australia Common Shares" and, collectively
with the Worldwide Shares, the "Shares"), all of which are owned by LLPMA;
WHEREAS, the Companies and the Company Subsidiaries are engaged
in the commercial property management and leasing and facilities management
and Project Management businesses throughout the world, and in the retail
property management and leasing business throughout the United States and
its territories (the "Compass Businesses");
WHEREAS, LLPMA is engaged in the commercial property management
and leasing and facilities management and Project Management businesses in
Australia (the "Australian Business"). As used herein, all references to
the Compass Businesses prior to the Australia Closing Date shall be deemed
to include the Australian Business;
WHEREAS, on or prior to the Worldwide Closing Date, LLPMA shall
transfer certain assets of the Australian Business to Compass Australia
(the "Australian Business Transfer"), pursuant to the Transfer and Sale
Agreement, in the form attached as EXHIBIT A hereto (the "Australian
Transfer Agreement"). As used herein, the Australian Business shall be
deemed to include the Australian Business as conducted by LLPMA, Lend Lease
and its Affiliates as of the date hereof; and
WHEREAS, this Agreement sets forth the terms and conditions
pursuant to which Buyer shall purchase all of the Shares.
NOW THEREFORE, in consideration of the premises and the mutual
covenants, agreements, representations and warranties contained herein,
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
Section 1.1 PURCHASE AND SALE OF THE WORLDWIDE SHARES. Upon the
terms and subject to the conditions set forth herein, at the Worldwide
Closing:
deliver to LaSalle or its designee(s) and LaSalle or its
designee(s) shall purchase from Lend Lease Europe, all of the Compass
UK Common Shares owned by Lend Lease Europe, free and clear of all Liens;
(b) Lend Lease International shall sell, assign, transfer and
deliver to LaSalle or its designee(s) and LaSalle or its designee(s) shall
purchase from Lend Lease International, all of the Compass Cayman Common
Shares owned by Lend Lease International, free and clear of all Liens;
(c) Lend Lease (US) Services shall sell, assign, transfer and
deliver to LaSalle or its designee(s) and LaSalle or its designee(s) shall
purchase from Lend Lease (US) Services, all of the Compass M&L Common Stock
owned by Lend Lease (US) Services, free and clear of all Liens;
(d) LLREI shall sell, assign, transfer and deliver to LaSalle
or its designee(s) and LaSalle or its designee(s) shall purchase from
LLREI, all of the ERE Retail Common Stock owned by LLREI, free and clear of
all Liens; and
(e) Lend Lease (US) Services shall sell, assign, transfer and
deliver to LaSalle or its designee(s) and LaSalle or its designee(s) shall
purchase from Lend Lease (US) Services, all of the TYGPM Common Stock owned
by Lend Lease (US) Services, free and clear of all Liens.
Section 1.1A PURCHASE AND SALE OF COMPASS AUSTRALIA SHARES.
Upon the terms and subject to the conditions set forth herein, at the
Australia Closing, LLPMA shall sell, assign, transfer and deliver to LPI
Australia or its designee(s) and LPI Australia or its designee(s) shall
purchase from LLPMA, all of the Compass Australia Common Shares owned by
LLPMA, free and clear of all Liens;
Section 1.2 PURCHASE PRICE
(a) Upon the terms and subject to the conditions set
forth herein, in consideration for the sale, assignment, transfer and
delivery of the Worldwide Shares to Buyer or its designee(s) by Sellers,
Buyer or its designee(s) shall (i) deliver, or cause to be delivered, to
Sellers at the Worldwide Closing, the Worldwide Closing Payment and (ii)
deliver, or cause to be delivered, to Lend Lease the payments, if any,
required by Section 1.6 hereof. For purposes of this Agreement, "Worldwide
Closing Payment" means US$167.0 million, as adjusted pursuant to Sections
1.2(b) and 1.2(f) hereof. Upon the terms and subject to the conditions set
forth herein, in consideration for the sale, assignment, transfer and
delivery of the Compass Australia Shares to LPI Australia or its
designee(s), LPI Australia or its designee(s) shall deliver, or cause to be
delivered, to LLPMA at the Australia Closing, the Australia Closing
Payment. For purposes of this Agreement, "Australia Closing Payment" means
US$13.0 million, as adjusted pursuant to sections 1.2(b) and 1.2(f) hereof
and clause 8(c) of Exhibit I, "Closing Payments" means the sum of the
Worldwide Closing Payment and the Australia Closing Payment, as adjusted
pursuant to Sections 1.2(b) and 1.2(f) hereof, and "Purchase Price" means
the sum of the Closing Payments, as adjusted pursuant to Sections 1.2(b)
and 1.2(f) hereof, and the net amount of any payments made to Lend Lease
pursuant to Section 1.6 hereof.
(b) (i) On or prior to the second Business Day immediately
preceding (x) the Worldwide Closing Date, Lend Lease shall deliver to Buyer
(A) an estimated balance sheet, as of the Worldwide Closing Date, of each
of (1) Compass UK, (2) Compass Cayman, (3) Compass M&L, (4) ERE Retail and
(5) TYGPM (together, the "Worldwide Estimated Closing Balance Sheets"), and
(y) the Australia Closing Date, Lend Lease shall deliver to Buyer an
estimated balance sheet, as of the Australia Closing Date, of Compass
Australia (the "Compass Australia Estimated Closing Balance Sheet" and,
together with the Worldwide Estimated Closing Balance Sheets, the
"Estimated Closing Balance Sheets"). The Worldwide Estimated Closing
Balance Sheets and the Compass Australia Estimated Closing Balance Sheet
shall include a good faith estimate of Working Capital for each of Compass
UK, Compass Cayman, Compass M&L, ERE Retail and TYGPM and Compass
Australia, respectively, based on their respective Estimated Closing
Balance Sheets (the "Estimated Working Capital Amounts"). Each of the
Estimated Closing Balance Sheets shall be prepared by Lend Lease in a
manner consistent with the preparation of the Financial Statements and the
Estimated Working Capital Amounts shall be calculated in accordance with
this Agreement. The Worldwide Closing Payment shall be increased or
decreased, as applicable, on a dollar-for-dollar basis to the extent that:
(i) the Estimated Working Capital Amount of Compass UK is more or less,
respectively, than US $200,000; (ii) the Estimated Working Capital Amount
for Compass Cayman is more or less, respectively, than US $200,000; (iii)
the Estimated Working Capital Amount for Compass M&L is more or less,
respectively, than US $6,000,000; (iv) the Estimated Working Capital
Amount for ERE Retail is more or less, respectively, than US $950,000; and
(v) the Estimated Working Capital Amount for TYGPM is more or less,
respectively, than US $200,000 (the "Worldwide Closing Payment
Adjustment"). The Australia Closing Payment shall be increased or
decreased, as applicable, on a dollar-for-dollar basis to the extent that
the Estimated Working Capital Amount for Compass Australia is more or less,
respectively, than US $450,000 (the "Australia Closing Payment Adjustment"
and together with the Worldwide Closing Payment Adjustment, the "Closing
Payment Adjustments").
(c) As soon as practicable, but in no event later than 30
days following (i) the Worldwide Closing Date, Buyer shall deliver to Lend
Lease a balance sheet for each of Compass UK, Compass Cayman, Compass M&L,
ERE Retail and TYGPM ("Worldwide Closing Balance Sheets"), and (ii) the
Australia Closing Date, Buyer shall deliver to Lend Lease a balance sheet
for Compass Australia ("Compass Australia Closing Balance Sheet" and,
together with the Worldwide Closing Balance Sheet, the "Closing Balance
Sheets"), in each case prepared by Buyer and reviewed by Buyer's
independent certified public accountants, prepared as of the close of
business on the Worldwide Closing Date for the Worldwide Companies and
prepared as of the close of business on the Australia Closing Date for
Compass Australia. The Worldwide Closing Balance Sheets and the Compass
Australia Closing Sheet shall include a Working Capital calculation for
each of Compass UK, Compass Cayman, Compass M&L, ERE Retail and TYGPM and
Compass Australia, respectively, based on their respective Closing Balance
Sheets (the "Closing Working Capital Amounts" and together with the
Closing Balance Sheets, the "Closing Statements").
(d) After receipt of the applicable Closing Statements, Lend
Lease shall have 30 days for review. Unless Lend Lease delivers written
notice to Buyer on or prior to the 30th day after receipt of the Closing
Statements for the Worldwide Companies or Compass Australia, as applicable,
of its disagreement as to any item included on or omitted from other such
Closing Statements (a "Closing Statements Objection"), the parties shall be
deemed to have accepted and agreed to such Closing Statements. If Lend
Lease so notifies Buyer of a Closing Statements Objection, Buyer and Lend
Lease shall, within 30 days following the date of such notice (the "Closing
Statements Resolution Period"), attempt to resolve their differences. Any
resolution by them as to any disputed amount shall be final and binding on
the parties hereto. The term "Final Closing Balance Sheets" shall mean the
definitive Closing Balance Sheets of each of Compass UK, Compass Cayman,
Compass M&L, ERE Retail and TYGPM or Compass Australia, as applicable, or,
in the absence of agreement, the definitive Closing Balance Sheets
including any adjustments resulting from the determination made by the
Neutral Auditor (in addition to those items theretofore agreed to by Buyer
and Lend Lease). The term "Final Working Capital Amounts" shall mean the
definitive Working Capital of each of Compass UK, Compass Cayman, Compass
M&L, ERE Retail and TYGPM or Compass Australia, as applicable, as based on
the applicable Final Closing Balance Sheets. For purposes of performing
the calculation of the Final Working Capital Amounts, with respect to the
Worldwide Companies, the applicable exchange rate in effect on the
Worldwide Closing Date shall be used and, with respect to Compass
Australia, the applicable exchange rate in effect on the Australia Closing
Date shall be used.
(e) If, at the conclusion of the applicable Closing
Statements Resolution Period, Buyer and Lend Lease have not resolved all
disputes, then all amounts remaining in dispute shall, at the election of
either party, be submitted to a mutually agreeable, nationally recognized
firm of independent public accountants, which shall not have provided
material service to either Lend Lease or Buyer or their respective
Affiliates within 24 months of the date on which either may have provided
the other party with written notice (a "Notice") of its intention to submit
the matter to arbitration (the "Neutral Auditor"). If Lend Lease and Buyer
are unable to mutually agree upon an accounting firm within fifteen days of
a Notice, an accounting firm shall be selected by the Chief Judge of the
United States District Court for the Northern District of Illinois, seated
in the City of Chicago. Each party agrees to execute, if requested by the
Neutral Auditor, a reasonable engagement letter. All fees and expenses of
the Neutral Auditor shall be borne equally by Buyer and Lend Lease. The
Neutral Auditor shall act as an arbitrator to determine, based solely on
the presentations by Buyer and Lend Lease, and not by independent review,
only those issues remaining 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 Buyer and Lend Lease and shall be
final and binding on the parties hereto.
(f) The Worldwide Closing Payment or the Australia Closing
Payment, as applicable, shall be increased or decreased, as applicable, on
a dollar-for-dollar basis to the extent that the respective Final Working
Capital Amounts for each of Compass UK, Compass Cayman, Compass M&L, ERE
Retail and TYGPM, or Compass Australia, is more or less, respectively, than
the respective Estimated Working Capital Amounts for each of them. All
amounts payable pursuant this Section 1.2(f) shall be paid in US Dollars
within five Business Days after the date that the applicable Closing
Balance Sheet is agreed to by Buyer and Lend Lease or as determined by the
Neutral Auditor (the "Closing Payment Due Date"). If Buyer or Lend Lease,
as the case may be, defaults in the payment required by this Section
1.2(f), Buyer or Lend Lease, as applicable, shall pay interest on such
overdue amount at the Default Rate per annum from the applicable Closing
Payment Due Date until paid, together with expenses reasonably incurred to
enforce collection.
Section 1.3 CLOSING. Subject to the conditions set forth herein, the
purchase and sale of the Worldwide Shares pursuant to this Agreement (the
"Worldwide Closing") shall take place at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois), 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx,
at 10:00 A.M., Chicago time, on the third Business Day following the date
on which all of the conditions to each party's obligations hereunder set
forth in Articles VII and VIII have been satisfied or waived, or such other
time and place as Buyer and Lend Lease may mutually agree upon in writing.
The date on which the Worldwide Closing is to occur is herein referred to
as the "Worldwide Closing Date." Subject to the conditions set forth
herein, the purchase and sale of the Compass Australia Shares pursuant to
this Agreement (the "Australia Closing") shall take place at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois) set forth in the
immediately preceding sentence, at 10:00 A.M., Chicago time, on the third
Business Day following the date on which all of the conditions to each
party's obligations hereunder set forth in Articles VII-A and VIII-A have
been satisfied or waived, or such other time and place as Buyer and Lend
Lease may mutually agree upon in writing. The date on which the Australia
Closing is to occur is herein referred to as the "Australia Closing Date."
The Worldwide Closing and the Australia Closing are collectively herein
referred to as the "Closings."
Section 1.4 DELIVERIES BY SELLERS AND THE COMPANIES. At the
Worldwide Closing and the Australia Closing, respectively, Sellers and the
Companies shall deliver, or cause to be delivered, to Buyer the following:
(a) certificates representing all of the Worldwide Shares or
the Compass Australia Shares, as applicable, in each case with all
necessary and appropriate stock powers duly executed in blank or other duly
executed instruments of transfer, and otherwise in a form acceptable to
Buyer for transfer on the books of the applicable Companies;
(b) the stock books, stock ledgers, minute books and
corporate seals of each Worldwide Company or Compass Australia, as
applicable, and each of their respective Subsidiaries (each a "Company
Subsidiary" and, collectively, the "Company Subsidiaries"), except with
respect to Compass UK and Compass Cayman as to which copies may be
delivered;
(c) copies of the Certificate of Incorporation (or similar
organizational document) of each Worldwide Company and Company Subsidiary,
or of Compass Australia, as applicable, certified after July 10, 1998 by
the Secretary of State (or other appropriate authority) of such Company's
jurisdiction of incorporation or formation;
(d) executed counterparts of any Consents referred to in
Section 5.3 hereof;
(e) the executive officer certificates referred to in Section
7.3 and 7A.3, respectively, hereof;
(f) the opinion of counsel referred to in Section 7.4 and
7A.4, respectively, hereof;
(g) resignations effective as of the Worldwide Closing Date
from such officers and directors of each Worldwide Company and Subsidiary
of a Worldwide Company, and as of the Australia Closing Date, from such
officers and directors of Compass Australia, in each case as Buyer shall
have requested in writing;
(h) at the Worldwide Closing, the reimbursement set forth in
Section 13.5(b) and (c); and
(i) all other previously undelivered documents, instruments
or writings reasonably requested by Buyer prior to the Worldwide Closing or
the Australia Closing, as applicable, to be delivered by any Seller or
Company to Buyer at or prior to the Worldwide Closing or the Australia
Closing, respectively, pursuant to this Agreement or otherwise required in
connection herewith.
Section 1.5 DELIVERIES BY BUYER. At the Worldwide Closing and the
Australia Closing, respectively, Buyer shall deliver, or cause to be
delivered, to Sellers the following:
(a) the Worldwide Closing Payment or the Australia Closing
Payment, respectively;
(b) the executive officer certificate referred to in Section
8.3 and 8A.3, respectively, hereof;
(c) the opinion of counsel referred to in Section 8.4 and
8A.4, respectively, hereof; and
(d) all other previously undelivered documents, instruments
or writings required to be delivered by Buyer to Sellers at or prior to the
Worldwide Closing or the Australia Closing, respectively, pursuant to this
Agreement or otherwise required in connection herewith.
Section 1.6 EARNOUT PAYMENT.
(a) As soon as practicable, but in no event later than 60
days following the period commencing on the Worldwide Closing Date and
ending on the last day of the month in which the third anniversary of the
Worldwide Closing Date occurs (the "Earnout Payment Period"), Buyer shall
deliver to Lend Lease a written computation statement setting forth in
reasonable detail, the Earnout Payment, if any, including Earnout Revenue
(by property and type), Annual Equitable Revenue (by property and type),
Three-Year Average Earnout Revenue and the other components thereof,
prepared by Buyer and reviewed and certified as to accuracy by Buyer's
independent public accountants (the "Earnout Payment Statement"). In
addition, Buyer shall deliver to Lend Lease within 90 days after the
first, second and fourth anniversaries of the Worldwide Closing Date, a
written computation statement setting forth, in reasonable detail, the
Earnout Revenue (by property and type) and Annual Equitable Revenue (by
property and type), if any, for the twelve (12) month period just ended;
PROVIDED, HOWEVER, that in no event shall such statements be certified as
to accuracy by Buyer's independent public accountants.
(b) After receipt of the Earnout Payment Statement, Lend
Lease shall have 10 days to review it. Unless Lend Lease delivers written
notice to Buyer on or prior to the 10th day after receipt of the Earnout
Payment Statement of its disagreement as to any item included on or omitted
from the Earnout Payment Statement (an "Earnout Payment Statement
Objection"), the parties shall be deemed to have accepted and agreed to the
Earnout Payment Statement. If Lend Lease so notifies Buyer of an Earnout
Payment Statement Objection, Lend Lease and Buyer shall, within 10 days
following the date of such notice (the "Resolution Period"), attempt to
resolve their differences. Any resolution by them as to any disputed
amount shall be final and binding on the parties hereto. The term "Final
Earnout Payment Statement" shall mean the definitive Earnout Payment
Statement, including the calculation of the Earnout Payment, Earnout
Revenue, Annual Equitable Revenues and Three-Year Average Earnout Revenue
agreed to by Lend Lease and Buyer in accordance with this Section 1.6(b),
or in the absence of such agreement, the definitive Earnout Statement,
including the Earnout Payment, Earnout Revenue, Annual Equitable Revenue,
and Three-Year Average Earnout Revenue resulting from the determination
made by the Neutral Auditor in accordance with Section 1.6(c) hereof (in
addition to those items to which Lend Lease and Buyer have theretofore
agreed).
(c) If, at the conclusion of the Resolution Period, Lend
Lease and Buyer have not resolved all disputes, then all amounts remaining
in dispute shall, at the election of either party, be submitted to the
Neutral Auditor. Each party agrees to execute, if requested by the Neutral
Auditor, a reasonable engagement letter. All fees and expenses of the
Neutral Auditor shall be borne equally by Lend Lease and Buyer. The
Neutral Auditor shall act as an arbitrator to determine, based solely on
the presentations by Lend Lease and Buyer, and not by independent review,
only those issues remaining 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 Lend Lease and Buyer and shall be
final and binding on the parties hereto.
(d) The Earnout Payment, if any, as reflected in the Final
Earnout Payment Statement, shall be paid in US Dollars in immediately
available funds by wire transfer to an account designated by Lend Lease
within five Business Days after the date that the Final Earnout Payment
Statement is agreed to by Lend Lease and Buyer or as determined by the
Neutral Auditor (the "Initial Earnout Payment Due Date"). If Buyer
defaults in the payment of the Earnout Payment on the Initial Earnout
Payment Due Date, Buyer shall pay interest on the Earnout Payment at the
Default Rate per annum from the Initial Earnout Payment Due Date until
paid, together with all expenses reasonably incurred to enforce collection.
(e) As soon as practicable, but in no event later than 60
days following the period commencing on the Worldwide Closing Date and
ending on the last day of the month in which the fifth anniversary of the
Worldwide Closing Date occurs (the "Look Back Period"), Buyer shall deliver
to Lend Lease a written computation statement setting forth, in reasonable
detail, the Look Back Payment, if any, including Earnout Revenue (by
property and type), Annual Equitable Revenue (by property and type), Five-
Year Average Earnout Revenue and the other components thereof, prepared by
Buyer and reviewed and certified as to accuracy by Buyer's independent
public accountants (the "Look Back Payment Statement"). Lend Lease shall
have the same opportunity to review the Look Back Payment Statement as it
did the Earnout Payment Statement, and any disputes in respect of the Look
Back Payment Statement shall be resolved in the same manner as disputes in
respect of the Earnout Payment Statement, all in accordance with the
provisions of clauses (a) through (c) of this Section 1.6. The term "Final
Look Back Payment Statement" shall mean the definitive Look Back Payment
Statement, including the calculation of the Look Back Payment agreed to by
Lend Lease and Buyer, or in the absence of such agreement, the definitive
Look Back Payment Statement, including the Look Back Payment resulting from
the determination made by the Neutral Auditor (in addition to those items
to which Lend Lease and Buyer theretofore agreed).
(f) (i) In the event that (A) the Five-Year Average
Earnout Revenue, as reflected in the Final Look Back Payment Statement, is
less than the Three-Year Average Earnout Revenue, as reflected in the Final
Earnout Payment Statement, and (B) an Earnout Payment was made to Lend
Lease pursuant to Section 1.6(d) hereof, then Lend Lease shall pay or cause
to be paid to Buyer an amount (the "Lend Lease Look Back Payment") equal to
the product of (1) the difference between the Three-Year Average Earnout
Revenue, as reflected in the Final Earnout Payment Statement, and the Five-
Year Average Earnout Revenue, as reflected in the Final Look Back Payment
Statement, multiplied by (2) the Earnout Multiplier; PROVIDED, HOWEVER,
that the Lend Lease Look Back Payment shall not exceed the Earnout Payment.
(ii) In the event that the Five-Year Average Earnout
Revenue, as reflected in the Final Look Back Payment Statement, is greater
than the Three-Year Average Earnout Revenue, as reflected in the Final
Earnout Payment Statement, then Buyer shall pay or cause to be paid to Lend
Lease an amount (the "Buyer Look Back Payment") equal to the product of (1)
the difference between the Five-Year Average Earnout Revenue, as reflected
in the Final Earnout Payment Statement, and the Three-Year Average Earnout
Revenue, as reflected in the Final Look Back Payment Statement, multiplied
by (2) the Earnout Multiplier; PROVIDED, HOWEVER, that the Buyer Look Back
Payment, together with the Earnout Payment, shall not exceed the Earnout
Maximum.
(g) The Lend Lease Look Back Payment or the Buyer Look Back
Payment, as the case may be, as reflected in the Final Look Back Payment
Statement, shall be paid in US Dollars in immediately available funds by
wire transfer to an account designated by Buyer or Lend Lease, as the case
may be, within five Business Days after the date that Lend Lease and Buyer
agree to the Final Look Back Payment Statement or as determined by the
Neutral Auditor (the "Final Earnout Payment Due Date"). If Buyer defaults
in the payment of any Buyer Look Back Payment on the Final Earnout Payment
Date, Buyer shall pay interest on the Buyer Look Back Payment at the
Default Rate per annum from the Final Earnout Payment Due Date until paid,
together with all expenses reasonably incurred to enforce collection. If
Lend Lease defaults in the payment of the Lend Lease Look Back Payment on
the Final Earnout Payment Due Date, Lend Lease shall pay interest on the
Lend Lease Look Back Payment at the Default Rate per annum from the Final
Earnout Payment Due Date until paid, together with all expenses reasonably
incurred to enforce collection.
(h) For purposes of this Section 1.6:
(i) "Annual Equitable Revenue" means the annual revenue
received by or payable to Buyer or its Affiliates for each Fiscal Year from
the provision of property management, facility management, leasing or
Project Management services to the properties owned by the Equitable
Related Entities. In the event there is a change in the strategic or
tactical investment approach of any of the Equitable Related Entities that
results in a greater than 20% increase in the Annual Equitable Revenue
above US $20.7 million, which increased level is sustained, or is
reasonably expected to be sustained, for a period of three or more years,
the amount of such increase shall be included in the calculation of Earnout
Revenue, but not in the calculation of Annual Equitable Revenue. The
acquisition of properties in the normal course of business for any of the
Equitable Related Entities, or the acquisition of portfolios of properties
which are scheduled for disposition within three years, are by way of
example, activities that would not result in incremental Earnout Revenue.
(ii) "Earnout Maximum" means US$77.5 million.
(iii)"Earnout Multiplier" means 2.3.
(iv) "Earnout Payment" means an amount equal to the
product of (A) the Three-Year Average Earnout Revenue, multiplied by (B)
the Earnout Multiplier; PROVIDED, HOWEVER, that in no event shall the
Earnout Payment exceed the Earnout Maximum.
(v) "Earnout Revenue" means, all revenue received by or
payable to Buyer or its Affiliates from the provision of property
management, facility management, leasing or Project Management services to
Lend Lease Controlled Properties that (A) were not served by the Compass
Businesses during the twelve (12) month period immediately preceding the
Worldwide Closing Date or (B) that were served by the Compass Businesses as
of the Worldwide Closing Date but only with respect to such revenue
received by or payable to Buyer or its Affiliates from the provision of
property management, facility management, leasing or Project Management
services that were not provided to such Lend Lease Controlled Properties
during the twelve (12) month period immediately preceding the Worldwide
Closing Date. Notwithstanding the foregoing, Earnout Revenue shall not
include any of the following: (a) Annual Equitable Revenue, except as
provided in Section 1.6(h)(i) hereof; PROVIDED, HOWEVER, that if any
property set forth in Section 1.6(h)(v)(1) of the Company Disclosure
Schedule is acquired by Lend Lease or its Affiliates in a bona fide arm's-
length transaction, revenue received by or payable to Buyer or its
Affiliates from the provision of property management, facility management,
leasing and Project Management services to any such acquired property shall
be included in Earnout Revenue until such time as such property is no
longer a Lend Lease Controlled Property; (b) revenue received by or payable
to Buyer or its Affiliates from the provision of property management,
facility management, leasing and Project Management services to those
properties set forth in Section 1.6(h)(v)(1)(A) of the Company Disclosure
Schedule (the "Xxxxxx Xxxxx Properties"); (c) revenue received by or
payable to Buyer or its Affiliates from the provision of property
management, facility management, leasing and Project Management services to
those clients set forth in Section 1.6(h)(v)(2) of the Company Disclosure
Schedule; and (d) revenue received from Retail Development Services
provided to any Lend Lease Controlled Property, except and only to the
extent such revenue exceeds, in the aggregate, (A) US$7.5 million in the
period commencing on the Worldwide Closing Date and ending on the last day
of the month in which the third anniversary of the Worldwide Closing Date
occurs and (B) US$12.5 million in the period commencing on the Worldwide
Closing Date and ending on the last day of the month in which the fifth
anniversary of the Worldwide Closing Date occurs.
Notwithstanding the foregoing, in the event that Lend
Lease or its Affiliates disposes of a Lend Lease Controlled Property,
revenue received by Buyer or its Affiliates from the provision of property
management, facility management, leasing and Project Management services to
such property shall only be included in Earnout Revenue (if Buyer or its
Affiliates is retained by the new owner) until the earlier of (A) twelve
months from the date such property is no longer a Lend Lease Controlled
Property or (B) the date on which Buyer or any of its Affiliates no longer
provides such services; PROVIDED that, with respect to clauses (A) and (B),
Buyer or such Affiliate did not at the time of such sale participate and is
not subsequently required to participate in a competitive bidding process
in order to retain such assignment and; PROVIDED, FURTHER, that neither
Buyer nor such Affiliate shall have any obligation to continue to provide
any services at such Lend Lease Controlled Property after such sale.
If (A) at any time during the period beginning on the
date hereof and ending on the Australia Closing Date, Compass Australia,
LLPMA or Lend Lease enters into an agreement to provide management services
to Westpac Banking Corporation and such agreement is assigned to Buyer or
its Affiliates or (B) within 120 days following the Australia Closing Date,
Buyer or any of its Affiliates enters into an agreement to provide
management services to Westpac Banking Corporation, in each case pursuant
to and in accordance with the terms of the bid for such services submitted
by Lend Lease (without a material modification in the terms or conditions
thereof including without limitation with respect to fees, services and
terms), a copy of which is included in Section 1.6(h)(v)(3) of the Company
Disclosure Schedule, revenue therefrom (net of unreimbursed project related
personnel costs, fees and start-up costs) shall be included in Earnout
Revenue. In the event that on the Australia Closing Date any Seller,
Company or Company Subsidiary serves as oversight manager of a Lend Lease
Controlled Property located in Australia and, following the Australia
Closing Date, a Company or Company Subsidiary becomes the property manager
for such property, revenue derived from additional fees received as the
direct property manager, net of the amount of any fees historically
received for oversight services provided, shall be included in Earnout
Revenue, unless the property manager who shall have been replaced by a
Company or Company Subsidiary after the Australia Closing Date is Buyer,
Xxxxx Lang Wootton or any of their respective Affiliates. Notwithstanding
anything to the contrary contained herein, revenue derived from the
Australia Business shall only be eligible for inclusion in the calculation
of Earnout Revenue after the Australia Closing Date.
(vi) "Equitable Related Entities" means the Equitable
General Account, Prime Property Fund ("PPF"), the Value Enhancement Fund
(VEF) I and the Value Enhancement Fund (VEF) II.
(vii)"Five-Year Average Earnout Revenue" means an amount
equal to (A) the quotient obtained by dividing (1) the sum of all Earnout
Revenue received by or payable to Buyer or its Affiliates during the Look
Back Period, by (2) five; minus (B) the sum of (x) US$4.6 million and (y)
the Five-Year Equitable Revenue Shortfall, if any.
(viii) "Five-Year Average Equitable Revenue" means
an amount equal to (A) the sum of the Annual Equitable Revenue received by
or payable to Buyer during the Look Back Period divided by (B) five.
(ix) "Five-Year Equitable Revenue Shortfall" means an
amount, if positive, equal to (A) US$20.7 million minus (B) the Five-Year
Average Equitable Revenue.
(x) "Three-Year Average Earnout Revenue" means an
amount, if positive, equal to (A) the quotient obtained by dividing (1) the
sum of all Earnout Revenue received by or payable to Buyer or its
Affiliates during the Earnout Payment Period by (2) three; minus (B) the
sum of (x) US$4.6 million and (y) the Three-Year Equitable Revenue
Shortfall, if any.
(xi) "Three-Year Average Equitable Revenue" means an
amount equal to (A) the sum of the Annual Equitable Revenue received by or
payable to Buyer during the Earnout Payment Period divided by (B) three.
(xii)"Three-Year Equitable Revenue Shortfall" means an
amount, if positive, equal to (A) US$20.7 million minus (B) the Three-Year
Average Equitable Revenue.
For purposes of this Section 1.6, "revenue" shall mean revenue
net of any reimbursable expenses. For purposes of converting revenue into
US Dollars in performing the calculations hereunder, the exchange rate in
effect at the end of the month in which such revenue is received shall be
used.
(i) Notwithstanding anything to the contrary contained herein
or in the Strategic Alliance Agreement, neither Buyer nor any of its
Affiliates (including the Companies and the Company Subsidiaries) shall
have any obligation to bid for any property management, leasing, facility
management or Project Management assignment relating to a Lend Lease
Controlled Property from Lend Lease or its Affiliates or any of the
Equitable Entities. Notwithstanding the foregoing, if Lend Lease or any of
its Affiliates offers to Buyer or any of its Affiliates any property
management, leasing, facility management or Project Management assignment
relating to a Lend Lease Controlled Property in a geographic market in
which Buyer or any such Affiliate is operating at the time of such offer
and Buyer or its Affiliate otherwise has the current capacity to perform
such services, and Buyer or its Affiliate declines such offer (an "Offered
Assignment"), revenue that would have been received by or payable to Buyer
or its Affiliates from the provision of property management, facility
management, leasing and Project Management services pursuant to such
Offered Assignment during the Earnout Payment Period shall be included in
the calculation of Earnout Revenue or Annual Equitable Revenue (such amount
to be calculated by multiplying the projected revenue from such Offered
Assignment during the initial twelve month period of the assignment by the
lesser of (x) the number of full years plus any fraction of a year during
the initial term of the agreement and (y) the number of full years plus any
fraction of a year remaining during the Earnout Payment Period), as the
case may be, PROVIDED, HOWEVER, that such revenue shall not be included if
(i) the terms and conditions of such Offered Assignment are not consistent
with the terms and conditions for comparable properties and services
located in the same geographic market as such Offered Assignment or (ii)
the acceptance of an Offered Assignment would, in the reasonable judgment
of Buyer, (a) be "inconsistent with the strategic objectives of Buyer;" (b)
result in annual EBITDA of less than 43% of projected revenue with respect
to the Offered Assignment; (c) be barred by or conflict with other
contractual obligations of Buyer or its Affiliates; (d) preclude Buyer or
its Affiliates from bidding on or accepting an alternative assignment (an
"Alternative Assignment") which Alternative Assignment would reasonably be
expected to result in an increase in profits to Buyer or its Affiliates
compared to that which would reasonably be expected to have been derived
from the Offered Assignment; PROVIDED, HOWEVER, that at the time of such
Offered Assignment, Buyer shall have received notice of a potential
Alternative Assignment and prior to declining the Offered Assignment, Buyer
shall have provided Lend Lease with written notice of such Alternative
Assignment; (e) Buyer or its Affiliates have a reasonable basis to believe
that the provision of services by Buyer or its Affiliates under such
Offered Assignment will not continue for a period of more than two years;
or (f) be barred by or inconsistent with applicable Law (each, a
"Prohibiting Factor"). An Offered Assignment shall be deemed to be
"inconsistent with the strategic objectives of Buyer" if Buyer or its
Affiliates are no longer accepting new assignments or providing any or all
of the services required by the Offered Assignment in the geographic area
or Buyer or its Affiliates has discontinued providing or determined not to
provide any or all of the services required by the Offered Assignment for
the particular type of property. Nothing contained herein shall prevent
Buyer or its Affiliates from terminating any property management, leasing,
facility management or Project Management assignment in accordance with the
terms of the related agreement; PROVIDED that in the event that Buyer
withdraws its acceptance of a bid or elects to no longer perform services
for a Lend Lease Controlled Property prior to the expiration of the initial
term of the assignment (a "Rejected Assignment") other than as a result of
(i) a breach of the agreement by the other party, or (ii) the existence of
a Prohibiting Factor, the revenue that would have been received by or
payable to Buyer or its Affiliates from such Rejected Assignment during the
Earnout Period for such initial term shall be included in Earnout Revenue
or Annual Equitable Revenue (such amount to be calculated by multiplying
the projected revenue from the provision of property management, facility
management, leasing or Property Management Services to such Rejected
Assignment during the initial twelve month period of the assignment by the
lesser of (x) the number of full years plus any fraction of a year
remaining during the initial term of the agreement and (y) the number of
full years plus any fraction of a year remaining during the Earnout Payment
Period), as the case may be; PROVIDED, FURTHER that in the event that Buyer
accepts an assignment from Lend Lease or its Affiliates for a Lend Lease
Controlled Property which, at the time of such acceptance, was projected to
yield annual EBITDA of less than 43% of projected revenue for such
assignment, Buyer or its Affiliates may elect to terminate such assignment
at any time and any future revenue that may have been derived therefrom
shall not be included in any revenue calculation hereunder.
(j) On the second Business Day following the end of the 120
day period following each of the third and fifth anniversaries of the
Worldwide Closing Date, Buyer shall deliver to Lend Lease a statement (a
"Doubtful Accounts Statement") setting forth (A) all Accounts Receivable,
if any, which have been included in the calculation of Earnout Revenue and
which have not been collected by Buyer within the 120 day period following
the third or fifth anniversary of the Worldwide Closing Date, as the case
may be (the "Doubtful Accounts"), and (B) a recalculation of the Earnout
Payment (the "Recalculated Earnout Payment") or the Buyer Look Back Payment
or Lend Lease Look Back Payment (the "Recalculated Look Back Payment"), as
the case may be, without the inclusion of any Doubtful Accounts for such
period. Lend Lease shall pay or cause to be paid to Buyer an amount (the
"Doubtful Accounts Payment") equal to the amount by which the Recalculated
Earnout Payment is less than the Earnout Payment or the Recalculated Look
Back Payment is less than the Buyer Look Back Payment or greater than the
Lend Lease Look Back Payment, as the case may be. The Doubtful Accounts
Payment shall be paid in US Dollars in immediately available funds by wire
transfer to an account designated by Buyer, within five Business Days after
the date that Buyer shall have delivered the Doubtful Accounts Statement
("Recalculated Look Back Payment Due Date"). Lend Lease shall pay interest
on the Doubtful Accounts Payment at the Interest Rate per annum from the
date on which the Earnout Payment, the Buyer Look Back Payment or Lend
Lease Look Back Payment, as the case may be, which included such Doubtful
Accounts, was made, through the Recalculated Look Back Payment Due Date.
In addition, if Lend Lease defaults in the payment of the amount described
in this Section 1.6(j) on the Recalculated Look Back Payment Due Date, Lend
Lease shall pay interest on the Doubtful Accounts Payment (including
interest therein through the Recalculated Look Back Payment Due Date) from
the Recalculated Look Back Payment Due Date until paid, together with all
expenses reasonably incurred to enforce collection. After the Worldwide
Closing Date or the Australia Closing Date, as the case may be, Buyer shall
use all commercially reasonable efforts to collect the Doubtful Accounts.
In the event that Lend Lease makes a payment pursuant to this Section
1.6(j), Buyer shall, at its sole election, either (A) assign to Lend Lease
all of its rights and interest in and to such Doubtful Account or (B)
continue to use commercially reasonable efforts to collect such receivable
and remit to Lend Lease any amounts Buyer may collect with respect to such
receivable. No Doubtful Account shall be included in any calculation
contained in this Section 1.6, except for purposes of this Section 1.6(j).
(k) Lend Lease (US) and Buyer shall allocate the Earnout
Payment and Buyer Lookback Payment or Lend Lease Lookback Payment, if any,
in accordance with the fair market values of the Companies and Company
Subsidiaries as set forth in Section 9.4 hereof.
ARTICLE II
PRE-CLOSING TRANSACTIONS
------------------------
Section 2.1 RETRANSFER OF FOREIGN INTANGIBLE PROPERTY RIGHTS. Prior
to the Worldwide Closing: (i) the Foreign Intangibles (as defined in the
Agreement for the Sale of Foreign Intellectual Property Rights, dated as of
June 30, 1997, between Compass M&L and Lend Lease International), (the
"1997 Compass M&L Intangible Sale Agreement"), which were transferred to
Lend Lease International pursuant to the 1997 Compass M&L Intangible Sale
Agreement, together with all improvements, additions and modifications
thereto, and the licensor's rights and obligations under: (a) the License
Agreement, dated February 6, 1996, between Compass M&L and Compass Cayman,
(b) the Consulting and Services Agreement, dated March 29, 1998, by and
between Compass M&L, Compass UK, PPM FM Holdings Ltd., and PPM Holdings
Ltd., and (c) the Software License Agreement, dated March 29, 1998, by and
among Compass M&L, Compass UK, PPM FM Holdings Ltd., and PPM Holdings Ltd.,
shall be transferred to Compass M&L pursuant to an Agreement for the Sale
of Foreign Intellectual Property Rights to Compass Management & Leasing,
Inc., in the form attached as EXHIBIT C hereto (the "1998 Compass M&L
Foreign Intangible Sale Agreement"), and (ii) the Foreign Intangibles (as
defined in the Agreement for the Sale of Foreign Intellectual Property
Rights, dated June 30, 1997 between ERE Retail and Lend Lease
International) (the "1997 ERE Retail Intangible Sale Agreement"), which
were transferred to Lend Lease International, pursuant to the 1997 ERE
Retail Intangible Sale Agreement, together with all improvements, additions
and modifications thereto, shall be transferred to ERE Retail pursuant to
an Agreement for the Sale of Foreign Intellectual Property Rights to ERE
Yarmouth Retail Inc., in the form attached as EXHIBIT D hereto (the "1998
ERE Retail Foreign Intangible Sale Agreement" and, together with the 1998
Compass M&L Foreign Intangible Sale Agreement, the "Foreign Intangible Sale
Agreements"); PROVIDED, HOWEVER, Buyer shall determine, in its sole
judgement, the purchase price at which such Foreign Intangibles are to be
transferred pursuant to the Foreign Intangible Sale Agreements.
Section 2.2 COMPASS M&L SHARE PURCHASE. Prior to the Worldwide
Closing, Compass M&L shall purchase, at no cost to Compass M&L, the
Companies or Company Subsidiaries or any of their respective Affiliates,
all of the shares of Compass Management and Leasing Co., a Colorado
corporation ("Compass Colorado"), owned by Xxxxxx Xxxxxxx, free and clear
of all Liens, such that, immediately prior to the Worldwide Closing,
Compass M&L shall own all of the issued and outstanding shares of capital
stock of Compass Colorado, free and clear of all Liens.
Section 2.3 INTERCOMPANY AND INTRACOMPANY ACCOUNTS. Effective as of
the Worldwide Closing, all intercompany and intracompany receivables,
payables and loans then existing between Sellers or any Continuing
Affiliate, on the one hand, and any Worldwide Company or Subsidiary of a
Worldwide Company on the other hand, shall be settled by way of capital
contribution in kind (with respect to receivables of the Worldwide Company
and the Subsidiaries of a Worldwide Company owed by Seller or any
Continuing Affiliate) or by way of dividend in kind (with respect to
payables or loans due to Sellers or any Continuing Affiliate).
Notwithstanding the foregoing, those intracompany loans set forth in
Section 2.3 of the Company Disclosure Schedule shall remain outstanding
following the Worldwide Closing in the amounts set forth therein.
Effective as of the Australia Closing, all intercompany and intracompany
receivables, payables and loans (including any obligation to "Seller" (as
defined in the Australian Transfer Agreement) then existing between Sellers
or any Continuing Affiliate, on the one hand, and Compass Australia on the
other hand, shall be settled by way of capital contribution in kind (with
respect to receivables of Compass Australia owed by Seller or any
Continuing Affiliate) or by way of dividend in kind (with respect to
payables or loans due to Sellers or any Continuing Affiliate).
Section 2.4 NAME CHANGE. Prior to the Worldwide Closing, with
respect to the Worldwide Companies, and prior to the Australia Closing,
with respect to Compass Australia each Seller may change the names of all
Companies and Company Subsidiaries and all Intangible Property Rights that
they own or license so that they do not contain any name, xxxx, logo, trade
dress or other identifying words or images which are similar to "ERE,"
"Yarmouth," "Lend Lease" or any combination thereof. When changing such
names, each Seller agrees to use any name recommended by Buyer, provided
that such recommended name does not contain any of the names listed above
or any combination thereof or is not otherwise prohibited by Law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SELLERS
Lend Lease with respect to itself and each Seller, Company and
Company Subsidiary, and each other Seller severally with respect to itself
and each Company in which such Seller is a shareholder and any Company
Subsidiary of such Company, represents and warrants to Buyer that:
Section 3.1 OWNERSHIP OF SHARES. Seller owns and has an unqualified
right to, and shall transfer to Buyer (i) at the Worldwide Closing, good,
valid and marketable title to the Worldwide Shares in any Worldwide Company
in which such Seller is a shareholder, free and clear of all Liens, and
(ii) at the Australia Closing, good, valid and marketable title to the
Compass Australia Shares, free and clear of all Liens.
Section 3.2 CORPORATE ORGANIZATION. Seller and each Company (a) is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, formation or organization; (b) has full
power and authority to carry on the Compass Businesses as they are now
being conducted by it and to own the properties and assets it now owns; and
(c) is duly qualified or licensed to do business as a foreign Person in
good standing in the jurisdictions listed in Section 3.2 of the Company
Disclosure Schedule, which are all the jurisdictions in which such
qualification or licensing is required, except jurisdictions in which the
failure to be so qualified or licensed or in good standing would not have a
Material Adverse Effect. The copies of the certificates of incorporation
and bylaws (or similar organizational documents) of each Company heretofore
delivered to Buyer by Seller are complete and correct copies of such
instruments, as presently in effect. Section 3.2 of the Company Disclosure
Schedule sets forth an accurate and complete organizational chart showing
Sellers and all entities through which the Compass Businesses are
conducted.
Section 3.3 CAPITALIZATION OF THE COMPANIES. As of the date of this
Agreement, the authorized capital stock of each Company and Company
Subsidiary is as set forth in Section 3.3 of the Company Disclosure
Schedule, which Section sets forth the par value per share (except in the
case of Compass Australia), the number of shares issued and outstanding and
the owner of such shares and the number of shares held in treasury with
respect to each class of stock of each Company and Company Subsidiary. All
issued and outstanding shares of capital stock or ownership interests of
each Company are validly issued, fully paid and nonassessable and free of
preemptive or similar rights. The Shares constitute all of the issued
shares in the capital of the relevant Company. There are no outstanding
(a) securities convertible into or exchangeable for, directly or
indirectly, the capital stock of or ownership interests in any Company or
Company Subsidiary; or (b) subscriptions, options, warrants, calls, rights,
contracts, commitments, understandings, restrictions or arrangements
relating to the issuance, sale, transfer or voting of any shares of capital
stock of or ownership interests in any Company or Company Subsidiary.
Section 3.4 SUBSIDIARIES AND AFFILIATES. Section 3.4 of the Company
Disclosure Schedule sets forth the name, jurisdiction of incorporation or
formation and capitalization of each Company Subsidiary and the
jurisdictions in which each Company Subsidiary is qualified to do business.
No Company owns, directly or indirectly, any capital stock or other equity
securities of any Person or has any direct or indirect equity or ownership
interest in any partnership, joint venture or business not listed in
Section 3.4 of the Company Disclosure Schedule. Except as and to the
extent set forth in Section 3.4 of the Company Disclosure Schedule, all the
outstanding capital stock of each Company Subsidiary is owned directly or
indirectly by a Company free and clear of all Liens, and is validly issued,
fully paid and nonassessable. Each Company Subsidiary (a) is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation; (b) has full power and
authority to carry on its business as it is now being conducted and to own
the properties and assets it now owns; and (c) is duly qualified or
licensed to do business as a foreign Person in good standing in the
jurisdictions listed in Section 3.4 of the Company Disclosure Schedule,
which are all the jurisdictions in which such qualification or licensing is
required, except jurisdictions in which the failure to be so qualified or
licensed or in good standing would not have a Material Adverse Effect. The
copies of the certificate of incorporation and bylaws (or similar
organizational documents) of each Company Subsidiary heretofore delivered
to Buyer by Sellers are complete and correct copies of such instruments, as
presently in effect.
Section 3.5 AUTHORIZATION. Seller and each Company has full power
and authority to enter into this Agreement, the Strategic Alliance
Agreement and the Ancillary Agreements to which it is a party and to carry
out the transactions contemplated hereby and thereby. The board of
directors (or similar governing body) and stockholder(s) of Seller and each
Company has taken all action required by Law, Seller's and each Company's
certificate of incorporation and bylaws (or similar organizational
documents) or otherwise to be taken by it or them to authorize the
execution and delivery of this Agreement, the Strategic Alliance Agreement
and the Ancillary Agreements to which it is a party, and the consummation
of the transactions contemplated hereby and thereby, and this Agreement,
the Strategic Alliance Agreement and the Ancillary Agreements are valid
and binding agreements of Seller and each Company party thereto,
enforceable in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization and
other similar Laws affecting creditors generally and by the availability of
equitable remedies.
Section 3.6 NO VIOLATION. Neither the execution and delivery of this
Agreement, the Strategic Alliance Agreement nor any Ancillary Agreement nor
the consummation of the transactions contemplated hereby or thereby shall
(a) violate or be in conflict with any provision of the certificate of
incorporation or bylaws (or similar organizational documents) of Seller,
any Company or Company Subsidiary; (b) except as specified in Section 3.6
of the Company Disclosure Schedule, violate, be in conflict with,
constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, cause or permit the acceleration
of, or give rise to any right of termination, imposition of fees or
penalties under, any debt, Contract, instrument or other obligation to
which Seller, any Company or Company Subsidiary is a party or by which its
assets are bound or affected, or result in the creation or imposition of
any Lien upon any property or assets of Seller, any Company or Company
Subsidiary; or (c) violate any statute, law, judgment, decree, order,
regulation, rule or other similar authoritative matters ("Law") of any
foreign, federal, state or local governmental or quasi-governmental,
administrative, regulatory or judicial court, department, commission,
agency, board, bureau, instrumentality or other authority ("Authority").
Section 3.7 UNAUDITED FINANCIAL STATEMENTS. Set forth in Section 3.7
of the Company Disclosure Schedule are (i) the unaudited combined balance
sheet of the Companies as of December 31, 1997 (the "Company 1997 Unaudited
Balance Sheet") and the related statements of income for the fiscal year
then ended (the "Company Unaudited Financial Statements"); and (ii) the
unaudited balance sheet of the Companies as of June 30, 1998 (the "Company
Interim Balance Sheet"), and the related statements of income for the six-
month period then ended (the "Company Interim Financial Statements" and,
together with the Company Unaudited Financial Statements, the "Financial
Statements"). Such Financial Statements are true, complete and accurate
and fairly present the combined financial condition and results of
operations of the Companies as of and for the periods referred to therein.
The Financial Statements have been derived from the books and records of
Sellers and the Company Audited Financial Statements and the Companies and
have been prepared in accordance with GAAP consistently applied throughout
the periods involved.
Section 3.7A AUDITED FINANCIAL STATEMENTS. Sellers will
promptly after the date hereof provide Buyer with (i) the audited combined
balance sheet of the Companies as of December 31, 1997 and the related
statements of income, changes in stockholders' equity and cash flows for
the calendar year then ended (the "Company Audited Financial Statements");
and (ii) the audited balance sheet of the Companies as of June 30, 1998,
and the related statements of income, changes in stockholders' equity and
cash flows for the six-month period then ended (the "Company Audited
Interim Financial Statements" and, together with the Company Audited
Financial Statements, the "Audited Financial Statements"). Such Audited
Financial Statements will be true, complete and accurate and fairly present
the assets, liabilities and financial condition of the Companies, as of the
respective dates thereof, and the statements of income, changes in
stockholders' equity and cash flows and the notes thereto included therein
will be true, complete and accurate and fairly present the results of
operations, retained earnings and cash-flows, as the case may be, of the
Companies, for the periods referred to therein. The Audited Financial
Statements shall have been derived from the books and records of Sellers
and the Companies and have been prepared in accordance with GAAP
consistently applied throughout the periods involved.
The accounting books and records of the Companies and Company
Subsidiaries and of Lend Lease, LLPMA and their respective Affiliates as
they relate to the Australian Business (i) are correct and complete 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 Companies, the Company Subsidiaries and the Australian
Business (except where the failure to so record would not violate GAAP as
consistently applied by the Company, the Company Subsidiaries and the
Australian Business).
Section 3.8 NO UNDISCLOSED LIABILITIES. There are no Liabilities of
any Company or Company Subsidiary of any kind whatsoever and, to the
Knowledge of each Seller, Company or Company Subsidiary, there is no valid
basis for the assertion of any such Liabilities, and no condition,
situation or set of circumstances exists which could reasonably be expected
to result in a Liability, other than:
(a) Liabilities adequately and expressly reflected and
reserved for in the Company 1997 Unaudited Balance Sheet;
(b) Liabilities incurred in the ordinary and usual course of
business consistent with past practice since December 31, 1997, which,
individually or in the aggregate, are not material to the Companies, the
Company Subsidiaries and the Australian Business taken as a whole; and
(c) Liabilities and obligations that are set forth in Section
3.8(c) of the Company Disclosure Schedule.
Section 3.9 ABSENCE OF CERTAIN CHANGES. Except as and to the extent
set forth in Section 3.9 of the Company Disclosure Schedule, since
December 31, 1997, (a) each Company and Company Subsidiary has conducted
its businesses and Lend Lease, LLPMA and their respective Affiliates have
conducted the Australian Business only in the ordinary and usual course of
business consistent with past practice and (b) neither any Company or any
Company Subsidiary nor Lend Lease or LLPMA nor any of their respective
Affiliates, with respect to the Australian Business, has:
(i) suffered any adverse change in its business,
customers or customer relations, employees or employee relations,
operations, properties, prospects, working capital, condition (financial or
otherwise), assets, Liabilities or reserves which, in any case or in the
aggregate, could have a Material Adverse Effect;
(ii) paid, discharged or satisfied any Liabilities other
than the payment, discharge or satisfaction in the ordinary and usual
course of business and consistent with past practice of Liabilities
reflected or reserved against in the Financial Statements or current
Liabilities incurred since December 31, 1997 in the ordinary and usual
course of business consistent with past practice;
(iii)permitted or allowed any of its properties or
assets (real, personal or mixed, tangible or intangible) to be subjected to
any Liens, except for Permitted Liens;
(iv) cancelled any debts or waived any claims or rights
of substantial value other than in the ordinary course of business
consistent with past practice;
(v) sold, transferred, or otherwise disposed of any of
its properties or assets (real, personal or mixed, tangible or
intangible), except in the ordinary and usual course of business,
consistent with past practice, except pursuant to the Australian Transfer
Agreement;
(vi) made any change in its selling, pricing,
advertising or personnel practices inconsistent with its prior practice and
prudent business practices prevailing in the industry;
(vii)settled or agreed to settle any litigation, action
or proceeding before any Authority other than in the ordinary and usual
course of business, consistent with past practice, but in no event
resulting in out-of-pocket Liabilities to any Company or Company Subsidiary
or Lend Lease, LLPMA or any of their respective Affiliates with respect to
the Australian Business, in excess of US$10,000, individually, or US$50,000
in the aggregate, or (B) any form of non-monetary recovery, including,
without limitation, consents, restraining orders or injunctions;
(viii) except as reflected in the Company 1997
Unaudited Balance Sheet, made any single capital expenditure or commitment
in excess of US$20,000 for additions to property, plant, equipment or
intangible capital assets or made aggregate capital expenditures and
commitments in excess of US$100,000 for additions to property, plant,
equipment or intangible capital assets;
(ix) except as required by Section 2.3 hereof, declared,
paid or set aside for payment any dividend or other distribution in respect
of its capital stock or redeemed, purchased or otherwise acquired, directly
or indirectly, any shares of capital stock or other securities of any
Company or Company Subsidiary;
(x) made any change in any method of financial or tax
accounting or financial or tax accounting practice;
(xi) paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets (real, personal or mixed,
tangible or intangible) to, or entered into any Contract or other
arrangement with, any of its officers or directors or shareholders, or any
Affiliate or Associate of any of its officers or directors or shareholders,
except pursuant to the Australian Transfer Agreement;
(xii)agreed to act as guarantor, surety, co-signer,
endorser, co-maker, indemnitor or otherwise, in respect of the obligation
of any Person, or granted or extended any power of attorney other than in
the ordinary course of business, consistent with past practice;
(xiii) prepaid any obligation having a fixed
maturity of more than 90 days from the date such obligation was issued or
incurred; or
(xiv)agreed, whether in writing or otherwise, to take
any action described in this Section 3.9.
Section 3.10 REAL PROPERTY.
(a) OWNED REAL PROPERTY. None of the Companies, Company
Subsidiaries, Lend Lease, LLPMA or their respective Affiliates with respect
to the Australian Business, owns any real property, other than fixtures and
Leased Real Property.
(b) REAL PROPERTY LEASES. Section 3.10(b) of the Company
Disclosure Schedule contains a complete and correct list of all real
property leased (the "Leased Real Property") by any Company or Company
Subsidiary, as tenant, or leased in connection with the Australian
Business, setting forth the address, landlord and tenant for each such
lease (collectively, the "Real Property Leases"). Seller has delivered or
caused each applicable Company or Company Subsidiary to deliver to Buyer
correct and complete copies of the Real Property Leases (including any
amendments, modifications or supplements thereto). Except as set forth in
Section 3.10(b) of the Company Disclosure Schedule, each Real Property
Lease is legal, valid, binding, enforceable, and in full force and effect
against any Company or Company Subsidiary that is the tenant thereunder,
and, to the Knowledge of each Seller, Company or Company Subsidiary, the
other party thereto, except as enforcement may be limited by bankruptcy,
insolvency, reorganization and similar laws affecting creditors generally
and by the availability of equitable remedies. No Seller, Company, Company
Subsidiary or, to the Knowledge of each Seller, Company or Company
Subsidiary, any other party, is in default, violation or breach in any
respect under any Real Property Lease, and no event has occurred and is
continuing that constitutes or, with notice or the passage of time or both,
would constitute a default, violation or breach in any respect under any
Real Property Lease by Seller, any Company or Company Subsidiary, or, to
the Knowledge of each Seller, Company or Company Subsidiary, by any other
party. Each Real Property Lease grants a Company or Company Subsidiary or,
with respect to the Australian Business, Lend Lease, LLPMA or their
respective Affiliates prior to the consummation of the Australian Business
Transfer or Compass Australia following the consummation of the Australian
Business Transfer, the exclusive right to use and occupy the demised
premises thereunder (the "Demised Premises"). Each Company and each
Company Subsidiary and, with respect to the Australian Business, Lend
Lease, LLPMA or their respective Affiliates prior to the consummation of
the Australian Business Transfer or Compass Australia following the
consummation of the Australian Business Transfer, have good and valid title
to the leasehold estate under each Real Property Lease to which it is a
party, free and clear of all Liens, other than Permitted Liens. Each
Company and Company Subsidiary and with respect to the Australian Business,
Lend Lease, LLPMA or their respective Affiliates prior to the consummation
of the Australian Business Transfer or Compass Australia following the
consummation of the Australian Business Transfer enjoys peaceful and
undisturbed possession under its respective Real Property Leases. Neither
any Company or Company Subsidiary nor Lend Lease, LLPMA nor any of their
respective Affiliates has sublet to any third party any portion of the
Leased Real Property.
(c) NO PROCEEDINGS. There are no eminent domain or other
similar proceedings pending or, to the Knowledge of each Seller, Company or
Company Subsidiary, threatened affecting any portion of the Demised
Premises and there is no writ, injunction, decree, order or judgment
outstanding, nor any action, claim, suit or proceeding, pending or to the
Knowledge of each Seller, Company or Company Subsidiary, threatened,
relating to the ownership, lease, use, occupancy or operation of any
Demised Premises by any Company or Company Subsidiary, or relating to the
real property taxes or assessments payable by any Company or Company
Subsidiary in respect thereof.
(d) CURRENT USE. The use and operation of the Demised
Premises by any Company or Company Subsidiary does not violate any
instrument of record or any other instrument or Contract affecting the
Demised Premises and there is no violation of any covenant, condition,
restriction, easement or order of any Authority having jurisdiction over
such property or of any other Person entitled to enforce the same affecting
the Demised Premises or the use or occupancy thereof.
Section 3.11 INTANGIBLE PROPERTY RIGHTS.
(a) Section 3.11(a) of the Company Disclosure Schedule sets
forth a complete and accurate list of the following types of Intangible
Property Rights owned or held by any Company or Company Subsidiary or to be
transferred pursuant to the Foreign Intangible Sale Agreements or Related
to the Australian Business: all United States, state, international and
foreign (i) patents and patent applications; (ii) registered trademarks,
service marks, and pending registrations therefor; (iii) material common
law trademarks, service marks and trade names; (iv) Internet domain names;
(v) registered copyrights and copyright applications; and (vi) material
unregistered copyrights other than those in Computer Programs which are
listed on Schedule 3.11(c).
(b) Section 3.11(b) of the Company Disclosure Schedule
identifies all license Contracts relating to Intangible Property Rights to
which any Company or Company Subsidiary is the licensee or sublicensee or
to which Lend Lease, LLPMA or any of their respective Affiliates is a party
and Related to the Australian Business or to be transferred pursuant to the
Foreign Intangible Sale Agreements. Each Intangible Property License is a
valid, legally binding obligation of Seller, the Company or Company
Subsidiary, and, to the Knowledge of each Seller, Company or Company
Subsidiary, all other parties thereto, enforceable in accordance with its
terms. With respect to each Intangible Property License, each Company and
Company Subsidiary and Lend Lease, LLPMA and their respective Affiliates
has made all payments required thereunder and there are no breaches or
defaults (or events, which, with the giving of notice or passage of time,
would constitute a default) by Seller, the Company or Company Subsidiary,
and, to the Knowledge of each Seller, Company or Company Subsidiary, any
other party thereto.
(c) Section 3.11(c) of the Company Disclosure Schedule lists
all of the material Computer Programs (other than off-the-shelf
applications having a purchase price or initial license fee of less than
US$10,000) which are owned, licensed, leased by any Company or Company
Subsidiary or by Lend Lease, LLPMA or any of their respective Affiliates
Related to the Australian Business, or will be transferred pursuant to the
Foreign Intangible Sale Agreements and identifies which Company, Company
Subsidiary or other company uses such Computer Programs, and which Computer
Programs are owned, licensed, leased, as the case may be. All Computer
Programs identified in Section 3.11(c) of the Company Disclosure Schedule
as owned by the Company or Company Subsidiary, Lend Lease, LLPMA or any of
their respective Affiliates or which will be transferred pursuant to the
Foreign Intangible Sale Agreements were either developed by (i) employees
of a Company, Company Subsidiary or Lend Lease, LLPMA or any of their
respective Affiliates within the scope of their employment, (ii) third
parties as "works-made-for-hire," as that term is defined under Section 101
of the United States Copyright Act, pursuant to written Contracts or (iii)
independent contractors who have assigned their rights to the appropriate
Company, Company Subsidiary, Lend Lease or other Affiliate of Lend Lease
pursuant to written Contracts.
(d) Each Company and Company Subsidiary and Lend Lease, LLPMA
or any of their respective Affiliates with respect to the Australian
Business, and the Foreign Intangibles to be transferred pursuant to the
Foreign Intangible Sales Agreements owns, or has the valid right to use,
sell or license, each Worldwide Company will, after the Worldwide Closing,
own, or have the valid right to use, sell or license, and Compass
Australia will, after the Australia Closing, own, or have the valid right
to use, sell or license, the Intangible Property Rights Related to the
Compass Businesses and the Australia Business, as applicable, free and
clear of all Liens other than Permitted Liens. Except as set forth in
Section 3.11(d)(1) of the Company Disclosure Schedule, no Company or
Company Subsidiary or Lend Lease, LLPMA or any of their respective
Affiliates with respect to the Australian Business, licenses any Intangible
Property Rights Related to the Compass Businesses to any third parties.
Except as set forth in Section 3.11(d)(2) of the Company Disclosure
Schedule, (i) the appropriate Company or Company Subsidiary is listed in
the records of the appropriate United States, state or foreign agency as
the sole owner of record for each registration and application listed in
Section 3.11(a) of the Company Disclosure Schedule, and (ii) no
registration or application listed in Section 3.11(a) of the Company
Disclosure Schedule is the subject of any pending, existing, or, to the
Knowledge of each Seller, Company or Company Subsidiary, threatened
opposition, interference, cancellation or other proceeding before any
Authority. Except as set forth on Schedule 3.11(a) Intangible Property
Rights listed in Section 3.11(a) of the Company Disclosure Schedule are
valid and subsisting, are in full force and effect in all material
respects, and have not been cancelled, expired or abandoned.
(e) To the Knowledge of each Seller, Company or Company
Subsidiary, the operation of the Compass Businesses does not infringe upon,
dilute, violate or misappropriate any intangible proprietary right of any
third party, and, except as set forth in Section 3.11(e) of the Company
Disclosure Schedule there are no claims pending or, to the Knowledge of
each Seller, Company or Company Subsidiary, threatened, alleging to such
effect. To the Knowledge of each Seller, Company or Company Subsidiary, no
third party is infringing upon, diluting, violating or misappropriating any
Intangible Property Rights owned or controlled by any Company or Company
Subsidiary or which will be owned or controlled by Compass Australia after
the Australian Business Transfer, or to be transferred pursuant to the
Foreign Intangible Sale Agreements and, except as set forth in Section
3.11(e) of the Company Disclosure Schedule, no such claims have been made
by any Seller, Company or Company Subsidiary within the past three years.
(f) Except as set forth in Section 3.11(f) of the Company
Disclosure Schedule, with respect to the Worldwide Companies and the
Company Subsidiaries, after the Closing, and with respect to Compass
Australia, after the Australia Closing, no Subsidiaries or Affiliates of
Lend Lease will retain any rights to own or use the Intangible Property
Rights currently used in or held for use, necessary for or sold in
connection with the Compass Businesses.
(g) Except as set forth in Section 3.11(g) of the Company
Disclosure Schedule, there are no settlements, consents, judgments or
orders or other Contracts which restrict any Company's or Company
Subsidiary's rights to use any of the Intangible Property Rights owned or
controlled by any Company or Company Subsidiary or by Lend Lease, LLPMA or
any of their respective Affiliates related to the Australian Business or to
be transferred pursuant to the Foreign Intangible Sales Agreements, Related
to the Compass Businesses or sold in connection with the Compass
Businesses.
(h) Except as set forth in Section 3.11(h) of the Company
Disclosure Schedule, the consummation of the transactions contemplated
hereby and by the Ancillary Agreements shall not result in the loss or
impairment of any Company's or Company Subsidiary's right to own or use any
of the Intangible Property Rights owned or controlled by any Company or
Company Subsidiary, Related to the Compass Businesses or sold in connection
with the Compass Businesses or on Buyer's right to own or use any of the
Intangible Property Rights Related to the Australian Business, nor shall it
require the consent of any Authority or Person in respect of any such
Intangible Property Rights. No present or former employee, officer or
director of Lend Lease, any Company or Company Subsidiary or other
Subsidiary of Lend Lease or the parties to the Foreign Intangible Sale
Agreements has any right, title, or interest, directly or indirectly, in
whole or in part, in any Intangible Property Rights.
Section 3.12 PERSONAL PROPERTY LEASES. Section 3.12 of the
Company Disclosure Schedule sets forth a list of all Contracts or
instruments pursuant to which any Seller, Company or any Company Subsidiary
or any of their respective Affiliates leases personal property Related to
the Compass Businesses ("Personal Property Leases"). Except as set forth
in Section 3.12 of the Company Disclosure Schedule, each Personal Property
Lease is legal, valid, binding and enforceable against any Company or
Company Subsidiary and, to the Knowledge of each Seller, Company or Company
Subsidiary, against any other party, and in full force and effect except as
enforceability may be limited by bankruptcy, insolvency, reorganization and
similar laws affecting creditors generally and by the availability of
equitable remedies. No Seller, Company or Company Subsidiary or, to the
Knowledge of each Seller, Company or Company Subsidiary, any other party
is, in default, violation or breach in any respect under any Personal
Property Lease, and no event has occurred and is continuing that
constitutes or, with notice or the passage of time or both, would
constitute a default, violation or breach in any respect under any Personal
Property Lease by any Company or Company Subsidiary, or to the Knowledge of
each Seller, Company or Company Subsidiary, by any other party.
Section 3.13 CERTAIN CONTRACTS.
(a) Section 3.13(a) of the Company Disclosure Schedule lists
all material contracts, commitments, instruments, notes, security
agreements, leases, agreements or understandings, oral or written, to which
any Company or Company Subsidiary is a party or by which it or any of its
properties or assets may be bound or affected or Related to the Australian
Business ("Listed Agreements"), other than Permitted Liens, including
without limitation, (i) all property management and facilities management
agreements; (ii) all employment or other contracts (including, without
limitation, non-competition, severance or indemnification agreements) with
any employee or current or former (to the extent any obligation remains
outstanding) officer, director or stockholder of any Company or Company
Subsidiary or the Australian Business (or any company which is controlled
by any such individual); (iii) all consulting contracts; (iv) union, guild
or collective bargaining contracts relating to employees of any Company,
Company Subsidiary or the Australian Business; (v) instruments for borrowed
money (including, without limitation, any indentures, guarantees, loan
agreements, sale and leaseback agreements, or purchase money obligations
incurred in connection with the acquisition of property); (vi) agreements
for acquisitions or dispositions (by merger, purchase or sale of assets or
stock or otherwise) of material assets, as to which any Company or Company
Subsidiary has continuing obligations or rights or Related to the
Australian Business; (vii) joint venture or partnership agreements; (viii)
purchase contracts or agreements giving rise in each case to Liabilities of
any Company or Company Subsidiary or the Australian Business in excess of
$25,000, other than contracts or agreements between a Company or Company
Subsidiary (entered into on behalf of or as agent for the property owner)
and third parties relating to the provision of maintenance, security, snow
removal and similar services, which are subject to reimbursement in full by
the property owner and which are not material to the Companies or the
Company Subsidiaries; and (x) guarantees, suretyships, indemnification and
contribution agreements. Except as indicated in Section 3.13(a) of the
Company Disclosure Schedule, a true and complete copy of each Listed
Agreement (together with all amendments thereto) has been provided to
Buyer. Each Listed Agreement is a legal, valid and binding obligation of
and enforceable against a Seller, Company or Company Subsidiary, as the
case may be, and, to the Knowledge of each Seller, Company or Company
Subsidiary, the other parties thereto, in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization
and similar laws affecting creditors generally and by the availability of
equitable remedies. No Seller, Company, Company Subsidiary or any of their
respective Affiliates, or, to the Knowledge of each Seller, Company or
Company Subsidiary, any other party, is in default, violation or breach in
any respect under any Listed Agreement and no event has occurred and is
continuing that constitutes, or with notice or the passage of time would
constitute, a default, violation or breach in any respect under any Listed
Agreement. Neither any Company or Company Subsidiary nor Lend Lease, LLPMA
or their respective Affiliates with respect to the Australian Business, has
an outstanding contract with officers, employees, agents, consultants,
advisors, brokers, representatives, distributors or dealers that are not
cancellable by it on notice of not longer than 30 days and without
liability, penalty or premium or any agreement or arrangement providing for
the payment of any bonus or commission based on fees or earnings.
(b) Except as set forth in Section 3.13(b) of the Company
Disclosure Schedule, no Contract or License restricts the ability of any
Company or Company Subsidiary to own or possess their respective assets or
properties or conduct their respective operations in any geographic area.
Section 3.14 ACCOUNTS RECEIVABLE.
(a) Section 3.14(a) of the Company Disclosure Schedule
accurately lists as of June 30, 1998 all Accounts Receivable arising out of
or Related to the Compass Businesses in excess of $25,000, including the
aging thereof.
(b) Except as set forth in Section 3.14(b) of the Company
Disclosure Schedule, all Accounts Receivable, whether reflected on the
Financial Statements or arising thereafter in the ordinary course of
business, (i) arose or will arise in the ordinary course of business from
bona fide arm's-length transactions for the sale of goods or performance of
services by Companies, Company Subsidiaries or the Australian Business;
(ii) are valid; (iii) to the Knowledge of each Seller, Company or Company
Subsidiary, are collectible in the ordinary course of business (subject to
reserves reflected on the Financial Statements) and are not subject to
counterclaims or setoffs; and (iv) are not more than 120 days past due from
the date first due and payable. Neither Seller, the Companies, nor the
Company Subsidiaries has Knowledge of any facts or circumstances which
would result in a material increase in the uncollectibility of the Accounts
Receivable, in excess of the reserves set forth in the Financial
Statements.
Section 3.15 LICENSES AND OTHER AUTHORIZATIONS. Section 3.15 of
the Company Disclosure Schedule lists all material licenses, permits,
franchises and other authorizations of any Authority, other than licenses
relating to Intangible Property Rights which are set forth in Section 3.11
of the Company Disclosure Schedule, necessary for, or otherwise material
to, the conduct of the Compass Businesses (the "Licenses") as currently
conducted. Except as disclosed in Section 3.15 of the Company Disclosure
Schedule, all such Licenses are in full force and effect. Except as
disclosed in Section 3.15 of the Company Disclosure Schedule, no proceeding
is pending or, to the Knowledge of each Seller, Company or Company
Subsidiary, threatened, seeking the revocation or limitation of any such
License.
Section 3.16 [Intentionally Omitted]
Section 3.17 CLIENTS.
(a) Section 3.17(a)(i) of the Company Disclosure Schedule
sets forth (i) the names and addresses of all clients (each a "Significant
Client") of each Company, Company Subsidiary or the Australian Business
that contributed US$100,000 or more to the revenue of the Companies,
Company Subsidiaries and the Australian Business during the twelve-month
period ended June 30, 1998 and (ii) the amount for which each such
Significant Client was invoiced during such period. No Seller, Company or
Company Subsidiary has received any notice or, to the Knowledge of each
Seller, Company or Company Subsidiary, has any reason to believe that any
Significant Client (A) has ceased, or shall cease, to use the services of
the Compass Businesses; (B) except as set forth on Section 3.17(a)(ii) of
the Company Disclosure Schedule, has substantially reduced or shall
substantially reduce, the use of the services of the Compass Businesses; or
(C) has sought, or is seeking, to reduce the fees it shall pay for the
services of the Compass Businesses, including in each case after the
consummation of the transactions contemplated hereby and by the Ancillary
Agreements. To the Knowledge of each Seller, Company or Company
Subsidiary, no Significant Client has otherwise threatened to take action
described in the preceding sentence as a result of the consummation of the
transactions contemplated by this Agreement or any Ancillary Agreement.
(b) Except as set forth in Section 3.17(b) of the Company
Disclosure Schedule (i) no property owned by any of the Equitable Related
Entities(A) is currently offered for sale; (B) to the Knowledge of each
Seller, Company or Company Subsidiary, will be offered for sale within one
year from the date hereof; or (C) has been recommended for sale by any
portfolio manager of the Equitable Related Entities; and (ii) none of the
Equitable Related Entities has provided a notice of intent to have any of
the properties in which it is invested sold within one year from the date
hereof.
Section 3.18 OPERATION OF THE BUSINESSES.
(a) Prior to or on the Australia Closing Date, except as set
forth in Section 3.18(a) of the Company Disclosure Schedule, or as provided
in the Transition Services Agreements, Lend Lease, LLPMA and their
respective Affiliates shall have transferred to Compass Australia, pursuant
to the Australian Transfer Agreement, all of the properties, assets,
claims, contracts and business and rights of every kind, character, and
description wherever located, whether real or personal, tangible or
intangible, and whether or not recorded on the books and records of Lend
Lease, LLPMA or their respective Affiliates, owned directly or indirectly
by Lend Lease, LLPMA or their respective Affiliates together with all
proprietary and associated rights including any goodwill related thereto,
Related to the Australian Business, (collectively, the "Australian
Assets"). Prior to the Australia Closing Date, Compass Australia shall own
and have an unqualified right to the Australian Assets, free and clear of
all Liens, except for Permitted Liens.
(b) There are no Liabilities of Compass Australia, and to the
Knowledge of each Seller, Company or Company Subsidiary, there is no valid
basis for the assertion of any such Liabilities, and no existing condition,
situation or set of circumstances exists which could reasonably be expected
to result in a Liability to Compass Australia, other than pursuant to the
Australian Transfer Agreement.
(c) Except as set forth in Section 3.18(c) of the Company
Disclosure Schedule or as provided pursuant to the Transition Services
Agreement, the Companies, the Company Subsidiaries and LLPMA have, and
after the Worldwide Closing and the Australia Closing, Buyer, the Worldwide
Companies and the Subsidiaries of the Worldwide Company, and Buyer and
Compass Australia, respectively, will have all rights, properties and
assets, real, personal and mixed, tangible and intangible relating to or
used or held for use in the conduct of the Compass Businesses (other than
the Australia Business) and for use in the conduct of the Australian
Business, respectively, including, without limitation, the Australian
Assets, during the twelve months prior to the Worldwide Closing or the
Australia Closing, as the case may be, free and clear of all Liens, other
than Permitted Liens (the "Compass Business Assets"). The Compass
Businesses Assets are adequate for the purposes for which they are
currently used or held for use and, to the Knowledge of each Seller,
Company or Company Subsidiary there are no facts or conditions affecting
them which could, individually or in the aggregate, interfere in any
material respect with the use, occupancy or operation thereof as currently
used, occupied or operated, or their adequacy for such use.
Section 3.19 INSURANCE. Section 3.19 of the Company Disclosure
Schedule contains an accurate and complete description of all material
policies of property, fire, liability, worker's compensation and other
forms of insurance owned or held by or on behalf of each Company or Company
Subsidiary. Sellers have delivered, or caused each Company or Company
Subsidiary to deliver copies of the stand alone U.S. liability policies
(including General Liability, Auto Liability, Worker's Compensation,
Umbrella-1st Layer and Fiduciary Liability insurance policies) to Buyer
prior to the date hereof. All such policies are in full force and effect,
and all premiums with respect thereto covering all periods up to and
including, with respect to the Worldwide Companies and the Subsidiaries of
the Worldwide Company, the Worldwide Closing Date, and with respect to
Compass Australia, the Australia Closing Date, have been paid, and no
notice of cancellation or termination has been received with respect to any
such policy. Such policies to the Knowledge of each Seller, Company or
Company Subsidiary (a) are materially sufficient for compliance with all
requirements of Law and of all Contracts to which any Company or Company
Subsidiary is a party; (b) are valid, outstanding and enforceable; (c)
provide adequate insurance coverage consistent with industry practice for
the assets and operations of each Company or Company Subsidiary; and (d)
shall remain in full force and effect, with respect to the Worldwide
Companies and the Subsidiaries of the Worldwide Companies, through the
Worldwide Closing Date, and with respect to Compass Australia, through the
Australia Closing Date. Section 3.19 of the Company Disclosure Schedule
identifies all risks relating to the Compass Businesses which have been
designated as being self insured. No Company or Company Subsidiary has
been refused any insurance with respect to its assets or operations, nor
has its coverage been limited by any insurance carrier to which it has
applied for any such insurance or with which it has carried insurance since
June 10, 1997.
Section 3.20 LABOR RELATIONS. Except to the extent set forth in
Section 3.20 of the Company Disclosure Schedule: (a) no Company or Company
Subsidiary is a party to any collective bargaining agreements, other
Contracts, written work rules or practices agreed to with any labor
organization, employee association or works council; (b) each Company and
Company Subsidiary and the Australian Business are and at all times have
been in compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment, occupational safety and health and wages and hours, and is not
engaged in any unfair labor practice as defined in the National Labor
Relations Act or other applicable Law; (c) there is no unfair labor
practice charge or complaint against any Company or Company Subsidiary or
relating to the Australian Business pending or to the Knowledge of each
Seller, Company or Company Subsidiary, threatened before the National Labor
Relations Board or any similar Authority; (d) there is no labor strike,
formal dispute, slowdown, lockout or stoppage pending or, to the Knowledge
of each Seller, Company or Company Subsidiary, threatened against or
affecting any Company or Company Subsidiary or relating to the Australian
Business, and during the past three years there has not been any such
action; (e) no grievance or arbitration proceeding arising out of or under
collective bargaining agreements, other Contracts, written work rules or
practices agreed to with any labor organization, employee association or
works council or other grievance procedure is pending or, to the Knowledge
of each Seller, Company or Company Subsidiary, threatened against any
Company or Company Subsidiary or relating to the Australian Business; (f)
none of the employees employed by any Company or Company Subsidiary or in
connection with the Australian Business is represented by a labor
organization, employee association or works council and, to the Knowledge
of each Seller, Company or Company Subsidiary there are no current union
organizing activities among such employees, nor does any question
concerning representation exist concerning such employees; (g) neither any
Company nor any Company Subsidiary has any written personnel policies,
rules or procedures applicable to employees employed by any Company or
Company Subsidiary or in connection with the Australian Business, other
than those set forth in Section 3.20 of the Company Disclosure Schedule,
true and correct copies of which have heretofore been delivered to Buyer;
(h) no charges pending or, to the Knowledge of each Seller, Company or
Company Subsidiary, threatened against or involving any Company or Company
Subsidiary or relating to the Australian Business are pending before the
Equal Employment Opportunity Commission or any other Authority responsible
for the prevention of unlawful employment practices; (i) there are no
complaints, lawsuits or other proceedings pending or, to the Knowledge of
each Seller, Company or Company Subsidiary, threatened in any forum by or
on behalf of any present or former employee employed by any Company or
Company Subsidiary or in connection with the Australian Business, any
applicant for such employment or classes of the foregoing alleging breach
of any express or implied contract of employment, any Law governing
employment or the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment relationship; (j)
neither any Company nor any Company Subsidiary has received notice of the
intent of any Authority responsible for the enforcement of labor or
employment laws to conduct an investigation with respect to any Company or
Company Subsidiary or the Australian Business and to the Knowledge of each
Seller, Company or Company Subsidiary, no such investigation is in
progress; and (k) none of the employees employed by any Company or Company
Subsidiary has suffered an "employment loss" (as defined in the Worker
Adjustment and Retraining Notification ("WARN") Act) since three months
prior to the date of this Agreement.
Section 3.21 EMPLOYEE BENEFIT PLANS.
(a) Section 3.21(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, Contract 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, termination or severance agreement; and each other employee
benefit plan, fund, program, Contract or arrangement, in each case, that is
sponsored, maintained or contributed to or required to be contributed to by
any Company or Company Subsidiary or by Lend Lease, LLPMA or any of their
respective Affiliates or in connection with the Australian Business or by
any trade or business, whether or not incorporated (an "ERISA Affiliate"),
that together with any Company or Company Subsidiary would be deemed a
"single employer" within the meaning of Section 4001(b) of ERISA, or to
which any Company or Company Subsidiary or an ERISA Affiliate is party,
whether written or oral, for the benefit of any employee or former employee
of any Company or Company Subsidiary (the "Plans"). Section 3.21(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"). No Company, Company Subsidiary or ERISA Affiliate has any
commitment or formal plan, whether legally binding or not, to create any
additional employee benefit plan or modify or change any existing Plan that
would affect any employee or former employee of any Company or Company
Subsidiary or the Australian Business.
(b) With respect to each Plan (other than any Plan in respect
of the Australian Business), Sellers have heretofore delivered or made
available to Buyer 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);
(ii) a copy of the two most recent annual reports and
actuarial reports, if required under ERISA, and the most recent report
prepared with respect thereto in accordance with Statement of Financial
Accounting Standards No. 87;
(iii)a copy of the most recent Summary Plan Description
required under ERISA with respect thereto;
(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 latest financial statements thereof; and
(v) the most recent determination letter received from
the Internal Revenue Service with respect to each Plan intended to qualify
under Section 401 of the Code.
(c) No liability under Title IV or Section 302 of ERISA has
been incurred by any Company, Company Subsidiary or any ERISA Affiliate
that has not been satisfied in full, and no condition exists that presents
a material risk to any Company, Company Subsidiary or 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 3.21(c)
applies to Sections 4064, 4069 or 4204 of Title IV of ERISA, it is made
with respect to any employee benefit plan, program, Contract or arrangement
subject to Title IV of ERISA to which any Company, Company Subsidiary or
ERISA Affiliate made, or was required to make, contributions during the
five year period ending on the last day of the most recent plan year ended
prior to the Worldwide Closing Date.
(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 shall be instituted.
(e) 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.
(f) 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
Worldwide Closing Date.
(g) All contributions required to be made with respect to any
Plan on or prior to the Worldwide Closing Date 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 any
Seller, ERISA Affiliate, Company or 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.
(h) No Title IV Plan is a "multiemployer pension plan," as
defined in Section 3(37) of ERISA, nor is any Title IV Plan a plan
described in Section 4063(a) of ERISA.
(i) Neither Lend Lease nor any Company, Company Subsidiary,
Plan or trust created thereunder or any trustee or administrator thereof
has engaged in a transaction in connection with which any Company or
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.
(j) Each Plan has been operated and administered in all
material respects in accordance with its terms and applicable law,
including but not limited to ERISA and the Code.
(k) Each Plan intended to be "qualified" within the meaning
of Section 401(a) of the Code is so qualified and the trusts maintained
thereunder are exempt from taxation under Section 501(a) of the Code. Each
Plan intended to satisfy the requirements of Section 501(c)(9) has
satisfied such requirements.
(l) Except as set forth in Section 3.21(1) of the Company
Disclosure Schedule, no Plan provides medical, surgical, hospitalization,
death or similar benefits (whether or not insured) for employees or former
employees of any Company, Company Subsidiary or the Australian Business for
periods extending beyond their retirement or other termination of service,
other than (i) coverage mandated by applicable law, (ii) death benefits
under any "pension plan," or (iii) benefits the full cost of which is borne
by the current or former employee (or his beneficiary). No condition
exists that would prevent any Company or Company Subsidiary from amending
or terminating any Plan providing health or medical benefits in respect of
any active employee of any Company or Company Subsidiary other than
limitations imposed under the terms of a collective bargaining agreement.
(m) Except as set forth in Section 3.21(m) of the Company
Disclosure Schedule, no amounts payable under the Plans shall fail to be
deductible for federal income tax purposes by virtue of Section 162(a)(1),
162(m) or 280G of the Code.
(n) Neither the consummation of the transactions contemplated
by this Agreement nor any Ancillary Agreement shall, either alone or in
combination with another event, (i) entitle any current or former employee
or officer of any Company, Company Subsidiary, the Australian Business or
ERISA Affiliate to severance pay, unemployment compensation or any other
payment, except as expressly provided in this Agreement, or (ii) accelerate
the time of payment or vesting, or increase the amount of compensation due
any such employee or officer.
(o) 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). No
Company or Company Subsidiary has contributed to a nonconforming group
health plan (as defined in Section 5000(c) of the Code) and no ERISA
Affiliate of any Company or Company Subsidiary has incurred a tax under
Section 5000(e) of the Code which is or could become a liability of any
Company or Company Subsidiary.
(p) There are no pending or, to the Knowledge of each Seller,
Company or 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).
Section 3.21A SUPERANNUATION AND OTHER BENEFITS FUNDS.
(a) For purposes of this Section 3.21A, except as otherwise
noted herein, "LLPMA's Fund" means the Lend Lease Superannuation Fund.
(b) Neither Lend Lease, LLPMA nor Compass Australia is a
party to any agreement with any union or industrial organization in respect
of superannuation benefits for its employees.
(c) Other than LLPMA's Fund:
(i) there are no superannuation, retirement or
provident funds or other arrangements providing for any payment to
employees or sub-contractors on their retirement or death or on the
occurrence of any permanent or temporary disability in operation by or in
relation to LLPMA or Compass Australia or their directors, employees or
sub-contractors; and
(ii) Neither LLPMA nor Compass Australia contribute to
any funds which will provide its directors, employees or sub-contractors or
their respective dependants with pensions, annuities or lump sum payments
on retirement or earlier death or otherwise.
(d) The following applies with respect to LLPMA's Fund (to
the extent it applies to employees of the Australian Business):
(i) otherwise than in the ordinary course of
administration, there are no outstanding and unpaid contributions on the
part of LLPMA, Compass Australia;
(ii) to the Knowledge of each Seller, Company or Company
Subsidiary, no director, employee or sub-contractor who is a member of the
fund has any right or entitlement to have any benefit under the fund
augmented, increased or accelerated by reason of this Agreement or by
reason of any other arrangement, agreement or understanding;
(iii)a list of the names of all directors, employees and
sub-contractors of LLPMA who are members of LLPMA's Fund has been supplied
to Buyer;
(iv) no undertaking or assurance has been given to
directors, employees or sub-contractors of LLPMA or Compass Australia as to
the continuance, introduction, increase or improvement of any benefits
under LLPMA's Fund;
(v) as at the Australia Closing Date, Compass Australia
will not have any further obligation to contribute to the fund other than
in respect of contributions which became due before the Australia Closing
Date and remain unpaid as at the Australia Closing Date and which are
accrued for in the Working Capital or Compass Australia.
(e) Compass Australia will not be liable to pay the
superannuation guarantee charge in respect of any its directors, employees
or sub-contractors for any contribution period (as defined in the
Superannuation Guarantee (Administration) Act 1992) up to and including the
Australia Closing Date.
(f) Except for LLPMA's Fund, neither LLPMA nor Compass
Australia is under any present legal liability or voluntary commitment
(whether or not legally binding) to pay to any Person (being a director,
employee or subcontractor of LLPMA or Compass Australia), any pension,
superannuation, allowance, retirement gratuity or like benefits or any
damages or compensation for loss of office or employment or for unfair or
wrongful dismissal.
Section 3.22 LITIGATION. Except as set forth in Section 3.22 of
the Company Disclosure Schedule, there is no action, claim, suit, inquiry,
judicial or administrative proceeding pending by or before any Authority
or, to the Knowledge of each Seller, Company or Company Subsidiary, any
investigation by or before any Authority pending or, to the Knowledge of
each Seller, Company or Company Subsidiary, threatened against or involving
any Company, Company Subsidiary or the Australian Business, or which
questions or challenges the validity of this Agreement, the Strategic
Alliance Agreement or any Ancillary Agreement or any action taken or to be
taken by any Seller, Company or Company Subsidiary pursuant to this
Agreement, the Strategic Alliance Agreement or any Ancillary Agreement or
in connection with the transactions contemplated hereby and thereby. No
Company or Company Subsidiary or the Australian Business is subject to any
judgment, order or decree entered in any lawsuit or proceeding which
purports to limit in any respect, or which may have an adverse effect on,
its business practices or its ability to acquire any property or conduct
all or any portion of the Compass Businesses in any locality.
Section 3.23 CONSENTS AND APPROVALS. Except as set forth in
Section 3.23 of the Company Disclosure Schedule, no Consent from or of any
third party or any Authority is necessary for execution and delivery of
this Agreement, the Strategic Alliance Agreement or the Ancillary
Agreements or the consummation by any Seller or Company of the transactions
contemplated hereby and thereby or to enable Buyer, the Companies and the
Company Subsidiaries to continue to conduct the Compass Businesses after
the Worldwide Closing Date and the Australian Business after the Australia
Closing Date, as applicable, in a manner which is consistent with that in
which the Compass Businesses or Australian Business, as the case may be,
are presently conducted, except for (i) compliance with the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act") and
(ii) approval by the Australian Foreign Investment Review Board (the
"FIRB"). Neither the execution, the delivery nor the performance of the
Australian Transfer Agreement requires filing with, notice to or consent of
the Treasurer of the Commonwealth of Australia under the Foreign Takeovers
& Acquisitions Act of 1975 of Australia, as amended (the "FATA") or
Australia's foreign investment policy.
Section 3.24 COMPLIANCE WITH LAW. The operations of each
Company and Company Subsidiary and the Australian Business have been
conducted in accordance with all applicable Laws and other requirements of
all national governmental authorities, and of all states, municipalities
and other political subdivisions and agencies thereof, having jurisdiction
over any Company or Company Subsidiary or the Australian Business, or any
of their respective properties, assets or businesses, including, without
limitation, all such Laws and requirements relating to antitrust, consumer
protection, currency exchange, health, occupational safety, pension,
securities and trading-with-the-enemy matters, but not including any
Environmental Laws. No Seller, Company or Company Subsidiary has received
any notification of any asserted present or past failure by any Company or
Company Subsidiary or the Australian Business to comply with such Laws.
Section 3.25 TAXES. Except as disclosed in Section 3.25 of the
Company Disclosure Schedule:
(a) All Tax Returns required to be filed (taking into account
any applicable extensions) with respect to each Company or Company
Subsidiary or the affiliated, combined or unitary group of which any
Company or Company Subsidiary is or was a member have been duly and timely
filed, and all such Tax Returns are true, correct and complete in all
material respects. Each Company and Company Subsidiary has duly and timely
paid, or has had paid on its behalf, all Taxes and other charges that are
due, whether or not shown as due on any Tax Return. There are no Liens
with respect to Taxes (except for Liens with respect to Taxes not yet due
and payable) upon any of the assets of any Company or Company Subsidiary.
(b) With respect to any period or portion thereof, with
respect to the Worldwide Companies, through the Worldwide Closing, and with
respect to Compass Australia, through the Australia Closing, for which Tax
Returns are not yet due (taking into account any applicable extensions), or
for which Taxes are not yet due or owing, each Company or Company
Subsidiary has established due and sufficient reserves for the payment of
such Taxes in accordance with GAAP.
(c) All Tax deficiencies which have been asserted, proposed
or assessed in writing against or with respect to any Company or Company
Subsidiary by any taxing authority have been paid in full or finally
settled, and no issue has been raised by any taxing authority in any
examination, audit or other proceeding which, by application of the same or
similar principles, reasonably could be expected to result in a material
proposed deficiency for any other period not so examined. There are no
outstanding Contracts, consents, waivers or arrangements extending the
statutory period of limitation applicable to any Tax Return or claim for,
or the period for the collection or assessment of, Taxes due from any
Company or Company Subsidiary for any taxable period.
(d) No audit or other proceeding by any domestic or foreign
court, governmental or regulatory authority, or similar Person is pending
or, to the Knowledge of each Seller, Company or Company Subsidiary,
threatened with respect to any Taxes due from any Company or Company
Subsidiary or any Tax Return filed or required to be filed by or relating
to any Company or Company Subsidiary. No assessment or deficiency for any
Tax is proposed or, based on existing facts and circumstances, is, to the
Knowledge of each Seller, Company or Company Subsidiary, threatened against
any Company or Company Subsidiary or any assets of any Company or Company
Subsidiary.
(e) None of the assets and properties of any Company or
Company Subsidiary is an asset or property that is or shall be required to
be treated as being (i) owned by any other Person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect immediately before the enactment of the Tax Reform
Act of 1986, or (ii) tax-exempt use property within the meaning of Section
168(h)(1) of the Code. 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 any
Company or Company Subsidiary or any of their assets.
(f) No Company or Company Subsidiary has agreed to or is
required to make any material adjustment pursuant to Section 481(a) of the
Code (or any predecessor provision) by reason of any change in any
accounting method of such Company or Company Subsidiary or otherwise, and
no Company or Company Subsidiary has any application pending with any
taxing authority requesting permission for any changes in any accounting
method of any of them. The Internal Revenue Service has not proposed any
such adjustment or change in accounting method.
(g) No Company or Company Subsidiary has been or is in
material violation (or with notice or lapse of time or both, would be in
violation) of any applicable Law relating to the payment or withholding of
Taxes (including, without limitation, withholding of Taxes pursuant to
Sections 1441 and 1442 of the Code or similar provisions under any foreign
laws). Each Company and Company Subsidiary has duly and timely withheld in
all material respects from employee salaries, wages and other compensation
and paid over to the appropriate taxing authorities all amounts required to
be so withheld and paid over for all periods under all applicable Laws.
(h) No Company or Company Subsidiary is a party to, is bound
by, or has any obligation under, any tax sharing Contract. No Company or
Company Subsidiary has any liability for the Taxes of any other Person
(other than any Company or Company Subsidiary) under Treasury Regulations
Section 1.1502-6 (or any corresponding provision of state, local or foreign
Tax law) as a transferee, by contract or otherwise. Lend Lease (US)
Services and LLREI are not foreign persons within the meaning of Section
1445(f)(3) of the Code.
(i) No material liabilities have been proposed with respect
to any Seller, Company or Company Subsidiary in connection with any audit
or other proceeding by any U.S. or foreign court, governmental or
regulatory authority, or similar person with respect to any Taxes due from
any such Seller, Company or Company Subsidiary or Tax Return filed by or
relating to any such Seller, Company or Company Subsidiary.
(j) No Company or Company Subsidiary has entered into any
compensatory agreements (whether written or oral) with respect to the
performance of services for which payment thereunder would result in a
nondeductible expense to such Company or Company Subsidiary pursuant to
Section 162(m) or 280G of the Code.
(k) There is no power of attorney given by or binding upon
any Company or Company Subsidiary with respect to Taxes for any period for
which the statute of limitations (including any waivers or extensions) has
not yet expired.
(l) Section 3.25 of the Company Disclosure Schedule sets
forth the states, political subdivisions thereof and foreign countries in
which each Company or Company Subsidiary files or joins in filing any
consolidated, unitary, combined or similar Tax Returns (or have such Tax
Returns filed on their behalf). Except for United States federal income
Tax Returns, the U.S. Companies do not file or join in filing any
consolidated, unitary, combined or similar Tax Returns with any Company
other than the U.S. Companies.
(m) None of Compass M&L, ERE Retail, TYGPM or any of their
Subsidiaries (each, a "U.S. Company" and, collectively, the "U.S.
Companies") has been a United States real property holding company (as
defined in Section 897(c)(2) of the Code) during the applicable period
specified in Section 897(c)(1)(ii) of the Code.
(n) With respect to Australian Tax Matters:
(i) Nothing has occurred in respect of Compass
Australia which will cause the disallowance for income tax purposes of the
carry forward of losses other than as a result of a transfer of its shares
under this Agreement.
(ii) All particulars given to any governmental or
regulatory authority in connection with or affecting any application for
any ruling, consent or clearance on behalf of LLPMA or Compass Australia
fully and accurately disclosed all facts and circumstances material for the
decision of the authority. Each ruling, consent or clearance is valid and
effective. Each transaction for which that ruling, consent or clearance
has previously been obtained has been carried into effect in accordance
with the terms of the relevant application, ruling, consent or clearance.
(iii)Compass Australia:
(A) maintains and has retained for the
period required by law, accurate records of franking credits and franking
debits (as defined in the Australian Income Tax Assessment Act of 1936 (the
"1936 Act")) in respect of its current and earlier accounting periods;
(B) has franked to the required amount any
dividend it has paid; and
(C) has not franked any dividend it has
paid to the extent that a franking deficit has or will arise at the end of
the succeeding franking year.
(iv) Compass Australia maintains and has retained for
the period required by law:
(A) accurate records of all assets to which
Part IIIA of the 1936 Act of Part 3 of the Australian Income Tax Assessment
Xxx 0000 (the "1997 Act") applies or has applied; and
(B) without limiting the generality of the
foregoing, accurate records of all information relating to those assets as
is referred to in section 160ZZU of the 1936 Act and in division 121 of the
1997 Act.
(v) There will be no Tax resulting from the application
of Section 160ZZOA of the 1936 Act or Subdivision 104-J of the 1997 Act (or
any statutory re-enactment or replacement of either provision) by reason of
Section 160ZZO of 1936 Act or Subdivision 126-B of the 1997 Act (or any
statutory re-enactment or replacement of either provision) having applied
in relation to the disposal of an asset to Compass Australia as a
consequence of the Australian Transfer Agreement or otherwise.
(vi) In the Australian Transfer Agreement, the
consideration to be apportioned to each asset:
(A) in the case of each depreciable asset,
represents its tax written down value or an amount greater than its tax
written down value;
(B) in the case of each other asset,
represents its market value.
(vii)All stamp duty and other similar tax payable in
respect of every Contract or transaction to which Compass Australia is or
has been a party, or by which LLPMA or Compass Australia derives, has
derived or will derive a substantial benefit, have been duly paid. No
Contract is unstamped or insufficiently stamped. No event has occurred as
a result of which any duty has become payable, from which LLPMA or Compass
Australia may have obtained relief. In particular, but without limitation:
(A) None of the Sellers have given an
undertaking as a condition of or in connection with the granting or
corporate reconstruction relief from stamp duty otherwise payable in
connection with the Australian Transfer Agreement under either:
(1) s137R of the Victorian Xxxxxx Xxx 0000;
(2) s49C of the Queensland Stamp Act of 1894;
(3) part IIIBAAA of the Western Australian Stamp
Act of 1921; or
(4) the stamp duty legislation of any other
Australian State or Territory; (collectively, the "CRR provisions");
(B) Compass Australia will not be required
to pay any Victorian, Queensland or Western Australian stamp duty or stamp
duty in any other Australian State or Territory (including fines, penalties
or interest) under the CRR provisions as a consequence of this Agreement
being entered into, or any of the transactions contemplated by it
occurring.
Section 3.26 ENVIRONMENTAL MATTERS. (a) Except as set forth in
Section 3.26(a) of the Company Disclosure Schedule, and except for any
allegation, claim or litigation which could not reasonably be expected to
have a Material Adverse Effect, neither Lend Lease, LLPMA or their
respective Affiliates with respect to the Australian Business, nor any
Company or Company Subsidiary has received written notice of any allegation
of Liability, nor has any claim or litigation been asserted or, to the
Knowledge of each Seller, Company or Company Subsidiary, threatened against
any Company or Company Subsidiary or Lend Lease or LLPMA or any of their
respective Affiliates with respect to the Australian Business, nor, to the
Knowledge of each Seller, Company or Company Subsidiary, has any claim or
litigation been asserted or threatened against the properties currently or
formerly under management by any Company or Company Subsidiary or Lend
Lease or LLPMA with respect to the Australian Business ("Managed
Properties"), nor, to the Knowledge of each Seller, Company or Company
Subsidiary, are there any circumstances which could form the basis for such
claim, pertaining to: off-site disposal or arranging for disposal or a re-
lease of Materials of Environmental Concern; migration of Materials of
Environmental Concern from Managed Properties; any nuisance or trespass
emanating from Managed Properties relating to Materials of Environmental
Concern; violations of any applicable Environmental Laws; releases of
Materials of Environmental Concern at or from current or former Managed
Properties (including claims for response costs); or third-party claims
for personal injury or property damage arising out of the release of or
exposure to Materials of Environmental Concern at or from the Managed Prop-
erties.
Disclosure Schedule, the Companies and the Company Subsidiaries,
and Lend Lease, LLPMA and their respective Affiliates with respect to the
Australian Business, are and, to the Knowledge of each Seller, Company or
Company Subsidiary, the Managed Properties are in compliance in all material
respects with applicable Environmental Laws, except for such noncompliance
which could not reasonably be expected to result in a Material Adverse
Effect.
(c) Except as set forth in Section 3.26(c) of the Company
Disclosure Schedule, to the Knowledge of each Seller, Company or Company
Subsidiary, (i) there has been no material spill, disposal or release of
any Materials of Environmental Concern on, at or from any of the current or
former Managed Properties; (ii) none of the current or former Managed
Properties is listed or, has been proposed to be listed under any state,
federal or foreign superfund or similar law; (iii) none of the current or
former Managed Properties is or was, a treatment, storage or disposal
facility requiring a permit under any hazardous waste law; and (iv) the
tenants under its management have occupied their premises and operated
their businesses in compliance, in all material respects, with the
Environmental Laws.
(d) Except as set forth in Section 3.26(d) of the Company
Disclosure Schedule, the Companies and the Company Subsidiaries and Lend
Lease, LLPMA and their respective Affiliates with respect to the Australian
Business are not currently paying any fines, settlements, judgments,
assessments or remedial costs because of an alleged violation of or
liability under any Environmental Law or any past or present release or
presence of Materials of Environmental Concern at any of the current or
former Managed Properties, nor, to the Knowledge of each Seller, Company or
Company Subsidiary, has any client party to any Contract with any Company
or Company Subsidiary, or Lend Lease, LLPMA or their respective Affiliates
with respect to the Australian Business, asserted that any Company or
Company Subsidiary, or Lend Lease or LLPMA with respect to the Australian
Business, is liable for any such costs or that such costs are not
indemnified pursuant to any past or present Contract, except for any such
fines, settlements, judgments, assessments or remedial costs which could
not reasonably be expected to have a Material Adverse Effect.
(e) (i) "Environmental Claim" means any claim, action, cause
of action, investigation or notice (written or oral) by any Person alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources 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 Material of Environmental Concern at any
location, whether or not owned or operated by a Company or Company
Subsidiary or (B) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.
(ii) "Environmental Laws" means (A) all federal, national,
interstate, state, provincial, local and foreign laws and regulations
relating to pollution or protection of human health, safety, or the
environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), including, without
limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of Materials of Environmental Concern, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern and (B) all applicable common law principles
regarding trespass, nuisance and negligence in so far as they may give rise
to any Environmental Claims.
(iii) "Materials of Environmental Concern" means chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
radioactive materials, asbestos, petroleum and petroleum products.
Section 3.27 PERSONNEL. Section 3.27 of the Company Disclosure
Schedule sets forth a list of all employees as of August 10, 1998 of each
Company, Company Subsidiary and the Australian Business. Such list
indicates as to each employee: (a) date of commencement and length of
service; (b) job title or brief job description and place of work; (c)
amount of salary and bonus, if applicable, accrued during the twelve-month
period ended August 10, 1998, including any amounts unpaid; (d) with
respect to salaried employees, the date of the last salary increase;
(e) the age of each employee; (f) any material commitments or arrangements
with such employee as to salary or bonus, if applicable. Except as set
forth in Section 3.27 of the Company Disclosure Schedule, no Company or
Company Subsidiary intends or has any current plans to terminate or lay off
any such employees during the next six months. To the Knowledge of each
Seller, Company or Company Subsidiary, no executive or key employee of any
Company, Company Subsidiary or the Australian Business has any plans to
terminate his or her employment.
Section 3.28 EQUITABLE TRANSACTIONS. Except with respect to the
obligation of Compass M&L and ERE Retail to provide property management,
facility management, leasing and Project Management services pursuant to
the agreements listed on Section 3.13(a) of the Company Disclosure Schedule
after the Worldwide Closing Date or Australia Closing Date, no Company or
Company Subsidiary has any obligations or Liabilities under any Contract or
understanding between Lend Lease or its Affiliates (including the Companies
and the Company Subsidiaries) on the one hand and the Equitable Life
Assurance Society of the United States (the "Equitable") and its Affiliates
on the other hand, whether or not arising out of or relating to Lend
Lease's acquisition of the investment management and investment advisory
businesses of the Equitable and its Affiliates.
Section 3.29 NON-SOLICITATION. Since March 31, 1998, none of
Sellers, the Companies or the Company Subsidiaries has (i) directly or
indirectly initiated contact or solicited for the purpose of offering
employment to or hiring (whether as an employee, consultant, agent,
independent contractor or otherwise) or actually hired or agreed to hire
any employee listed in Section 3.27 of the Company Disclosure Schedule, the
hiring of whom would be, if occurring after the Worldwide Closing or the
Australia Closing, as applicable, a violation of Section 13.2 hereof.
Section 3.30 JOINT VENTURES. No Company or Company Subsidiary
has any obligation, whether written or oral, to engage in the formation of
a joint venture or similar entity or relationship with any party, including
the Enterprise Group of Companies, and there is no valid basis for the
assertion of any such obligation and no existing condition, situation or
set of circumstances which could reasonably be expected to result in any
such obligation on the part of any Company or Company Subsidiary.
Section any Sellers in this Agreement, the Strategic Alliance Agreement
or any Ancillary Agreement, and no statement contained in any document
(including, without limitation, financial statements, the Company Disclosure
Schedule and the Disclosure Schedule to the Australian Transfer Agreement),
certificate, or other writing furnished or to be furnished by Sellers to
Buyer or any of its representatives pursuant to the provisions hereof or in
connection with the transactions contemplated hereby, contains or will
contain any untrue statement of material fact or omits or shall omit to
state any material fact necessary, in light of the circumstances under
which it was made, in order to make the statements herein or therein not
misleading, and all of the foregoing accurately, completely and correctly
present the information required or purported to be set forth herein or
therein.
Section 3.32 BROKERS AND FINDERS. Except as set forth in
Section 3.32 of the Company Disclosure Schedule, no Seller, Company or
Company Subsidiary nor any of their respective officers, directors or
employees has employed any broker or finder or incurred any liability for
any brokerage fees, commissions or finders' fees in connection with the
transactions contemplated by this Agreement, the Strategic Alliance
Agreement or the Ancillary Agreements.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Each Buyer hereby jointly and severally represents and warrants
to Sellers that:
Section 4.1 CORPORATE ORGANIZATION. Each Buyer is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
Section 4.2 AUTHORIZATION. Each Buyer has full corporate power and
authority to enter into this Agreement, the Strategic Alliance Agreement
and the Ancillary Agreements to which it is a party and to carry out the
transactions contemplated hereby and thereby. The Board of Directors of
each Buyer has taken all action required by Law, such Buyer's charter and
bylaws or otherwise to be taken by it to authorize the execution and
delivery of this Agreement, the Strategic Alliance Agreement and the
Ancillary Agreements to which it is a party, and the consummation of the
transactions contemplated hereby and thereby, and this Agreement, the
Strategic Alliance Agreement and the Ancillary Agreements to which it is a
party are valid and binding agreements of Buyer, enforceable in accordance
with their terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization and other similar Laws affecting creditors
generally and by the availability of equitable remedies.
Section 4.3 NO VIOLATION. Neither the execution and delivery of this
Agreement nor any Ancillary Agreement nor the consummation of the
transactions contemplated hereby or thereby shall: (a) violate or be in
conflict with any provision of the charter and bylaws of each Buyer; (b)
except as specified in Section 4.3 of the disclosure schedule delivered by
each Buyer (the "Buyer Disclosure Schedule"), violate, or be in conflict
with, or constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, cause or permit the
acceleration of, or give rise to any right of termination, imposition of
fees or penalties under any debt, Contract, instrument or other obligation
to which Buyer is a party or by which its assets are bound, or result in
the creation or imposition of any Lien upon any property or assets of each
Buyer; or (c) violate any Law of any Authority.
Section 4.4 LITIGATION. Except as set forth in Section 4.4 of the
Buyer Disclosure Schedule, there is no action, claim, suit, inquiry,
judicial or administrative proceeding pending by or before any Authority
or, to the knowledge of each Buyer, any investigation by or before any
Authority pending or, to the knowledge of each Buyer, threatened against or
involving such Buyer, which questions or challenges the validity of this
Agreement, the Strategic Alliance Agreement or any Ancillary Agreement to
which it is a party or any action to be taken by such Buyer pursuant to
this Agreement, the Strategic Alliance Agreement or any Ancillary Agreement
to which it is a party or in connection with the transactions contemplated
hereby and thereby.
Section 4.5 CONSENTS AND APPROVALS. Except as set forth in Section
4.5 of the Buyer Disclosure Schedule, no Consent from or of any third party
or any Authority is necessary for execution and delivery of this Agreement,
the Strategic Alliance Agreement or the Ancillary Agreements (to which it
is a party) by each Buyer or the consummation by each Buyer of the
transactions contemplated hereby and thereby, except (a) for compliance
with the HSR Act, (b) the FIRB, (c) filings under the Securities Exchange
Act of 1934, as amended, or pursuant to the rules of the New York Stock
Exchange or (d) such filings where the failure to obtain such Consent or to
make such filing or notification, would not prevent such Buyer from
consummating the transactions contemplated by this Agreement, the Strategic
Alliance Agreement and the Ancillary Agreements.
Section 4.6 BROKERS AND FINDERS. Except as set forth in Section 4.6
of the Buyer Disclosure Schedule, neither Buyer nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement, the
Strategic Alliance Agreement or the Ancillary Agreements.
Section 4.7 FINANCING. As of the date hereof, Buyer has received
commitments with respect to $140 million of debt financing (the "Commitment
Letters") in order to finance the Closing Payments.
ARTICLE V
COVENANTS OF SELLERS AND THE COMPANIES
Section 5.1 OPERATION OF THE COMPANIES AND THE AUSTRALIAN BUSINESS.
With respect to the Worldwide Companies and the Compass Businesses, from
the date hereof to the Worldwide Closing, and with respect to Compass
Australia and the Australian Business, from the date hereof to the
Australia Closing, except as disclosed in Section 5.1 of the Company
Disclosure Schedule or as otherwise provided in this Agreement, or except
as consented to in writing by Buyer, Lend Lease with respect to itself and
each Seller and Company, and each other Seller severally with respect to
itself and each Company in which such Seller is a shareholder, agrees that:
(a) The Compass Businesses shall be conducted only in the
ordinary course and substantially in the same manner as heretofore
conducted;
(b) Seller shall obtain Buyer's consent to any business
decision calculated to have a significant financial or operational effect
on the Compass Businesses;
(c) Each Seller, Company and Company Subsidiary shall refrain
from taking or omitting to take any action that would violate the
representations and warranties of Sellers hereunder or render them
inaccurate as of the date hereof or as of the Worldwide Closing Date or
Australia Closing Date, as applicable, or that in any way would prevent or
adversely effect the consummation of the transactions contemplated hereby;
(d) Without limiting the foregoing, without the prior written
consent of Buyer, each Seller, Company and LLPMA, with respect to the
Australian Business, shall not, and Lend Lease, together with each Seller
as it relates to any Company in which such Seller is a shareholder (and any
Company Subsidiary thereof) shall cause the Companies and Company
Subsidiaries not to:
(i) amend any Company's or Company Subsidiary's
respective certificate of incorporation or bylaws (or similar
organizational documents);
(ii) incur or guarantee any material obligation or
Liability (whether absolute, accrued, contingent or otherwise and whether
due or to become due), except as otherwise permitted in this Agreement or
any Ancillary Agreement, or enter into or amend any material Contract;
(iii)make any capital expenditures, except as disclosed
in the capital budget which has heretofore been delivered to Buyer;
(iv) pay, discharge or satisfy any Lien or Liability
other than Liabilities shown on the Financial Statements and Liabilities
incurred after the date thereof in the ordinary course of business in
normal amounts, and no such payment, discharge or satisfaction shall be
effected other than in accordance with the ordinary payment terms relating
to the Liability paid, discharged or satisfied;
(v) permit or allow any of its respective properties or
assets, real, personal or mixed, tangible or intangible, to be mortgaged,
pledged or subjected to any Lien, except for any Permitted Liens;
(vi) cancel any debts or claims, or waive any rights of
material value or, sell, transfer or convey any of its respective
properties or assets, real, personal or mixed, tangible or intangible;
(vii)dispose of license or permit to lapse any
Intangible Property Rights, or disclose to any Person other than
representatives of Buyer any Intangible Property Rights not theretofore a
matter of public knowledge;
(viii) enter into any employment contract or
compensation arrangement or benefit of any kind whatsoever, or change
(including, without limitation, any change pursuant to any bonus, pension,
profit-sharing or other plan, commitment, policy or arrangement) the
compensation payable or to become payable to any of its officers,
directors, employees or agents;
(ix) except as provided in Section 2.3 hereof, declare,
pay or make, or set aside for payment or make, any dividend or other
distribution in respect of its capital stock or other securities, or
directly or indirectly redeem, purchase or otherwise acquire any of its
capital stock or other securities, other than dividends paid or payable by
a wholly owned Company Subsidiary;
(x) issue, grant or sell any shares of its capital
stock or any equity security or issue, grant or sell any security, option,
warrant, call, subscription or other right of any kind, fixed or
contingent, that directly or indirectly calls for the issuance, sale,
pledge or other disposition of any shares of its capital stock or any
equity security;
(xi) make any change in any accounting or tax
principles, practices or methods;
(xii)enter into or terminate or permit the termination
of any lease or sublease of real property or material lease of personal
property;
(xiii) terminate or amend or suffer the termination
or amending of, or fail to perform any of its obligations or suffer or
permit any default to exist or cause any breach under, any material
Contract;
(xiv)sell, transfer or dispose of any of its material
assets, enter into any material joint venture or partnership or purchase
any material assets or securities of any Person;
(xv) authorize, recommend, propose or announce an
intention to do any of the foregoing, or enter into any Contract or other
obligation to do any of the foregoing; or
(xvi)amend, terminate, suspend or in any way modify the
Australian Transfer Agreement from the form set forth in Exhibit A;
(e) Each Seller, Company and Company Subsidiary shall give
prompt notice to Buyer of any other event that has resulted, or may
reasonably be expected to result in, a Material Adverse Effect;
(f) Each Seller, Company and Company Subsidiary shall take
such action as may be necessary to maintain, preserve, renew and keep in
full force and effect each Company's and Company Subsidiary's and the
Australian Business' existence, rights, Licenses and franchises;
(g) Each Seller, Company and Company Subsidiary shall use
commercially reasonable efforts to preserve the existing relationships with
its respective clients and employees and others with respect to the
Compass Businesses with which any of them has business relationships. Each
Company or Company Subsidiary, and with respect to the Australian Business,
Lend Lease and LLPMA, shall permit Buyer to contact suppliers, customers
and employees in cooperation with its respective personnel;
(h) Each Company and Company Subsidiary, and with respect to
the Australian Business, Lend Lease and LLPMA, shall duly comply in all
material respects with all Laws applicable to it and its respective
properties, operations, businesses and employees; and
(i) Notwithstanding anything to the contrary contained in
this Section 5.1, either LLPMA or Lend Lease may enter into and perform its
obligations under the Australian Transfer Agreement. Lend Lease, LLPMA and
Compass Australia shall use commercially reasonable efforts to complete the
transactions contemplated by the Australian Transfer Agreement, including,
but not limited to, providing assistance in the transfer of the Australian
Assets, obtaining all necessary Consents and taking all other action as may
be required to give effect to the transfer of the Australian Business to
Compass Australia prior to the Australia Closing Date.
Section 5.2 ACCESS. With respect to the Worldwide Companies and the
Compass Businesses, from the date hereof to the Worldwide Closing, and with
respect to Compass Australia and the Australian Business, from the date
hereof to the Australia Closing:
(a) Each Seller, Company and Company Subsidiary shall
permit Buyer and its representatives to have full access to and to examine
all premises, properties, files, books, documents, records, financial
information (including working papers and data in the possession of any of
Seller's, Company's or Company Subsidiaries' independent public
accountants, internal audit reports, and "management letters" from such
accountants with respect to any Seller's, Company's or Company Subsidiary's
systems of internal control) and other information of any Company or
Company Subsidiary or Seller or any Affiliate relating to the Compass
Businesses (including the right to make extracts therefrom or copies
thereof), and shall cooperate with Buyer in its investigation of the
Compass Businesses.
(b) Each Seller, Company and Company Subsidiary shall permit
representatives of Buyer to consult with its personnel concerning all
financial and operational matters relating to the Compass Businesses, and
shall be available, or make available its personnel, to consult with such
representatives.
(c) Each Seller, Company and Company Subsidiary shall
promptly furnish to Buyer such other documents as Buyer or its
representatives may reasonably request from time to time.
(d) Each Seller, Company, and Company Subsidiary shall
provide to Buyer all information and documents in its possession, including
but not limited to blueprints, drawings, title surveys and title
information, operational manuals, engineering or environmental reports or
assessments, and all information, documents, and files relating to
compliance with Environmental Laws, the presence of Materials of
Environmental Concern, or Environmental Claims, including but not limited
to the results and analysis of all environmental testing or sampling of
such premises, relating to the Compass Businesses. Nothing in this
paragraph shall preclude Seller from retaining copies of any materials
provided to Buyer pursuant to this paragraph.
(e) Information shall not be withheld from Buyer under a
claim of privilege or confidentiality but Buyer shall be obligated to
maintain the confidentiality of all such information, as provided in this
Agreement.
Section 5.3 CONSENTS. With respect to the Worldwide Companies and
the Compass Businesses, from the date hereof to the Worldwide Closing, and
with respect to Compass Australia and the Australian Business, from the
date hereof to the Australia Closing, each Seller and Company shall use its
commercially reasonable efforts to obtain, prior to the Worldwide Closing
or the Australia Closing, as applicable, all Consents necessary to its
consummation of the transactions contemplated hereby, including, without
limitation, (a) the Consents set forth in Section 3.23 of the Company
Disclosure Schedule and (b) such additional Consents as Buyer or its
counsel shall reasonably determine to be necessary. All such consents
shall be in writing and executed counterparts thereof shall be delivered to
Buyer promptly after receipt thereof by Company but in no event later than
immediately prior to the Worldwide Closing or the Australia Closing, as
applicable.
Section 5.4 PERFORMANCE. With respect to the Worldwide Companies and
the Compass Businesses, from the date hereof to the Worldwide Closing, and
with respect to Compass Australia and the Australian Business, from the
date hereof to the Australia Closing: (a) each Seller and Company shall
perform all acts to be performed by it pursuant to this Agreement and the
Australian Transfer Agreement; and (b) each Seller and Company shall use
commercially reasonable efforts to satisfy or cause to be satisfied all the
conditions to the obligations of Buyer set forth in Article VII and VII-A
hereof.
Section 5.5 WARN ACT. With respect to the Worldwide Companies (to
the extent applicable to any of them) and the Compass Businesses, from the
date hereof to the Worldwide Closing, neither any Company nor any Company
Subsidiary shall, at any time 90 days before the Worldwide Closing Date,
without complying fully with the notice and other requirements of the WARN
Act, effectuate (i) a "plant closing" (as defined in the WARN Act) af-
fecting any site of employment or one or more facilities or operating units
within any site of employment or facility of Company or any Company
Subsidiary; or (ii) a "mass layoff" (as defined in the WARN Act) affecting
any site of employment or facility of such Company or Company Subsidiary;
or any similar action under applicable Law requiring notice to employees in
the event of a plant closing or layoff. In addition, Lend Lease on behalf
of itself and each other Seller and each Seller severally hereby agrees to
indemnify Buyer and to defend and hold Buyer harmless from and against any
and all claims, losses, damages, expenses, obligations and liabilities
(including costs of collection, attorney's fees and other costs of defense)
which Buyer may incur in connection with any suit or claim or violation
brought against Buyer under the WARN Act or any similar state, local or
foreign law, which relates to actions taken before the Worldwide Closing by
any Worldwide Company or Subsidiary of a Worldwide Company with regard to
any site of employment or one or more facilities or operating units within
any site of employment of such Worldwide Company or Subsidiary of a
Worldwide Company.
Section 5.6 UPDATING OF INFORMATION.
(a) Each Seller and Company shall have the continuing
obligation to promptly supplement or amend the Company Disclosure Schedule
with respect to any matter hereafter arising or discovered which, if
existing or known at the date of this Agreement, would have been required
to be set forth or described in the Company Disclosure Schedule. Any such
supplement or amendment of the Company Disclosure Schedule shall not modify
the representations and warranties made by Sellers hereunder and shall not
affect the obligations of each Seller to indemnify Buyer pursuant to
Article XII which indemnity obligations shall continue to operate as if no
such supplement or amendment of the Schedules had occurred.
(b) In the event that a Significant Client or Significant
Clients provide Sellers with notice that such Significant Client or
Significant Clients intend to terminate (solely as a result of Buyer's
acquisition of the Companies and the Company Subsidiaries) any or all of
the Contracts that any of them may have with any Company or Company
Subsidiary and the impact of such termination or terminations would be the
loss of $15 million or more of revenue to the Companies and the Company
Subsidiaries during the next twelve months, Seller shall provide written
notice to Buyer which notice shall include the names of such clients, the
Contracts that will be terminated and an estimate of the revenue that will
be lost. During the 10-day period following such notice, Buyer shall have
the right to (a) require that Lend Lease negotiate in good faith to reduce
the purchase price to reflect the effect of such termination or
terminations or (b) terminate the Agreement. If LaSalle elects to
terminate this agreement during such 10-day period or if the parties do not
agree to such reduction within fifteen (15) days after Buyer's notice, this
Agreement shall terminate pursuant to Article XI of this Agreement.
Section 5.7 SINGAPORE OPERATIONS. At any time following the
Worldwide Closing Date, at the request of Buyer and in no event later than
60 days following such request, Lend Lease shall transfer and assign, or
cause its Affiliates to transfer and assign, to Buyer or its designee(s),
any and all assets related to the commercial property management and
leasing and facilities management and Project Management business operated
by Lend Lease and its Affiliates in the Republic of Singapore (the
"Singapore Business"). The consideration to be paid by Buyer in connection
with such transfer shall be US$10.00. In connection with such transfer,
Seller shall execute such instruments of assignment and obtain any
necessary Consents as reasonably requested by Buyer. To the extent that
Buyer exercises its rights under this Section 5.7 and the Singapore
Business has accepted additional commercial property management, leasing,
facilities management or Project Management assignments after the Worldwide
Closing Date, but prior to the time of such assignment, such additional
assignments shall be considered Offered Assignments for purposes of Section
1.6(i) of this Agreement.
Section 5.8 DUE AND PAYABLE ACCOUNTS RECEIVABLE. With respect to the
Worldwide Companies and the Subsidiaries of the Worldwide Companies,
following the Worldwide Closing, and with respect to Compass Australia,
following the Australia Closing, in the event that any Account Receivable
on the Worldwide Closing Date or the Australia Closing Date, as applicable,
remains uncollected for a period of more than 120 days from the date first
due and payable ("Uncollected Receivable"), Buyer shall provide written
notice to Lend Lease specifying the Uncollected Receivable. Lend Lease
shall pay to Buyer an amount equal to the amount of Account Receivable(s)
specified in such notice, no later than five Business Days following such
notice. Any amounts paid to Buyer from Lend Lease pursuant to this Section
5.8 shall be paid in US Dollars in immediately available funds by wire
transfer to an account designated by Buyer. After the Worldwide Closing
Date or the Australia Closing Date, as applicable, Buyer shall use all
commercially reasonable efforts to collect the Accounts Receivable. In the
event that Lend Lease makes a payment in respect of an Uncollected
Receivable, Buyer shall, at its sole election, either (A) assign to Lend
Lease all of its rights and interest in and to such Uncollected Receivable
or (B) continue to use commercially reasonable efforts to collect such
receivable and promptly remit to Lend Lease any amounts Buyer may collect
with respect to such receivable.
Section 5.9 XXXXXX XXXXX PROPERTIES. Lend Lease and LLPMA agree that
following the Australia Closing Date, Lend Lease, LLPMA and their
respective Affiliates shall retain any rights and obligations under that
certain letter agreement, dated October 17, 1997 between Xxxxxx Xxxxx (Vie)
Pty Limited (together with its affiliated entities, "Xxxxxx Xxxxx") and
LLPMA set forth in Section 5.9 of the Company Disclosure Schedule (the
"Xxxxxx Xxxxx Letter Agreement") and shall not transfer any such rights and
obligations to Compass Australia pursuant to the Australian Business
Transfer. Following the Australia Closing Date and following the first to
occur of (a) Lend Lease's payment to Xxxxxx Xxxxx of $1,000,000 in fees
pursuant to the terms of the Xxxxxx Xxxxx Letter Agreement, or (b) March
31, 1999, Lend Lease shall retain Buyer for the provision of property
management, facility management, leasing and Project Management services to
those properties listed on Section 5.9(b) of the Company Disclosure
Schedule, on terms no less favorable than in effect on the date hereof.
Revenue received by or payable to Buyer or its Affiliates from the
provision of property management, facility management, leasing and Project
Management services to any such property shall not be included in the
calculation of Earnout Revenue pursuant to this Agreement.
Section 5.10 ERISA ACCOUNTS. Prior to the Worldwide Closing,
and subject to the terms of the ERISA Prohibited Transaction Exemption 97-
33 ("PTE 97-33") and the approval of the independent fiduciary appointed
thereunder (the "Independent Fiduciary"), (i) each of Compass M&L and ERE
Retail shall assign all contracts for the provision of property management,
leasing, facility management or Project Management services to ERISA
covered accounts of the Equitable Related Entities (the "ERISA Contracts")
to LLREI and (ii) immediately following such assignment, LLREI will enter
into a subcontract with each of Compass M&L and ERE Retail pursuant to
which Compass M&L and ERE Retail will provide the services required by the
applicable ERISA Contract on the same terms and conditions as specified in
the ERISA Contract.
Section 5.11 SALE OF INVESTMENT ADVISORY BUSINESS.
(a) For a period of two years following the Worldwide Closing
Date (the "Sale Restriction Period"), Lend Lease shall not, and shall cause
its Affiliates not to, sell, transfer or dispose of to any unrelated third
party or enter into any agreement relating to the sale, transfer or other
disposition to any unrelated third party, in one or a series of
transactions, of all or substantially all of the assets, properties,
business or operations of the investment management and investment advisory
businesses currently or hereafter conducted by Lend Lease, Lend Lease Real
Estate Investments Limited, Lend Lease Real Estate Investments, Inc. and
their respective Affiliates (the "Investment Advisory Business"),whether
through a merger, reorganization, sale of stock or assets or otherwise (an
"Advisory Sale Transaction").
(b) For a period of six years following the final day of the
Sale Restriction Period (the "Limited Sale Restriction Period"), Lend Lease
shall not, and shall cause its Affiliates not to, enter into any agreement
relating to or engage in an Advisory Sale Transaction with any Person set
forth on Section 5.11 of the Company Disclosure Schedule or any of their
respective Affiliates or successors and assigns (a "Lend Lease Restricted
Acquiror"). If at any time during the Limited Sale Restriction Period,
Lend Lease desires to engage in an Advisory Sale Transaction with any
unrelated third party (other than a Lend Lease Restricted Acquiror), Lend
Lease shall first offer to Buyer, by way of written notice, the opportunity
to engage in such Advisory Sale Transaction (a "Lend Lease Sale Notice").
The Lend Lease Sale Notice shall state in reasonable detail the type of
transaction, type of consideration and other material terms and conditions
of a proposed Advisory Sale Transaction; PROVIDED, that the Lend Lease Sale
Notice shall not be required to specify the purchase price for the Advisory
Sale Transaction.
(c) Buyer shall have 30 days after Buyer receives the Lend
Lease Sale Notice (the "Buyer Offer Period") to deliver a written notice to
Lend Lease offering to engage in an Advisory Sale Transaction (the "Buyer
Offer"). The Buyer Offer shall specify the type of transaction, purchase
price, type of consideration and other material terms and conditions upon
which Buyer would engage in the Advisory Sale Transaction. The Buyer Offer
shall also state the period during which Lend Lease may accept the Buyer
Offer (the "Buyer Offer Term"). If Lend Lease accepts the Buyer Offer
during the Buyer Offer Term, Lend Lease and Buyer shall negotiate in good
faith to enter into an agreement containing the terms and conditions
specified in the Buyer Offer and such other terms and conditions as Lend
Lease and Buyer shall mutually agree.
(d) If all required notices pursuant to this Section 5.11 are
given, and (i) Buyer does not make a Buyer Offer to enter into an Advisory
Sale Transaction within the Buyer Offer Period, (ii) Buyer makes a Buyer
Offer which is rejected by Lend Lease in writing (the date of such
rejection, the "Buyer Offer Rejection Date"), (iii) Buyer delivers written
notice to Lend Lease of its intention not to submit a Buyer Offer (a "Buyer
Offer Decline Notice") or (iv) Buyer and Lend Lease fail to enter into an
agreement within 90 days of Lend Lease's acceptance of a Buyer Offer (the
"Buyer Offer Negotiation Period"), Lend Lease shall be free for a period of
270 days from the earlier of (A) the expiration of the Buyer Offer Period,
(B) the Buyer Offer Rejection Date, (C) the date on which Lend Lease
receives a Buyer Offer Decline Notice or (D) the expiration of the Buyer
Offer Negotiation Period, to execute definitive agreements relating to the
consummation of an Advisory Sale Transaction with an unrelated third party
other than a Lend Lease Restricted Acquiror at a price equal to or greater
than that specified in the Buyer Offer and on other terms and conditions no
less favorable to Lend Lease than those specified in the Buyer Offer (a
"Lend Lease Third Party Advisory Sale Transaction"); PROVIDED, that Lend
Lease shall provide Buyer with written notice comparing the final purchase
price, type of transaction, type of consideration and other material terms
of any Third Party Advisory Sale Transaction with the Buyer Offer at least
five Business Days prior to the execution of definitive agreements relating
to such transaction. If Lend Lease has not executed a definitive agreement
related to the Lend Lease Third Party Advisory Sale Transaction within the
270-day period set forth in the preceding sentence, Lend Lease shall be
required to reoffer any subsequent Advisory Sale Transaction to Buyer
pursuant to the terms of this Section 5.11.
(e) If at any time during the Limited Sale Restriction
Period, Lend Lease receives an unsolicited bona fide offer to engage in an
Advisory Sale Transaction (an "Advisory Purchase Offer"), from an unrelated
third party (other than a Lend Lease Restricted Acquiror) and Lend Lease
does not reject such Offer, Lend Lease shall deliver to Buyer a written
notice (an "Advisory Purchase Notice"). The Advisory Purchase Notice shall
state in reasonable detail the type of transaction, type of consideration
and other material terms and conditions of the Advisory Purchase Offer;
PROVIDED, that the Advisory Purchase Notice shall not be required to
specify the purchase price for the Advisory Sale Transaction contained in
the Advisory Purchase Offer (the "Third Party Purchase Price").
(f) Buyer shall have 30 days after Buyer receives the
Advisory Purchase Offer (the "Buyer Matching Period") to deliver a written
notice to Lend Lease electing to engage in an Advisory Sale Transaction (a
"Buyer Matching Offer"). The Buyer Matching Offer shall specify the type
of transaction, purchase price, type of consideration and other material
terms and conditions upon which Buyer would engage in the Advisory Sale
Transaction. If the purchase price included in the Buyer Matching Offer is
equal to or greater than the Third Party Purchase Price and the other terms
and conditions of the Buyer Matching Offer are not materially less
favorable to Lend Lease than those contained in the Buyer Matching Offer,
Lend Lease and Buyer shall negotiate in good faith to enter into an
agreement containing the terms and conditions specified in the Buyer
Matching Offer and such other terms and conditions as Lend Lease and Buyer
shall mutually agree.
(g) If all required notices pursuant to this Section 5.11 are
given, and (i) Buyer does not submit a Buyer Matching Offer within the
Buyer Matching Period, (ii) the purchase price included in the Buyer
Matching Offer is less than the Third Party Purchase Price or the other
terms and conditions in the Buyer Matching Offer are materially less
favorable to Lend Lease than those in the Advisory Purchase Offer (a "Buyer
Inferior Proposal"), (iii) Buyer delivers written notice to Lend Lease of
its intention not to submit a Buyer Matching Offer (a "Buyer Matching Offer
Decline Notice"), or (iv) Buyer and Lend Lease fail to enter into an
agreement within 90 days of Lend Lease's acceptance of a Buyer Matching
Offer (the "Buyer Matching Offer Negotiation Period"), Lend Lease shall be
free for a period of 270 days from the earlier of (A) the expiration of the
Buyer Matching Period, (B) the date of delivery of the Buyer Inferior
Proposal, (C) the date on which Lend Lease receives a Buyer Matching Offer
Decline Notice or (D) the expiration of the Buyer Matching Offer
Negotiation Period, to execute definitive agreements relating to the
consummation of an Advisory Sale Transaction with the Person making the
Advisory Purchase Offer at a purchase price equal to or greater than the
purchase price included in the Buyer Matching Offer and on other terms and
conditions that are materially no less favorable to Lend Lease than those
specified in the Buyer Matching Offer (a "Lend Lease Bona Fide Purchase
Transaction"); PROVIDED, that Lend Lease shall provide Buyer with written
notice comparing the final purchase price, type of transaction, type of
consideration and other material terms of any Lend Lease Bona Fide Purchase
Transaction with the Buyer Matching Offer at least five Business Days prior
to the execution of definitive agreements relating to such transaction. If
Lend Lease has not executed a definitive agreement relating to the Lend
Lease Bona Fide Purchase Transaction with the Person making the Advisory
Purchase Offer within the 270-day period set forth in the preceding
sentence, Lend Lease shall be required to reoffer any subsequent
unsolicited Advisory Purchase Offer to Buyer pursuant to the terms of this
Section 5.11.
(h) Lend Lease shall not, and shall cause its Affiliates not
to, disclose to any Person, that Buyer has made a Buyer Offer or a Buyer
Matching Offer or any of the terms thereof.
(i) Nothing herein shall prevent Lend Lease from entering
into an agreement with respect to the sale of or otherwise selling all of
the outstanding capital stock or substantially all of the assets of Lend
Lease (whether through merger, reorganization, sale of stock or assets or
otherwise).
(j) Lend Lease agrees that it will not, and it will cause its
Affiliates not to, in any way challenge the enforceability of any provision
of this Section 5.11 or the provisions of the Strategic Alliance Agreement.
Accordingly, notwithstanding anything to the contrary contained herein,
Lend Lease agrees that Buyer shall be entitled to an injunction or injunc-
tions to prevent breaches of the provisions of this Section 5.11 and to
enforce specifically the terms and provisions of this Section 5.11 in any
action instituted in any court having jurisdiction over the parties and the
matter, in addition to any other remedy to which it may be entitled, at law
or in equity.
Section 5.12 RETAIL EBITDA. To the extent that EBITDA from
TYGPM and ERE Retail revenue ("Retail Services Revenue") (other than from
Retail Development Services or from PPF accounts), in the aggregate, is
less than $650,000 for the first calendar year following the Worldwide
Closing, or $710,000 for each of the four subsequent years, Lend Lease
shall make a cash payment (the "Retail EBITDA Payment") to Buyer in the
amount of such shortfall up to a maximum amount of $370,000 for the first
year, and $310,000 in each subsequent year. Payment, if any, shall be due
within 10 Business Days following (the "Retail EBITDA Payment Date")
presentation of a Retail Revenue Services EBITDA statement (the "Retail
EBITDA Statement"). Any payment made by Lend Lease to Buyer pursuant to
this Section 5.12 shall be made in US Dollars in immediately available
funds by wire transfer to an account designated by Buyer. If Lend Lease
defaults on the payment of the Retail EBITDA Payment on the Retail EBITDA
Payment Date, Lend Lease shall pay interest on the Retail EBITDA Payment at
the Default Rate per annum from the Retail EBITDA Payment Date until paid,
together with all expenses reasonably incurred to enforce collection. For
purposes of this calculation, Retail Services Revenue included in the
calculation shall not include revenue from (i) management contracts signed
after the Closing Date, (ii) Retail Development Services, or (iii) PPF
accounts.
ARTICLE VI
COVENANTS OF BUYER
Buyer covenants and agrees with Sellers that from the date
hereof until the Worldwide Closing or Australia Closing, as set forth
herein, it shall do the following:
Section 6.1 CONSENTS. Buyer shall use its commercially reasonable
efforts to obtain, prior to the Worldwide Closing or the Australia Closing,
as applicable, all Consents necessary to its consummation of the
transactions contemplated hereby, including, without limitation, the
Consents set forth in Section 4.5 of the Buyer Disclosure Schedule. All
such Consents shall be in writing and executed counterparts thereof shall
be delivered to Sellers promptly after receipt thereof by Buyer, but in no
event later than immediately prior to the Worldwide Closing or the
Australia Closing, as applicable.
Section 6.2 REPRESENTATIONS AND WARRANTIES. Buyer shall not take any
action that would cause any of the representations and warranties set forth
in Article IV not to be true and correct in all material respects at and as
of the Worldwide Closing or the Australia Closing, as applicable.
Section 6.3 PERFORMANCE. Buyer shall perform all acts to be
performed by it pursuant to this Agreement and each Ancillary Agreement to
which it is a party and shall refrain from taking or omitting to take any
action that would violate Buyer's representations and warranties hereunder
or render them inaccurate as of the date hereof or the Worldwide Closing
Date or the Australia Closing, as applicable, or that in any way would
prevent the consummation of the transactions contemplated hereby, and Buyer
shall use commercially reasonable efforts to satisfy or cause to be
satisfied all the conditions to the obligations of Sellers set forth in
Articles VIII and VIII-A hereof.
Section 6.4 UPDATING OF INFORMATION. Until the Australia Closing,
Buyer shall have the continuing obligation to promptly supplement or amend
the Buyer Disclosure Schedule with respect to any matter hereafter arising
or discovered which, if existing or known at the date of this Agreement,
would have been required to be set forth or described in the Buyer
Disclosure Schedule. Any such supplement or amendment of the Buyer
Disclosure Schedule shall not modify the representations and warranties
made by Buyer hereunder and shall not affect the obligations of Buyer to
indemnify Sellers pursuant to Article XII which indemnity obligations shall
continue to operate as if no such supplement or amendment of the Schedules
had occurred.
Section 6.5 WARN ACT. Neither Buyer nor any Affiliate shall, at any
time 90 days after the Worldwide Closing, without complying fully with the
notice and other requirements of the WARN Act, effectuate (i) 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 of Buyer or any of its Affiliates; or (ii) a "mass layoff" (as
defined in the WARN Act) affecting any site of employment or facility of
Buyer or such Affiliate; or any similar action under applicable Law
requiring notice to employees in the event of a plant closing or layoff.
In addition, each Buyer jointly and severally, hereby agree to indemnify
Sellers and to defend and hold Sellers harmless from and against any and
all claims, losses, damages, expenses, obligations and liabilities
(including costs of collection, attorney's fees and other costs of defense)
which Sellers may incur in connection with any suit or claim or violation
brought against Sellers under the WARN Act or any similar state, local or
foreign law, which relates to actions taken after the Worldwide Closing by
any Buyer or any Affiliate with regard to any site of employment or one or
more facilities or operating units within any site of employment of Buyer
or such Affiliate.
Section 6.6 ACCESS. For a period of six years from the Worldwide
Closing Date, Buyer shall not dispose of any books, records, documents or
information relating to the Compass Businesses prior to the Worldwide
Closing Date or the Australia Business prior to the Australia Closing Date,
to the extent applicable, without first giving notice to Lend Lease and
permitting Lend Lease to retain or copy such books and records as it may
select, which selection must be made within a reasonable time. During the
six year period, Buyer shall permit Lend Lease to examine and make copies,
at Lend Lease's expense, of books, records, documents or information for
purposes of defending any litigation now pending or hereafter commenced
against Lend Lease in connection with the Compass Businesses, as
applicable, or the preparation of income or other tax returns. In
addition, Buyer shall make available to Lend Lease, on a reasonable basis
and as reasonably requested from time to time by Lend Lease, those persons
and documents relevant to the above-described matters for purposes of
consultation and/or testimony in connection therewith.
Section 6.7 SAS70 OPINION. Following the Worldwide Closing, to the
extent required by an Equitable Related Entity, if consistent with past
practice, Buyer shall deliver or cause to be delivered to such Equitable
Related Entity on an annual basis, an SAS70 opinion letter (containing
reports on both controls placed in operation and tests of operative
effectiveness) in regard to property management operations provided by
Buyer and its Affiliates to such Equitable Related Entity, prepared by a
national recognized accounting firm.
Section 6.8 SALE OF PROPERTY MANAGEMENT BUSINESS.
(a) For the Sale Restriction Period, LaSalle shall not, and
shall cause its Affiliates not to, sell, transfer or dispose of to any
unrelated third party or enter into any agreement relating to the sale,
transfer or other disposition to any unrelated third party, in one or a
series of transactions, of all or substantially all of the assets,
properties, business or operations of the property management and leasing
and facility management businesses currently or hereafter conducted by
LaSalle Partners Management Services, Inc. or its Subsidiaries, whether
through a merger, reorganization, sale of stock or assets or otherwise (a
"Management and Leasing Sale Transaction").
(b) For the Limited Sale Restriction Period, LaSalle shall
not, and shall cause its Affiliates not to, enter into any agreement
relating to or engage in a Management and Leasing Sale Transaction with any
Person set forth on Section 6.8 of the Buyer Disclosure Schedule or any of
their respective Affiliates or successors and assigns (a "LaSalle
Restricted Acquiror"). If at any time during the Limited Sale Restriction
Period, LaSalle desires to engage in a Management and Leasing Sale
Transaction with any unrelated third party (other than a LaSalle Restricted
Acquiror), LaSalle shall first offer to Lend Lease, by way of written
notice, the opportunity to engage in such Management and Leasing Sale
Transaction (a "LaSalle Sale Notice"). The LaSalle Sale Notice shall state
in reasonable detail the type of transaction, type of consideration and
other material terms and conditions of a proposed Management and Leasing
Sale Transaction; PROVIDED, that the LaSalle Sale Notice shall not be
required to specify the purchase price for the Management and Leasing Sale
Transaction.
(c) Lend Lease shall have 30 days after Lend Lease receives
the LaSalle Sale Notice (the "Lend Lease Offer Period") to deliver a
written notice to LaSalle offering to engage in a Management and Leasing
Sale Transaction (the "Lend Lease Offer"). The Lend Lease Offer shall
specify the type of transaction, purchase price, type of consideration and
other material terms and conditions upon which Lend Lease would engage in
the Management and Leasing Sale Transaction. The Lend Lease Offer shall
also state the period during which LaSalle may accept the Lend Lease Offer
(the "Lend Lease Offer Term"). If LaSalle accepts the Lend Lease Offer
during the Lend Lease Offer Term, LaSalle and Lend Lease shall negotiate in
good faith to enter into an agreement containing the terms and conditions
specified in the Lend Lease Offer and such other terms and conditions as
LaSalle and Lend Lease shall mutually agree.
(d) If all required notices pursuant to this Section 6.8 are
given, and (i) Lend Lease does not make a Lend Lease Offer to enter into a
Management and Leasing Sale Transaction within the Lend Lease Offer Period,
(ii) Lend Lease makes a Lend Lease Offer which is rejected by LaSalle in
writing (the date of such rejection, the "Lend Lease Offer Rejection
Date"), (iii) Lend Lease delivers written notice to LaSalle of its
intention not to submit a Lend Lease Offer (a "Lend Lease Offer Decline
Notice") or (iv) Lend Lease and LaSalle fail to enter into an agreement
within 90 days of LaSalle's acceptance of a Lend Lease Offer (the "Lend
Lease Offer Negotiation Period"), LaSalle shall be free for a period of 270
days from the earlier of (A) the expiration of the Lend Lease Offer Period,
(B) the Lend Lease Offer Rejection Date, (C) the date on which LaSalle
receives a Lend Lease Offer Decline Notice or (D) the expiration of the
Lend Lease Offer Negotiation Period, to execute definitive agreements
relating to the consummation of a Management and Leasing Sale Transaction
with an unrelated third party other than a LaSalle Restricted Acquiror at a
price equal to or greater than that specified in the Lend Lease Offer and
on other terms and conditions no less favorable to LaSalle than those
specified in the Lend Lease Offer (a "LaSalle Third Party Management and
Leasing Sale Transaction"); PROVIDED, that LaSalle shall provide Lend Lease
with written notice comparing the final purchase price, type of
transaction, type of consideration and other material terms of any LaSalle
Third Party Management and Leasing Sale Transaction with the Lend Lease
Offer at least five Business Days prior to the execution of definitive
agreements relating to such transaction. If LaSalle has not executed a
definitive agreement related to the LaSalle Third Party Management and
Leasing Sale Transaction Offer within the 270-day period set forth in the
preceding sentence, LaSalle shall be required to reoffer any subsequent
Management and Leasing Sale Transaction to Lend Lease pursuant to the terms
of this Section 6.8.
(e) If at any time during the Limited Sale Restriction
Period, LaSalle receives an unsolicited bona fide offer to engage in a
Management and Leasing Sale Transaction (a "Management and Leasing Purchase
Offer"), from an unrelated third party (other than a LaSalle Restricted
Acquiror) and LaSalle does not reject such offer, LaSalle shall deliver to
Lend Lease a written notice (a "Management and Leasing Purchase Notice").
The Management and Leasing Purchase Notice shall state in reasonable detail
the type of transaction, type of consideration and other material terms and
conditions of the Management and Leasing Purchase Offer; PROVIDED, that the
Management and Leasing Purchase Notice shall not be required to specify the
purchase price for the Management and Leasing Sale Transaction contained in
the Management and Leasing Purchase Offer (the "Third Party Management and
Leasing Purchase Price").
(f) Lend Lease shall have 30 days after Lend Lease receives
the Management and Leasing Purchase Offer (the "Lend Lease Matching
Period") to deliver a written notice to LaSalle electing to engage in a
Management and Leasing Sale Transaction (a "Lend Lease Matching Offer").
The Lend Lease Matching Offer shall specify the type of transaction,
purchase price, type of consideration and other material terms and
conditions upon which Lend Lease would engage in the Management and Leasing
Sale Transaction. If the purchase price included in the Lend Lease
Matching Offer is equal to or greater than the Third Party Management and
Leasing Purchase Price and the other terms and conditions of the Lend Lease
Matching Offer are not materially less favorable to LaSalle than those
contained in the Lend Lease Matching Offer, LaSalle and Lend Lease shall
negotiate in good faith to enter into an agreement containing the terms and
conditions specified in the Lend Lease Matching Offer and such other terms
and conditions as LaSalle and Lend Lease shall mutually agree.
(g) If all required notices pursuant to this Section 6.8 are
given, and (i) Lend Lease does not submit a Lend Lease Matching Offer
within the Lend Lease Matching Period, (ii) the purchase price included in
the Lend Lease Matching Offer is less than the Third Party Management and
Leasing Purchase Price or the other terms and conditions in the Lend Lease
Matching Offer are materially less favorable to LaSalle (a "Lend Lease
Inferior Proposal"), (iii) Lend Lease delivers written notice to LaSalle of
its intention not to submit a Lend Lease Matching Offer (a "Lend Lease
Matching Offer Decline Notice"), or (iv) Lend Lease and LaSalle fail to
enter into an agreement within 90 days of LaSalle's acceptance of a Lend
Lease Matching Offer (the "Lend Lease Matching Offer Negotiation Period"),
LaSalle shall be free for a period of 270 days from the earlier of (A) the
expiration of the Lend Lease Matching Period, (B) the date of delivery of
the Lend Lease Inferior Proposal, (C) the date on which LaSalle receives a
Lend Lease Matching Offer Decline Notice or (D) the expiration of the Lend
Lease Matching Offer Negotiation Period, to execute definitive agreements
relating to the consummation of a Management and Leasing Sale Transaction
with the Person making the Management and Leasing Purchase Offer at a
purchase price equal to or greater than the purchase price included in the
Lend Lease Matching Offer and on other terms and conditions that are
materially no less favorable to LaSalle than those specified in the Lend
Lease Matching Offer (a "LaSalle Bona Fide Purchase Transaction");
PROVIDED, that LaSalle shall provide Lend Lease with written notice
comparing the final purchase price, type of transaction, type of
consideration and other material terms of any LaSalle Bona Fide Purchase
Transaction with the Lend Lease Matching Offer at least five Business Days
prior to the execution of definitive agreements relating to such
transaction. If LaSalle has not executed a definitive agreement related to
the LaSalle Bona Fide Purchase Transaction with the Person making the
Management and Leasing Purchase Offer within the 270-day period set forth
in the preceding sentence, LaSalle shall be required to reoffer any
subsequent unsolicited Management and Leasing Purchase Offer to Lend Lease
pursuant to the terms of this Section 6.8.
(h) LaSalle shall not, and shall cause its Affiliates not to,
disclose to any unrelated third party that Lend Lease has made a Lend Lease
Offer or a Lend Lease Matching Offer or any of the terms thereof.
(i) Nothing herein shall prevent LaSalle from entering into
an agreement with respect to the sale of or otherwise selling all of the
outstanding capital stock or substantially all of the assets of LaSalle
(whether through merger, reorganization, sale of stock or assets or
otherwise).
(j) LaSalle agrees that it will not, and it will cause its
Affiliates not to, in any way challenge the enforceability of any provision
of this Section 6.8. Accordingly, notwithstanding anything to the contrary
contained herein, LaSalle agrees that Lend Lease shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Section 6.8 and to enforce specifically the terms and provisions of this
Section 6.8 in any action instituted in any court having jurisdiction over
the parties and the matter, in addition to any other remedy to which it may
be entitled, at law or in equity.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF BUYER
TO EFFECT THE WORLDWIDE CLOSING
The obligation of Buyer to purchase the Worldwide Shares at the
Worldwide Closing is subject to the satisfaction or waiver by Buyer of the
following conditions on or before the Worldwide Closing Date:
Section 7.1 REPRESENTATIONS AND WARRANTIES CORRECT. Each
representation and warranty of each Seller made herein or in the Strategic
Alliance Agreement or Ancillary Agreements and qualified as to materiality
or Material Adverse Effect shall be true and correct in all respects as of
the date made and at and as of the Worldwide Closing Date, with the same
force and effect as though made at and as of the Worldwide Closing Date.
Each such representation and warranty not so qualified shall be true and
correct in all material respects as of the date made and at and as of the
Worldwide Closing Date, with the same force and effect as though made at
and as of the Worldwide Closing Date.
Section 7.2 PERFORMANCE; NO DEFAULT. Each Seller, Company or Company
Subsidiary shall have performed and complied in all material respects with
all the obligations, agreements and conditions required by this Agreement,
the Australian Transfer Agreement and each Ancillary Agreement to which it
is a party to be performed or complied with by it at or prior to the
Worldwide Closing.
Section 7.3 DELIVERY OF CERTIFICATE. Each Seller shall have
delivered to Buyer a certificate, dated the Worldwide Closing Date,
executed by an executive officer of such Seller certifying to such Seller's
fulfillment of the conditions set forth in Sections 7.1 and 7.2 hereof.
Section 7.4 OPINION OF COUNSEL TO SELLERS AND THE COMPANIES.
Sellers shall have delivered to Buyer an opinion of counsel to Sellers and
the Companies, dated the Worldwide Closing Date, in substantially the form
set forth in EXHIBIT E.
Section 7.5 GOOD STANDING CERTIFICATES. Buyer shall have received
certificates for each Worldwide Company and each Subsidiary of a Worldwide
Company, in form and substance reasonably satisfactory to counsel to Buyer,
(a) from the Secretary of State (or similar Authority) of its respective
jurisdiction of incorporation or formation evidencing its continued
existence and its good standing and organization under the laws of such
jurisdictions; (b) from each jurisdiction in which it is qualified or
licensed to do business as a foreign company, evidencing its continued good
standing as a company as licensed or qualified; and (c) to the extent
reasonably available, from each jurisdiction referred to in (a) and (b)
above, evidencing its current payment of taxes.
Section 7.6 GOVERNMENTAL FILINGS AND CONSENTS; THIRD PARTY CONSENTS.
All Consents or Licences required to be made or obtained prior to the
Worldwide Closing by any Seller, Worldwide Company or Subsidiary of a
Worldwide Company from any Authority in connection with the execution and
delivery of this Agreement, the Strategic Alliance Agreement and the
Ancillary Agreements, the consummation of the transactions contemplated
hereby and thereby to the extent related to the Worldwide Companies and the
Subsidiaries of the Worldwide Companies and the Compass Businesses
(excluding Compass Australia and the Australian Business) shall have been
made or obtained. All Consents of any third party (other than an
Authority) required to be obtained by each party hereto in connection with
the execution and delivery of this Agreement, the Strategic Alliance
Agreement and the Ancillary Agreements and the transactions contemplated
hereby and thereby (including, without limitation, those expressly set
forth in Section 3.23 of the Company Disclosure Schedule to the extent
related to the Worldwide Companies and the Subsidiaries of the Worldwide
Companies and the Compass Businesses (excluding Compass Australia and the
Australian Business)) shall have been obtained.
Section 7.7 BIRMANN CONSENT. The consent of Birmann S/A Comercio e
Emprendimentos ("Birmann") required to be obtained prior to the Worldwide
Closing pursuant to the Joint Venture Agreement, dated February 6, 1996, by
and between Compass Cayman and Birmann in form reasonably acceptable to
Buyer shall have been obtained.
Section 7.8 NO INJUNCTION. On the Worldwide Closing Date, there
shall (a) be no effective injunction, writ, preliminary restraining order
or any order of any nature issued by a court or Authority of competent
jurisdiction directing that any of the transactions provided for in this
Agreement, the Strategic Alliance Agreement or the Ancillary Agreements not
be consummated as so provided or permitting such consummation only subject
to any condition unacceptable to Buyer, in its sole judgment, or (b) be any
action, suit or proceeding, pending or to the Knowledge of each Seller,
Company or Company Subsidiary, threatened which could reasonably be
expected to have any of the effects set forth in clause (a) of this Section
7.8.
Section 7.9 HSR ACT WAITING PERIODS. All waiting periods applicable
to this Agreement and the transactions contemplated hereby under the HSR
Act shall have expired or been terminated.
Section 7.10 NO MATERIAL ADVERSE CHANGE. Since June 30, 1998,
no change, event, development or combination of developments shall have
occurred which, individually or in the aggregate, has resulted in or is
reasonably likely to result in a Material Adverse Effect.
Section 7.11 DUE DILIGENCE REVIEW. Buyer shall have been
provided reasonable access to and shall have concluded its due diligence
investigation of each of those clients of the Companies and the Company
Subsidiaries set forth on Section 7.11 of the Company Disclosure Schedule
and shall be satisfied, in its sole discretion, with the results thereof.
Section 7.12 STRATEGIC ALLIANCE AGREEMENT. Simultaneously with
the Worldwide Closing, Lend Lease and its Affiliates named therein shall
have executed and delivered to Buyer the Strategic Alliance Agreement in
the form attached as EXHIBIT F.
Section 7.13 TRANSITION SERVICES AGREEMENT. Simultaneously with
or prior to the Worldwide Closing, Lend Lease shall have executed and
delivered the Transition Services Agreement in the form attached as
EXHIBIT G.
Section 7.14 COMPASS COLORADO. Compass M&L shall own all of the
issued and outstanding shares of Compass Colorado, free and clear of all
Liens.
Section 7.15 ERISA SUBCONTRACT. Compass M&L and ERE Retail
shall have assigned the ERISA Contracts to LLREI and LLREI shall have
entered into a subcontract with Compass M&L and ERE Retail pursuant to
which Compass M&L and ERE Retail will provide the required services under
such Contracts on the terms and conditions of the ERISA Contract, which
assignment and subcontract shall have been approved by the Independent
Fiduciary and shall be reasonably satisfactory to Buyer.
Section 7.16 FINANCIAL STATEMENTS. Sellers shall have delivered
or caused the Companies to deliver to Buyer the Company Audited Financial
Statements which Audited Financial Statements shall be identical to the
comparable Financial Statements; PROVIDED, that the Company Audited
Financial Statements shall include true, complete and accurate statements
of stockholders' equity, cash flows and footnote disclosures. Sellers
shall also have delivered or caused the Companies to deliver to Buyer
audited combined balance sheets of the Companies and the Company
Subsidiaries and the Australian Business and the related statements of
income, changes in stockholders' equity and cash flows for the calendar
years ended December 31, 1995 and 1996.
Section 7.17 FINANCING. On or prior to Closing Date, Buyer
shall have received funding on terms consistent with the Commitment Letters
in an amount equal to or greater than the Closing Payments.
ARTICLE VII-A
CONDITIONS TO OBLIGATIONS OF BUYER
TO EFFECT THE AUSTRALIA CLOSING
The obligation of Buyer to purchase the Compass Australia
Shares at the Australia Closing is subject to the satisfaction or waiver by
Buyer of the following conditions on or before the Australia Closing Date:
Section 7A.1 REPRESENTATIONS AND WARRANTIES CORRECT. Each
representation and warranty of each Seller made herein or in the Strategic
Alliance Agreement or Ancillary Agreements to the extent related to Compass
Australia or the Australian Business and qualified as to materiality or
Material Adverse Effect shall be true and correct in all respects as of the
date made and at and as of the Australia Closing Date (provided that, for
purposes of this Section 7A.1 Material Adverse Effect shall only be deemed
to relate to Compass Australia and the Australian Business), with the same
force and effect as though made at and as of the Australia Closing Date.
Each such representation and warranty not so qualified shall be true and
correct in all material respects as of the date made and at and as of the
Australia Closing Date, with the same force and effect as though made at
and as of the Australia Closing Date.
Section 7A.2 PERFORMANCE; NO DEFAULT. Each Seller, Company or
Company Subsidiary shall have performed and complied in all material
respects with all the obligations, agreements and conditions relating to
Compass Australia or the Australian Business required by this Agreement,
the Australian Transfer Agreement and each Ancillary Agreement to which it
is a party to be performed or complied with by it at or prior to the
Australia Closing.
Section 7A.3 DELIVERY OF CERTIFICATE. Each Seller shall have
delivered to Buyer a certificate, dated the Australia Closing Date,
executed by an executive officer of such Seller certifying to such Seller's
fulfillment of the conditions set forth in Sections 7A.1 and 7A.2 hereof.
Section 7A.4 OPINION OF COUNSEL TO SELLERS AND THE COMPANIES.
Sellers shall have delivered to Buyer an opinion of counsel to Sellers and
the Companies, dated the Australia Closing Date, substantially in the form
set forth in EXHIBIT E; PROVIDED, that such opinion shall only relate to
Compass Australia and the Australian Business.
Section 7A.5 GOVERNMENTAL FILINGS AND CONSENTS; THIRD PARTY
CONSENTS. All Consents or Licences required to be made or obtained prior
to the Australia Closing by any Seller, Company or Company Subsidiary from
any Authority to the extent related to Compass Australia or the operation
of the Australian Business shall have been made or obtained. All Consents
of any third party (other than an Authority) required to be obtained by
each party hereto in connection with the execution and delivery of this
Agreement, the Strategic Alliance Agreement and the Ancillary Agreements
and the transactions contemplated hereby and thereby (including, without
limitation, those expressly set forth in Section 3.23 of the Company
Disclosure Schedule to the extent related to Compass Australia and the
Australian Business) shall have been obtained.
Section 7A.6 NO INJUNCTION. On the Australia Closing Date,
there shall (a) be no effective injunction, writ, preliminary restraining
order or any order of any nature issued by a court or Authority of
competent jurisdiction directing that any of the transactions provided for
in this Agreement, the Strategic Alliance Agreement or the Ancillary
Agreements not be consummated as so provided or permitting such
consummation only subject to any condition unacceptable to Buyer, in its
sole judgment, or (b) be any action, suit or proceeding, pending or to the
Knowledge of each Seller or Compass Australia, threatened which could
reasonably be expected to have any of the effects set forth in clause (a)
of this Section 7A.6.
Section 7A.7 FIRB APPROVAL. Either (i) Buyer shall have
received a notice from the Treasurer of the Commonwealth of Australia (the
"Treasurer") or his agent to the effect that there is no objection to the
purchase of the Australia Shares under the Commonwealth Government of
Australia's foreign investment policy, such notice being either
unconditional or imposing conditions which are acceptable to Buyer in its
sole discretion; (ii) the period provided under the FATA, during which the
Treasurer may make an order under Section 17 of the FATA or and interim
order under Section 22 of the FATA in relation to the purchase of the
Shares, elapsing without such an order being made; or (iii) if an interim
order under Section 22 of the FATA is made, the subsequent period for
making a final order prohibiting the purchase of the Australia Shares
elapsing without a final order being made.
Section 7A.8 NO MATERIAL ADVERSE CHANGE. Since June 30, 1998,
no change, event, development or combination of developments shall have
occurred which, individually or in the aggregate, has resulted in or is
reasonably likely to result in a material adverse effect with respect to
Compass Australia or the Australian Business.
Section 7A.9 DUE DILIGENCE REVIEW. Buyer shall have been
provided reasonable access to and shall have concluded its due diligence
investigation of each of those clients of Compass Australia and the
Australian Business set forth on Section 7A.9 of the Company Disclosure
Schedule and shall be satisfied, in its sole discretion, with the results
thereof.
Section 0X.00 XXXXXXXXXX TRANSFER AGREEMENT. LLPMA shall have
entered into the Australian Transfer Agreement on terms reasonably
satisfactory to Buyer and in the form set forth in EXHIBIT A and shall have
completed the sale and transfer of the Australian Business in accordance
with the terms of the Australian Transfer Agreement. All conditions
precedent to the Completion (as defined in the Australian Transfer
Agreement) and all obligations of LLPMA required to be performed prior to
Completion shall have been satisfied or performed in a manner reasonably
satisfactory to Buyer.
Section 0X.00 XXXXXXXXXX MANAGEMENT CONTRACTS. Compass Australia
shall have entered into (i) written contracts, in the form delivered to
Australian counsel of Buyer and on terms and conditions consistent with the
manner in which the Australian Business has heretofore been conducted, for
the provision of property management, facility management, leasing or
Project Management services to those properties set forth in Section
7A.11(a) of the Company Disclosure Schedule and (ii) letter agreements, in
substantially the form delivered to Australian counsel of Buyer and on
terms and conditions consistent with the manner in which the Australian
Business has heretofore been conducted, for the provision of property
management, facility management, leasing or Project Management Services to
those properties set forth on Section 7A.11(b) of the Company Disclosure
Schedule.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF SELLERS
TO EFFECT THE WORLDWIDE CLOSING
The obligation of Sellers to sell the Worldwide Shares on the
Worldwide Closing Date is subject to the satisfaction or waiver by Sellers
of the following conditions, on or before the Worldwide Closing Date:
Section 8.1 REPRESENTATIONS AND WARRANTIES CORRECT. Each
representation and warranty of Buyer made herein and qualified as to
materiality shall be true and correct in all respects as of the date made
and at and as of the Worldwide Closing Date, with the same force and effect
as though made at and as of the Worldwide Closing Date. Each such
representation and warranty of Buyer not so qualified shall be true and
correct in all material respects as of the date made and at and as of the
Worldwide Closing Date, with the same force and effect as though made at
and as of the Worldwide Closing Date.
Section 8.2 PERFORMANCE; NO DEFAULT. Buyer shall have performed and
complied in all material respects with all the obligations, agreements and
conditions required by this Agreement and each Ancillary Agreement to which
it is a party to be performed or complied with by it at or prior to the
Worldwide Closing.
Section 8.3 DELIVERY OF CERTIFICATE. Buyer shall have delivered to
Sellers a certificate, dated the Worldwide Closing Date, executed by an
executive officer of Buyer, certifying to the fulfillment of the conditions
set forth in Sections 8.1 and 8.2 hereof.
Section 8.4 OPINION OF COUNSEL TO BUYER. Buyer shall have delivered
to Sellers an opinion of counsel to Buyer, dated the Worldwide Closing
Date, in substantially the form set forth in EXHIBIT J.
Section 8.5 GOOD STANDING CERTIFICATE. Sellers shall have received a
certificate from LaSalle, in form and substance reasonably satisfactory to
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, counsel to Sellers, from the State
Department of Assessments and Taxation of Maryland, evidencing the
existence, good standing and organization of LaSalle under the laws of
Maryland and its current payment of taxes.
Section 8.6 GOVERNMENTAL FILINGS AND CONSENTS; THIRD PARTY CONSENTS.
All Consents required to be made or obtained prior to the Worldwide Closing
by Buyer from any Authority in connection with the execution and delivery
of this Agreement, the Strategic Alliance Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby shall have been made or obtained. All Consents of any third party
(other than an Authority) required to be obtained by each party hereto in
connection with the execution and delivery of this Agreement, the Strategic
Alliance Agreement and the Ancillary Agreements and the transactions
contemplated hereby and thereby (including, without limitation, those
expressly set forth in Section 4.5 of the Buyer Disclosure Schedule) shall
have been obtained.
Section 8.7 NO INJUNCTION. On the Worldwide Closing Date, there
shall be no injunction, writ, preliminary restraining order or any order of
any nature issued by a court or Authority of competent jurisdiction
directing that any of the transactions provided for in this Agreement, the
Strategic Alliance Agreement or the Ancillary Agreements, not be
consummated as so provided.
Section 8.8 HSR ACT WAITING PERIODS. All waiting periods applicable
to this Agreement and the transactions contemplated hereby under the HSR
Act shall have expired or been terminated.
Section 8.9 ERISA SUBCONTRACT. Compass M&L and ERE Retail shall have
assigned the ERISA Contracts to LLREI and LLREI shall have entered into a
subcontract with Compass M&L and ERE Retail pursuant to which Compass M&L
and ERE Retail will provide the required services under such Contracts on
the terms and conditions of the ERISA Contract, which assignment and
subcontract shall have been approved by the Independent Fiduciary and shall
be reasonably satisfactory to Sellers.
ARTICLE VIII-A
CONDITIONS TO OBLIGATIONS OF SELLERS
TO EFFECT THE AUSTRALIA CLOSING
The obligation of Sellers to sell the Compass Australia Shares
on the Australia Closing Date is subject to the satisfaction or waiver by
Sellers of the following conditions, on or before the Australia Closing
Date:
Section 8A.1 REPRESENTATIONS AND WARRANTIES CORRECT. Each
representation and warranty of Buyer made herein and qualified as to
materiality shall be true and correct in all respects as of the date made
and at and as of the Australia Closing Date, with the same force and effect
as though made at and as of the Australia Closing Date. Each such
representation and warranty of Buyer not so qualified shall be true and
correct in all material respects as of the date made and at and as of the
Australia Closing Date, with the same force and effect as though made at
and as of the Australia Closing Date.
Section 8A.2 PERFORMANCE; NO DEFAULT. Buyer shall have
performed and complied in all material respects with all the obligations,
agreements and conditions required by this Agreement, the Strategic
Alliance Agreement and each Ancillary Agreement to which it is a party to
be performed or complied with by it at or prior to the Australia Closing.
Section 8A.3 DELIVERY OF CERTIFICATE. Buyer shall have
delivered to Sellers a certificate, dated the Australia Closing Date,
executed by an executive officer of Buyer, certifying to the fulfillment of
the conditions set forth in Sections 8A.1 and 8A.2 hereof.
Section 8A.4 OPINION OF COUNSEL TO BUYERS. Buyer shall have
delivered to Sellers an opinion of counsel to Buyer, dated the Australia
Closing Date, substantially in the form set forth in EXHIBIT J; PROVIDED,
that such opinion shall only relate to matters material to the purchase by
Buyer of the Compass Australia Shares.
Section 8A.5 NO INJUNCTION. On the Australia Closing Date,
there shall be no injunction, writ, preliminary restraining order or any
order of any nature issued by a court or Authority of competent
jurisdiction directing that any of the transactions provided for in this
Agreement, the Strategic Alliance Agreement and the Ancillary Agreements,
not be consummated as so provided.
ARTICLE IX
TAX MATTERS
Section 9.1 CONSOLIDATED SUBSIDIARIES; COMPLIANCE BY LEND LEASE (US).
Lend Lease represents and warrants that each U.S. Company is, directly or
indirectly, a wholly-owned subsidiary of Lend Lease (US), Inc. ("Lend Lease
(US)") and each of the U.S. Companies shall be included in the consolidated
tax return of Lend Lease (US) for United States federal income tax purposes
for the taxable period of each of the U.S. Companies that includes the
Worldwide Closing Date. Lend Lease shall cause Lend Lease (US) to comply
with all provisions of this Article IX.
Section 9.2 SECTION 338 ELECTIONS AND FORMS. With respect to Buyer's
acquisition of the stock of the U.S. Companies hereunder, Lend Lease (US)
and Buyer shall jointly make the Section 338(h)(10) Elections in accordance
with applicable Tax Laws on a timely basis and as set forth herein;
PROVIDED, HOWEVER, that no Section 338(h)(10) Elections shall be made with
respect to the purchase of the stock of TYGPM. Lend Lease (US) and Buyer
shall supply in advance to one another copies of all correspondence,
filings or communications (or memoranda setting forth the substance
thereof) to be sent or made by Buyer or Lend Lease (US) or their respective
representatives or Affiliates to or with the IRS or other taxing authority
relating to any Section 338(h)(10) Elections. Buyer and Lend Lease (US)
shall report the transfers under this Agreement consistent with any Section
338(h)(10) Elections, and shall take no position contrary thereto (and
shall cause their respective Affiliates to take no position contrary
thereto) unless required to do so by applicable Tax Laws pursuant to a
"determination" (as described in Section 1313 of the Code). Lend Lease
agrees that it shall give or cause to be given to Buyer and its
representatives and agents for their review access to the Tax Returns of
each of the U.S. Companies which include the reporting and tax effect of
the Section 338(h)(10) Elections.
Section 9.3 PREPARATION OF FORMS. Buyer shall be responsible for the
preparation and filing of all Section 338 Forms in accordance with
applicable Tax Laws and the terms of this Agreement, and Buyer shall
deliver such forms and related documents to Lend Lease (US) at least thirty
(30) days prior to the date such Section 338 Forms are required to be filed
under applicable Tax Laws for the approval of Lend Lease (US) (which
approval shall not be unreasonably withheld). Lend Lease (US) shall
provide all information reasonably requested in writing by Buyer and shall
execute and deliver to Buyer such documents or forms as are reasonably
requested by Buyer or are required by any Tax Laws to properly complete the
Section 338 Forms, no more than ten (10) days after the date such documents
or forms are requested and provided by Buyer. Lend Lease (US) shall be
responsible for the preparation and filing of the Tax Returns of the U.S.
Companies (including but not limited to any consolidated, combined or
unitary group return of which any U.S. Company is a member which includes
the gain or loss on the deemed sale of assets of any U.S. Company under
Section 338 of the Code or similar state or local statute) for the period
through the Worldwide Closing Date.
Section 9.4 ALLOCATION. Sellers and Buyer agree that the Purchase
Price shall be allocated within the parameters set forth on EXHIBIT K.
Lend Lease (US) and Buyer shall allocate the "Modified Aggregate Deemed
Sale Price," as computed under applicable Treasury Regulations (or similar
state law provisions) with respect to the acquisition of shares of stock of
the U.S. Companies (other than TYGPM) among the assets of such U.S.
Companies for tax purposes in accordance with Buyer's reasonable
determination of their fair market values. Any dispute as to the
reasonableness of Buyer's determination shall be resolved pursuant to the
procedures set forth in Section 9.10 hereof.
Section 9.5 TAXABLE PERIODS ENDING ON OR BEFORE THE CLOSING DATES.
Sellers shall be liable for, shall pay and shall indemnify and hold Buyer,
each Company and Company Subsidiary, and any of their Affiliates harmless
against, (i) all Taxes of Sellers, the Companies, the Company Subsidiaries
and any of their Affiliates for any taxable year or taxable period ending
on or before the Worldwide Closing Date, (ii) all Taxes of Sellers, Compass
Australia and the Australian Business for any taxable year or taxable
period ending on or before the Australia Closing Date, and (iii) any
liability for Taxes pursuant to Treasury Regulations Section 1.1502-6 or
1.338(h)(10)-1(e)(5) (or any similar provision of Tax Law). All
liabilities and obligations between any Company or Company Subsidiary on
the one hand, and Sellers or any of the Sellers' Affiliates on the other
hand, under any tax allocation agreement or arrangement in effect prior to
the Worldwide Closing or the Australia Closing, as applicable (other than
this Agreement or as set forth herein) shall cease to apply to the
Companies (excluding Compass Australia) and Company Subsidiaries as of the
Worldwide Closing and to Compass Australia and the Australian Business as
of the Australia Closing. Sellers shall determine the amount of taxable
income of the Worldwide Companies, Company Subsidiaries, Compass Australia
for the taxable year ending on the Worldwide Closing Date or the Australia
Closing Date, as applicable, on the basis of their permanent records
(including workpapers) in a manner consistent with past tax methods
utilized in preparing prior Tax Returns. Such determination shall be
subject to the dispute resolution procedures of Section 9.10.
Section 9.6 TAXABLE PERIODS COMMENCING AFTER THE CLOSING DATES.
Buyer shall be liable for, shall pay and shall indemnify and hold Sellers
and their Affiliates harmless against, (i) any and all Taxes of the
Worldwide Companies and the Subsidiaries of the Worldwide Companies for any
taxable year or taxable period commencing after the Worldwide Closing Date
and (ii) any and all Taxes of Compass Australia and the Australian Business
for any taxable year or taxable period commencing after the Australia
Closing Date, and Buyer shall be responsible for preparing all Tax Returns
for this period:
Section 9.7 TAXABLE PERIODS COMMENCING ON OR BEFORE THE CLOSING DATES
AND ENDING AFTER THE CLOSING DATES. Any Taxes for a taxable period
beginning on or before the Worldwide Closing Date and ending after the
Worldwide Closing Date with respect to the Worldwide Companies or any
Subsidiaries of the Worldwide Companies and any Taxes for a taxable period
beginning on or before the Australia Closing Date and ending after the
Australia Closing Date with respect to Compass Australia and the Australian
Business (either such period, the "Closing Period") shall be apportioned
between Buyer and Sellers as if the Closing Period had ended at the
Worldwide Closing or the Australia Closing, as applicable, but with Sellers
bearing the effect of all Section 338(h)(10) Elections. For purposes of
this Section 9.7, and Sections 9.5 and 9.6, the portion of the Closing
Period deemed to end on the Worldwide Closing Date or the Australia Closing
Date, as applicable, shall be deemed to be a taxable period (the "Pre-
Closing Period"). All gross or net income, franchise or doing business
taxes shall be allocated based on an interim closing of the books. All
other Taxes of any Company or Company Subsidiary for a Closing Period shall
be apportioned between Buyer and Sellers as of the Worldwide Closing Date
or the Australia Closing Date, as applicable, based on the number of days
of such taxable period included in the Pre-Closing Period and the number of
days of such taxable period after the Worldwide Closing Date or the
Australia Closing Date, as applicable, and Buyer shall be responsible for
preparing all Tax Returns for the Closing Period. With respect to any
Taxes for the Closing Period:
(a) At least thirty (30) days prior to the due date for the
payment of any Tax with respect to the Closing Period, Buyer shall present
the affected Seller with a schedule detailing the computation of such Tax
that is allocable to the Pre-Closing Period.
(b) Fifteen (15) days after Buyer presents such Seller with
the schedule described in clause (a) above, such Seller shall present Buyer
with any changes it requests. Buyer shall implement the changes requested;
PROVIDED, that if Buyer reasonably believes that Sellers' proposed changes
are more likely than not incorrect, Seller and Buyer must jointly obtain
and share equally the cost of an opinion of counsel or a nationally
recognized accounting firm (which opinion and counsel or accounting firm
shall be reasonably acceptable to both the affected Seller and Buyer)
determining the appropriate position in order for such changes to be made.
The affected Seller shall pay to Buyer the amount of the Tax allocable to
the Pre-Closing Period on or before the due date for payment of such Tax.
Section 9.8 REFUNDS OR CREDITS. Except as otherwise set forth in
this Agreement, any refunds or credits of Taxes, to the extent that such
refunds or credits are attributable to taxable periods ending on or before
the Worldwide Closing Date with respect to the Worldwide Companies or the
Company Subsidiaries, or attributable to taxable periods ending on or
before the Australia Closing Date with respect to Compass Australia or the
Australian Business, shall be for the account of Seller, and, to the extent
that such refunds or credits are attributable to taxable periods beginning
after the Worldwide Closing Date with respect to the Worldwide Companies or
the Subsidiaries of the Worldwide Companies, or attributable to taxable
periods ending after the Australia Closing Date with respect to Compass
Australia or the Australian Business, such refunds or credits shall be for
the account of Buyer. To the extent that such refunds or credits are
attributable to Taxes for a Closing Period that are described in Section
9.7, such refunds and credits shall be for the account of the party who
bears responsibility for such Taxes pursuant to Section 9.7. Buyer shall
cause the Companies or Company Subsidiaries to forward to Sellers or to
reimburse Sellers for any such refunds or credits due Sellers pursuant to
this Section 9.8 within fifteen (15) days after receipt thereof by Buyer or
any of the Companies or Company Subsidiaries that are for the account of
Sellers hereunder, and Sellers shall forward to Buyer or reimburse Buyer
for any refunds or credits that are for the account of Buyer within fifteen
(15) days after receipt thereof by Sellers or any of their Affiliates that
are for the account of Buyer hereunder; PROVIDED, that the refunding party
shall be entitled to deduct from the amount to be refunded all reasonable
costs and expenses incurred by such refunding party in obtaining such
refund.
Section 9.9 CONTESTS. Whenever any taxing authority asserts a claim,
makes an assessment, or otherwise disputes the amount of Taxes owed by any
Company or Company Subsidiary for which Sellers are or may be liable under
this Agreement, Buyer shall promptly upon learning of such claim inform
Sellers, and Sellers shall have the right to control any resulting
proceedings and to determine whether and when to settle any such claim,
assessment or dispute to the extent such proceedings or determinations
would materially affect the amount of Taxes for which Sellers are liable
under this Agreement; PROVIDED, that Sellers shall not enter into any such
settlement without the consent of Buyer, which consent shall not be
unreasonably withheld, if such settlement could affect the amount of Taxes
for which Buyer is liable under this Agreement. Whenever any Taxing
Authority asserts a claim, makes an assessment or otherwise disputes the
amount of Taxes for which Buyer is liable under this Agreement, Sellers
shall promptly upon learning of such claim inform Buyer, and Buyer shall
have the right to control any resulting proceedings and to determine
whether and when to settle any such claim, assessment or dispute to the
extent such proceedings would materially affect the amount of Taxes for
which Buyer is liable under this Agreement; PROVIDED, that Buyer shall not
enter into any such settlement without the consent of the affected Seller,
which consent shall not be unreasonably withheld, if such settlement could
affect the amount of Taxes for which Sellers are liable under this
Agreement. With respect to the Worldwide Companies and the Subsidiaries of
the Worldwide Companies, for a period of six years after the Worldwide
Closing, and, with respect to Compass Australia and the Australian
Business, for a period of six years after the Australia Closing, and, if at
the expiration thereof any tax audit or judicial proceeding is in progress
or the applicable statute of limitations has been extended in writing, for
such longer period as such tax audit or judicial proceeding is in progress
or such statutory period has been agreed to be extended, Buyer shall, and
shall cause the Companies and Company Subsidiaries to maintain and make
available to Lend Lease U.S. and the Sellers, on the reasonable request of
Lend Lease U.S. or the Sellers, copies of any and all information, working
papers, books and records used in the preparation of or relating to the Tax
Returns of each of the Companies and Company Subsidiaries. After such
period, Buyer, the Companies and Company Subsidiaries may dispose of such
information, working papers, books and records.
Section 9.10 RESOLUTION OF DISAGREEMENTS BETWEEN SELLER AND
BUYER. If Buyer and Sellers disagree as to the amount of Taxes for which
each is liable under this Agreement, Buyer and Sellers shall promptly
consult each other in an effort to resolve such dispute. If any such point
of disagreement cannot be resolved within fifteen (15) days of the date of
consultation, Buyer and Sellers shall within ten (10) days after such 15-
day period jointly engage a big six accounting firm (the "Tax Auditor") to
act as an arbitrator to resolve all points of disagreement concerning tax
accounting matters with respect to this Agreement. All fees and expenses
relating to the work performed by any Tax Auditor or arbitrator in
accordance with this Section 9.10 shall be borne equally by Buyer and
Sellers, unless otherwise ordered by the Tax Auditor or arbitrator.
Section 9.11 TRANSFER TAXES. Notwithstanding any provision in
this Agreement to the contrary, Buyer shall be liable for and shall pay all
transfer taxes arising out of or in connection with (a) the transactions
contemplated by the Australian Transfer Agreement (the "Initial Transfer
Tax") and (b) the purchase of the Compass Australia Common Shares from
LLPMA by LPI Australia (the "Stock Transfer Tax").
Section 9.12 TAX COOPERATION. Buyer and Sellers agree to (and
to cause their respective Affiliates to) furnish or cause to be furnished,
upon request and on a timely basis, such information and assistance as is
reasonably necessary for the timely filing of any Tax Return, the making of
any election related to Taxes, the preparation for any audit or examination
by any taxing authority and the prosecution of or defense of any claim,
suit or proceeding relating to Taxes. All out-of-pocket costs incurred in
providing such information and assistance shall be paid by the party
requesting such information and assistance. Buyer and Sellers shall
cooperate with each other in the conduct of any audit or other proceeding
relating to Taxes.
Section 9.13 SURVIVAL OF INDEMNIFICATION. The indemnification
obligations of Buyer and Sellers set forth in Sections 9.5, 9.6, 9.7 and
9.11 shall terminate on the date that is 60 days after the expiration of
the applicable statute of limitations.
Section 9.14 CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms shall have the following meanings:
(a) "Section 338 Forms" means all returns, documents,
statements, and other forms that are required to be submitted to any
federal, state, county, or other local taxing authority in connection with
a Section 338(h)(10) Election. Section 338 Forms shall include, without
limitation, any "statement of section 338 election" and United States
Internal Revenue Service Form 8023 (together with any schedules or
attachments thereto) that are required pursuant to Treas. Reg. Section
1.338(h)(10)-1.
(b) "Section 338(h)(10) Election" means an election described
in Section 338(h)(10) of the Code with respect to the sale of the stock of
any U.S. Company to Buyer pursuant to this Agreement. Section 338(h)(10)
Election shall also include, at Buyer's option, any substantially similar
election under a state or local statute corresponding to federal Tax Laws.
(c) "Tax Laws" means the Code and any other Laws relating to
Taxes and any official administrative pronouncements released thereunder.
ARTICLE X
EMPLOYEE BENEFIT MATTERS
Section 10.1 EMPLOYEE BENEFIT MATTERS. Reference is made to
EXHIBIT I which is incorporated herein by reference.
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
Section 11.1 TERMINATION OF AGREEMENT. This Agreement may be
terminated at any time prior to the Worldwide Closing, and, with respect to
obligations related to Compass Australia and the Australian Business, at
any time prior to the Australia Closing:
(a) by mutual consent of Lend Lease and Buyer;
(b) by either Lend Lease or Buyer if (i) with respect to
termination of this Agreement, the Worldwide Closing shall not have
occurred on or before October 31, 1998, or (ii) with respect to termination
of obligations related to the purchase and sale of the Compass Australia
Shares, if the Australia Closing shall not have occurred on or before
October 31, 1998, in either case unless the failure of the Worldwide
Closing or the Australia Closing, as applicable, to occur by such date
shall be due to the failure of the party seeking to terminate this
Agreement to perform or observe the covenants and agreements of such party
set forth in this Agreement;
(c) by either Lend Lease or Buyer in the event any court of
competent jurisdiction in the United States or other Authority shall have
issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the transactions contemplated hereby and
such order, decree or ruling or other action shall have become final and
nonappealable after the affected party or parties have made all reasonable
efforts to contest and appeal the issuance of such order, decree, ruling or
other action;
(d) by either Lend Lease or Buyer (PROVIDED, that the
terminating party is not then in material breach of any representation,
warranty or covenant in this Agreement) if there shall have been a material
breach of any of the representations, warranties or covenants in this
Agreement on the part of the other party, which breach is not cured within
30 days following written notice to the party committing such breach, or
which breach, by its nature, cannot be cured prior to the Worldwide Closing
or the Australia Closing, as applicable; and
(e) by Buyer, pursuant to Section 5.6(b).
Section 11.2 EFFECT OF TERMINATION. In the event of termination
and abandonment of this Agreement pursuant to Section 11.1 hereof, written
notice thereof shall forthwith be given to the other parties and the
transactions contemplated by this Agreement shall be terminated and
abandoned, without further action by Buyer or Sellers. If the transactions
contemplated by this Agreement are so terminated and abandoned as provided
herein:
(a) Notwithstanding any such termination, Sections 13.1, 13.5
and 13.10 shall remain in full force and effect; and
(b) No party hereto shall have any liability or further
obligation to any other party to this Agreement except (i) as stated in
subparagraph (a) of this Section 11.2 or (ii) for any willful breach of
this Agreement.
ARTICLE XII
SURVIVAL AND INDEMNIFICATION
Section 12.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. All representations and warranties of each party contained in
this Agreement shall survive the respective Closings, for a period ending
upon the date of the filing of Buyer's Annual Report on Form 10-K with the
Securities and Exchange Commission for the first full fiscal year for
LaSalle following the Worldwide Closing Date, except that: (a) the
representations and warranties set forth in Sections 3.1, 3.2, 3.3, 3.5,
3.18, 3.28, 4.1 and 4.2 shall survive without limitation; (b) the
representations and warranties set forth in Section 3.26 shall survive for
a period ending on the seventh anniversary of the Worldwide Closing Date
and (c) the representations and warranties set forth in Sections 3.21,
3.21A and 3.25 shall survive until the applicable statute of limitations
has run plus thirty (30) days. The covenants and agreements contained
herein shall survive the Closings without limitation as to time unless the
covenant or agreement specifies a term, in which case such covenant or
agreement shall survive for such specified term. The respective expiration
dates for the survival of the representations and warranties and the
covenants shall be referred to herein as the relevant "Expiration Date."
The right to indemnification or any other remedy based on representations,
warranties, covenants and obligations in this Agreement shall 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 Worldwide Closing
Date or the Australia Closing Date, as the case may be, 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 or any other remedy based on such representations,
warranties, covenants and obligations.
Section 12.2 INDEMNIFICATION BY BUYER. Buyer agrees to
indemnify, defend and hold Sellers and their respective officers,
directors, employees and agents, harmless, from and against any and all
Liabilities and against all claims in respect thereof (including, without
limitation, interest, penalties and fees and amounts paid in settlement and
reasonable costs of investigation herein referred to collectively as
"Losses" or individually as "Loss") suffered or incurred by reason of (a)
any untrue representation of, or breach of warranty by, Buyer in this
Agreement or any certificate given in connection herewith, notice of which
is given to Buyer prior to 30 days following the relevant Expiration Date;
(b) any nonfulfillment of any covenant or agreement of Buyer in this
Agreement, notice of which is given to Buyer on or prior to 30 days
following the Expiration Date; and (c) enforcing the indemnification rights
of Sellers pursuant to this Section 12.2.
Section 12.3 INDEMNIFICATION BY SELLERS. Lend Lease, on behalf
of itself and each Seller, and each other Seller severally, agrees to
indemnify, defend and hold Buyer, the Companies and Company Subsidiaries
and their respective officers, directors, employees agents and Affiliates
harmless from and against all Losses suffered or incurred by reason of (a)
any untrue representation of, or breach of warranty by, Sellers in this
Agreement or any certificate given in connection herewith, notice of which
is given to Sellers on or prior to 30 days following the relevant
Expiration Date; (b) any nonfulfillment of any covenant or agreement of
Sellers or the Companies in this agreement, notice of which is given to
Sellers on or prior to 30 days following the relevant Expiration Date; (c)
any Liabilities of Lend Lease, LLPMA, Compass Australia or any of their
respective Affiliates of any kind whatsoever, whether or not accrued or
fixed, absolute or contingent, or determined or determinable, relating to
or arising out of the Australian Business prior to and including the
Australia Closing Date including, without limitation, (i) any Taxes that
are attributable to any period prior to and including the Australia Closing
Date; (ii) any Liabilities to or with respect to current or former
employees of the Australian Business or pursuant to or with respect to
Plans; and (iii) Liabilities to or with respect to current employees of the
Australian Business who have accepted employment with Buyer or any of its
Affiliates, to the extent related to or arising out of services provided on
or prior to the Australia Closing Date; (d) any Liabilities under any "stay
pay," severance or similar agreement under which any Company or Company
Subsidiary may have any Liability or obligations including, but not limited
to those agreements set forth in Section 3.21(a) and Section 14(b) of the
Company Disclosure Schedule; (e) except with respect to the obligation to
provide property management, facility management, leasing and Project
Management Services pursuant to the agreements listed on Section 3.14(a) of
the Company Disclosure Schedule after the Worldwide Closing Date, any
obligations or Liabilities under any agreement or understanding between
Lend Lease or its Affiliates (including the Companies and the Company
Subsidiaries) on the one hand and the Equitable and its Affiliates on the
other hand whether or not arising out of or relating to Lend Lease's
acquisition of the investment management and investment advisory businesses
of the Equitable and its Affiliates; (f) any Liabilities relating to or
arising out of any item set forth on Schedule 3.22 of the Company
Disclosure Schedule; and (h) enforcing the indemnification rights of Buyer
pursuant to this Section 12.3.
Section 12.4 CLAIMS FOR INDEMNIFICATION. (a) Notwithstanding the
provisions of Sections 12.2 and 12.3, to the extent that (i) Sellers incur
a Loss under Section 12.2(a), or (ii) Buyer or a Company or a Company
Subsidiary incurs a Loss under Section 12.3(a), the other party shall be
required to indemnify and hold harmless the party incurring the Loss with
respect to such Loss only with respect to any Loss which individually
exceeds US$20,000 (each a "Minimum Claim") and in any event only if the
aggregate of all Minimum Claims by such party exceeds US$2,000,000, in
which case, the other shall be liable for the full amount of all such
claims; PROVIDED, THAT the foregoing limit does not apply with respect to
Sellers' breach of the representations and warranties set forth in Sections
3.25 or 3.28 and the covenants set forth in Article IX, or to any
fraudulent breach of any representation or warranty or any claim with
respect to fraudulent inducement to enter into this Agreement; PROVIDED,
FURTHER, that for purposes of determining the accuracy in or breach of the
representations and warranties or covenants referred to in Sections 12.2
and 12.3 above, references to Material Adverse Effect and materiality shall
not be applicable.
(b) GENERAL. The parties intend that all indemnification
claims be made as promptly as practicable by the party seeking
indemnification (the "Indemnified Party"). Notwithstanding the foregoing,
no party shall assert a new claim (excluding third party claims) for
indemnification against the other party until the aggregate value of all
unasserted claims by such party exceeds US$100,000 unless the failure to
assert any such claim at such time would result in such party losing its
rights to indemnification from the other party with respect to such claim.
Whenever any claim shall arise for indemnification, the Indemnified Party
shall promptly notify the party from whom indemnification is sought (the
"Indemnifying Party") prior to the applicable Expiration Date in reasonable
detail of the breached provision, the claim, and the facts constituting the
basis for such claim. The failure to so notify the Indemnifying Party
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 materially prejudiced
thereby.
(c) CLAIMS BY THIRD PARTIES. With respect to claims made by
third parties, the Indemnifying Party, upon acknowledgment of its liability
for the claim, shall be entitled to assume control of the defense of such
action or claim with counsel reasonably satisfactory to the Indemnified
Party; PROVIDED, that:
(i) the Indemnified Party shall be entitled to
participate in the defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim;
(ii) no Indemnifying Party shall consent to the entry of
any judgment or enter into any settlement without the consent of the
Indemnified Party (A) if such judgment or settlement does not include as an
unconditional term thereof the giving by each claimant or plaintiff to each
Indemnified Party of a release from all Liability in respect to such claim,
(B) if such judgment or settlement would result in the finding or admission
of any violation of Law, or (C) if as a result of such consent or
settlement injunctive or other equitable relief would be imposed against
the Indemnified Party or such judgment or settlement could interfere with
or adversely affect the business, operations or assets of the Indemnified
Party. In the event that the Indemnified Party shall in good faith
determine that the conduct of the defense of any claim subject to
indemnification hereunder or any proposed settlement of any such claim by
the Indemnifying Party might be expected to affect adversely the
Indemnified Party's Tax Liability or the ability of Buyer to conduct their
business, or that the Indemnified Party may have available to it one or
more defenses or counterclaims that are inconsistent with one or more of
those that may be available to the Indemnifying Party in respect of such
claim or any litigation relating thereto, the Indemnified Party shall have
the right at all times to take over and assume control over the defense,
settlement, negotiations or litigation relating to any such claim, with
counsel reasonably acceptable to the Indemnifying Party, at the sole cost
of the Indemnifying Party, provided that if the Indemnified Party does so
take over and assume control, the Indemnified Party shall not settle such
claim or litigation without the written consent of the Indemnifying Party,
such consent not to be unreasonably withheld. In any event, the
Indemnifying Party and the Indemnified Party shall cooperate in the defense
of any claim or litigation subject to the Agreement and the records of each
shall be available to the other with respect to such defense; and
(iii)if the Indemnifying Party does not assume control
of the defense of such claim in accordance with the foregoing provisions
within ten days after receipt of notice of the claim or, if having taken
over such defense, does not in the reasonable opinion of the Indemnified
Party proceed diligently to defend such claim, the Indemnified Party shall
have the right to defend such claim in such manner as it may deem
appropriate at the cost and expense of the Indemnifying Party pursuant to
the terms of this Agreement. The Indemnifying Party shall be bound by any
defense or settlement that the Indemnified Party shall make in good faith
with respect to such claim, and the Indemnifying Party shall promptly
reimburse the Indemnified Party therefore in accordance with this Article
XII.
Section 12.5 REMEDIES CUMULATIVE. The sole monetary recourse
for breaches of the representations and warranties contained herein shall,
absent fraud or intentional breaches of misrepresentations, be through the
indemnification procedures set forth in this Article XII. Notwithstanding
anything to the contrary contained herein, the aggregate liability for
money damages under this Agreement, the Strategic Alliance Agreement and
the Ancillary Agreements for any breach of any of Buyer or Sellers shall
not, absent fraud, exceed $180 million.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 CONFIDENTIALITY. (a) Each of the Sellers and
Buyer agree that, from and after the date hereof, except as otherwise
consented to in writing by the non-disclosing party, (i) neither party will
directly or indirectly disclose or use in a manner adverse to the other
party, any Confidential Information except as required by the terms of a
valid and effective subpoena or order issued by a court of competent
jurisdiction or by a governmental body; (ii) the Confidential Information
will be the exclusive property of the disclosing party and, any time on or
after date hereof, if requested by the disclosing party, the receiving
party will promptly deliver to the disclosing party all Confidential
Information, including all copies thereof, which are in the possession, or
under the control of the receiving party, its agents or representatives,
without making or retaining any copies or extracts thereof; and (iii) if
Buyer or any of the Sellers receives a request to disclose all or any part
of the Confidential Information in connection with a legal proceeding,
Buyer or any the of Sellers, as the case may be, will (A) immediately
notify the other party of the existence, terms and circumstances
surrounding such request, (B) seek a protective order or other appropriate
remedy, and (C) in the event no such protective order or other remedy is
obtained and disclosure of such information is required, and at the other
party's cost and expense, exercise their best efforts to obtain an order or
other reliable assurance that confidential treatment will be accorded such
portion of the disclosed information which the other party so designates.
(b) "CONFIDENTIAL INFORMATION" means any and all information
relating to the management, operations, finances, products, trade secrets,
technology or services of the parties and their Affiliates, including but
not limited to any and all financial data, employee information, computer
programs and systems, computer based information, plans, projections,
existing and proposed and contemplated projects or investments, formulae,
processes, methods, products, manuals, drawings, supplier lists, customer
lists, purchase and sales records, marketing information, commitments,
correspondence and other information relating to the respective parties'
businesses, whether written, oral or computer generated, other than such
information as may at any time be or become lawfully available to the
general public through no fault of the disclosing party or its
representatives. Notwithstanding the foregoing, (i) it is understood and
agreed that, after the Worldwide Closing with respect to the World
Companies and the Subsidiaries of the World Companies and the Compass
Businesses (excluding the Australian Business), and after the Australia
Closing with respect to Compass Australia and the Australian Business,
Confidential Information that was shared by the Compass Businesses and the
business of the Continuing Affiliates may be disclosed to any person who is
a director, officer or employee of (A) Lend Lease or a Continuing Affiliate
in the case of information concerning the Compass Businesses or (B) Buyer,
the Companies, Company Subsidiaries and their respective Affiliates in the
case of information concerning a Continuing Affiliate, and (ii) nothing in
this Section 13.1(b) shall preclude Lend Lease or its Affiliates from
considering such Confidential Information in connection with a decision to
retain any Company or Company Subsidiary pursuant to the Strategic Alliance
Agreement.
(c) The covenants and undertakings contained in this Section
13.1 relate to matters which may be of a special, unique and extraordinary
character and a violation of any of the terms of this Section 13.1 may
cause irreparable injury to the non-disclosing party, the amount of which
may be impossible to estimate or determine and for which adequate
compensation may not be available. Therefore, the non-disclosing party
shall be entitled to an injunction, restraining order or other equitable
relief from a court of competent jurisdiction, restraining any violation or
threatened violation of any such terms by the disclosing party and such
other persons as the court orders.
(d) Notwithstanding anything to the contrary contained
herein, Sellers shall have the right to disclose the Earnout Payment, Lend
Lease Look Back Payment and the Buyer Look Back Payment provisions of this
Agreement to any client of a Seller for whom such Seller provides
investment advisory or management services and for whom such Seller is
proposing to recommend or to hire Buyer or any of its Affiliates to provide
property management, leasing, facilities management or Project Management
services; PROVIDED, HOWEVER that Sellers shall not make any such
disclosure, directly or indirectly or cause to be made any such disclosure
without the prior written consent of Buyer with respect to the form, manner
and content of any such disclosure.
Section 13.2 NON-COMPETITION. (a) Except as provided in
subsection (b), each Seller agrees that, to assure that Buyer will retain
the value of the Compass Businesses as a "going concern," for a period of 5
years beginning on the Worldwide Closing Date, such Seller shall not,
directly or indirectly, or through one or more of its Affiliates, engage or
have an interest in:
(i) the provision of property management, leasing or
facilities management (as conducted by the Companies or Company
Subsidiaries on the Worldwide Closing Date or Australia Closing Date, as
applicable) services with respect to office or industrial office/warehouse
properties, or the provision of project management services associated
therewith, anywhere in the world; PROVIDED, that until the occurrence of
the Australia Closing, Seller may engage or have an interest in the
provision of such services in Australia; or
(ii) the provision of property management, leasing or
facilities management (as conducted by the Companies or Company
Subsidiaries on the Closing Date) services with respect to retail
properties, or the provision of project management and development
management services associated therewith, anywhere in the United States or
its territories or possessions.
For purposes of this Section 13.2(a), the term "Affiliate" (as defined in
Article XIV) shall not include any person controlled by a Seller or a
Subsidiary of a Seller which, pursuant to agreement, is a third party
investment management or investment advisory client of such Seller (or a
Subsidiary thereof), or is an investment fund sponsored or managed by such
Seller (or a Subsidiary thereof) as part of its investment management or
investment advisory business, provided that the Sellers and their
respective Subsidiaries do not own, directly or indirectly, individually or
in the aggregate more than ten percent (10%) of the outstanding ownership
interests in such client or investment fund.
(b) Notwithstanding anything to the contrary in subsection
(a) above:
(i) Subsection (a) shall not prohibit an investment in
any Person by an investment fund sponsored or managed by Seller or a
Subsidiary of any Seller as part of its investment management or investment
advisory business, in which investment fund the Sellers and their
respective Subsidiaries, individually or in the aggregate, do not own,
directly or indirectly, more than ten percent (10%) of the outstanding
ownerships interests (a "Qualifying Investment Fund") therein, or a co-
investment by Seller or a Subsidiary of any Seller in a Person in
conjunction with and as part of an investment in such Person by such
Seller's or Subsidiary's investment management or investment advisory
clients or client accounts in the ordinary course of such Seller's or
Subsidiary's investment management or advisory business; provided that (A)
the primary purpose of the investment is unrelated to engaging in or
profiting from the conduct of a Competitive Business; (B) Sellers and their
respective Subsidiaries investment represents, directly or indirectly,
individually or in the aggregate less than 25% of the outstanding ownership
interests in such Person and (C) other than such investment, no financial
assistance is provided by Seller or any of its Subsidiaries to such Person
and neither Seller nor any Subsidiary of Seller shall grant such Person the
right to use the name "Lend Lease" in connection with such Person's
business activities.
(ii) Subsection (a) shall not be deemed to prohibit the
Sellers or their Affiliates from engaging in their property development and
development management, and project management and construction businesses,
as such businesses are conducted in the ordinary course anywhere in the
world on the date hereof. In addition, Subsection (a) shall not prohibit
the Sellers or their Affiliates from entering into any agreement to perform
property management, leasing or facilities management services for a
client, or project management services associated therewith, if (A)
performance of such services is subcontracted to Buyer or any of its
Affiliates, or (B) such services are provided with respect to a property
pursuant to or in connection with, and as an integral part of, an
assignment for the Sellers or their Affiliates to construct, develop or
rehabilitate such property.
(iii)Neither the Sellers nor any of their Affiliates
shall be prohibited from acquiring a Person which conducts a business
described in subsection (a)(i) or (a)(ii) (a "Competitive Business") if (x)
such Competitive Business did not comprise, for the twelve (12) months
prior to such acquisition, more than twenty-five percent (25%) of the
revenues or profits of such Person and (y) promptly following such
acquisition such Seller or its Affiliate provides Buyer with written notice
of such acquisition and offers to sell such Competitive Business to Buyer.
If Buyer provides such Seller or Affiliate with written notice of its
interest in acquiring such Competitive Business within fifteen (15) days
following written notice from such Seller or Affiliate, Seller or its
Affiliate and Buyer shall, for a period of no longer than three (3) months
thereafter, negotiate in good faith for the sale of such Competitive
Business to Buyer on terms and conditions and at a price mutually agreeable
to Seller and Buyer based on the sale terms and allocable price of the
purchase of the Competitive Business by the Seller; PROVIDED, that if Buyer
elects not to enter into such negotiation, the parties do not reach
agreement within such 3-month period or the sale to Buyer is not
accomplished, such Seller shall or shall cause its Affiliates to use their
best efforts to dispose of the Competitive Business within one (1) year
thereafter; and
(iv) Subsection (a) shall not apply if any unrelated
third party acquires substantially all of the assets of Lend Lease.
or indirectly, through one or more Affiliates, on behalf of itself
or any other person or entity, recruit or otherwise solicit or induce any
person who is an employee of, or otherwise engaged by, Buyer, the Companies
or Company Subsidiaries or any successor to Buyer, the Companies or Company
Subsidiaries to terminate his or her employment or other relationship with
Buyer, the Companies or Company Subsidiaries; or (ii) during the period
ending on the third anniversary of the Worldwide Closing Date, Sellers
shall not, directly or indirectly, through one or more Affiliates on behalf
of itself or any other Person, offer employment to or employ a person who
is at that time an employee (other than secretarial or clerical employees)
of Buyer, or any Company or Company Subsidiary or who was such an employee
within one year of the time of such offer or employment Sellers shall not
at any time, directly or indirectly, through one or more Affiliates, use or
purport to authorize any person to use any name, xxxx, logo, trade dress or
other identifying words or images which are the same as or similar to any
of those used in the Compass Businesses, whether or not such use would be
in a business in which Seller is prohibited from engaging pursuant to this
Section 13.2.
(d) If, at the time of enforcement of this Section 13.2, a
court shall hold that the duration, scope or area restrictions stated
herein are unreasonable under the circumstances then existing, the maximum
duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area. Sellers acknowledge and
agree that Buyer would be damaged irreparably if any of the provisions of
this Section 13.2 are not performed in accordance with their specific terms
or otherwise are breached. Accordingly, notwithstanding anything to the
contrary contained herein, Sellers agree that Buyer shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Section 13.2 and to enforce specifically the terms and provisions of this
Section 13.2 in any action instituted in any court having jurisdiction over
the parties and the matter, in addition to any other remedy to which it may
be entitled, at law or in equity.
Section 13.3 ARBITRATION. (a) Except as otherwise provided in
this Agreement and except for any action to specifically enforce the terms
and provisions of this Agreement or the Strategic Alliance Agreement, from
and after the Worldwide Closing Date with respect to the obligations of the
parties in connection with the purchase and sale of the Worldwide Shares
and from and after the Australia Closing Date with respect to the
obligations of the parties in connection with the purchase and sale of the
Compass Australia Shares, all controversies, actions, lawsuits or other
claims (each a "Claim") arising among the parties, including without
limitation claims arising out of or relating to this Agreement, the subject
matter hereof, and the arbitrability of any Claim, will be settled
exclusively by arbitration as provided herein. The arbitration and all
preliminary proceedings related thereto will be conducted in accordance
with such rules as may be agreed upon by the parties, or failing such
agreement on such rules, in accordance with the Rules for Commercial
Arbitration of the American Arbitration Association ("AAA"), as amended
from time to time and as modified by this Agreement. The dispute will be
presented to an arbitration panel sitting in New York, New York.
(b) Sellers and Buyer will each select an arbitrator, and a
third arbitrator will be selected jointly by the arbitrators selected by
Sellers and Buyer within 15 days after demand for arbitration is made by a
party. If the arbitrators selected by Sellers and Buyer are unable to
agree on a third arbitrator within that period, then either Sellers or
Buyer may request that the AAA select the third arbitrator. The
arbitrators will possess substantive legal experience in the principal
issues in dispute and will be independent of Sellers and Buyer.
(c) Any discovery permitted will be limited to information
directly relevant to the controversy or Claim in arbitration. In the event
of discovery disputes, the arbitrators are directed to issue such orders as
are appropriate to limit discovery in accordance with the foregoing and as
are reasonable in light of the issues in dispute, the amount in controversy
and other relevant considerations. To the extent the parties are unable to
agree on the scope of discovery, the arbitrators will require the party
seeking discovery on an issue to present the legal and factual basis for
the Claim and will permit the party opposing discovery to respond. The
arbitrators will permit discovery on an issue only if the arbitrators
conclude that there is a reasonable and good-faith basis in Law and in fact
for bringing such allegations and that the discovery appears likely to
present substantive evidence regarding that Claim. The arbitrators may
permit limited discovery to permit investigation of some of the Claims or
to determine whether a Claim has sufficient basis in law or in fact to
warrant further discovery but will issue appropriate orders to restrict the
scope of such discovery. The federal or state rules of procedure and
evidence will not apply to the arbitration proceedings, including without
limitation the rules of discovery. The arbitrators will consider claims of
privilege, work product and other restrictions on discovery as appear to be
warranted.
(d) The arbitrators will award the prevailing party, to the
extent it prevails on its Claims, its reasonable attorneys' and experts'
fees and disbursements incurred in resolving the dispute (including those
of in-house counsel and experts) and any other expense directly related to
the dispute.
(e) Except as may otherwise be agreed in writing by the
parties or as ordered by the arbitrators upon substantial justification
shown, the hearing for the dispute will be held within 60 days of
submission of the dispute to arbitration. The arbitrators will render
their final award within 30 days following conclusion of the hearing and
any required post-hearing briefing or other proceedings ordered by the
arbitrators. The arbitrators will state the factual and legal basis for
the award. The decision of the arbitrators will be final and binding,
except as provided in the Federal Arbitration Act, 9 U.S.C. Section 1, et
seq., and except for errors of law based on the findings of fact. Final
judgment may be entered upon such an award in any court of competent
jurisdiction, but entry of such judgment will not be required to make such
award effective.
Notwithstanding the foregoing, any controversies, Claims or
other disputes arising (i) pursuant to Sections 13.1, 13.2, 5.11 and 6.8
shall come before the appropriate court of competent jurisdiction, and (ii)
with respect to Taxes shall be governed by the procedures set forth in
Section 9.10. Controversies, claims and disputes described in the previous
sentence shall not be governed by this Section 13.3.
Section 13.4 FURTHER EFFORTS. (a) Each of the parties to this
Agreement shall: (i) promptly make any filings required by them or any of
their Affiliates, and thereafter make any other submissions required under
all applicable Laws with respect to the transactions contemplated hereby,
the Strategic Alliance Agreement and by the Ancillary Agreements; and (ii)
use all reasonable efforts to promptly take, or cause to be taken, all
other actions and do, or cause to be done, all other things necessary,
proper or appropriate to consummate and make effective the transactions
contemplated by this Agreement, the Strategic Alliance Agreement and the
Ancillary Agreements. In addition, in the event of any action, suit,
proceeding or investigation relating hereto or to the transactions
contemplated by this Agreement, the Strategic Alliance Agreement or by the
Ancillary Agreements, the parties to this Agreement agree to cooperate and
use all reasonable efforts to vigorously defend against and respond
thereto.
(b) Without limiting the generality of the foregoing, each of
the parties to this Agreement shall make as promptly as practicable all
filings necessary with the FIRB or under the HSR Act or FATA in order to
obtain the required regulatory clearance in connection with the
transactions contemplated hereby and by the Ancillary Agreements. Subject
to the limitations contained in the last sentence of this Section 13.4(b),
each of the parties to this Agreement shall use all reasonable efforts to
resolve such objections, if any, that any Authorities with jurisdiction may
assert with respect to the transactions contemplated hereby and by the
Strategic Alliance Agreement and the Ancillary Agreements. Each of the
parties to this Agreement agrees that Buyer shall have the primary
responsibility for dealing with such Authorities and for resolving any such
objections; PROVIDED, that Buyer and Sellers shall consult with each other
before submitting any application or other written communication to any
such Authority. Notwithstanding the foregoing or any other provisions
contained in this Agreement, the Strategic Alliance Agreement or any
Ancillary Agreement to the contrary, neither Buyer nor any of its
Affiliates shall be under any obligation of any kind to enter into any
negotiations or to otherwise agree with any Authority, including but not
limited to any Authority with jurisdiction over the enforcement of the HSR
Act or FATA, or any other party to sell or otherwise dispose of, hold
separate (through the establishment of a trust or otherwise) particular
assets or categories of assets or businesses of the Compass Businesses,
Buyer or Buyer's Affiliates.
Section 13.5 EXPENSES.
(a) Each Seller and Buyer shall pay its own legal, accounting
and other miscellaneous expenses incident to this Agreement ("Transaction
Expenses"). The Companies and Company Subsidiaries shall not pay nor have
any liability for any Transaction Expenses relating to this transaction.
(b) Buyer shall pay the filing fee required under the HSR
Act; PROVIDED that Lend Lease shall reimburse Buyer for 50% of the amount
of such filing fee and; PROVIDED, FURTHER that such reimbursement will be
paid at the Worldwide Closing in US Dollars by wire transfer of immediately
available funds to an account designated by Buyer.
(c) At the Worldwide Closing, (i) Lend Lease shall pay US$
400,000 to Buyer by wire transfer of immediately available funds to an
account designated by Buyer, as partial reimbursement of certain expenses.
Five Business Days following a demand by Buyer, Lend Lease shall reimburse
Buyer, in US Dollars by wire transfer of immediately available funds to an
account designated by Buyer, for the full amount of the Stock Transfer Tax
paid by Buyer.
Section 13.6 PRESS RELEASES AND ANNOUNCEMENTS. After the date
of this Agreement and through and including the Australia Closing, no party
to this Agreement shall directly or indirectly make or cause to be made any
public announcement or disclosure, or issue any notice with respect to this
Agreement or the transactions contemplated by this Agreement without the
prior consent of the other parties to this Agreement; PROVIDED, that any
party to this Agreement may make any public announcement or disclosure
which is with the advice of counsel, required by Law or regulations or
applicable stock exchange requirements.
Section 13.7 ENTIRE AGREEMENT. This Agreement and the Schedules
and other writings referred to herein or delivered pursuant hereto which
form a part hereof, the Strategic Alliance Agreement, the Ancillary
Agreements and any other agreement executed contemporaneously herewith by
the parties hereto contain the entire understanding of the parties with
respect to its subject matter.
Section 13.8 AMENDMENT, EXTENSION AND WAIVER. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to its subject matter. At any time prior to the Australia Closing
Date, Buyer and Sellers may (a) amend this Agreement, (b) extend the time
for the performance of any of the obligations or other acts of the parties
hereto, (c) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (d) waive
compliance with any of the agreements or conditions contained herein. This
Agreement may not be amended except by an instrument in writing signed on
behalf of all of such parties. Any agreement on the part of a party hereto
to any extension or waiver under this Section 13.8 shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
Section 13.9 HEADINGS. The Article and Section headings
contained herein are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
Section 13.10 NOTICES. All notices, requests, demands and other
communications made under or by reason of the provisions of this Agreement
shall be in writing and shall be given by hand-delivery, certified or
registered mail, return receipt requested, telex, telecopier (with a copy
also sent by hand delivery or air courier, which shall not alter the time
at which the telecopier notice is deemed received), or air courier to the
parties at the addresses set forth below. Such notices shall be deemed
given: at the time personally delivered, if delivered by hand with receipt
acknowledged; at the time received if sent certified or registered mail;
when answered back, if telexed; upon transmission thereof by the sender and
issuance by the transmitting machine of a confirmation slip that the number
of pages constituting the notice have been transmitted without error, if
telecopied, and the first business day after timely delivery to the
courier, if sent by air courier.
If to any Seller:
Lend Lease Corporation Limited
Level 00
Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxxxxx XXX, Xxxxxxxxx 2000
Attention: Company Secretary
Telephone: 00-0-0000-0000
Fax: 00-0-0000-0000
With a copy (which shall not constitute notice) given in the
manner prescribed above, to:
Lend Lease Real Estate Investments, Inc.
Monarch Tower
8th Floor
Atlanta, Georgia, USA
Attention: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
and to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Buyer:
LaSalle Partners Incorporated
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy (which shall not constitute notice) given in the
manner prescribed above, to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
and to:
Xxxxx & Associates
000 Xxxx Xxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
Section 13.11 NEGOTIATIONS WITH THIRD PARTIES. From the date of
this Agreement until the earlier of the consummation of the transactions
contemplated by this Agreement or the termination of this Agreement in
accordance with Section 11.1 hereof, no Seller or Company will, and will
cause each of their respective officers, directors and advisors not to,
directly or indirectly (i) explore, initiate, encourage or approve any
inquiries, discussions, proposals or negotiations with third parties or
continue any discussions, negotiations, proposals or agreements relating to
any merger, sale or other disposition of all or any part of the Compass
Businesses to any party other than Buyer, (ii) explore, initiate, encourage
or approve any form of recapitalization transaction (each of the
transactions referred to in clauses (i) and (ii) above, a "Sale
Transaction") or (iii) cooperate with, or provide any assistance or any
information to, any Person other than Buyer in connection with any such
inquiry, discussion, proposal, negotiation or Sale Transaction; PROVIDED,
that any Seller or Company may respond to inquiries with respect to a Sale
Transaction for the sole purpose of informing the inquiring Person that no
discussions of any kind may occur while this Section 13.12 is in effect;
PROVIDED, HOWEVER, that nothing in this Section 13.11 shall restrict Lend
Lease from any such inquires directed solely at a Sale Transaction of Lend
Lease. Each Seller and Company acknowledges and agrees that each Company
is unique and not available on the open market and that Buyer shall have,
in addition to all other legal remedies available to it, the right to
enforce the terms of this Agreement by a decree of specific performance.
Section 13.12 ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors, legal representatives and assigns, but this Agreement may not
be assigned by any party without the written consent of the other parties,
provided, that Buyer may assign all or any portion of its respective rights
hereunder, though not its obligations, without the prior written consent of
any Seller or Company to an Affiliate of Buyer or to any bank or financial
institution providing financing to Buyer.
Section 13.13 APPLICABLE LAW. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of
New York, without giving effect to the conflict of laws provisions thereof.
Section 13.14 JURISDICTION. Each of the parties hereto hereby
expressly and irrevocably submits to the non-exclusive personal
jurisdiction of the United States District Court for the Northern District
of Illinois, and to the jurisdiction of any other competent court of the
State of Illinois located in the County of Xxxx (collectively, the
"Illinois 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. If the aforementioned courts do not have
subject matter jurisdiction, then the proceeding shall be brought in any
other state or federal court located in the State of Illinois, preserving,
however, all rights of removal to such federal court under 28 U.S.C. Sec-
tion 1441. Each 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 of the parties hereto agrees that each of the other
parties shall have the right to bring any action or proceeding for enforce-
ment of a judgment entered by the Illinois Courts in any other court or
jurisdiction.
Section 13.15 SERVICE OF PROCESS. Each party irrevocably
consents to the service of process outside the territorial jurisdiction of
the courts referred to in Section 13.14 hereof 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 13.10 hereof. 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 13.16 CONSENT OF THIRD PARTIES. Anything to the contrary
in this Agreement notwithstanding, to the extent that the sale, conveyance,
transfer or assignment of any agreement, lease, governmental approval,
permit, Contract or other document or instrument or any claim, right or
benefit arising thereunder or resulting therefrom requires the consent of a
third party, this Agreement shall not constitute an agreement to effect
such sale, conveyance, transfer or assignment if such action would
constitute a breach or violation thereof or adversely affect Buyer's rights
thereunder. To the extent that any such consent is not obtained prior to
the Worldwide Closing Date or the Australia Closing Date, as applicable,
(i) Sellers shall use their respective commercially reasonable efforts to
(A) obtain any such consent after the Worldwide Closing Date or the
Australia Closing Date, as applicable, until such time as the consent has
been obtained, (B) provide or cause to be provided to Buyer the benefits of
any such agreement, lease, contract or other document or instrument for
which consent or waiver has not been obtained, (C) cooperate in any
arrangement, reasonable and lawful as to Sellers and Buyer designed to
provide such benefits to Buyer, (D) enforce for the account of Buyer any
rights of Sellers arising from such agreement, lease, contract or other
document or instrument for which consent has not been obtained against the
other party, including, without limitation, the right to elect to terminate
in accordance with the terms thereof on Buyer, and (E) Sellers shall pay,
defend, indemnify and hold Buyer harmless from any Loss suffered by Buyer
as a result of any failure of Sellers to obtain such consent whether before
or after the Worldwide Closing Date or the Australia Closing Date, as
applicable, and (ii) Buyer shall use all reasonable efforts to perform the
obligations of Sellers arising under such agreement, lease, contract or
other document or instrument for which consent has not been obtained, to
the extent that by reason of the transactions consummated pursuant to this
Agreement, Buyer has control over the resources necessary to perform such
obligations.
Section 13.17 WORDS IN SINGULAR AND PLURAL FORM. Words used in
the singular form in this Agreement shall be deemed to import the plural,
and vice versa, as the sense may require.
Section 13.18 WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO
THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON
LAW AND STATUTORY CLAIMS. THE PARTIES ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY
HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT
EACH PARTY WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE
DEALINGS. EACH PARTY FURTHER WARRANTS AND REPRESENTS IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTION CONTEMPLATED
HEREBY. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
Section 13.19 COUNTERPARTS. This Agreement may be executed
simultaneously in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
ARTICLE XIV
CERTAIN DEFINITIONS
"Accounts Receivable" means all notes and accounts receivable
held by the Companies or Company Subsidiaries or the Australian Business,
including, without limitation, all trade notes and trade accounts
receivable and all deposits and prepaid rents, license fees and other
expenses of the Companies or Company Subsidiaries or the Australian
Business.
"Affiliate or Affiliates " means, with respect to any person,
any direct or indirect subsidiary of such person, and any other person that
directly, or through one or more intermediaries, controls or is controlled
by or is under common control with such first person, and, if such a
person, is an individual, any member of the immediate family (including
parents, spouses and children) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any person who is controlled by any such member or
trust. As used in this definition, "control" (including, with correlative
meanings, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).
"Ancillary Agreements" means the 1998 Compass M&L Foreign
Intangible Sale Agreement, the 1998 ERE Retail Foreign Intangible Sale
Agreement, the Transition Services Agreement and the Australian Transfer
Agreement.
"Associate" has the meaning defined in the Rules and
regulations of the Securities and Exchange Commission under the Securities
Act of 1933, as amended.
"Business Day" means any day (other than a Saturday or Sunday)
on which banks are permitted to be open and transact business in The City
of New York.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consent" shall mean any consent, approval, authorization,
waiver, permit, grant, franchise, concession, Contract, license, exemption
or order of, registration, certificate, declaration or filing with, or
report or notice to, any Person, including but not limited to any
Authority.
"Consolidated Return" means any consolidated federal Income Tax
Return filed by any affiliated group of corporations, within the meaning of
Section 1504(a) of the Code, of which any Company and its Subsidiaries were
or are members.
"Continuing Affiliate" means any Affiliate of Sellers other
than the Company, the Company Subsidiaries and the Australian Business.
"Contract" or "Contracts" means any agreement or understanding,
whether written or oral, including, without limitation, any agreement to
manage the operation and/or leasing of commercial or retail property,
mortgage, indenture, note, guarantee, lease, license, franchise purchase
agreement or sale agreement.
"Default Rate" means five percent (5%) above the Interest Rate.
"EBITDA" means earnings before interest expense, taxes,
depreciation and amortization, where earnings includes deductions for
direct or indirect (corporate) expenses, as reasonably allocated consistent
with Buyer's current practice.
"Fiscal Year" means the twelve-month period beginning on the
Worldwide Closing Date, or, with respect to the second, third and fourth
years following the Worldwide Closing Date, the twelve-month period
beginning on the anniversary of the Worldwide Closing Date.
"GAAP" means generally accepted accounting principles, as in
effect in the United States or Australia, as appropriate.
"Income Tax" or "Income Taxes" means any federal, state, local
or foreign income, franchise or similar Tax.
"Intangible Property Rights" means the intangible assets,
rights and claims of every kind and nature, including associated goodwill
and documentation relating to such intangibles, including without
limitation the following:
(i) "Patent Rights" All United States, state,
international and foreign patents, patent applications and related patent
rights, including all reissues, divisionals, continuations and
continuations in part, and extensions, and rights of priority under
international conventions and rights to xxx for past infringement thereof;
(ii) "Trademarks" All common law and registered
trademarks, service marks, logos, trade dress and trade names Internet
Domain names and related rights and all applications for registration of
the foregoing;
(iii)"Computer Programs" All computer software
programs, including all source and object code, including any and all data
and collections of data, whether machine readable or otherwise, all
descriptions, flow-charts and other work product used to design, plan,
organize and develop any of the foregoing;
(iv) "Copyrights" All United States and foreign
registered and unregistered copyrights, applications for copyright
registration, and all rights of ownership and authorship and documents and
other copyrightable works including copyrights in Computer Programs and
business Information and semi-conductor chip product "mask works" (as
defined under 17 USCA 905, et. seq.);
(v) "Personal Rights" All rights of publicity and
privacy including, without limitation, the right to use the names,
likenesses, signatures, voices and biographies of real persons;
(vi) "Technology" All technical information and
know-how, confidential and non-confidential, including, without limitation,
all information and know-how related to increasing efficiency and
profitability, computer software, software licenses, patterns, plans,
designs, research data, trade secrets and other proprietary know-how,
formulae, sales, service or other processes, operating manuals, drawings,
technology, data, records, procedures, analytical methods, toxicity and
general health and safety information, environmental compliance and
regulatory information, research and development records and reports and
other documents relating to the foregoing, and all licenses, approvals,
authorizations or other rights to use intangible property rights of others;
"Interest Rate" means the prime or base rate of interest
reported from time to time by The Chase Manhattan Bank (or if The Chase
Manhattan Bank shall cease to publish a prime or base rate, then the prime
or base rate of interest as shall be announced by such national bank with
its headquarters in New York, New York as shall be mutually agreed upon by
Buyer and Lend Lease.
"IRS" means the Internal Revenue Service.
"Knowledge" means with respect to any Seller, Company or
Company Subsidiary, knowledge of those persons listed under such Seller,
Company or Company Subsidiary in Section 14(a) of the Company Disclosure
Schedule, and shall be limited to the actual knowledge of such persons
without any obligation on the part of any such person to perform any due
diligence or inquiry
"Lend Lease Controlled Property" means any property for which
Lend Lease or its Affiliates directly controls the appointment, selection
or determination of the provider of property management, leasing, facility
management or Project Management services for such property or is obligated
to make a recommendation for such provider on behalf of a client or client
accounts.
"Liabilities" shall mean any and all debts, losses, expenses,
liabilities, damages, fines, costs, royalties, proceedings, deficiencies or
obligations of any nature (whether known or unknown, asserted or
unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, due or to become due, and whether or not resulting from
third-party claims) and any out-of-pocket costs and expenses (including
reasonable attorneys, accountants or other fees) including any liability
for Taxes.
"Liens" means all mortgages, pledges, security interests,
liens, charges, options, conditional sales Contracts, claims, restrictions,
covenants, easements, rights of way, title defects or other encumbrances or
restrictions of any nature whatsoever.
"Material Adverse Effect" shall mean an (i) individual or
cumulative material adverse change in, or effect on, the business,
customers, prospects, operations, properties, working capital, condition
(financial or otherwise), assets, properties or Liabilities of the
Companies, the Company Subsidiaries and the Australian Business, taken as a
whole, or (ii) an individual or cumulative adverse change that is
reasonably expected to be materially adverse to the business, customers,
prospects, operations, properties, working capital, condition (financial or
otherwise), assets, properties or Liabilities of the Companies, the Company
Subsidiaries and the Australian Business, taken as a whole, or (iii) would
prevent any Seller or Company from consummating the transactions
contemplated by this Agreement.
"Permitted Liens" means (i) liens shown on the Companies
Balance Sheet or Australian Balance Sheet as securing specified liabilities
(with respect to which no default exists), (ii) liens for current taxes not
yet due and (iii) minor imperfections of title and encumbrances, if any,
which are not substantial in amount, do not detract from the value of the
property subject thereto or impair the operations of any Company or Company
Subsidiary or the Australian Business and have arisen only in the ordinary
and usual course of business consistent with past practice.
"Person" means any corporation, individual, joint stock
company, joint venture, partnership, unincorporated association,
governmental regulatory entity, country, state or political subdivision
thereof, trust or other entity.
"Project Management" means the interior buildout of tenant
space and other interior capital improvement projects, including but not
limited to, lobby renovation or mechanical retrofits.
"Related to the Australian Business" or "Related to the Compass
Businesses" means, as applicable, relating to, owned, used in or held for
use in connection with or otherwise necessary to the Australian Business or
the Compass Businesses, as the case may be, as conducted immediately prior
to the Worldwide Closing or the Australia Closing, as applicable.
"Retail Development Services" means land acquisition, zoning,
site planning, construction management, anchor tenant leasing or similar
services as conducted by the Compass Businesses immediately prior to the
Worldwide Closing Date.
"Subsidiary" or "Subsidiaries"of any Person means any other
Person, the voting securities, other voting ownership or voting partnership
interests of which are sufficient to elect at least a majority of its board
of directors or other governing body (or, if there are not such voting
interests, 50% or more of the equity interest of which) at the time of such
determination, are owned by such Person or another Subsidiary of such
Person.
"Tax" or "Taxes" means taxes of any kind, levies or other like
assessments, customs duties, imposts, charges or fees, including, without
limitation, income, gross receipts, ad valorem, value added, excise, real
or personal property, asset, sales, use, license, payroll, transaction,
capital, net worth and franchise taxes, stamp duty, withholding,
employment, social security, workers compensation, utility, severance,
production, unemployment compensation, occupation, premium, windfall
profits, transfer and gains taxes or other governmental taxes imposed or
payable to the United States or Australia, or any state, county, local or
foreign government or subdivision or agency thereof, and in each instance
such term shall include any interest, penalties and additions to Tax
attributable to any such Tax.
"Tax Return" or "Tax Returns" means any return, report,
information return, schedule or other document (including any amendments
thereto and related or supporting information) filed or required to be
filed with respect to Taxes.
"Working Capital" means the sum of all cash and Accounts
Receivable of each Company and Company Subsidiary minus the sum of all
trade accounts payable of each Company and Company Subsidiary each as
determined in accordance with GAAP applied on a basis consistent with the
Financial Statements. Notwithstanding the foregoing, for purposes of
calculating Working Capital, (a) any (i) Accounts Receivable from third
parties that fail to satisfy the requirements set forth in clauses (i)
through (iv) of Section 3.14(b) and (ii) intercompany and intracompany
receivables, shall not be considered Accounts Receivable, (b) any amount of
the cash of the Companies or Company Subsidiaries which would be described
as "restricted cash" on a balance sheet prepared in accordance with GAAP
applied on a basis consistent with the Audited Financial Statements shall
be included in "cash" and the offsetting liability with respect to such
restricted cash balance shall be included in "trade accounts payable," (c)
the amount of all accrued and payable Liabilities for severance, change of
control payouts, salary, wages, annual leave, long service leave, sick
leave, back pay, bonuses, profits or any other type of employee
compensation or remuneration for any period prior to the Worldwide Closing
Date or Australia Closing Date, as applicable, other than any liabilities
of any Company or Company Subsidiary under any "stay pay," severance or
similar agreement (as set forth on Section 14(b) of the Company Disclosure
Schedule) shall be included in trade accounts payable, and (d) any
indebtedness of any Company, Company Subsidiary or the Australian Business,
other than intercompany indebtedness which is settled pursuant to Section
2.3 hereof, shall be included in "trade accounts payable."
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by the duly authorized officer
of each Seller and each Company and Buyer as of the day and year first
above written.
LASALLE PARTNERS INCORPORATED
By:
Title:
LPI (AUSTRALIA) HOLDINGS PTY LIMITED
By:
Name:
Title:
LEND LEASE CORPORATION LIMITED
By:
Name:
Title:
LEND LEASE PROPERTY MANAGEMENT (AUSTRALIA)
PTY LIMITED
By:
Name:
Title:
LEND LEASE EUROPE LTD.
By:
Name:
Title:
LEND LEASE INTERNATIONAL PTY LIMITED
By:
Name:
Title:
LEND LEASE (US) SERVICES, INC.
By:
Name:
Title:
LEND LEASE REAL ESTATE INVESTMENTS, INC.
By:
Name:
Title:
COMPASS MANAGEMENT AND
LEASING (UK), LTD.
By:
Name:
Title:
COMPASS CAYMAN
By:
Name:
Title:
COMPASS MANAGEMENT & LEASING (AUSTRALIA) PTY
LIMITED
By:
Name:
Title:
COMPASS MANAGEMENT & LEASING, INC.
By:
Name:
Title:
ERE/YARMOUTH RETAIL, INC.
By:
Name:
Title:
THE YARMOUTH GROUP PROPERTY MANAGEMENT, INC.
By:
Name:
Title:
