Exhibit 10.08
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DEL-LPL LIMITED PARTNERSHIP
AND DEL-LPAML LIMITED PARTNERSHIP,
LASALLE PARTNERS LIMITED PARTNERSHIP
AND LA SALLE PARTNERS MANAGEMENT LIMITED PARTNERSHIP,
THE XXXXXXXXX COMPANY AND
THE XXXXXXXXX COMPANY OF CALIFORNIA, INC.
XXXXXXXXX HOLDING LLC,
and
THE STOCKHOLDERS OF THE XXXXXXXXX COMPANY
AND XXXXXXXXX COMPANY OF CALIFORNIA, INC.
________________________________________
CONTRIBUTION AND EXCHANGE AGREEMENT
________________________________________
Dated as of April 22, 1997
CONTRIBUTION AND EXCHANGE AGREEMENT
Table of Contents
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1. DEFINITIONS........................................................... 3
2. THE TRANSACTION....................................................... 9
2.1 Contribution and Exchange....................................... 9
2.2 Closing......................................................... 10
2.3 Closing Deliveries.............................................. 10
3. REPRESENTATIONS AND WARRANTIES OF THE DEL
PARTNERSHIPS AND THE LA SALLE PARTNERSHIPS............................ 14
3.1 Organization and Standing....................................... 14
3.2 Capitalization.................................................. 17
3.3 Financial Statements............................................ 18
3.4 No Undisclosed Liabilities...................................... 19
3.5 Absence of Certain Changes, Events or
Conditions...................................................... 20
3.6 Litigation, Etc................................................. 20
3.7 Trademarks, Etc................................................. 21
3.8 Compliance...................................................... 22
3.9 Labor Matters................................................... 23
3.10 No Conflict With Other Documents................................ 23
3.11 Authority....................................................... 24
3.12 Contracts....................................................... 25
3.13 Clients......................................................... 27
3.14 Tax Matters..................................................... 28
3.15 Title to Properties; Absence of Liens and
Encumbrances, Etc............................................... 30
3.16 Pension and Employee Benefit Plans.............................. 32
3.17 Insurance....................................................... 38
3.18 No Pending Transactions......................................... 39
3.19 Disclosure...................................................... 39
3.20 Transactions with Affiliates.................................... 39
3.21 Environmental Matters........................................... 40
3.22 Investment Intent............................................... 46
4. REPRESENTATIONS AND WARRANTIES OF THE XXXXXXXXX
COMPANIES AND G-LLC................................................... 47
4.1 Organization and Standing; Subsidiaries......................... 47
4.2 Capitalization of the Xxxxxxxxx Companies....................... 49
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4.3 Financial Statements............................................. 51
4.4 No Undisclosed Liabilities....................................... 52
4.5 Absence of Certain Changes, Events or
Conditions....................................................... 52
4.6 Fixed Assets; Real Estate........................................ 53
4.7 Litigation, Etc.................................................. 53
4.8 Trademarks, Etc.................................................. 54
4.9 Compliance....................................................... 55
4.10 Labor Matters.................................................... 55
4.11 No Conflict With Other Documents................................. 56
4.12 Authority........................................................ 57
4.13 G-LLC Authorization.............................................. 57
4.14 Contracts........................................................ 58
4.15 Clients.......................................................... 59
4.16 Tax Matters...................................................... 60
4.17 Title to Properties; Absence of Liens and
Encumbrances, Etc................................................ 64
4.18 Pension and Employee Benefit Plans............................... 65
4.19 Insurance........................................................ 73
4.20 Environmental Matters............................................ 74
4.21 No Pending Transactions.......................................... 77
4.22 Disclosure....................................................... 78
4.23 Transactions with Affiliates..................................... 78
4.24 Investment Intent................................................ 79
4.25 Consent to Other Matters......................................... 80
5. PRECLOSING COVENANTS OF THE DEL PARTNERSHIPS AND
LA SALLE PARTNERSHIPS.................................................. 80
5.1 Conduct of Business.............................................. 80
5.2 Amendment of La Salle Partnership Agreements..................... 82
5.3 Information...................................................... 82
5.4 Consents......................................................... 83
5.5 Employee Matters................................................. 83
6. PRECLOSING COVENANTS OF THE XXXXXXXXX COMPANIES
AND THE STOCKHOLDERS................................................... 83
6.1 Conduct of Business.............................................. 84
6.2 Information...................................................... 86
6.3 Consents......................................................... 87
6.4 Corporate Transactions........................................... 87
6.5 Employee Matters................................................. 88
6.6 Restructuring.................................................... 89
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7. CONDITIONS TO THE LA SALLE PARTNERSHIPS'
OBLIGATIONS............................................................ 93
7.1 Representations, Warranties and Covenants........................ 94
7.2 Binding Court Order.............................................. 94
8. CONDITIONS TO THE XXXXXXXXX COMPANIES', G-LLC'S
AND THE STOCKHOLDERS' OBLIGATIONS...................................... 95
8.1 Representations, Warranties and Covenants........................ 95
8.2 No Binding Court Order........................................... 96
9. POST-CLOSING COVENANTS................................................. 96
9.1 Tax Matters...................................................... 96
9.2 Interest in Xxxxxx............................................... 98
9.3 Management Committee; Board of Directors......................... 99
10. INDEMNIFICATION........................................................ 100
10.1 Indemnification by the DEL Partnership
and La Salle Partnerships........................................ 100
10.2 Indemnification by the Stockholders.............................. 101
10.3 Limitations on Indemnification................................... 102
10.4 Notice and Defense............................................... 103
10.5 Insurance........................................................ 105
11. PUBLIC ANNOUNCEMENTS................................................... 106
12. SURVIVAL; NO RIGHT OF CONTRIBUTION POST CLOSING........................ 106
13. BROKERS AND ADVISORS................................................... 107
14. EXPENSES; DAMAGES...................................................... 108
15. NOTICES................................................................ 109
16. REPRESENTATIVE......................................................... 111
17. CONSENT TO JURISDICTION AND SERVICE.................................... 113
18. TERMINATION............................................................ 114
19. ENTIRE AGREEMENT....................................................... 114
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20. GENERAL................................................................ 115
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EXHIBITS
Exhibit A -- Exchange of Capital Stock for Units
Exhibit B -- Amendment to Agreement of Limited Partnership of LPML
Exhibit C -- Amendment to Agreement of Limited Partnership of LPL
Exhibit D -- Closing Balance Sheet
Exhibit E -- Liquidity Agreement
Exhibit F -- Xxxxxxxxx Management and LaSalle Management
Exhibit G -- Stockholders' Holdings of the Xxxxxxxxx
Companies' Capital Stock
Exhibit H -- Xxxxxxx Xxxxxxxxx Employment Agreement
Exhibit I -- Registration Rights Agreement
Exhibit J -- License Agreement
Exhibit K -- Consent of The Xxxxxxxxx Companies
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CONTRIBUTION AND EXCHANGE AGREEMENT
CONTRIBUTION AND EXCHANGE AGREEMENT (this "Agreement") dated as of April
22, 1997, by and among DEL-LPL Limited Partnership, a Delaware limited
partnership ("DEL-LPL"), and DEL-LPAML Limited Partnership, a Delaware limited
partnership ("DEL-LPAML" and together with DEL-LPL, the "DEL Partnerships"), La
Salle Partners Limited Partnership, a Delaware limited partnership ("LPL"), La
Salle Partners Management Limited Partnership, a Delaware limited partnership
("LPML" and together with LPL, the "La Salle Partnerships"). The Xxxxxxxxx
Company, an Ohio corporation ("Xxxxxxxxx Ohio"), and The Xxxxxxxxx Company of
California, Inc., a California corporation ("Xxxxxxxxx California" and together
with Xxxxxxxxx Ohio, the "Xxxxxxxxx Companies"), Xxxxxxxxx Holdings, LLC, a
Delaware limited liability company ("G-LLC"), and Xxxxxxx Xxxxxxxxx ("LG") and
the other stockholders of the Xxxxxxxxx Companies (the "Stockholders").
Introduction
The Stockholders are contributing to G-LLC all of the outstanding Xxxxxxxxx
Capital Stock (as defined below). At the Closing (as defined below) G-LLC will
contribute the Xxxxxxxxx Capital Stock to LPL and LPML, respectively, in
exchange for Units in LPL and LPML in the amounts set forth on Exhibit A (the
"Exchange").
In connection with and as a condition to the contribution and exchange, (a)
G-LLC is entering into the LPL and LPML Partnerships by execution of the Fourth
Amendments to the Amended and Restated Agreements of Limited Partnerships of
each of LPL and LPML in the forms of Exhibits B and C, (b) G-LLC and the DEL
Partnerships are entering into a Put Agreement in the form of Exhibit D pursuant
to which G-LLC has certain rights to put its Units to the DEL Partnerships, (c)
the La Salle Partnerships and LG are entering into an Employment Agreement in
the form of Exhibit G, (d) The DEL Partnerships, LP-Inc. (as defined below), the
La Salle Partnerships and G-LLC are entering into a Registration Rights
Agreement in the form of Exhibit H and (e) G-LLC and the La Salle Partnerships
are entering into a License Agreement permitting the use of the Xxxxxxxxx name
in the form of Exhibit I.
Immediately prior to the Closing, the Xxxxxxxxx Companies will grant to
certain employees the right to receive stock in the Xxxxxxxxx Companies, which
rights will be assumed by the La Salle Partnerships and will be satisfied by the
issuance of Units or stock of the successor corporation to the La Salle
Partnerships. In the event that Units
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are issued, the employees will contribute those units immediately upon receipt
to a new limited liability company to be formed by the Xxxxxxxxx Companies prior
to the Closing.
The DEL Partnerships, the La Salle Partnerships, the Xxxxxxxxx Companies,
G-LLC and the Stockholders wish to enter into this Agreement setting for the
terms and conditions of the foregoing transactions.
In consideration of the foregoing and of the covenants, agreements,
representations and warranties hereinafter contained, the DEL Partnerships, the
La Salle Partnerships, the Xxxxxxxxx Companies, G-LLC and the Stockholders
hereby agree as follows:
1. DEFINITIONS.
1.1 An "Affiliate" shall have the meaning given that term under the
rules and regulations promulgated pursuant to the Securities Act.
1.2 "Amendments to the La Salle Partnership Agreements" shall mean
the documents attached hereto as Exhibit B and C.
1.3 "CERCLA" shall have the meaning given to that term in Section
3.21(a)(iv).
1.4 "CERCLIS" shall have the meaning given to that term in Section
3.21(d).
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1.5 "Closing" shall have the meaning given to that term in Section
2.2.
1.6 "Closing Balance Sheet" shall mean the unaudited pro forma
balance sheet of the Xxxxxxxxx Companies as of the Closing, attached hereto as
Exhibit D.
1.7 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.8 "DEL-LPL" shall mean DEL-LPL Limited Partnership, a Delaware
limited partnership.
1.9 "DEL-LPMAL" shall mean DEL-LPAML Limited Partnership, a Delaware
limited partnership.
1.10 "DEL Partnerships" shall mean DEL-LPL and DEL-LPAML.
1.11 "DEL Partnership Agreements" shall mean the Third Amended and
Restated Agreements of Limited Partnership of DEL-LPL and DEL-LPAML as amended
by Amendment dated January 1, 1994, Second Amendment dated November 30, 1994,
and Third Amendment dated as of December 1, 1996.
1.12 "Environmental Laws" shall have the meaning given to that term
in Section 3.21(a)(iv).
1.13 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
1.14 "Exchange" shall have the meaning given to that term in Section
2.1.
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1.15 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.16 "Exchange Agreement" shall mean that certain agreement of even
date herewith by and among the DEL Partnerships and Xxxxxxxxx LPL Holdings LLC.
1.17 "Excluded Liabilities" shall have the meaning given that term in
Section 6.6(c).
1.18 "Excluded Property" shall have the meaning given that term in
Section 6.6(a).
1.19 "Expiration Date" shall have the meaning given that term in
Section 12.
1.20 "Xxxxxxxxx California" shall mean Xxxxxxxxx Company of California,
Inc., a California corporation.
1.21 "Xxxxxxxxx California Common Stock" shall have the meaning set
forth in Section 4.2.
1.22 "Xxxxxxxxx California Non-Voting Common Stock" shall have the
meaning set forth in Section 4.2.
1.23 "Xxxxxxxxx Capital Stock" shall have the meaning set forth in
Section 4.2.
1.24 "Xxxxxxxxx Companies" shall mean Xxxxxxxxx Ohio and Xxxxxxxxx
California.
1.25 "Xxxxxxxxx Companies' Documents" shall have the meaning given to
that term in Section 7.2(d).
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1.26 "Xxxxxxxxx Disclosure Schedule" shall have the meaning given to
that term in Section 4.1.
1.27 "Xxxxxxxxx Financial Statements" shall have the meaning given to
that term in Section 4.3.
1.28 "Xxxxxxxxx Management" shall mean the individuals listed on
Exhibit F.
1.29 "Xxxxxxxxx Material Adverse Effect" shall have the meaning give
to that term in Section 4.1.
1.30 "Xxxxxxxxx Ohio" shall mean The Xxxxxxxxx Company, an Ohio
corporation.
1.31 "Xxxxxxxxx Ohio Common Stock" shall have the meaning given to
that term in Section 4.2.
1.32 "Xxxxxxxxx Ohio Non-Voting Common Stock" shall have the meaning
given to that term in Section 4.2.
1.33 "Xxxxxxxxx Plans" shall have the meaning given to that term in
Section 4.18(a).
1.34 "Xxxxxxxxx Properties" shall have the meaning given to that
term in Section 4.20(a).
1.35 "Xxxxxxxxx Qualified Plans" shall have the meaning given to that
term in Section 4.18(b).
1.36 "Xxxxxxxxx Subsidiaries" shall have the meaning given to that
term in Section 4.1.
1.37 "La Salle Disclosure Schedule" shall have the meaning given to
that term in Section 3.1.
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1.38 "La Salle Documents" shall have the meaning given to that term
in Section 8.2(e).
1.39 "La Salle Financial Statements" shall have the meaning given to
that term in Section 3.3.
1.40 "La Salle Management" shall have those persons constituting the
La Salle Management Committee on the date of this Agreement. Such persons are
listed on Exhibit F hereto.
1.41 "La Salle Material Adverse Effect" shall have the meaning given
to that term in Section 3.1.
1.42 "La Salle Partnerships" shall mean LPL and LPML.
1.43 "La Salle Partnership Agreements" shall mean the Amended and
Restated Agreements of Limited Partnership of LPL and LPML, which, prior to
Closing, shall be amended by the Amendments thereto, attached hereto as
Exhibits B and C, respectively.
1.44 "La Salle Plans" shall have the meaning given that term in
Section 3.16(a).
1.45 "La Salle Properties" shall have the meaning given to that term
in Section 3.21(a)(i).
1.46 "La Salle Qualified Plans" shall have the meaning given to that
term in Section 3.16(b).
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1.47 "La Salle Subsidiaries" shall have the meaning given to that
term in Section 3.1.
1.48 "Liquidity Agreement" shall mean the agreement attached hereto
as Exhibit E.
1.49 "LP-Inc." shall mean La Salle Partners Incorporated, a Maryland
corporation.
1.50 "LPL" shall mean La Salle Partners Limited Partnership, a
Delaware limited partnership.
1.51 "LPML" shall mean La Salle Partners Management Limited
Partnership, a Delaware limited partnership.
1.52 "Materials of Environmental Concern" shall have the meaning
given to that term in Section 3.21(a)(iii).
1.53 "Release" shall have the meaning given to that term in Section
3.21(a)(ii).
1.54 "Representative" shall have the meaning given to that term in
Section 16.
1.55 "Restructuring" shall have the meaning given to that term in
Section 6.6.
1.56 "Securities Act" shall mean the Securities Act of 1933, as
amended.
1.57 "Transaction Documents" shall include this Agreement, the
Liquidity Agreement, the License Agreement, the Registration Rights Agreement,
the Exchange Agreement,
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the La Salle Partnership Agreements and the Employment Agreements between the La
Salle Partnerships and Xxxxxxx Xxxxxxxxx.
1.58 "Taxes" shall have the meaning given to that term in Section
3.14.
1.59 "Units" shall mean limited partnership units in LPL or LPML, as
that case may be, as more fully described in the La Salle Limited Partnership
Agreements.
2. THE TRANSACTION.
Subject to the terms and conditions of this Agreement, the DEL
Partnerships, the La Salle Partnerships, the Xxxxxxxxx Companies, G-LLC and the
Stockholders agree to effect the following transactions at the Closing:
2.1 Contribution and Exchange. Prior to the Closing, the Stockholders
will contribute to G-LLC all of the Xxxxxxxxx Capital Stock held by them. At the
Closing, the Stockholders will cause G-LLC to contribute all of the Xxxxxxxxx
Capital Stock owned by it to LPL and LPML in exchange for Units as set forth on
Exhibit A (the "Exchange"). In order to effect the Exchange, (i) G-LLC will
deliver to LPL and LPML, respectively, at the Closing certificates evidencing
the shares of Xxxxxxxxx Capital Stock owned by them, duly endorsed or
accompanied by duly
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executed stock powers, and (ii) G-LLC shall execute the La Salle Partnership
Agreements.
2.2 Closing.
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The closing (the "Closing") of the transactions contemplated by this
Agreement shall take place at the offices of the La Salle Partnerships at 000 X.
Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, beginning at 10:00 a.m. Chicago time, on
April 22, 1997, or at such other time and place as may be agreed upon by the La
Salle Partnerships and the Stockholders.
2.3 Closing Deliveries.
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(a) Documents to be Delivered by the Stockholders. At the
Closing, G-LLC and the Stockholders shall deliver to the La Salle Partnerships
the following documents:
(i) A certificate or certificates, dated the date of the
Closing, in such detail as the La Salle Partnerships may reasonably
request, signed by the Chief Financial Officer or the Chief Executive
Officer of the Xxxxxxxxx Companies certifying that the representations and
warranties of the Xxxxxxxxx Companies contained in Section 4 of this
Agreement are true and correct in all material respects at and
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as of the date of the Closing, that the Xxxxxxxxx Companies have performed
all obligations, and complied with all covenants in all material respects
required by this Agreement to be performed or complied with by them prior
to the Closing, and that the Closing Balance Sheet confirms performance of
the Xxxxxxxxx Companies' covenant to deliver at the Closing at least
$1,200,000, of stockholders' equity, cash of at least $750,000, and no
liability for borrowed money (subject to the adjustments footnoted on such
balance sheet).
(ii) Opinions, dated the date of the Closing, of Xxxxxx,
Xxxxx & Xxxxx, and Xxxxx & Xxxxxxxxx LLP, special counsel to the Xxxxxxxxx
Companies and the Stockholders, in form and substance reasonably
satisfactory to the La Salle Partnerships.
(iii) The Employment Agreement in the form of Exhibit H
duly executed by LG.
(iv) The License Agreement in the form of Exhibit J duly
executed by G-LLC.
(v) The certificates representing the Xxxxxxxxx Capital
Stock, duly endorsed for transfer.
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(vi) Evidence reasonably satisfactory to the La Salle
Partnerships of the transfer to the Xxxxxxxxx Companies of the partnership
interest in Xxxxxxxxx Middle-Atlantic Partnership owned by Tricor, Inc.,
free and clear of any liens and encumbrances.
(vii) Evidence reasonably satisfactory to the La Salle
Partnerships of the repayment or extinguishing of all outstanding debt of
the Xxxxxxxxx Companies.
(viii) The La Salle Partnership Agreements, joined in by
G-LLC.
(ix) The Exchange Agreement.
(b) Documents to be Delivered by the La Salle Partnerships. At
the Closing, the La Salle Partnerships shall deliver to the Representative the
following documents:
(i) A certificate or certificates, dated the date of the
Closing, in such detail as the Representative may reasonably request,
signed by the Chief Operating Officer or the Chief Financial Officer of the
La Salle Partnerships, certifying that the representations and warranties
of the La Salle Partnerships contained
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in Section 3 of this Agreement are true and correct in all material
respects at and as of the date of the Closing, and that the La Salle
Partnerships have performed all obligations, and complied with all
covenants, in all material respects required by this Agreement to be
performed or complied with by them prior to the Closing.
(ii) An opinion, dated the date of the Closing, of Piper &
Marbury L.L.P., special counsel to the La Salle Partnerships, in form and
substance reasonably satisfactory to the Representative.
(iii) The Amendments to the La Salle Partnership
Agreements in the forms of Exhibits B and C duly executed as required for
effectiveness.
(iv) The Employment Agreement in the form of Exhibit H
duly executed by the La Salle Partnerships.
(v) The License Agreement in the form of Exhibit J duly
executed by the La Salle Partnerships.
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(vi) The Registration Rights Agreement in the form of
Exhibit I duly executed by the DEL Partnerships, LP-Inc. and the La Salle
Partnerships.
3. REPRESENTATIONS AND WARRANTIES OF THE DEL PARTNERSHIPS AND THE
LA SALLE PARTNERSHIPS.
The DEL Partnerships and the La Salle Partnerships hereby jointly and
severally represent and warrant to the Xxxxxxxxx Companies and the Stockholders,
as follows:
3.1 Organization and Standing.
-------------------------
Each of the DEL Partnerships and the La Salle Partnerships is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware and has full partnership power to carry on its
business as it is now being conducted and to own or hold under lease the
properties and assets it now owns or holds under lease. LaSalle Partners
Incorporated ("LP-Inc.") is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Maryland and has full
corporate power to carry on its business as it is now being conducted and to own
or hold under lease the properties and assets it now owns or holds under lease.
Copies of the charter documents and by-laws of LP-Inc. have been delivered to
the Xxxxxxxxx companies,
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and such copies are complete, correct and in full force and effect. Copies of
the entire DEL Partnership Agreements and La Salle Partnership Agreements have
been delivered to the Xxxxxxxxx Companies, and such copies are complete and
correct and in full force and effect. The DEL Partnerships together own
directly or indirectly 1,246,081 Units of the outstanding partnership interests
of the La Salle Partnerships. The La Salle Partnerships have delivered to the
Stockholders a disclosure schedule (the "La Salle Disclosure Schedule") which
sets forth a true and complete listing of all of the subsidiaries of LPL and
LPML of which 50% or more of the partnership interests or capital stock is
directly or indirectly owned by any of the La Salle Partnerships and any other
corporation, partnership or business entity in which the La Salle Partnerships
directly or indirectly own an equity investment of greater than $100,000
(collectively, the "La Salle Subsidiaries") and each subsidiary of the DEL
Partnerships and indicates which La Salle Subsidiaries are wholly-owned. Except
as set forth on the La Salle Disclosure Schedule, such shares of capital stock
or partnership interests are validly issued, fully paid and non-assessable and
are owned by the La Salle Partnerships free and clear of any claims, liens,
charges or encumbrances. Except as set forth on the La Salle
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Disclosure Schedule, each of the La Salle Subsidiaries is wholly-owned by the La
Salle Partnerships and none of the La Salle Subsidiaries is a party to or bound
by any options, calls, contracts or commitments of any character relating to any
issued or unissued stock or any other equity issued or to be issued by it.
Copies of the charter, by-laws and other constitutive documents of the La Salle
Subsidiaries have been made available to the Xxxxxxxxx Companies, and to the
knowledge of La Salle Management, such copies are complete and correct and in
full force and effect. Each of the La Salle Subsidiaries is a corporation or
partnership duly organized, validly existing and in good standing under the laws
of the jurisdiction of its formation, and each has full corporate or partnership
power to carry on its business as it is now being conducted and to own or hold
under lease the properties and assets it now owns or holds under lease. Except
as set forth on the La Salle Disclosure Schedule, the DEL Partnerships do not
own any equity interest in any entity other than the La Salle Partnerships and
DEL/LaSalle Finance Company L.L.C., a Delaware limited liability company of
which the DEL Partnerships own 100% of the equity interest. Except as set forth
on the La Salle Disclosure Schedule, such interests are validly issued, fully
paid and non-
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assessable and are owned by the DEL Partnerships free and clear of any claims,
liens, charges or encumbrances. Each of the DEL Partnerships, the La Salle
Partnerships, the La Salle Subsidiaries and LP-Inc. are duly qualified to do
business and are in good standing as foreign entities in all jurisdictions where
the character of their properties or the nature of their respective activities
makes such qualification necessary and where the failure to be so qualified
would have a material adverse effect on the business or financial condition of
the DEL Partnerships, the La Salle Partnerships, the La Salle Subsidiaries and
LP-Inc. on a consolidated basis ("La Salle Material Adverse Effect").
3.2 Capitalization.
--------------
The entire outstanding general and limited partnership interests of
LPL and LPML consist of 1,648,966 Units. The La Salle Disclosure Schedule sets
forth a true and complete list of the names of each holder of general and
limited partnership interests of each of the DEL Partnerships and each of the La
Salle Partnerships, including the number and percentage of units held by each
holder. The outstanding limited partnership interests in each of the DEL
Partnership and the La Salle Partnerships are referred to collectively as the
"La Salle Units."
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LP-Inc.'s authorized capital stock consists of 10,000,000 shares of Common
Stock, par value $.01 per share (the "LP-Inc. Common Stock"), of which __ shares
are issued and outstanding. All of the La Salle Units have been duly and
validly issued and are fully-paid, and free from any preemptive or similar
rights. When issued to the Stockholders at Closing, the Units will be duly and
validly issued and fully paid, and free from any preemptive or similar rights.
Except as set forth on the La Salle Disclosure Schedule, neither the DEL
Partnerships or the La Salle Partnerships are neither party to or bound by any
options or calls, of any character relating to any issued or unissued La Salle
Units or any other equity security issued or to be issued by them or any of the
DEL Subsidiaries or the La Salle Subsidiaries.
3.3 Financial Statements.
--------------------
The La Salle Partnerships have delivered to the Xxxxxxxxx Companies
copies of the DEL Partnerships' and La Salle Partnerships' audited consolidated
financial statements for the fiscal year ended December 31, 1994, 1995 and 1996
(collectively, the "La Salle Financial Statements"). These financial statements
are true and complete in all material respects, have been prepared in accordance
with generally accepted accounting principles consistently
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followed throughout the periods covered by such statements (except as may be
stated in the explanatory notes to such statements), and present fairly the
consolidated financial position and results of operations of the DEL
Partnerships and the La Salle Partnerships, respectively, at the dates of such
statements and for the periods covered thereby. The DEL Partnerships have
delivered to the Xxxxxxxxx Companies true and correct copies of the DEL
Partnerships' and the La Salle Partnerships' pro forma consolidated financial
statements for the fiscal year ended December 31, 1996 giving effect to the DEL
Partnerships' acquisition from Alex. Xxxxx Kleinwort Xxxxxx Realty Advisors
Corporation ("ABKB") of the limited partnership interests of the La Salle
Partnerships held by ABKB and related transactions as if such transactions had
occurred at the beginning of such year.
3.4 No Undisclosed Liabilities.
Except as and to the extent reflected or reserved against in the
consolidated balance sheets included within the La Salle Financial Statements
(including the explanatory notes to such statements), at the dates of such
statements, the DEL Partnerships, the La Salle Partnerships and the La Salle
Subsidiaries had no material liabilities or obligations (whether accrued,
absolute or contingent), of
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the character which, under generally accepted accounting principles, should be
shown, disclosed or indicated in a balance sheet of the DEL Partnerships or a
consolidated balance sheet of the La Salle Partnerships or explanatory notes or
information supplementary thereto.
3.5 Absence of Certain Changes, Events or Conditions.
Since December 31, 1996, there has not been any change in the La Salle
Partnerships' consolidated financial position, results of operations, assets,
liabilities, net worth or business, other than changes which have not had a La
Salle Material Adverse Effect. Since December 31, 1996, the La Salle
Partnerships have not experienced any event or condition of any character
(whether or not covered by insurance) which has caused a La Salle Material
Adverse Effect.
3.6 Litigation, Etc.
Except as described on the La Salle Disclosure Schedule, there is no
litigation, proceeding or governmental investigation pending or, to the
knowledge of La Salle Management, threatened or in prospect against or relating
to the DEL Partnerships, the La Salle Partnerships or the La Salle Subsidiaries,
their respective properties or businesses, or their ability to consummate the
transac-
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tions contemplated by this Agreement, which are not covered by insurance
(subject to applicable deductibles and retainages) or which would reasonably be
expected to have a La Salle Material Adverse Effect or prevent or materially
delay the consummation of such transactions. Except as disclosed on the La
Salle Disclosure Schedule, neither of the DEL Partnerships, the La Salle
Partnerships nor any of the La Salle Subsidiaries is subject to or bound by any
order of any court, regulatory commission, board or administrative body entered
in any proceeding to which it is a party or of which La Salle Management has
knowledge which would reasonably be expected to cause a La Salle Material
Adverse Effect.
3.7 Trademarks, Etc.
The DEL Partnerships, the La Salle Partnerships and the La Salle
Subsidiaries own or possess the right to use all of the patents, trademarks,
service marks, trade names, copyrights, licenses, franchises and permits
relating to such intellectual property rights, necessary for the present and
currently planned future conduct of their respective businesses. All material
patents, trademarks, service marks, trade names and copyrights owned by or
licensed by or to the DEL Partnerships, the La Salle Partnerships or the La
Salle Subsidiaries, and other agreements
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pertaining to any of the foregoing to which the DEL Partnerships, the La Salle
Partnerships or the La Salle Subsidiaries is a party or bound, have been
identified and listed on the La Salle Disclosure Schedule. The DEL
Partnerships, the La Salle Partnerships and the La Salle Subsidiaries have not
received any notice or allegation that, and do not have any knowledge or reason
to believe that, (i) any of the items listed on such schedule is being infringed
upon by others or (ii) their respective operations conflict with or infringe
upon any patent, patent application, trademark, service xxxx, trade name or
copyright of others.
3.8 Compliance.
To the knowledge of La Salle Management, the DEL Partnerships, the La
Salle Partnerships and the La Salle Subsidiaries have all licenses, permits,
approvals and other authorizations, and have made all filings and registrations,
that are necessary in order to enable them to conduct their businesses in all
material respects. The La Salle Disclosure Schedule fairly and accurately
summarizes or lists all material licenses, permits, approvals, authorizations
and regulatory matters relating to the business or products of the La Salle
Partnerships and the La Salle Subsidiaries. To the knowledge of La Salle
Management, the DEL Partnerships, the La Salle Partnerships
22
and the La Salle Subsidiaries are in compliance in all material respects with
all applicable laws, regulations and ordinances, the violation of which would
have a La Salle Material Adverse Effect.
3.9 Labor Matters.
The La Salle Partnerships and the La Salle Subsidiaries have no
collective bargaining or other agreement with or relating to their employees.
Except as set forth on the La Salle Disclosure Schedule, no labor dispute,
strike, work stoppage, employee action or labor relations problem of any kind
which has affected or may affect the La Salle Partnerships, any of the La Salle
Subsidiaries or any of their respective businesses or operations has occurred
since December 31, 1996, or currently is pending or, to the knowledge of La
Salle Partnerships' Management, threatened. The DEL Partnerships have no
employees.
3.10 No Conflict With Other Documents.
Except as described in the La Salle Disclosure Schedule, neither the
execution and delivery of this Agreement nor the carrying out of the
transactions contemplated hereby will result in any violation, default,
termination, right of termination or modification of, or be in conflict with,
the DEL Partnership Agreements, the La Salle Partnership Agreements or any terms
of any contract, instru-
23
ment, obligation or other document to which either of the DEL Partnerships, the
La Salle Partnerships or the La Salle Subsidiaries is a party, or any judgment,
decree or order applicable to any of the DEL Partnerships, the La Salle
Partnerships or the La Salle Subsidiaries, or result in the creation of any
lien, charge or encumbrance upon any of their properties or assets.
3.11 Authority.
The DEL Partnerships and the La Salle Partnerships have all requisite
power and authority to execute, deliver and perform this Agreement and the other
Transaction Documents. The DEL Partnerships and the La Salle Partnerships have
duly authorized, executed and delivered this Agreement and the Other Transaction
Documents and this Agreement and the other Transaction Documents have been duly
authorized by the Board of Directors of the La Salle Partnerships, and this
Agreement and the other Transaction Documents are valid, legally binding and
enforceable obligations of the DEL Partnerships, the La Salle Partnerships and
LP-Inc. (as to the Registration Rights Agreement only) except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws or (b) general principles of equity. The DEL
Partnership Agreements and the La Salle Partnership Agree-
24
ments have been duly executed and delivered on behalf of the partners thereto,
and such agreements are valid, legally binding and enforceable obligations of
the DEL Partnerships and the La Salle Partnerships, respectively, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws or (b) general principles of equity.
3.12 Contracts.
Except as shown on the La Salle Disclosure Schedule, neither of the
DEL Partnerships, the La Salle Partnerships nor any of the La Salle Subsidiaries
is a party to or subject to: (a) any employment contract with any officer,
consultant, director or employee; (b) any plan or contract or arrangement
providing for bonuses, pensions, options, deferred compensation, retirement
payments, profit sharing, or the like; (c) any lease of real or personal
property with a remaining term in excess of one year or calling for yearly lease
payments in excess of $100,000; (d) any agreement for the purchase, sale or
other disposition of any materials, equipment, supplies or inventory in an
amount in excess of $100,000 for a particular contract, except individual
purchase or sales orders from suppliers having a term of less than three months
incurred in the ordinary course of business; (e) any instrument creating a
25
lien or evidencing or related to indebtedness for borrowed money; (f) any
franchise, manufacturer's representative, distributorship or similar agreement;
(g) any material contract containing covenants not to enter into or consummate
the transactions contemplated hereby or which will be terminated or modified by
the carrying out of such transactions; (h) any agreement relating to the
provision of property management, tenant representation, agency leasing or other
similar services by the La Salle Partnerships or the La Salle Subsidiaries; or
(i) any other material contract or agreement not of the type covered by any of
the other specific items of this section. Each of the contracts, instruments,
and other documents described on the La Salle Disclosure Schedule is valid and
in full force and effect, and a true and complete copy thereof has been made
available to the Stockholders. The DEL Partnerships, the La Salle Partnerships
and each of the La Salle Subsidiaries is not in default, or to the knowledge of
La Salle Management, alleged to be in default, in any material respect under any
contract, instrument, obligation or other document to which it is a party or by
which it is bound, which could reasonably be expected to have a La Salle
Material Adverse Effect. Except as shown on the La Salle Disclosure Schedule,
the consummation of the transactions contemplated
26
by this Agreement will not cause a default under, or provide any right of
termination with respect to, any contract, instrument, obligation or other
document to which any of the DEL Partnerships, the La Salle Partnerships or any
of the La Salle Subsidiaries is a party or by which any of the DEL Partnerships,
the La Salle Partnerships or any of the La Salle Subsidiaries is bound, which
could reasonably be expected to have a La Salle Material Adverse Effect. To the
knowledge of La Salle Management, no party with whom the DEL Partnerships, the
La Salle Partnerships or any of the La Salle Subsidiaries has an agreement is in
default thereunder in any material respect that could reasonably be expected to
have a La Salle Material Adverse Effect.
3.13 Clients.
The La Salle Disclosure Schedule lists the 10 largest property
management and tenant representation clients for the fiscal year ended December
31, 1996, which schedule also lists the amount of the net revenues of the La
Salle Partnerships and the La Salle Subsidiaries applicable to each client so
listed. The DEL Partnerships have no clients. Except as disclosed on the La
Salle Disclosure Schedule, and except for clients with whom La Salle's
relationship to date has been for specific assignments and
27
therefore does not contemplate the rendering of ongoing services, the DEL
Partnerships, the La Salle Partnerships, and the La Salle Subsidiaries have
received no notice and La Salle Management has no actual knowledge that, and La
Salle Management does not have actual knowledge that, any such client will not
continue to do business with the La Salle Partnerships or the La Salle
Subsidiaries subsequent to the closing of the transactions contemplated by this
Agreement.
3.14 Tax Matters.
The DEL Partnerships and the La Salle Partnerships qualify for
treatment under Subchapter K of the Code. Except as set forth on the La Salle
Disclosure Schedule, the provisions made for Taxes on the December 31, 1996
consolidated balance sheet of the La Salle Partnerships and the La Salle
Subsidiaries contained in the La Salle Financial Statements referred to in
Section 3.3 of this Agreement are sufficient for the payment of all unpaid Taxes
of the La Salle Partnerships and the La Salle Subsidiaries, whether or not
disputed. The federal income tax returns of the LaSalle Partnerships and the La
Salle Subsidiaries have never been audited by the Internal Revenue Service.
Except as set forth on the La Salle Disclosure Schedule, there are no proposed
additional Taxes, interest or penalties with
28
respect to any year examined or not yet examined. No deficiency or addition to
Taxes, interest or penalties exists against the La Salle Partnerships or the La
Salle Subsidiaries. The La Salle Partnerships have made available to the
Xxxxxxxxx Companies true and complete copies of the federal and state income tax
returns of the La Salle Partnerships and the La Salle Subsidiaries for the five
years ended December 31, 1995, together with true and complete copies as filed
of all reports of any taxing authority relating to examinations thereof which
have been delivered to the La Salle Partnerships or any La Salle Subsidiary.
Except as set forth in the La Salle Disclosure Schedule, each such tax return
and all other tax returns of the La Salle Partnerships and the La Salle
Subsidiaries filed after December 31, 1995 were prepared in accordance with
applicable law and properly reflect the liability for Taxes of the La Salle
Partnerships and the La Salle Subsidiaries to the jurisdictions to which such
return is made for the period covered thereby. Except as set forth on the La
Salle Disclosure Schedule, neither the DEL Partnerships, the La Salle
Partnerships nor any of the La Salle Subsidiaries have entered into any
agreements extending the statute of limitations with respect to any Taxes.
29
For purposes of this Agreement, "Tax" means any of the Taxes and
"Taxes" means, with respect to any person or entity (A) all income taxes
(including any tax on or based upon net income, or gross income, or income as
specially defined, or earnings or profits, or selected items of income, earnings
or profits) and all gross receipts, sales, use, ad valorem, transfer, franchise,
license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property or windfall profits taxes, alternative or add-on
minimum taxes, customs duties or other taxes, fees, assessments or charges of
any kind whatsoever, together with any interest and any penalties, additions to
tax or additional amounts imposed by any taxing authority (domestic or foreign)
on such person or entity and (B) any liability for the payment of any amount of
the type described in the immediately preceding clause (A) as a result of being
a "transferee" (within the meaning of Section 6901 of the Code or any other
applicable law) of another person or entity or a member of an affiliated or
combined group.
3.15 Title to Properties; Absence of Liens and Encumbrances, Etc.
The DEL Partnerships, La Salle Partnerships and the La Salle
Subsidiaries have good and marketable title to
30
or a valid leasehold interest in all their properties and assets, real and
personal (including those reflected in the December 31, 1996 consolidated
balance sheets contained in the La Salle Financial Statements except as sold or
otherwise disposed of in the ordinary course of business since the date
thereof), in each case free and clear of all liens and encumbrances, except (i)
liens and encumbrances reflected in such financial statements or in the notes to
such financial statements or securing debt reflected as liabilities on such
financial statements, (ii) liens for current taxes and assessments not in
default or which are being contested in good faith, (iii) mechanics', carriers',
workmen's, repairmen's, statutory or common law liens relating to payments that
are not delinquent or which are being contested in good faith and (iv)
imperfections of title, easements and encumbrances, liens, rights of way,
variances and other matters or limitations of any kind, if any, which would not
result in a material adverse effect on the DEL Partnerships' or the La Salle
Partnerships' use of the property affected. Except as set forth in the La Salle
Disclosure Schedule, the DEL Partnerships have good and marketable title to the
general partnership units in the La Salle Partnerships held by them, free and
clear of all liens and encumbrance. Except as is not reasonably expect-
31
ed to cause a La Salle Material Adverse Effect, neither the DEL Partnerships,
the La Salle Partnerships nor any of the La Salle Subsidiaries has received any
notice of violation of any applicable zoning laws, orders, regulations, or
requirements relating to its operations or its properties which has not been
remedied. The La Salle Management has no knowledge of any threatened or
impending condemnation of any properties of the La Salle Partnerships or the La
Salle Subsidiaries by any governmental authority.
3.16 Pension and Employee Benefit Plans.
(a) Except as shown on the La Salle Disclosure Schedule, there
are no plans (other than multiemployer plans as defined in Section 3(37) of
ERISA) for pension, profit sharing, deferred compensation, severance pay,
bonuses, or any other form of retirement or deferred benefit, or for any health,
accident or other welfare benefit, including without limitation, employee
benefit plans as defined in Section 3(3) of ERISA and all other material
employee benefit arrangements, obligations, customs, or practices, which are
sponsored or maintained by any of the La Salle Partnerships or the La Salle
Subsidiaries and under which any current or former employee of the La Salle
Partnerships or the La Salle Subsidiaries is entitled to any benefit or is
entitled to participate (collectively the
32
"La Salle Plans"). The DEL Partnerships have made available to the Xxxxxxxxx
Companies true and complete copies of each of the La Salle Plans, all trust
agreements, insurance contracts, investment management agreements and other
agreements currently in effect with respect to the La Salle Plans, written
descriptions of all material non-written agreements relating to the La Salle
Plans (including without limitation non-written agreements with current or
former employees for post-employment health or other welfare benefits), all
reports regarding the La Salle plans received by the La Salle Partnerships, La
Salle Subsidiaries or La Salle Management within the three years preceding the
date of this Agreement from plan actuaries, administrators or consultants
concerning the testing of a La Salle Plan for compliance with the qualification
requirements of the Code, all notices within the three years preceding the date
of this Agreement received from any governmental agency or entity regarding any
La Salle Plan, all documents relating to the funding (including the latest
actuarial report), termination or attempted termination of any La Salle Plan
which is subject to Title IV of ERISA, and all summary plan descriptions
currently in effect with respect to the La Salle Plans. Each of the La Salle
Plans complies, in form and in operation, with applicable law. All
33
required governmental filings have been made with respect to the La Salle Plans.
Except as set forth on the La Salle Disclosure Schedule, the La Salle
Partnerships, La Salle Subsidiaries and La Salle Management have no knowledge of
any material pending investigations, proceedings or other matters concerning the
La Salle Plans before the Internal Revenue Service, the Department of Labor or
the Pension Benefit Guaranty Corporation. There are no pending threatened
claims by or disputes with any participants or former participant in the La
Salle Plans, other than benefit claims by participants made in the normal
course of operating the La Salle Plans. Except as set forth on the La Salle
Disclosure Schedule, the La Salle Partnerships, La Salle Subsidiaries and La
Salle Management have no knowledge of any facts which could give rise to any
claims against the La Salle Plans or against any La Salle Partnerships, La
Salle Subsidiaries or fiduciary of any La Salle Plan other than benefit claims
by participants expected in the normal course of operating the La Salle Plans
and claims which would not result in a La Salle Material Adverse Effect. None
of the La Salle Partnerships, La Salle Subsidiaries or, to the knowledge of the
La Salle Partnerships, La Salle Subsidiaries or La Salle Management, any other
fiduciary of any La Salle Plan has given notice to
34
their fiduciary liability insurer of any claims or potential claims against them
with respect to any La Salle Plan. True and correct copies of the annual
reports of the La Salle Plans filed with the Department of Labor and the
Internal Revenue Service for the last three years for which such reports have
become due, and all audited financial statements of the La Salle Plans for the
plan years ended in 1993, 1994, and 1995 have been made available to the
Xxxxxxxxx Companies. No "prohibited transaction" as defined in Section 406(a)
and (b) of the ERISA, or as defined in Section 4975 of the Code, has occurred
with respect to any La Salle Plan, except transactions exempt under Section 408
of ERISA or Section 4975(d) of the Code. Each La Salle Plan (including without
limitation a plan covering retirees or beneficiaries of retirees) may be
terminated or amended by the plan sponsor, in any manner and at any time,
without the consent of any person covered by such plan and without any further
liability for benefits that may be accrued or expenses that may be incurred
after the date of such termination or amendment, other than benefits required
under Section 4980B of the Code or Sections 601 through 608 of ERISA if paid
100% by the participant or beneficiary.
(b) Each of the La Salle Plans which is intended to qualify
under Section 401 of the Code is desig-
35
nated on the La Salle Disclosure Schedule as being a qualified plan (the La
Salle Plans so designated being hereinafter referred to as the "La Salle
Qualified Plans"). Each La Salle Qualified Plan is qualified under Section
401(a) of the Code and is the subject of a currently effective determination
letter from the Internal Revenue Service confirming such qualification. Any
operational defect or violation that will or might disqualify a La Salle
Qualified Plan can be remedied under the Internal Revenue Service Closing
Agreement Program, Voluntary Compliance Resolution Program or Administrative
Policy Regarding Self-Correction without resulting in a La Salle Material
Adverse Effect. True and correct copies of all currently effective
determination letters from the Internal Revenue Service with respect to the La
Salle Qualified Plans have been made available to the Xxxxxxxxx Companies.
(c) With respect to each La Salle Plan, none of the La Salle
Partnerships or La Salle Subsidiaries has incurred any accumulated funding
deficiency within the meaning of ERISA, has obtained a waiver of any minimum
funding requirements imposed by ERISA or Code in respect of such La Salle Plan,
has incurred any liability in connection with the termination of or withdrawal
from a La Salle Plan subject to Title IV of ERISA, has otherwise incurred
36
any liability to the Pension Benefit Guaranty Corporation in connection with any
La Salle Plan (except liability under Section 4007 of ERISA), has ceased
operations at any facility or has withdrawn from any La Salle Plan in a manner
that would give rise to liability under Section 4062, 4063 or 4064 of ERISA, or
has failed to pay all premiums due to the Pension Benefit Guaranty Corporation
under Section 4007 or ERISA. No "reportable event," as such term is defined in
Section 4043 of ERISA and in regulations issued thereunder, has occurred with
respect to the La Salle Plans since the effective date of ERISA, other than
events with respect to which the Department of Labor has waived the requirement
of 30 days' notice. During the period from January 1, 1992 to the date hereof,
none of the La Salle Partnerships or the La Salle Subsidiaries has any liability
with respect to any pension plan subject to Title IV of ERISA, and the benefit
liabilities (as defined in Section 4001(a)(16) of ERISA) under each La Salle
Plan that is a Title IV plan, calculated using the actuarial assumptions that
would be used by the Pension Benefit Guaranty Corporation in the event of plan
termination, do not exceed the fair market value of plan assets.
(d) None of the La Salle Partnerships or La Salle Subsidiaries
is obligated to make payments to any
37
multiemployer plan (as defined by Section 3(37) of ERISA) and none of the DEL
Partnerships, the La Salle Partnerships or the La Salle Subsidiaries is or could
be deemed to be an employer with respect to any multiemployer plan for purposes
of Title IV or ERISA.
(e) None of the La Salle Partnerships or La Salle Subsidiaries
has any liability (including a contingent liability) with respect to any
employee benefit plan or arrangement which is not a La Salle Plan.
3.17 Insurance.
The La Salle Disclosure Schedule summarizes the insurance currently
carried by the DEL Partnerships, the La Salle Partnerships and the La Salle
Subsidiaries in respect of their respective properties and operations,
including, without limitation, general liability, umbrella liability,
contractual liability, employers' liability, automobile liability, workers'
compensation, property and casualty, business interruption and other insurance.
To the knowledge of the La Salle Management, all such insurance continues to be
in full force and effect, and the La Salle Partnerships and the La Salle
Subsidiaries are in compliance with all requirements and provisions thereof.
Neither the DEL Partnerships nor the La Salle Partnerships have any reason to
believe that such insurance coverage will not be
38
renewed upon the expiration thereof at premiums substantially equivalent to
those currently being paid.
3.18 No Pending Transactions.
-----------------------
Except contemplated by this Agreement or as disclosed on the La Salle
Disclosure Schedule, none of the DEL Partnerships, the La Salle Partnerships or
the La Salle Subsidiaries is a party to or bound by or the subject of any
agreement, undertaking or commitment (i) to merge or consolidate with, or
acquire all or substantially all of the property and assets of, any other
corporation or person or (ii) to sell, lease or exchange all or substantially
all of its property and assets to any other corporation or person.
3.19 Disclosure.
----------
No representation or warranty made by the DEL Partnerships or the La
Salle Partnerships in this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary to make the statements contained herein or therein not misleading.
3.20 Transactions with Affiliates.
----------------------------
Except as disclosed on the La Salle Disclosure Schedule, neither of
the La Salle Partnerships nor any of the La Salle Subsidiaries is a party to any
transaction
39
(other than the employment agreements set forth in the La Salle Disclosure
Schedule or agreements on terms no less favorable to the Company than could be
obtained from independent third parties) with any (i) current partner or officer
of the La Salle Partnerships or any of the La Salle Subsidiaries, or (ii) any
parent, spouse, child, brother or sister of any such partner or officer or (iii)
any corporation or partnership of which any such partner, officer or family
relation is an officer, director, partner or greater than 10% stockholder (based
on percentage ownership of voting stock) or (iv) any Affiliate of any such
persons or entities, including, without limitation, any transaction involving a
contract, agreement or other arrangement providing for the employment of,
furnishing of materials, products or services by, rental of real or personal
property from, or otherwise requiring payments to, any such person or entity.
3.21 Environmental Matters.
(a) As used in this Section 3.21, the following terms shall have
the meanings indicated:
(i) The "La Salle Properties" means any real property or
facility currently or previously owned, leased or operated by the La Salle
Partnerships or the La Salle Subsidiaries,
40
directly or indirectly. The DEL Partnerships do not and have not owned,
leased or operated any real property or facility.
(ii) "Release" means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping or disposing into the environment of any Materials of Environmental
Concern, including the abandonment or discarding of barrels, containers,
and other receptacles containing any Materials of Environmental Concern.
(iii) "Materials of Environmental Concern" means any
substance regulated under Environmental Laws, including but not limited to
asbestos and asbestos-containing materials, polychlorinated biphenyls,
petroleum and its fractions, radioactive materials, and any substance
defined as solid waste, hazardous waste, hazardous substances, regulated
substances, pollutants or contaminants, toxic substances, hazardous
chemicals, hazardous air pollutants, toxic chemicals, hazardous materials,
extremely hazardous substances, toxic waste, or terms of similar meaning
under Environmental Laws.
41
(iv) "Environmental Laws" means any statute, regulation,
rule, ordinance, code, common law, order or judgment of any applicable
federal, state, local or foreign jurisdiction relating to pollution, the
protection of the environment, natural resources or human health, including
by way of example and not by way of limitation, the Clean Air Act, the
Clean Water Act, the Resource Conservation and Recovery Act ("RCRA"); the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"); the Toxic Substances Control Act ("TSCA"); the Hazardous
Materials Transportation Act; and the Emergency Planning and Community
Right to Know Act, all as currently amended.
(b) The La Salle Disclosure Schedule lists all material reports,
audits, assessments, studies, inspections, evaluations, surveys, corrective
action plans, remedial action plans, and other similar documents in the
possession or control of the DEL Partnerships, the La Salle Partnerships
relating to the environmental conditions of any of the La Salle Properties (as
defined above).
(c) The La Salle Disclosure Schedule lists all material
agreements, judgments, orders or similar
42
documents which obligate any of the DEL Partnerships, the La Salle Partnerships
or the La Salle Subsidiaries to indemnify third parties in connection with
Materials of Environmental Concern at any property, or which obligate any of the
DEL Partnerships, the La Salle Partnerships or the La Salle Subsidiaries to
investigate, assess, clean up, remediate, xxxxx, monitor or otherwise address
Materials of Environmental Concern at any property.
(d) Except as set forth on the La Salle Disclosure Schedule or
that would not reasonably be expected to have a La Salle Material Adverse
Effect, none of the La Salle Properties is listed on or has been proposed for
listing on the National Priorities List CERCLA, is listed on the Comprehensive
Environmental Response, Compensation and Liability Information System
("CERCLIS"), or, to the knowledge of La Salle Management, is listed on any state
or local list of potentially contaminated properties.
(e) Except as set forth on the La Salle Disclosure Schedule or
that would not reasonably be expected to have a La Salle Material Adverse
Effect, none of the DEL Partnerships, the La Salle Partnerships or the La Salle
Subsidiaries has received any request for information from any governmental
entity pertaining to the environmental condition of any property, or the use,
generation, trans-
43
portation, treatment, storage, disposal or other management of Materials of
Environmental Concern;
(f) Except as set forth on the La Salle Disclosure Schedule,
none of the DEL Partnerships, the La Salle Partnerships or the La Salle
Subsidiaries has received notice of potential liability for environmental
conditions at any of the La Salle Properties.
(g) Except as set forth on the La Salle Disclosure Schedule or
that would not reasonably be expected to have a La Salle Material Adverse
Effect, no environmental approvals, clearances or consents are required under
applicable law from any governmental agency or authority in order for the
parties to this Agreement to consummate the transactions contemplated herein.
(h) Except as would not have La Salle Material Adverse Effect,
or as disclosed on the La Salle Disclosure Schedule,
(i) to the knowledge of La Salle Management, there has
been no material Release at, on, under or from any of the La Salle
Properties;
(ii) to the knowledge of La Salle Management, all
underground storage tanks owned or operated by the La Salle Partnerships or
the
44
La Salle Subsidiaries are properly registered and meet all applicable
standards for release detection, corrosion protection and spill and
overfill protection;
(iii) there are no administrative, civil or criminal
proceedings, demands, suits, complaints, citations, notices of violation or
claims pending, or to the knowledge of the La Salle Management, threatened,
against the La Salle Partnerships or the La Salle Subsidiaries in
connection with Materials of Environmental Concern at or the environmental
condition of any of the La Salle Properties; in connection with activities
at, or on, any of the La Salle Properties affecting the environment, health
or safety; or to the knowledge of La Salle Management, in connection with a
Release at any other property.
(iv) The DEL Partnerships, the La Salle Partnerships and
the La Salle Subsidiaries are in material compliance with Environmental
Laws.
45
3.22 Investment Intent.
In connection with the transactions contemplated by this Agreement,
each of the La Salle Partnerships hereby represents and warrants that:
(a) the officers of, and advisors to, such partnership have had
the opportunity to ask questions, of, and receive answers from, executive
officers of the Xxxxxxxxx Companies concerning the business and operations of
the Xxxxxxxxx Companies and the terms and conditions of this Agreement, and has
had access to additional information which such officers or advisors considered
necessary for evaluating an investment in the Xxxxxxxxx Companies.
(b) such partnership acknowledges that it must bear the economic
risks of the shares of Xxxxxxxxx Capital Stock to be contributed to such
partnership under this Agreement; and
(c) the officers of, and advisors to, such partnership have
sufficient experience in financial and business matters to enable such officers
and advisors to be capable of evaluating the merits and the risks of the
exchange of the Xxxxxxxxx Capital Stock contemplated by this Agreement and such
partnership's prospective investment in the Xxxxxxxxx Companies.
46
4. REPRESENTATIONS AND WARRANTIES OF THE XXXXXXXXX COMPANIES AND G-
LLC.
The Xxxxxxxxx Companies and G-LLC hereby jointly and severally
represent and warrant to the DEL Partnerships and the La Salle Partnerships as
follows:
4.1 Organization and Standing; Subsidiaries.
---------------------------------------
Xxxxxxxxx Ohio is a corporation duly organized, validly existing and
in good standing under the laws of the State of Ohio, and Xxxxxxxxx California
is a corporation duly organized, validly existing and in good standing under the
laws of the State of California. G-LLC is a limited liability company duly
organized, validly existing and good standing under the laws of the State of
Delaware. Each of the Xxxxxxxxx Companies and G-LLC has full corporate power to
carry on its business as it is now being conducted and to own or hold under
lease the properties and assets it now owns or holds under lease. The Xxxxxxxxx
Companies have delivered to the La Salle Partnerships a disclosure schedule
prior to the date hereof (the "Xxxxxxxxx Disclosure Schedule"), which sets forth
a true and complete listing, after giving effect to the Restructuring, of all of
the Xxxxxxxxx Companies' subsidiaries of which 50% or more of the capital stock
is directly or indirectly owned by the Xxxxxxxxx Companies and any other
corporation, partnership
47
or business entity in which the Xxxxxxxxx Companies directly or indirectly own
an equity investment of greater than $50,000 (collectively, the "Xxxxxxxxx
Subsidiaries") and indicates which Xxxxxxxxx Subsidiaries are wholly-owned.
Except as set forth on the Xxxxxxxxx Disclosure Schedule, the Xxxxxxxxx
Subsidiaries' shares owned by the Xxxxxxxxx Companies are validly issued, fully
paid and non-assessable and are owned by the Xxxxxxxxx Companies free and clear
of any claims, liens, charges or encumbrances. Except as otherwise provided on
the Xxxxxxxxx Disclosure Schedule, each Xxxxxxxxx Subsidiary is a wholly-owned
subsidiary of the Xxxxxxxxx Companies and none of the Xxxxxxxxx Subsidiaries is
a party to or bound by any options, calls, contracts or commitments of any
character relating to any issued or unissued stock or any other equity security
issued or to be issued by it. Copies of the charter documents and by-laws of
the Xxxxxxxxx Companies, G-LLC, and each of the Xxxxxxxxx Subsidiaries have been
delivered or made available to the La Salle Partnerships, and to the knowledge
of Xxxxxxxxx Management, such copies are complete and correct and in full force
and effect. Each of the Xxxxxxxxx Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, and each has full corpo-
48
rate power to carry on its business as it is now being conducted and to own or
hold under lease the properties and assets it now owns or holds under lease.
The Xxxxxxxxx Companies, G-LLC and each of the Xxxxxxxxx Subsidiaries are duly
qualified to do business in all jurisdictions where the character of their
respective properties or the nature of their respective activities makes such
qualification necessary and where the failure to be so qualified would have a
material adverse effect on the business or financial condition of the Xxxxxxxxx
Companies and any of the Xxxxxxxxx Subsidiaries on a consolidated basis except
that occurrences due as a result of the announcement of the execution of this
Agreement or the transactions proposed to be consummated by this Agreement shall
be excluded from consideration for purposes of the effect of an action or an
inaction on the Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries on a
consolidated basis (a "Xxxxxxxxx Material Adverse Effect").
4.2 Capitalization of the Xxxxxxxxx Companies.
-----------------------------------------
Xxxxxxxxx Ohio's authorized capital stock consists of 75 shares of
Class A Common Stock, without par value (the "Xxxxxxxxx Ohio Capital Stock"), of
which 10 shares are issued and outstanding, and 675 shares of Class B Common
Stock, without par value (the "Xxxxxxxxx Ohio Non-
49
Voting Common Stock"), of which 90 shares are issued and outstanding. Xxxxxxxxx
California's entire authorized capital stock consists of 100 shares of Class A
Common Stock, without par value (the "Xxxxxxxxx California Common Stock"), 10
shares of which are issued and outstanding, and 900 shares of Class B Common
Stock, no par value (the "Xxxxxxxxx California Non-Voting Common Stock"), of
which 90 shares are issued and outstanding. Xxxxxxxxx Ohio has granted to
certain employees of Xxxxxxxxx Ohio irrevocable rights to receive an aggregate
of 19.7477 shares of Xxxxxxxxx Ohio Non-Voting Common Stock. The Xxxxxxxxx
Ohio Common Stock, the Xxxxxxxxx Ohio Non-Voting Stock, the Xxxxxxxxx California
Common Stock and the Xxxxxxxxx California Non-Voting Common Stock are referred
to collectively as the "Xxxxxxxxx Capital Stock". All issued and outstanding
interests of G-LLC are owned by the Stockholders. All such issued and
outstanding shares of Xxxxxxxxx Capital Stock have been duly and validly issued
and are fully paid and non-assessable, free of any preemptive rights, and are
owned by the Stockholders in the amounts indicated under their respective names
on Exhibit E. Each of the Stockholders has good and marketable title to the
Xxxxxxxxx Capital Stock owned by such Stockholder, free of any liens,
restrictions or encumbrances of any kind. Other than as
50
described above, neither the Xxxxxxxxx Companies nor any of the Stockholders is
a party to or bound by any options, calls, contracts or commitments of any
character relating to any issued or unissued stock or any other equity security
issued or to be issued by the Xxxxxxxxx Companies.
4.3 Financial Statements.
--------------------
The Xxxxxxxxx Companies have delivered to the La Salle Partnerships
copies of the Xxxxxxxxx Companies' audited consolidated financial statements
for the fiscal years ended December 31, 1994, 1995 and 1996 (the "Xxxxxxxxx
Financial Statements"). The Xxxxxxxxx Financial Statements are true and
complete in all material respects, have been prepared in accordance with
generally accepted accounting principles consistently followed throughout the
period covered by such statements (except as may be stated in the explanatory
notes to such statements), and present fairly the consolidated financial
position and results of operations of the Xxxxxxxxx Companies at the dates of
such statements and for the periods covered thereby. Attached hereto as Exhibit
D is the Closing Balance Sheet, reflects stockholders' equity of at least
$1,200,000, cash of at least $750,000, and no liability for borrowed money
(subject to the adjustments footnoted on such balance sheet).
51
4.4 No Undisclosed Liabilities.
--------------------------
Except as and to the extent reflected or reserved against in the
consolidated balance sheets included within the Xxxxxxxxx Financial Statements
(including the explanatory notes to such statements), at the date of such
statements, the Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries had no
material liabilities or obligations (whether accrued, absolute or contingent),
of the character which, under generally accepted accounting principles, should
be shown, disclosed or indicated in a consolidated balance sheet of the
Xxxxxxxxx Companies or explanatory notes or information supplementary thereto.
4.5 Absence of Certain Changes, Events or Conditions.
------------------------------------------------
Since December 31, 1996, there has not been any change in the
Xxxxxxxxx Companies' consolidated financial position, results of operations,
assets, liabilities, net worth or business, other than changes which have not
had a Xxxxxxxxx Material Adverse Effect. Since December 31, 1996, the Xxxxxxxxx
Companies and the Xxxxxxxxx Subsidiaries have not experienced any event or
condition of any character (whether or not covered by insurance) which has
caused a Xxxxxxxxx Material Adverse Effect.
52
4.6 Fixed Assets; Real Estate.
-------------------------
The Xxxxxxxxx Companies have previously delivered the depreciation
schedule for the fixed assets shown on the balance sheet included in the
December 31, 1996 financial statements referred to in Section 4.3. Neither of
the Xxxxxxxxx Companies owns any real estate or acts as a general partner of,
or owns a general partnership interest in, an entity that holds title to, or
operates, real property.
4.7 Litigation, Etc.
----------------
Except as described on the Xxxxxxxxx Disclosure Schedule, there is no
litigation, proceeding or governmental investigation pending or, to the
knowledge of the Xxxxxxxxx Management, threatened against or relating to the
Xxxxxxxxx Companies or the Xxxxxxxxx Subsidiaries, their respective properties
or businesses, or the transactions contemplated by this Agreement, which are not
covered by insurance (subject to applicable deductibles and retainages) or
which would reasonably be expected to have a Xxxxxxxxx Material Adverse Effect
or prevent or materially delay the consummation of such transactions. Except as
disclosed on the Xxxxxxxxx Disclosure Schedule, neither of the Xxxxxxxxx
Companies nor any of the Xxxxxxxxx Subsidiaries is subject to or bound by any
order of any court,
53
regulatory commission, board or administrative body entered in any proceeding to
which it is a party or of which Xxxxxxxxx Management has knowledge which would
reasonably be expected to cause a Xxxxxxxxx Material Adverse Effect.
4.8 Trademarks, Etc.
----------------
The Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries own or possess
the right to use all of the trademarks, service marks, trade names, copyrights,
licenses, franchises and permits relating to such intellectual property rights,
necessary for the conduct of their respective businesses. All material
trademarks, service marks, trade names and copyrights owned by or licensed by or
to the Xxxxxxxxx Companies or the Xxxxxxxxx Subsidiaries, and other agreements
pertaining to any of the foregoing to which any of the Xxxxxxxxx Companies or
the Xxxxxxxxx Subsidiaries is a party or bound, have been identified and listed
on the Xxxxxxxxx Disclosure Schedule. Except as disclosed on the Xxxxxxxxx
Disclosure Schedule, the Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries
have not received any notice or allegation that, and do not have any knowledge
or reason to believe that, (i) any of the items listed on such schedule is being
infringed upon by others or (ii) their respective operations conflict with or
in-
54
fringe upon any patent, patent application, trademark, service xxxx, trade name
or copyright of others.
4.9 Compliance.
----------
To the knowledge of Xxxxxxxxx Management, the Xxxxxxxxx Companies and
the Xxxxxxxxx Subsidiaries have all governmental licenses, permits, approvals
and other authorizations, and have made all filings and registrations that are
necessary in order to enable them to conduct their businesses in all material
respects. To the knowledge of Xxxxxxxxx Management, the Xxxxxxxxx Disclosure
Schedule fairly and accurately summarizes or lists all material licenses,
permits, approvals, authorizations and regulatory matters relating to the
business of the Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries. The
Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries have complied and are in
compliance in all material respects with all applicable laws, regulations and
ordinances, the violation of which would have a Xxxxxxxxx Material Adverse
Effect.
4.10 Labor Matters.
-------------
The Xxxxxxxxx Companies heretofore made available to the La Salle
Partnerships a copy of each collective bargaining or other agreement with or
relating to the employees of the Xxxxxxxxx Companies or of any of the
Xxxxxxxxx Subsidiaries. Except as set forth on the
55
Xxxxxxxxx Disclosure Schedule, no labor dispute, strike, work stoppage, employee
action or labor relations problem of any kind which has affected or may affect
the Xxxxxxxxx Companies, any of the Xxxxxxxxx Subsidiaries or any of their
respective businesses or operations has occurred since December 31, 1996, or
currently is pending or, to the knowledge of the Xxxxxxxxx Management,
threatened.
4.11 No Conflict With Other Documents.
--------------------------------
Except as described on the Xxxxxxxxx Disclosure Schedule, neither the
execution and delivery of this Agreement nor the carrying out of the
transactions contemplated hereby will result in any violation, default,
termination, right of termination or modification of, or be in conflict with,
(a) the Xxxxxxxxx Companies' charter documents or By-laws, or (b) any terms of
any contract, instrument, obligation or other document to which either of the
Xxxxxxxxx Companies or any of the Xxxxxxxxx Subsidiaries is a party, or any
judgment, decree or order applicable to the Xxxxxxxxx Companies or any of the
Xxxxxxxxx Subsidiaries, or result in the creation of any right of purchase,
lien, charge or encumbrance upon any of the properties or assets of the
Xxxxxxxxx Companies or any of the Xxxxxxxxx Subsidiaries, so as to have in the
case of each of the documents
56
referred to under (b) above, as a Xxxxxxxxx Material Adverse Effect.
4.12 Authority.
---------
The execution, delivery and performance of this Agreement by the
Xxxxxxxxx Companies have been duly authorized and approved by the Board of
Directors of the Xxxxxxxxx Companies, and this Agreement is a valid, legally
binding and enforceable obligation of the Xxxxxxxxx Companies, except as
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to the
rights and remedies of creditors generally or (ii) general principles of
equity. This Agreement, the Exchange and the other transactions contemplated
hereunder have been approved unanimously by the stockholders of the Xxxxxxxxx
Companies, and all corporate authorizations required for consummation of the
transactions contemplated by this Agreement have been received and continue to
be in full force and effect.
4.13 G-LLC Authorization.
-------------------
Each of the Stockholders has full power and authority to enter into
this Agreement and to agree to the exchange of shares of Xxxxxxxxx Capital Stock
for Units of the La Salle Partnerships as contemplated hereby. This
57
Agreement has been duly executed and delivered by each of the Stockholders and
constitutes a valid and legally binding and enforceable obligation of each of
the Stockholders. At the Closing, the Stockholders will transfer to the La
Salle Partnerships all of the issued and outstanding Xxxxxxxxx Capital Stock
free and clear of all liens and encumbrances.
4.14 Contracts.
---------
Except as shown on the Xxxxxxxxx Disclosure Schedule, neither the
Xxxxxxxxx Companies nor any of the Xxxxxxxxx Subsidiaries is a party to or
subject to: (a) any employment contract with any officer, consultant, director
or employee; (b) any plan or contract or arrangement providing for bonuses,
pensions, options, deferred compensation, retirement payments, profit sharing,
or the like; (c) any contract or agreement with any labor union; (d) any lease
of real or personal property with a remaining term in excess of one year or
calling for yearly lease payments in excess of $50,000; (e) any agreement for
the purchase, sale or other disposition of any materials, equipment, supplies or
inventory in an amount in excess of $50,000 for a particular contract, except
individual purchase or sales orders from suppliers having a term of less than
three months incurred in the ordinary course of business; (f) any
58
instrument creating a lien or evidencing or related to indebtedness for borrowed
money; (g) any agreement relating to the provision of property management,
tenant representation, agency, leasing or other services by the Xxxxxxxxx
Companies or the Xxxxxxxxx Subsidiaries or (h) any other material contract or
agreement not of the type covered by any of the other specific items of this
section. Each of the contracts, instruments, and other documents described on
the Xxxxxxxxx Disclosure Schedule is valid and in full force and effect, and a
true and complete copy thereof heretofore have been made available to the La
Salle Partnerships. To the knowledge of Xxxxxxxxx Management, the Xxxxxxxxx
Companies and each of the Xxxxxxxxx Subsidiaries is not in default, or alleged
to be in default, in any material respect under any of the contracts,
instruments, obligations or other documents to which it is a party or by which
it is bound. To the knowledge of Xxxxxxxxx Management, no party with whom the
Xxxxxxxxx Companies or any of the Xxxxxxxxx Subsidiaries has an agreement is in
default thereunder in any material respect.
4.15 Clients.
-------
The Xxxxxxxxx Disclosure Schedule lists the 10 largest clients of the
Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries for the fiscal year ended
Decem-
59
ber 31, 1996 which schedule also lists the amount of the net revenues of the
Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries applicable to each client so
listed. Except as disclosed on the Xxxxxxxxx Disclosure Schedule, and except
for clients with whom the Xxxxxxxxx Companies' relationship to date has been
for specific assignments and therefore does not contemplate the rendering of
ongoing services, the Xxxxxxxxx Companies have received no notice that and
Xxxxxxxxx Management has no actual knowledge that, any such client will not
continue to do business with the Xxxxxxxxx Companies or the Xxxxxxxxx
Subsidiaries subsequent to the closing of the transactions contemplated by this
Agreement.
4.16 Tax Matters.
-----------
The Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries have paid all
material Taxes due from and payable by them prior to the date hereof and will
pay, prior to the Closing, all material Taxes due from and payable by them prior
to the Closing or adequate provision shall have been made for such Taxes on the
Xxxxxxxxx Financial Statements. The Xxxxxxxxx Companies and the Xxxxxxxxx
Subsidiaries have filed and will, prior to the Closing, file all returns,
declarations of estimated tax, tax reports, information returns and statements
required to be filed by them prior
60
to the Closing (other than those for which extensions shall have been granted
prior to Closing) relating to any Taxes will respect to any income, properties
or operations of Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries prior to
Closing (collectively, "Returns"). Except as set forth on the Xxxxxxxxx
Disclosure Schedule, as of the time of filing, the Returns were prepared in
accordance with applicable law and correctly reflected (and, as to any Returns
not filed as of the date hereof, will correctly reflect) the facts regarding the
income, business, assets, operations, activities and status of Xxxxxxxxx
Companies and the Xxxxxxxxx Subsidiaries and any other information required to
be shown therein. The Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries have
timely paid all Taxes that have been shown as due and payable on the Returns
that have been filed. The Xxxxxxxxx Companies have provided to the La Salle
Partnerships true and complete copies of the Federal and state income tax
returns of the Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries for the five
years ended December 31, 1995, together with true and complete copies as filed
of all reports of any taxing authority relating to examinations thereof which
have been delivered to the Xxxxxxxxx Companies or any Xxxxxxxxx Subsidiary.
Except as disclosed on the Xxxxxxxxx Disclosure Schedule,
61
the Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries (A) have made provision
on the Xxxxxxxxx Financial Statements for the period ending December 31, 1996
and March 31, 1997 for all Taxes payable for any periods that end on or before
December 31, 1996 for which no Returns have yet been filed and for any periods
that begin on or before March 1, 1997 and end after such date to the extent such
Taxes are attributable to the portion of any period ending on March 31, 1997
and (B) have made provision on its books and records for all Taxes payable for
any periods that end on or before the date of the Closing for which no Returns
have then been filed and for any periods that begin on or before the date of the
Closing and end after such date to the extent such Taxes are attributable to the
portion of any such period ending on such date. The Xxxxxxxxx Companies and the
Xxxxxxxxx Subsidiaries are not delinquent in the payment of any Taxes nor, other
than set forth in the Xxxxxxxxx Disclosure Schedule, have they requested any
extension of time within which to file any Return, which Return has not since
been filed. With respect to all Tax Returns of Xxxxxxxxx Companies and the
Xxxxxxxxx Subsidiaries, the statute of limitations for the assessment of Taxes
has expired with respect to all periods ending on or before January 1, 1993 (for
federal and state income tax purpos-
62
es), and, to Xxxxxxxxx Management's knowledge, there are no anticipated or
pending Tax audits of any Returns of the Xxxxxxxxx Companies and the Xxxxxxxxx
Subsidiaries. Except as set forth on the Xxxxxxxxx Disclosure Schedule, no
deficiency or addition to Taxes, interest or penalties exists against the
Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries (or any member of any
affiliated or combined group of which Xxxxxxxxx Companies could be liable).
Except as set forth on the Xxxxxxxxx Disclosure Schedule, the Xxxxxxxxx
Companies and the Xxxxxxxxx Subsidiaries have not been granted, nor does there
exist, any extension, waiver or agreement for the extension of time for the
assessment or payment of any Tax by the Xxxxxxxxx Companies and the Xxxxxxxxx
Subsidiaries. Each of the Xxxxxxxxx Companies has made a valid election,
accepted by the Internal Revenue Service, under Section 1362(a) of the Code to
be taxed as an "S corporation" and has qualified to be treated under Section
1361 of the Code as an S corporation for Federal income tax purposes for all
periods beginning May 1, 1987 through the date hereof and will be treated as an
S corporation from the date hereof through the close of business on the day
before the Closing. Each of the Xxxxxxxxx Companies has qualified for and made
corresponding elections under the tax laws of every state in which
63
Xxxxxxxxx Companies is subject to Tax for each of such taxable years. The
Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries have not made an election
to be treated as a "consenting corporation" under Section 341(f) of the Code.
4.17 Title to Properties; Absence of Liens and Encumbrances, Etc.
------------------------------------------------------------
The Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries have good and
marketable title to, or a valid leasehold interest in, all of their properties
and assets, real and personal (including those reflected in the consolidated
balance sheets contained in the Xxxxxxxxx Financial Statements except as sold or
otherwise disposed of in the ordinary course of business since the date
thereof), in each case free and clear of all liens and encumbrances, except (i)
liens and encumbrances reflected in such financial statements or in the notes to
such financial statements or securing debt reflected as liabilities on such
financial statements, (ii) liens for current taxes and assessments not in
default or which are being contested in good faith, (iii) mechanics', carriers',
workmen's, repairmen's, statutory or common law liens relating to payments that
are not delinquent or which are being contested in good faith and (iv)
imperfections of title, easements and encumbrances, liens, rights of way,
variances and other matters or limi-
64
tations of any kind, if any, which would not result in a material adverse effect
on the Xxxxxxxxx Companies' or the Xxxxxxxxx Subsidiaries' use of the property
affected. Except as is not reasonably expected to cause a Xxxxxxxxx Material
Adverse Effect, neither the Xxxxxxxxx Companies nor any of the Xxxxxxxxx
Subsidiaries has received any notice of violation of any applicable zoning laws,
orders, regulations, or requirements relating to its operations or its
properties which has not been remedied. The Xxxxxxxxx Management has no
knowledge of any threatened or impending condemnation of any properties of the
Xxxxxxxxx Companies or the Xxxxxxxxx Subsidiaries by any governmental authority.
The Xxxxxxxxx Companies are the sole owners of or have the right to use all
assets necessary to the conduct of their businesses as currently conducted.
4.18 Pension and Employee Benefit Plans.
(a) Except as shown on the Xxxxxxxxx Disclosure Schedule, there
are no plans (other than multiemployer plans as defined in Section 3(37) of
ERISA or plans providing welfare benefits for which the Xxxxxxxxx Companies or
the Xxxxxxxxx Subsidiaries pass on the expense or are otherwise 100% reimbursed)
for pension, profit sharing, deferred compensation, severance pay, bonuses,
stock options, stock purchases, or any other form of re-
65
tirement or deferred benefit, or for any health, accident or other welfare
benefit, including, without limitation, employee benefit plans as defined in
Section 3(3) of ERISA and all other material employee benefit arrangements,
obligations, customs or practices, which are sponsored or maintained by any of
the Xxxxxxxxx Companies or the Xxxxxxxxx Subsidiaries and under which any
current or former employee of the Xxxxxxxxx Companies (including, without
limitation, any former employee of The Xxxxxxxxx Company, Inc.) or the Xxxxxxxxx
subsidiaries, is entitled to any benefit or is entitled to participate
(collectively, the "Xxxxxxxxx Plans"). The Xxxxxxxxx Companies have delivered
or made available to the DCL Partnerships true and complete copies of each of
the Xxxxxxxxx Plans, all trust agreements, insurance contracts, investment
management agreements and other agreements currently in effect with respect to
the Xxxxxxxxx Plans, written descriptions of all material non-written agreements
relating to the Xxxxxxxxx Plans (including, without limitation, nonwritten
agreements with current or former employees for post-employment health or other
welfare benefits other than benefits for which the beneficiary pays 100% of the
premium or the Xxxxxxxxx Companies' cost), all reports regarding the Xxxxxxxxx
Plans received by the Xxxxxxxxx Companies,
66
Xxxxxxxxx Subsidiaries or Xxxxxxxxx Management within the three years preceding
the date of this Agreement from plan actuaries, administrators or consultants
concerning the testing of a Xxxxxxxxx Plan for compliance with the qualification
requirements of the Code, all notices within the three years preceding the date
of this Agreement received from any governmental agency or entity regarding any
Xxxxxxxxx Plan, all documents relating to the funding (including the latest
actuarial report), termination or attempted termination of any Xxxxxxxxx Plan
which is subject to Title IV of ERISA, and all summary plan descriptions
currently in effect with respect to the Xxxxxxxxx Plans. Each of the Xxxxxxxxx
Plans complies, in form and in operation, with applicable law. All required
governmental filings have been made with respect to the Xxxxxxxxx Plans. Except
as set forth on the Xxxxxxxxx Disclosure Schedule, the Xxxxxxxxx Companies, the
Xxxxxxxxx Subsidiaries and Xxxxxxxxx Management have no knowledge of any
material pending investigations, proceedings or other matters concerning the
Xxxxxxxxx Plans before the Internal Revenue Service, the Department of Labor or
the Pension Benefit Guaranty Corporation. There are no pending or threatened
claims by or disputes with any participants or former participants in the
Xxxxxxxxx Plans, other than
67
benefit claims by participants made in the normal course of operating the
Xxxxxxxxx Plans. Except as set forth on the Xxxxxxxxx Disclosure Schedule, the
Xxxxxxxxx Companies, Xxxxxxxxx Subsidiaries and Xxxxxxxxx Management have no
knowledge of any facts which could give rise to any claims against the Xxxxxxxxx
Plans or against any Xxxxxxxxx Companies, Xxxxxxxxx Subsidiaries or fiduciary of
any Xxxxxxxxx Plan other than benefit claims by participants expected in the
normal course of operating the Xxxxxxxxx Plans and claims which would not result
in a Xxxxxxxxx Material Adverse Effect. None of the Xxxxxxxxx Companies, the
Xxxxxxxxx Subsidiaries or, to the knowledge of the Xxxxxxxxx Companies,
Xxxxxxxxx Subsidiaries or Xxxxxxxxx Management, any other fiduciary of any
Xxxxxxxxx Plan has given notice to their fiduciary liability insurer of any
claims or potential claims against it with respect to any Xxxxxxxxx Plan. True
and correct copies of the annual reports of the Xxxxxxxxx Plans filed with the
Department of Labor and the Internal Revenue Service for the last three plan
years for which such reports have become due, and all audited financial
statements of the Xxxxxxxxx Plans for the plan years ended in 1993, 1994, and
1995 previously have been made available to the DEL Participants. No
"prohibited transaction" as defined in Section 406(a) and (b) of
68
ERISA, or as defined in Section 4975 of the Code, has occurred with respect to
any Xxxxxxxxx Plan, except transactions exempt under Section 408 of ERISA or
Section 4975(d) of the Code. Except with respect to certain Settlement
Agreements set forth on the Xxxxxxxxx Disclosure Schedule, each Xxxxxxxxx Plan
(including without limitation a plan covering retirees or beneficiaries of
retirees) may be terminated or amended by the plan sponsor, in any manner and at
any time, without the consent of any person covered by such plan and without any
further liability for benefits that may be accrued or expenses that may be
incurred after the date of such termination or amendment, other than benefits
required under Section 4980B of the Code or Sections 601 through 608 of ERISA if
paid 100% by the participant or beneficiary.
(b) Each of the Xxxxxxxxx Plans which is intended to qualify
under Section 401 of the Code is designated on the Xxxxxxxxx Disclosure Schedule
as being a qualified plan (the Xxxxxxxxx Plans so designated being hereinafter
referred to as the "Xxxxxxxxx Qualified Plans"). Each Xxxxxxxxx Qualified Plan
is qualified under Section 401(a) of the Code and is the subject of a currently
effective determination letter from the Internal Revenue Service confirming such
qualification. Any operational
69
defect or violation that will or might disqualify a Xxxxxxxxx Qualified Plan can
be remedied under the Internal Revenue Service Closing Agreement Program,
Voluntary Compliance Resolution Program or Administrative Policy Regarding Self-
Correction without resulting in a Xxxxxxxxx Material Adverse Effect. True and
correct copies of all currently effective determination letters from the
Internal Revenue Service with respect to the Xxxxxxxxx Qualified Plans have been
made available to the DEL Partnerships.
(c) With respect to each Xxxxxxxxx Plan, none of the Xxxxxxxxx
Companies or the Xxxxxxxxx Subsidiaries has incurred any accumulated funding
deficiency within the meaning of ERISA, has obtained a waiver of any minimum
funding requirements imposed by ERISA or the Code in respect of such Xxxxxxxxx
Plan, has incurred any liability in connection with the termination of or
withdrawal from a Xxxxxxxxx Plan subject to Title IV of ERISA, has otherwise
incurred any liability to the Pension Benefit Guaranty Corporation in connection
with any Xxxxxxxxx Plan (except liability under Section 4007 of ERISA), has
ceased operations at any facility or has withdrawn from any Xxxxxxxxx Plan in a
manner that would give rise to liability under Section 4062, 4063 or 4064 of
ERISA, or has failed to pay all premiums due to the Pension Benefit Guaranty
Corpora-
70
tion under Section 4007 or ERISA. No "reportable event," as such term is
defined in Section 4043 of ERISA and in regulations issued thereunder, has
occurred with respect to the Xxxxxxxxx Plans since the effective date of ERISA,
other than events with respect to which the Department of Labor has waived the
requirement of 30 days' notice. Except as shown on the Xxxxxxxxx Disclosure
Schedule, none of the Xxxxxxxxx Companies or Xxxxxxxxx Subsidiaries has any
liability with respect to any pension plan subject to Title IV of ERISA, and the
benefit liabilities (as defined in Section 4001(a)(16) of ERISA) under each
Xxxxxxxxx Plan that is a Title IV plan, calculated using the actuarial
assumptions that would be used by the Pension Benefit Guaranty Corporation in
the event of plan termination, do not exceed the fair market value of plan
assets.
(d) Except as disclosed in the Xxxxxxxxx Disclosure Schedule,
none of the Xxxxxxxxx Companies or the Xxxxxxxxx Subsidiaries has contributed or
is or was obligated to make payments, in each case with respect to any current
or former employees, to any multiemployer pension plan as defined by Section
3(37) of ERISA. The multiemployer plans listed or is required to be listed on
the Xxxxxxxxx Disclosure Schedule shall be referred to hereinafter as the
"Multiemployer Plans." The Xxxxxxxxx
71
Companies and Xxxxxxxxx Subsidiaries have made all contributions to the
Multiemployer Plans as required by law and by the applicable collective
bargaining agreements. The Xxxxxxxxx Companies will use their best efforts in
good faith to provide to the DEL Partnerships as promptly as such information is
made available by the Multi-employer Plan a schedule showing, with respect to
each Multiemployer Plan, the amount of potential withdrawal liability of the
Xxxxxxxxx Companies or the Xxxxxxxxx Subsidiaries, calculated by each
Multiemployer Plan as of its last valuation date. To their knowledge and the
knowledge of Xxxxxxxxx Management, the Xxxxxxxxx Companies and Xxxxxxxxx
Subsidiaries have not incurred any liability under Title IV of the ERISA as a
result of any complete or partial withdrawal from the Multiemployer Plan. To
the knowledge of the Xxxxxxxxx Companies, Xxxxxxxxx Subsidiaries and Xxxxxxxxx
Management, no event has occurred or circumstances exists (other than the
transactions contemplated under this Agreement) that presents a risk of the
occurrence of any future withdrawal form, or the termination, reorganization, or
insolvency of, a Multiemployer Plan.
(e) None of (i) the aggregate amount of liability of the
Xxxxxxxxx Companies and Xxxxxxxxx Subsidiaries with respect to employee benefits
for retired em-
72
ployees and their beneficiaries (ii) the aggregate liability of the Xxxxxxxxx
Companies and Xxxxxxxxx Subsidiaries with respect to any Xxxxxxxxx Plan subject
to Title IV of ERISA (including any liability which may be incurred in
connection with the termination of such plan), will cause a Xxxxxxxxx Material
Adverse Effect.
(f) None of the Xxxxxxxxx Companies or Xxxxxxxxx Subsidiaries
has any liability (including a contingent liability) with respect to any
employee benefit plan or arrangement which is not a Xxxxxxxxx Plan or
Multiemployer Plan except plans providing welfare benefits for which the
Xxxxxxxxx Companies or Xxxxxxxxx Subsidiaries pass on the expense or are
otherwise 100% reimbursed.
4.19 Insurance.
The Xxxxxxxxx Disclosure Schedule summarizes the insurance currently
carried by the Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries in respect of
their respective properties and operations, including, without limitation,
general liability, umbrella liability, contractual liability, employers'
liability, automobile liability, workers' compensation, property and casualty,
business interruption and other insurance. To the knowledge of Xxxxxxxxx
Management, all such insurance continues to be in full force and effect, and the
Xxxxxxxxx Companies and the Xxxxxxxxx
73
Subsidiaries are in compliance with all requirements and provisions thereof.
The Xxxxxxxxx Companies has no reason to believe that any such insurance
coverage will not be renewed upon the expiration thereof at premiums
substantially equivalent to those currently being paid.
4.20 Environmental Matters.
(a) As used in this Section 4.20, the "Xxxxxxxxx Properties"
means any real property or facility currently or previously owned, leased or
operated by the Xxxxxxxxx Companies or the Xxxxxxxxx Subsidiaries, directly or
indirectly.
(b) The Xxxxxxxxx Disclosure Schedule lists all material
reports, audits, assessments, studies, inspections, evaluations, surveys,
corrective action plans, remedial action plans, and other similar documents in
the possession or control of the Xxxxxxxxx Companies relating to the
environmental conditions of any of the Xxxxxxxxx Properties.
(c) The Xxxxxxxxx Disclosure Schedule lists all material
agreements, judgments, orders or similar documents which obligate either of the
Xxxxxxxxx Companies or any of the Xxxxxxxxx Subsidiaries to indemnify third
parties in connection with Materials of Environmental Concern at any property,
or which obligate either of the
74
Xxxxxxxxx Companies or any of the Xxxxxxxxx Subsidiaries to investigate, assess,
clean up, remediate, xxxxx, monitor or otherwise address Materials of
Environmental Concern at any property.
(d) Except as set forth on the Xxxxxxxxx Disclosure Schedule or
that would not reasonably be expected to have a Xxxxxxxxx Material Adverse
Effect, none of the Xxxxxxxxx Properties is listed on or has been proposed for
listing on the National Priorities List promulgated CERCLA, is listed on the
CERCLIS, or, to the knowledge of Xxxxxxxxx Management, is listed on any state or
local list of potentially contaminated properties.
(e) Except as set forth on the Xxxxxxxxx Disclosure Schedule or
that would not reasonably be expected to have a Xxxxxxxxx Material Adverse
Effect, neither of the Xxxxxxxxx Companies nor any of the Xxxxxxxxx Subsidiaries
has received any request for information from any governmental entity pertaining
to the environmental condition of any property, or the use, generation,
transportation, treatment, storage, disposal or other management of Materials of
Environmental Concern.
(f) Except as set forth on the Xxxxxxxxx Disclosure Schedule or
that would not reasonably be expected to have a Xxxxxxxxx Material Adverse
Effect, neither of
75
the Xxxxxxxxx Companies nor any of the Xxxxxxxxx Subsidiaries has received
notice of potential liability for environmental conditions at any of the
Xxxxxxxxx Properties or with respect to any other property.
(g) Except as set froth on the Xxxxxxxxx Disclosure Schedule or
that would not reasonably be expected to have a Xxxxxxxxx Material Adverse
Effect, to the knowledge of Xxxxxxxxx Management, no environmental approvals,
clearances or consents are required under applicable law from any governmental
agency or authority in order for the parties to this Agreement to consummate the
transactions contemplated herein.
(h) Except as would not have a Xxxxxxxxx Material Adverse
Effect, or as disclosed on the Xxxxxxxxx Disclosure Schedule,
(i) to the knowledge of Xxxxxxxxx Management, there has
been no material Release at, on, under or from any of the Xxxxxxxxx
Properties;
(ii) to the knowledge of Xxxxxxxxx Management, all
underground storage tanks owned or operated by the Xxxxxxxxx Companies or
the Xxxxxxxxx Subsidiaries are properly registered and meet all applicable
standards for release
76
detection, corrosion protection and spill and overfill protection;
(iii) there are no administrative, civil or criminal
proceedings, demands, suits, complaints, citations, notices of violation or
claims pending, or to the knowledge of the Xxxxxxxxx Management threatened,
against the Xxxxxxxxx Companies or the Xxxxxxxxx Subsidiaries in connection
with Materials of Environmental Concern at, or the environmental condition
of any of the Xxxxxxxxx Properties; in connection with activities at or on
any of the Xxxxxxxxx Properties affecting the environment, health or
safety; or to the knowledge of Xxxxxxxxx Management, in connection with a
Release at any other property.
(iv) The Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries
are in material compliance with Environmental Laws.
4.21 No Pending Transactions.
Except for the transactions contemplated by this Agreement or as
disclosed on the Xxxxxxxxx Disclosure Schedule, neither the Xxxxxxxxx Companies
nor any of the Xxxxxxxxx Subsidiaries is a party to or bound by or the subject
of any agreement, undertaking or commitment (i) to
77
merge or consolidate with, or acquire all or substantially all of the property
and assets of, any other corporation or person or (ii) to sell, lease or
exchange all or substantially all of its property and assets to any other
corporation or person.
4.22 Disclosure.
No representation or warranty made by the Xxxxxxxxx Companies in this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary to make the statements
contained herein or therein not misleading.
4.23 Transactions with Affiliates.
Except as disclosed on the Xxxxxxxxx Disclosure Schedule, neither the
Xxxxxxxxx Companies nor any of the Xxxxxxxxx Subsidiaries is a party to any
transaction (other than the employment agreements set forth in the Xxxxxxxxx
Disclosure Schedule or agreements on terms no less favorable to the Xxxxxxxxx
Companies than could be obtained from an independent third party) with any (i)
current officer or director of the Xxxxxxxxx Companies or any of the Xxxxxxxxx
Subsidiaries, (ii) any parent, spouse, child, brother or sister of any such
officer or director or (iii) any corporation or partnership of which any such
officer or director or any such family relation is an officer, director, part-
78
ner or greater than 10% stockholder (based on percentage ownership of voting
stock) or (iv) any Affiliate of any such persons or entities, including, without
limitation, any transaction involving a contract, agreement or other arrangement
providing for the employment of, furnishing of materials, products or services
by, rental of real or personal property from, or otherwise requiring payments
to, any such person or entity.
4.24 Investment Intent.
In connection with the transactions contemplated by this Agreement,
each of the Stockholders and G-LLC hereby represents and warrants that:
(a) such Stockholder, or such Stockholder's representative, had
the opportunity to ask questions of, and receive answers from, executive
officers of the La Salle Partnerships concerning the terms and conditions of
this Agreement and has had access to any additional information which such
Stockholder considered necessary for evaluating an investment in the Units;
(b) such Stockholder has been advised and understands that he
must bear the economic risks of the Units to be issued hereunder for an
indefinite period of time because the Units are subject to the restrictions upon
transfer contained in the La Salle Partnership Agreements
79
and, therefore, may not be sold unless such sale is made in compliance with the
provisions of such Agreements; and
(c) such Stockholder, together with such Stockholder's
representative, has sufficient knowledge and experience in financial and
business matters to enable such Stockholder, together with such Stockholder's
representative, to be capable of evaluating the merits and the risks of the
exchange of the Units for the Xxxxxxxxx Capital Stock contemplated by this
Agreement and such Stockholders' prospective investment in the La Salle
Partnerships.
4.25 Consent to Other Matters.
G-LLC and the Stockholders shall have consented to all of the matters
set forth in the Consent of The Xxxxxxxxx Companies attached hereto as Exhibit
K.
5. PRECLOSING COVENANTS OF THE DEL PARTNERSHIPS AND LA SALLE
PARTNERSHIPS.
The La Salle Partnerships covenant to the Stockholders that, except as
otherwise consented to in writing by the Stockholders after the date of this
Agreement and prior to Closing:
5.1 Conduct of Business.
With respect to each of the DEL Partnerships and the La Salle
Partnerships and each of the La Salle Subsidiaries (a) its business will be
conducted in the ordinary
80
course; (b) it will use all reasonable efforts to preserve its business
organization intact, to keep available the service of its officers and employees
and to preserve the goodwill of clients, suppliers and others doing business
with it; (c) it will not acquire or agree to acquire by merging or consolidating
with, purchasing substantially all of the assets of, or otherwise, any business
or any corporation, partnership, association or other business organization or
division thereof; (d) no change shall be made in its partnership agreement,
charter documents, by-laws or other constitutive documents; (e) no change shall
be made in the number of limited partnership units or shares or terms of its
authorized, issued or outstanding limited partnership interests or capital
stock, nor shall it enter into or grant any options, calls, contracts, or
commitments of any character relating to any issued or unissued limited
partnership units or capital stock; (f) no dividend or other distribution or
payment shall be declared or paid in respect of its limited partnership units or
capital stock; and (g) no other action shall be taken that would if taken after
the Closing require the consent of the Stockholders pursuant to the DEL
Partnerships or the La Salle Partnership Agreements.
81
5.2 Amendment of La Salle Partnership Agreements.
--------------------------------------------
The La Salle Partnerships will take such action as may be necessary to
enter into the amendments to the La Salle Partnership Agreements set forth in
Exhibits B and C.
5.3 Information.
-----------
The La Salle Partnerships and the La Salle Subsidiaries will give to
the Xxxxxxxxx Companies and to the Xxxxxxxxx Companies' officers, accountants,
counsel and other representatives full access, during normal business hours upon
reasonable notice throughout the period prior to the Closing, to all the
properties, books, contracts, commitments and records of the La Salle
Partnerships and the La Salle Subsidiaries. The La Salle Partnerships and the La
Salle Subsidiaries will furnish to the Xxxxxxxxx Companies during such period
all such information concerning the La Salle Partnerships and the La Salle
Subsidiaries and their business and properties as the Xxxxxxxxx Companies may
reasonably request. If requested by the Xxxxxxxxx Companies, the La Salle
Partnerships will use their reasonable efforts to cause to be made available to
the Xxxxxxxxx Companies and their accountants the work papers and other
information utilized by the La Salle Partnerships' accoun-
82
tants in the preparation of the financial statements of the La Salle
Partnerships and the La Salle Subsidiaries.
5.4 Consents.
--------
The DEL Partnerships and the La Salle Partnerships will take all
necessary corporate or other action, and use all reasonable efforts to complete
all filings and obtain all governmental and other consents and approvals,
required for consummation of the transactions contemplated by this Agreement.
5.5 Employee Matters.
----------------
Through the date of the Closing, there will be no material change in
the operations of the La Salle Plans or in the documents constituting or
affecting the La Salle Plans.
6. PRECLOSING COVENANTS OF THE XXXXXXXXX COMPANIES AND THE
STOCKHOLDERS.
The Xxxxxxxxx Companies and the Stockholders covenant to the La Salle
Partnerships that, except for the Restructuring or as otherwise set forth in the
Xxxxxxxxx Disclosure Schedule or as otherwise consented to in writing by the La
Salle Partnerships after the date of this Agreement and prior to Closing:
83
6.1 Conduct of Business.
-------------------
With respect to each of the Xxxxxxxxx Companies and each of the
Xxxxxxxxx Subsidiaries except for actions taken to effect the Restructuring, (a)
its business will be conducted in the ordinary course; (b) except as may be
otherwise required by applicable law or regulation, it will not enter into,
adopt or amend any employee pension, profit-sharing, retirement, insurance,
incentive compensation, severance or similar plan, agreement or arrangement,
enter into or amend any employment contracts, or increase the salaries or
compensation of its executive officers or, other than ordinary increases in
salaries in accordance with past practices, of other employees; (c) it shall not
incur any liability for borrowed money, encumber any of its assets or enter into
any agreements relating to the incurrence of additional debt; (d) it will use
all reasonable efforts to preserve its business organization intact, to keep
available the service of its officers and employees and to preserve the goodwill
of clients, suppliers and others doing business with it; (e) it will not acquire
or agree to acquire by merging or consolidating with, purchasing substantially
all of the assets of, or otherwise, any business or any corporation,
partnership, association or other business organization or division thereof; (f)
it
84
will not enter into or amend any contract or agreement with any labor union or
any lease of real estate or personal property other than leases entered into or
amended in the ordinary course of business in a manner consistent with past
practices calling for yearly lease payments not in excess of $50,000; (g) it
will not enter into any agreement for the purchase, sale or other disposition,
or purchase, sell or dispose of, any equipment, supplies, inventory, investments
or other assets other than in the ordinary course of business in a manner
consistent with past practice; (h) unless approved by the La Salle Partnerships
in writing, it will not enter into any agreement that commits either of the
Xxxxxxxxx Companies or the Xxxxxxxxx Subsidiaries to any further financial or
performance obligations unless such agreement is terminable without penalty on
notice of 90 days or less; (i) it will not compromise or write off any material
account receivable other than by collection of the full recorded amount thereof
other than in the ordinary course of business in a manner consistent with past
practice; (j) no change shall be made in its charter documents or by-laws; (k)
no change shall be made in the number of shares or terms of its authorized,
issued or outstanding capital stock, nor shall it enter into or grant any
options, calls, contracts or commitments of any
85
character relating to any issued or unissued capital stock; and (l) no dividend
or other distribution or payments shall be declared or paid in respect of its
capital stock, except for any distributions or assignments necessary to effect
the Restructuring.
6.2 Information.
-----------
The Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries will give to
the La Salle Partnerships and to the La Salle Partnerships' officers,
accountants, counsel and other representatives full access, during normal
business hours upon reasonable notice throughout the period prior to the
Closing, to all the properties, books, contracts, commitments and records of
the Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries. The Xxxxxxxxx Companies
and the Xxxxxxxxx Subsidiaries will furnish to the La Salle Partnerships during
such period all such information concerning the Xxxxxxxxx Companies and the
Xxxxxxxxx Subsidiaries and their business and properties as the La Salle
Partnerships may reasonably request. If requested by the La Salle Partnerships,
the Xxxxxxxxx Companies will use their reasonable efforts to cause to be made
available to the La Salle Partnerships and the La Salle Partnerships'
accountants the work papers and other information utilized by the Xxxxxxxxx
Companies' accountants in the preparation of the
86
financial statements of the Xxxxxxxxx Companies and the Xxxxxxxxx Subsidiaries.
6.3 Consents.
--------
The Xxxxxxxxx Companies and the Stockholders agree to take all
necessary corporate or other action and to use their all reasonable efforts to
complete all filings and obtain all governmental and other consents and
approvals required for consummation of the transactions contemplated by this
Agreement.
6.4 Corporate Transactions.
----------------------
From the date of this Agreement until April 28, 1997, neither the
Xxxxxxxxx Companies nor any of the Stockholders will seek the affiliation of the
Xxxxxxxxx Companies with any entity other than the La Salle Partnerships and
neither will negotiate or entertain any offer with respect to the sale of part
or all of the Xxxxxxxxx Capital Stock or substantially all of the Xxxxxxxxx
Companies' assets. Neither the Xxxxxxxxx Companies nor any of the Stockholders
will, nor will the Xxxxxxxxx Companies or any of the Stockholders permit any
Xxxxxxxxx Subsidiary to, nor will the Xxxxxxxxx Companies or any of the
Stockholders authorize or permit any officer, director or employee of the
Xxxxxxxxx Companies to, or authorize any investment banker, attorney, accountant
or other representative re-
87
tained by the Xxxxxxxxx Companies or any of the Xxxxxxxxx Subsidiaries or
Stockholders to, solicit or encourage (including by way of furnishing
information) any inquiries or the making of any proposal that is reasonably
expected may lead to the acquisition of part or all of the Xxxxxxxxx Capital
Stock or substantially all of its assets by any person other than the La Salle
Partnerships.
6.5 Employee Matters.
----------------
(a) Through the date of the Closing, there will be no material
change in the operations of the Xxxxxxxxx Plans or in the documents
constituting or affecting the Xxxxxxxxx Plans.
(b) Prior to the Closing, the Xxxxxxxxx Companies and Xxxxxxxxx
Subsidiaries will make available to the La Salle Partnerships, La Salle
Subsidiaries and their agents, employees, accountants and other representatives,
upon their reasonable request, such actuarial, payroll, financial, personnel and
related information as necessary or appropriate for the purpose of preparing for
the administration of the Xxxxxxxxx Plans, the La Salle Plans and the payroll
records after the Closing with respect to employees affected by the
transactions contemplated hereunder.
88
6.6 Restructuring.
-------------
(a) On or prior to the Closing Date, the Stockholders shall cause
the Xxxxxxxxx Companies to sell, assign or otherwise convey (the
"Restructuring"), to an entity controlled by the Stockholders, all of the
Xxxxxxxxx Companies' right, title and interest in and to the following assets
(and all obligations and liabilities relating to such assets):
(i) cash, in an amount that will leave at least the amount
of case shown on the Closing Balance Sheet,
(ii) 10% partnership interest in Colonial Village Center
Associates, General Partnership,
(iii) New York's tenant representation business (including,
among other things, all contracts, agreements and accounts receivable
primarily relating to such business),
(iv) capital stock in Xxxxxxxxx Asset Advisors, Inc.,
(v) capital stock in DWA Fed Oak Inc.,
(vi) 16% partnership interest in Xxxxxxxxx Denver L.P.,
89
(vii) 99% partnership interest in Xxxxxxxxx Columbus Circle
Development Associates L.P.,
(viii) capital stock of Xxxxxxxxx Columbus Circle
Development Corp.,
(ix) the Xxxxxxxxx name,
(x) any carried interest in any property received in
connection with any properties owned or developed by Alliance Commercial
Properties, Ltd., pursuant to the co-investment agreement,
(xi) any carried interest in the One Xxxxxxxxx property,
(xii) the Co-investment Agreement, dated December 23, 1995,
among Xxxxxxxxx-Ohio, Xxxxxxx X. Xxxxx, Xxxxxxx Xxxx and the entity being
formed by Messrs. Stone and Xxxx,
(xiii) any carried interest in the Page Mill property,
(xiv) Indemnity and Contribution Agreement, dated as of
April 22, 1997, among the Xxxxxxxxx Companies, the Stockholders, E. Xxxxx
Xxxxxx, Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, and
90
(xv) certain other assets and liabilities necessary to
effect the distributions to G-LLC as set forth on the Closing Balance
Sheet, including without limitation, those assets and liabilities set forth
on Section 6.6 of the Xxxxxxxxx Disclosure Schedule (together with (i) -
(xiv) above, the "Excluded Property").
(b) In the event that an assignment in connection with the
Restructuring of any right, title or interest in, to or under any contract,
license, lease or other agreement or any claim or right to any benefit arising
thereunder or resulting therefrom, without the consent of a third party thereto,
would constitute a breach thereof, or in any way adversely affect the rights of
the Xxxxxxxxx Company or the Stockholders thereunder, and such consent is not
obtained, then this Agreement shall not constitute an agreement to assign such
contract, license, lease or other agreement and in such event, the Stockholders
and the La Salle Partnerships shall cooperate (to the extent permitted by law or
the terms of any applicable agreement) in a mutually agreeable arrangement under
which the Stockholders would, to the extent possible, obtain the benefits and
assume the obligations with respect to such asset, in accordance with this
Agreement, including sub-
91
contracting, sub-licensing, or sub-leasing to the Stockholders, or under which
the La Salle Partnerships would or would cause the Xxxxxxxxx Company to enforce
for the benefit of the Stockholders, with the Stockholders assuming the La Salle
Partnerships' or the Xxxxxxxxx Company's obligations, any and all rights of La
Salle Partnerships or the Xxxxxxxxx Company against a third party thereto. The
La Salle Partnerships shall or shall cause the Xxxxxxxxx Company to, without
further considerations therefor, pay and remit to the Stockholders promptly all
monies, right and other considerations received in respect of the Stockholders'
performance of such obligations. If and when any such consent shall be obtained
or such contract, license, lease or other agreement shall otherwise become
assignable, the La Salle Partnerships shall or shall cause the Xxxxxxxxx Company
to promptly assign all of its rights and obligations thereunder to the
Stockholders (or to their designee) without payment of further consideration and
the Stockholders shall, without the payment of any further consideration
therefor, assume such rights and obligations and La Salle Partnerships shall be
relieved of any and all liability hereunder. The Stockholders and the La Salle
Partnerships agree to use their reasonable best efforts to obtain the consent of
such other party to the assignment of
92
any of the Excluded Property to the Stockholders in all cases in which such
consent is or may be required for such assignment.
(c) Prior to the Closing, the Stockholders shall assume, remove,
extinguish or cause to be assumed, removed or extinguished all obligations and
liabilities of the Company including those arising out of the Excluded Property
(the "Excluded Liabilities"). After the Closing, all Excluded Liabilities shall
be liabilities of the Stockholders.
(d) The Stockholders shall cause the consolidated stockholders'
equity of the Xxxxxxxxx Companies at the Closing to be not less than $1,200,000,
and shall leave at least $750,000 in cash, and no liabilities for borrowed
money, in the Xxxxxxxxx Companies (subject to the adjustments footnoted on the
Closing Balance Sheet).
7. CONDITIONS TO THE LA SALLE PARTNERSHIPS' OBLIGATIONS.
Unless waived by the La Salle Partnerships in writing in their sole
discretion, all obligations of the La Salle Partnerships under this Agreement
are subject to the fulfillment, prior to or at the Closing, of each of the
following conditions:
93
7.1 Representations, Warranties and Covenants.
The representations and warranties of the Stockholders contained in
Section 4 of this Agreement shall be true at and as of the date of the Closing,
shall be deemed made again at and as of such date and be true as so made again;
the Xxxxxxxxx Companies and the Stockholders shall have performed all
obligations or complied with all covenants required by this Agreement to be
performed or complied with by them prior to the Closing, and the La Salle
Partnerships shall have received from the Xxxxxxxxx Companies and the
Stockholders a certificate or certificates in such reasonable detail as the La
Salle Partnerships may reasonably request, signed by the Chief Operating Officer
or Chief Executive Officer of the Xxxxxxxxx Companies and by the Representatives
on behalf of the Stockholders and dated the date of Closing, to the foregoing
effect. The Xxxxxxxxx Companies, G-LLC and the Stockholders shall have made the
closing deliveries set forth in Section 2.3(a).
7.2 Binding Court Order.
There shall not be in effect any binding court order against the
Xxxxxxxxx Companies, G-LLC, the DEL Partnerships, the La Salle Partnerships, or
their respective officers or directors, or any of the Stockholders,
94
which restrains or prohibits any of the transactions contemplated by this
Agreement.
8. CONDITIONS TO THE XXXXXXXXX COMPANIES', G-LLC'S AND THE
STOCKHOLDERS' OBLIGATIONS.
Unless waived by the Xxxxxxxxx Companies in writing in its sole discretion,
all obligations of the Xxxxxxxxx Companies, G-LLC and the Stockholders under
this Agreement are subject to the fulfillment, prior to or at the Closing, of
each of the following conditions:
8.1 Representations, Warranties and Covenants.
The representations and warranties of the La Salle Partnerships
contained in Section 3 of this Agreement shall be true at and as of the date of
the Closing, shall be deemed made again at and as of such date and be true as so
made again; the La Salle Partnerships shall have performed all obligations or
complied with in all materials respects all covenants required by this Agreement
to be performed or complied with by it on or prior to the Closing; and the
Xxxxxxxxx Companies and the Stockholders shall have received from the La Salle
Partnerships a certificate or certificates in such reasonable detail as the
Xxxxxxxxx Companies may reasonably request, signed by the Chief Operating
Officer or Chief Financial Officer of the La Salle Partnerships and dated the
date of Closing, to the
95
foregoing effect. The DEL Partnerships and the La Salle Partnerships shall have
made the closing deliveries set forth in Section 2.3(b).
8.2 No Binding Court Order.
There shall not be in effect any binding court order against the
Xxxxxxxxx Companies, G-LLC, the DEL Partnerships, the La Salle Partnerships, or
their respective officers or directors, or any of the Stockholders, which
restrains or prohibits any of the transactions contemplated by this Agreement.
9. POST-CLOSING COVENANTS.
9.1 Tax Matters.
(a) The DEL Partnerships and the La Salle Partnerships shall be
responsible for all transfer, excise, stamp, sale, use, recording or similar
taxes or fees arising out of the sale, transfer, conveyance or assignment of the
Xxxxxxxxx Capital stock by G-LLC to the La Salle Partnerships.
(b) The Stockholders shall cause the Xxxxxxxxx Companies, G-LLC
and the Xxxxxxxxx Subsidiaries to file when due all Returns that are required to
be filed by the Xxxxxxxxx Companies, G-LLC and the Xxxxxxxxx Subsidiaries for
taxable years or periods ending on or before the Closing, and the La Salle
Partnerships shall file or cause
96
to be filed when due all other Returns that are required to be filed by or with
respect to the Xxxxxxxxx Companies, G-LLC and the Xxxxxxxxx Subsidiaries.
(c) (i) Notwithstanding any other provision of this Agreement,
including, without limitation, Section 10.3, the Stockholders shall be
liable for and shall indemnify the La Salle Partnerships, the La Salle
Subsidiaries and each of their respective Affiliates for (A) any loss or
damage resulting from any misrepresentation made in Section 4.16, (B) Taxes
of the Xxxxxxxxx Companies, G-LLC and the Xxxxxxxxx Subsidiaries for any
taxable years or periods that end on or before the Closing and, with
respect to any taxable years or periods beginning before and ending after
the Closing, the portion of such taxable years ending on and including the
Closing, including any taxes that become payable by reason of the
conversion of the Xxxxxxxxx Companies from S corporations to C
corporations, and (C) all claims, actions, suits, proceedings, demands,
assessments, judgments, costs, attorneys' fees and expenses of any nature
related to the foregoing.
(ii) For purposes of subparagraph (i) above, whenever it is
necessary to determine
97
the liability for Taxes of the Xxxxxxxxx Companies, G-LLC and the Xxxxxxxxx
Subsidiaries for a portion of a taxable year or period that begins before
and ends after the Closing, the determination of such Taxes for the portion
of the year or period ending on, and the portion of the year or period
beginning after, the Closing, shall be determined using the closing of
books method described in Section 1362(e)(1) of the Code.
(iii) Except as set forth in Section 4.16 and in Section
12, the indemnification obligations set forth in subparagraph (i) above
shall not be limited in any way and shall survive the Closing under this
Agreement. In making a claim for indemnification hereunder, the La Salle
Partnerships, the La Salle Partnership, the La Salle Subsidiaries and the
Stockholders shall follow the procedures set forth in Section 10.4.
9.2 Interest in Xxxxxx.
The parties agree that after the Closing, any property, payment,
proceeds, etc. received by Xxxxxxxxx-Ohio in connection with its residual
carried interest in the Xxxxxx project pursuant to which Xxxxxxxxx-Ohio,
together with a consortium, submitted a bid to provide ser-
98
viced accommodation for the Social Security Prime Project in the United Kingdom,
such property shall be distributed as follows:
(a) fifteen percent (15%) to Xxxxxxxxx-Ohio's partner in the
Xxxxxx project, Xxxx Xxxxx; and
(b) the remainder in equal portions to Xxxxxxxxx-Ohio and G-LLC.
9.3 Management Committee; Board of Directors.
So long as G-LLC owns directly or indirectly at least 10% of the total
outstanding shares of LP-Inc. Common Stock or 5% of the total outstanding Units,
G-LLC shall have the right to appoint one member of the DEL Partnerships' and
La Salle Partnerships' Management Committee and Board of Directors. G-LLC
initially appoints LG to these positions.
The LaSalle Partnerships shall be responsible for the withholding tax
liability of The Xxxxxxxxx Company in connection with the granting of rights to
certain employees to receive stock in The Xxxxxxxxx Company. The liability of
The La Salle Partnership with respect to this liability is limited to $1
million.
99
10. INDEMNIFICATION.
10.1 Indemnification by the DEL Partnership and La Salle
Partnerships.
Each of the DEL Partnerships and the La Salle Partnerships hereby
jointly and severally covenants and agrees to indemnify and hold harmless the
Stockholders and their respective successors and assigns at all times from and
after the date of Closing against and in respect of the following:
(a) (i) any damage or loss resulting from any
misrepresentation, breach of warranty, or non-fulfillment of any agreement
or covenant on the part of the DEL Partnerships or the La Salle
Partnerships under this Agreement, (ii) any damage or loss resulting from
any breach of the representations and warranties of the DEL Partnerships or
the La Salle Partnerships set forth in Section 3.14, (iii) any damage or
loss resulting from undisclosed liabilities of the DEL Partnerships or the
La Salle Partnerships of which La Salle Management had actual knowledge
arising from operations prior to Closing, and (iv) any damage or loss
resulting from fraud or intentional misrepresentation on the part of the
DEL Partnerships or the La Salle Partnerships.
100
(b) all claims, actions, suits, proceedings, demands,
assessments, judgments, costs, attorneys' fees and expenses of any nature
incident to any of the matters indemnified against pursuant to this Section
10.1.
10.2 Indemnification by the Stockholders.
In consideration of the La Salle Partnerships effecting the Exchange,
each of the Stockholders and G-LLC hereby severally and not jointly covenants
and agrees to indemnify and hold harmless the DEL Partnerships, La Salle
Partnerships, the Xxxxxxxxx Companies and each of their respective successors
and assigns, at all times from and after the date of Closing against and in
respect of the following:
(a) (i) any damage or loss resulting from any misrepresentation,
breach of warranty or non-fulfillment of any agreement or covenant on the part
of the Xxxxxxxxx Companies or G-LLC under this Agreement, (ii) any damage or
loss resulting from undisclosed liabilities of the Xxxxxxxxx Companies of which
Xxxxxxxxx Management had actual knowledge arising from operations prior to
Closing, (iii) any damage or loss resulting from the litigation entitled
National City Bank N.A. vs. The Xxxxxxxxx Company, Kudatzky vs. The Xxxxxxxxx
Company, and the claim made against the Xxxxxxxxx Companies by Wegco referred to
in
101
item 2 of Schedule 4.8 of the Xxxxxxxxx Disclosure Schedule, (iv) any damage or
loss arising out of the purchase of the La Salle Partnership of the stock of
Tricor, Inc., and (v) any damage or loss resulting from fraud or intentional
misrepresentation on the part of the Xxxxxxxxx Companies.
(b) all claims, actions, suits, proceedings, demands,
assessments, judgments, costs, attorneys' fees and expenses of any nature
incident to any of the matters indemnified against pursuant to this Section
10.2.
10.3 Limitations on Indemnification.
(a) The following limitations shall apply to indemnification by
the La Salle Partnerships, the DEL Partnerships, G-LLC and Stockholders under
this Section 10:
(i) Except as set forth in Section 9.1(c)(i),
indemnification under the provisions of this Section 10 shall be the
parties' exclusive remedy for any and all breaches of this Agreement.
(ii) Indemnification under this Section 10 shall be limited
to the actual dollar amount of damages and shall not be determined on the
basis of a multiple of loss of revenue or earnings.
102
(iii) The aggregate damages payable by either the
Stockholders as a group or the DEL Partnerships and the La Salle
Partnerships as a group under this Section 10 shall be limited to 30% of
the value of the Units issued on the Exchange, except that such limit shall
not be applicable to claims arising under Section 9.1(b), 10.1(a)(ii)-(iv),
Section 10.2(a)(ii), (iii), (iv) or (v).
(b) Any and all indemnification obligations under this Section
10 may be satisfied by payment in the form of Units or capital stock of the
corporate successor to the La Salle Partnerships.
10.4 Notice and Defense.
The parties seeking indemnification (the "Indemnified Parties") shall
notify the other parties (the "Indemnifying Parties") of any such asserted
liability, damage, loss or expense claimed to give rise to indemnification
hereunder. Thereafter, the Indemnifying Parties shall have, at their election,
the right to compromise or defend any such matter at their sole cost and
expense through counsel chosen by the Indemnifying Parties and approved by the
Indemnified Parties; provided, however, that any such compromise or defense
shall be conducted in a
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manner which is reasonable and not contrary to the interests of the Indemnified
Parties and the Indemnified Parties shall in all events have a right to veto any
such compromise or defense which is unreasonable or which would jeopardize in
any material respect any assets or business of the Indemnified Parties or any of
its Affiliates or increase the potential liability of, or create a new liability
for, the Indemnified Parties or any of its Affiliates, and provided further,
that the Indemnifying Parties shall in all events indemnify the Indemnified
Parties and its Affiliates against any damage resulting from the manner in which
such matter is compromised or defended, including any failure to pay any such
claim while such litigation is pending. In the event that the Indemnifying
Parties do so undertake to compromise and defend, the Indemnifying Parties shall
notify the Indemnified Parties of their intention to do so. Each party agrees
in all cases to cooperate with the defending party and its or his counsel in the
compromise of or defending of any such liabilities or claims. In addition, the
non-defending party shall at all times be entitled to monitor such defense
through the appointment, at their own cost and expense, of advisory counsel of
their own choosing. In connection with any proceeding under this Section 10,
the DEL Partnerships, the
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La Salle Partnerships, G-LLC and the Stockholders shall each be obligated to
appoint a representative to act on their behalves in connection with any
discussions or other interaction with each other. Each party in all events
shall be entitled to deal solely with the representative so appointed. If no
such representative is appointed and one party receives conflicting demands or
notices from the other, the receiving party shall be entitled to conduct its own
defense of any asserted liability, damage, cost and expense and to seek
reimbursement and indemnity from the other party as provided herein.
10.5 Insurance.
The amount of any damage or loss suffered by an Indemnified Party
shall be reduced by any third party insurance or other indemnification benefits
which such party or its representatives receive in respect of or as a result of
such damage or loss (net of any costs and expenses incurred in connection with
obtaining such benefits). If any damage or loss for which indemnification has
been paid hereunder is subsequently reduced by any third party insurance payment
or other indemnification recovery from a third party, the amount of the
reduction shall be remitted to the Indemnified Party as appropriate (net of any
costs
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and expenses incurred in connection with obtaining such benefits).
11. PUBLIC ANNOUNCEMENTS.
The DEL Partnerships and the La Salle Partnerships on the one hand,
and the Xxxxxxxxx Companies and the Stockholders, on the other hand, will
consult with each other before issuing, and provide each other the opportunity
to review and comment upon, any press release or other public statements with
respect to the transactions contemplated by this Agreement, and shall not issue
any such press release or make any such public statement prior to such
consultation. Prior to Closing, neither the DEL Partnerships and the La Salle
Partnerships, on the one hand, nor the Xxxxxxxxx Companies and the Stockholders,
on the other hand, shall issue any such press release or make any such public
statement without the other's prior consent.
12. SURVIVAL; NO RIGHT OF CONTRIBUTION POST CLOSING.
The representations, warranties and agreements made by the parties in
this Agreement and in any other certificates and documents delivered in
connection herewith, including the indemnification obligations set forth in
Section 10 hereof, shall survive the Closing under this Agreement, until the
date of issuance of the audited 1997
106
financial statements of the La Salle Partnerships or any successors or entities
thereto (which shall not be later than March 31, 1998 (the "Expiration Date));
provided, however, that this Section 12 shall not apply to (a) any claim for
indemnification of which notice is given under Section 10.4 prior to the
Expiration Date; and (b) Sections 9, 11, 12, 13, 14, 15, 16, 17 and the last
sentence of Section 20, which provisions shall survive forever. The
representations and warranties contained in Section 4.16 shall continue in full
force and effect until all applicable statutes of limitations, including waivers
and extensions, have expired with respect to each matter addressed therein, and
if no statute of limitations exists, forever thereafter. Following the Closing,
G-LLC and the Stockholders shall have no right of contribution or similar action
against the Xxxxxxxxx Companies for any claim arising under, or in connection
with, this Agreement.
13. BROKERS AND ADVISORS.
Except for Xxxxxxx Xxxxx & Company, which has acted as financial
advisor to the La Salle Partnerships in connection with the transactions
contemplated by this Agreement, and except for E&Y Xxxxxxx Xxxxxxxxx, which has
acted as financial advisor to the Xxxxxxxxx Companies and the Stockholders in
connection with the transaction contem-
107
plated by this Agreement, the La Salle Partnerships on the one hand, the
Xxxxxxxxx Companies and each of the Stockholders, on the other hand, represent
and warrant to each other that the transactions contemplated by this Agreement
have been negotiated directly between them and their respective counsel, without
the intervention of any person as a result of any action by them in such a
manner as to give rise to a valid claim against any party hereto for a brokerage
commission, finder's fee, counseling or advisory fee, or like payment, and each
agrees to indemnify the opposite party against any such liability arising from
or through it.
14. EXPENSES; DAMAGES.
Pending the Closing, each party to this Agreement shall pay all of its
respective expenses relating to the transactions contemplated by this Agreement,
including fees and disbursements of its counsel, accountants, investment
bankers, and financial advisors; provided that: (a) any consulting, brokerage or
investment banking fees, including fees payable to E&Y Xxxxxxx Xxxxxxxxx,
whether by the Xxxxxxxxx Companies, G-LLC or the Stockholders, shall be expenses
of, and paid by, the Stockholders.
(b) In the event the DEL Partnerships or the La Salle
Partnerships materially breach this Agreement,
108
prior to Closing, the DEL Partnerships or the La Salle Partnerships, as
applicable, shall pay to the Stockholders within five days of such termination
or breach $2,000,000 as minimum damages.
(c) In the event the Stockholders materially breach their
obligations under this Agreement prior to Closing, the Xxxxxxxxx Companies shall
pay to the La Salle Partnerships within five days of such breach $2,000,000 as
minimum damages.
(d) Nothing in this Section 14 shall be deemed a payment of
liquidated damages or an election of remedies, and either party may seek from
the other actual damages from the other.
15. NOTICES.
All notices, requests, demands and other communications under or in
connection with this Agreement shall be in writing, and
(a) if to the La Salle Partnerships, shall be addressed to:
La Salle Partners Limited
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx,
Executive Vice President
and Chief Financial Officer
Facsimile: (000) 000-0000
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with a copy to:
Xxxxxx X. Xxxxx
Xxxxx & Associates
Suite 4322
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
(b) if to the Xxxxxxxxx Companies, shall be addressed to:
The Xxxxxxxxx Company
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Chairman
and Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to
Xxxxx X. Xxxxx
Xxxxxx, Xxxxx & Xxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
and if to the Stockholders, shall be through a single notice addressed to
Xxxxxxx Xxxxxxxxx at the above address. All such notices, requests, demands or
communications shall be mailed postage prepaid, certified mail, return receipt
requested, delivery personally, or sent by confirmed facsimile transmission, and
shall be sufficient and effective when received at the address so specified.
Any party may change the address at which it is to receive notice by like
written notice to the other.
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16. REPRESENTATIVE.
(a) By execution and delivery of this Agreement, each of the
Stockholders hereby appoints and designates Xxxxxxx Xxxxxxxxx as his or her
representative (the "Representative") to act on behalf of each such Stockholder
in connection with the transactions contemplated by this Agreement and hereby
designates and appoints the Representative as attorney-in-fact to take such
actions and execute such documents on behalf of each such Stockholder as may be
required hereunder, including, without limitation, the following:
(i) any amendment or modification to or waiver of this
Agreement as may be necessary or appropriate in the view of the
Representative, other than any amendment or modification decreasing the
amount or changing the form of the consideration to be received by such
Stockholders;
(ii) any and all documents required to be executed and
delivered by such Stockholders pursuant to this Agreement in order to
effect the transactions contemplated by this Agreement, including any
required endorsement of stock certificates;
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(iii) receive and provide receipt for all payments required
to be made to the Stockholders under this Agreement and distribute such
payments as appropriate to the Stockholders; and
(iv) any and all actions required to be taken by such
Stockholders in connection with any claim for indemnity pursuant to the
provisions of Section 9, 10 or 11 of this Agreement or any other claim made
by the La Salle Partnerships pursuant to the provisions of this Agreement.
(b) It is acknowledged by the Stockholders appointing the
Representative that the designation of the Representative as attorney-in-fact is
coupled with an interest and is therefore irrevocable and binding upon such
Stockholders notwithstanding the death, incapacity or dissolution of any such
Stockholder. If any such event shall occur prior to the completion of the
transactions contemplated by this Agreement, the Representative is,
nevertheless, to the extent that he is legally able to do so, authorized and
directed to complete all transactions and act pursuant to this authority as if
such event had not occurred. The La Salle Partnerships are entitled to deal
112
solely with the Representative in connection with this Agreement and are
entitled to rely upon the provisions hereof and the authority granted to the
Representative to act on behalf of the Stockholders named herein.
17. CONSENT TO JURISDICTION AND SERVICE.
The DEL Partnerships, the La Salle Partnerships, LP-Inc., the
Xxxxxxxxx Companies, G-LLC and the Stockholders each irrevocably agree and
consent to the non-exclusive personal jurisdiction of the courts of Delaware and
the courts of the United States of America located in the State of Delaware for
the purpose of any action, suit or proceeding arising out of or related to this
Agreement. The Xxxxxxxxx Companies, G-LLC and the Stockholders each hereby
appoint Xxxxxxx Xxxxxxxxx as their authorized agent upon which process may be
served in any such action, suit or proceeding. Each party will take at its
expense any and all action, including the filing of any and all documents and
instruments, that may be necessary to establish and continue such appointment in
full force and effect. Service of process on the authorized agent and written
notice of such service to such party in the manner and to the address shown in
Section 15 shall be deemed in every respect effective service of process upon
such party.
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The DEL Partnerships, the La Salle Partnerships, LP-Inc., the
Xxxxxxxxx Companies, G-LLC and the Stockholders each hereby irrevocably waives
any objection which it may now or hereafter have to the laying of venue as
provided in this Section, and further irrevocably waives any claim that any
action, suit, proceeding, controversy or claim brought in accordance with this
Section was brought in an inconvenient forum.
18. TERMINATION.
The parties, by mutual written consent, may terminate this Agreement
at any time prior to the Closing and, unless otherwise specifically provided in
such consent, any such termination shall be without liability on the part of any
party hereto.
19. ENTIRE AGREEMENT.
This Agreement (including the exhibits hereto and the lists, schedules
and documents delivered pursuant hereto, which are a part hereof) is intended
by the parties to and does constitute the entire agreement of the parties with
respect to the transactions contemplated by this Agreement. Except for the
Confidentiality Agreement by and between The Xxxxxxxxx Company and La Salle
Partners Limited dated January 24, 1997, and the non-solicitation letter
agreement dated March 24, 1997, both of which shall remain
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in full force and effect, this Agreement supersedes any and all prior
understandings, written or oral, between the parties, and this Agreement may be
amended, modified, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the amendment,
modification, waiver, discharge or termination is sought.
20. GENERAL.
The paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns, but nothing herein, express or implied, is
intended to or shall confer any rights, remedies or benefits upon person other
than the parties hereto. This Agreement may not be assigned by any party
hereto. This Agreement shall be construed in accordance with and governed by
the laws of the State of Delaware.
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IN WITNESS WHEREOF, the DEL Partnerships, the La Salle Partnerships,
the Xxxxxxxxx Companies, G-LLC and the Stockholders have caused this Agreement
to be duly executed and their respective seals to be hereunto affixed as of the
date first above written.
WITNESS: DEL-LPL LIMITED PARTNERSHIP
_____________________________ By: /s/ Xxxxxx X. Xxxxxxx (SEAL)
------------------------
WITNESS: DEL-LPAML
_____________________________ By: /s/ Xxxxxxx X. Xxxxx (SEAL)
------------------------
WITNESS: LA SALLE PARTNERS LIMITED
PARTNERSHIP
_____________________________ By: /s/ Xxxxxxx X. Xxxxxxxx (SEAL)
------------------------
WITNESS: LA SALLE PARTNERS MANAGEMENT
LIMITED PARTNERSHIP
_____________________________ By: /s/ Xxxxxxx X. Xxxxx (SEAL)
------------------------
ATTEST: THE XXXXXXXXX COMPANY
_____________________________ By: /s/ Xxxxxxx Xxxxxxxxx (SEAL)
------------------------
[Corporate Seal]
ATTEST: THE XXXXXXXXX COMPANY OF
CALIFORNIA, INC.
_____________________________ By: /s/ Xxxxxxx Xxxxxxxxx (SEAL)
------------------------
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ATTEST: XXXXXXXXX HOLDINGS LLC
_____________________________ By: /s/ Xxxxxxx Xxxxxxxxx (SEAL)
-----------------------------
[Corporate Seal]
WITNESS: STOCKHOLDERS
_____________________________ /s/ Xxxxxxx Xxxxxxxxx Xxxxxx (SEAL)
---------------------------------
Xxxxxxx Xxxxxxxxx Xxxxxx, as trustee
for the separate trust for the
benefit of Xxxxxxx Xxxxxxxxx Xxxxxx,
Xxxx X. Xxxxxxxxx, III and Xxxxxx
Xxxxxxxxx Xxxxxxx under the
Irrevocable Trust created by Xxxxxx
X. Xxxxxxxxx on April 12, 1995.
_____________________________ /s/ Xxxxxxx Xxxxxxxxx (SEAL)
---------------------------------
Xxxxxxx Xxxxxxxxx
/s/ Xxxxxxx Xxxxxxxxx
_____________________________ Attorney In Fact For (SEAL)
---------------------------------
Xxxxxx Xxxxxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxxxx
_____________________________ Attorney In Fact For (SEAL)
---------------------------------
Xxxx X. Xxxxxxxxx, III
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