EXHIBIT 10.7
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[FORM OF INDEMNITY AND ESCROW AGREEMENT]
INDEMNITY AND ESCROW AGREEMENT, dated as of October 21, 1998
(this "Agreement"), by and among (i) LaSalle Partners Incorporated, a
Maryland corporation ("Parent"), JLLINT, Inc., an Illinois corporation and
an indirect wholly-owned subsidiary of Parent ("US Acquisition Sub"),
JLLIP, Inc., an Illinois corporation and an indirect wholly-owned subsid-
iary of Parent ("US Acquisition Sub II"), LPI (Australia) Holdings Pty
Limited, a corporation organized under the laws of the Australian Capital
Territory and an indirect wholly-owned subsidiary of Parent ("Australia
Acquisition Sub" and, together with Parent, US Acquisition Sub and US
Acquisition Sub II, the "Buyers"), (ii) the Persons named as "Shareholders"
on the signature pages hereto (each a "Shareholder" and, collectively, the
"Shareholders" (which term includes the Management Shareholders)), and in
respect of each Shareholder, if applicable, the person named as its
"Related JLW Owner" on the applicable signature page hereto (each a
"Related JLW Owner" and, collectively, the "Related JLW Owners") and (iii)
Xxxxxx Trust and Savings Bank, as escrow agent (the "Escrow Agent").
WHEREAS, as of the date hereof, Parent and the other parties
named therein are entering into a Purchase and Sale Agreement (the "Eu-
rope/USA Region Agreement"), pursuant to which, among other things, Parent
has the right (and may be required) to acquire all of the issued and
outstanding capital stock or share capital, as applicable, of each of the
Europe/USA Region Companies;
WHEREAS, as of the date hereof, Parent, US Acquisition Sub, US
Acquisition Sub II and the other parties named therein are entering into a
Purchase and Sale Agreement, (the "Asia Region Agreement"), pursuant to
which, among other things, US Acquisition Sub and US Acquisition Sub II
will collectively acquire (except as otherwise set forth therein) all of
the issued and outstanding share capital of each of the Asia Region
Companies;
WHEREAS, as of the date hereof, Parent, US Acquisition Sub,
Australia Acquisition Sub and the other parties named therein are entering
into a Purchase and Sale Agreement (the "Australasia Region Agreement" and,
together with the Europe/USA Region Agreement and the Asia Region Agree-
ment, the "Purchase Agreements" and each, individually, a "Purchase
Agreement"), pursuant to which, among other things, Australia Acquisition
Sub and US Acquisition Sub will collectively acquire all of the issued and
outstanding share capital of each of the Australasia Region Companies;
WHEREAS, it is a condition to the consummation of the transac-
tions contemplated by the Purchase Agreement and Joinder Agreement to which
each Shareholder and in respect of such Shareholder, if applicable, its
Related JLW Owner are parties (the "Applicable Purchase Agreement" and the
"Applicable Joinder Agreement," respectively) that such Shareholder and, if
applicable, such Related JLW Owner execute and deliver this Agreement;
WHEREAS, pursuant to Section 6.7 of each Purchase Agreement,
the Buyers have agreed, among other things, to establish a trust (the
"ESOT," with the trustee thereof being referred to herein as the "ESOT
Trustee") for the purpose of holding and distributing 1,787,710 shares of
Parent Common Stock (the "ESOT Shares") to certain employees of the JLW
Businesses, in accordance with the terms and conditions to be set forth in
the trust agreement (the "ESOT Trust Agreement") to be entered into in
connection therewith;
WHEREAS, in connection with the creation of the ESOT, the
Buyers will collectively deposit with the Escrow Agent (i) 93,023 ESOT
Shares on behalf of the ESOT to be held by the Escrow Agent as Escrow
Shares and (ii) 110,171 ESOT Shares on behalf of the ESOT to be held by the
Escrow Agent as Adjustment Shares;
WHEREAS, the ESOT Trustee shall enter into an appropriate
joinder agreement (the "ESOT Joinder Agreement"), pursuant to which, among
other things, such ESOT Trustee shall become a party to this Agreement and
agree to be bound by the applicable terms hereof, in each case solely in
its capacity as trustee of the ESOT;
WHEREAS, pursuant to Section 1.3(c) of the Asia Region Agree-
ment, the appropriate Buyers will collectively deposit with the Escrow
Agent all of the Forfeiture Shares under the Asia Region Agreement (the
"Asia Region Forfeiture Shares") to be held by the Escrow Agent as Escrow
Shares, pursuant to and in accordance with Sections 1.1(f), 3.4(e) and 3.7
hereof;
WHEREAS, Sections 1.2, 1.3 and 6.7 of each Purchase Agreement
and Sections 1.2 and 1.3 of each Joinder Agreement provide for the place-
ment in escrow, pursuant to the terms of this Agreement, of the Escrow
Shares and the Adjustment Shares;
WHEREAS, pursuant to a Shareholders Contribution and Coordina-
tion Agreement to be entered into pursuant to Section 1.8 of each Purchase
Agreement (the "SCCA"), the Shareholders, the Related JLW Owners and the
JLW Sellers are expected to appoint Xxxxxx Xxx, Xxx Xxxxxxxxxxxxxx and
Xxxxx Xxxxxxx as the "Shareholders' Representatives," and Xxxxxxx Xxxxx,
Xxxxxxxxxxx Xxxxxxx and Xxxxxx Xxxxxx as their respective alternates, for
the purposes of the Purchase Agreements, the Joinder Agreements and this
Agreement and have agreed to reapportion the various indemnification and
payment obligations of the Shareholders and the Related JLW Owners under
this Agreement, the Joinder Agreements and the Purchase Agreements; and
WHEREAS, pursuant to the Purchase Agreements, the SCCA and the
Joinder Agreements the Shareholders have authorized the Shareholders'
Representatives to, among other things, (i) take all action necessary in
connection with the defense and/or settlement of any claims made against
the Escrow Fund (as hereinafter defined), (ii) give and receive on behalf
of the Shareholders and the Related JLW Owners certain notices required to
be given under this Agreement, and (iii) take on behalf of the Shareholders
and the Related JLW Owners certain additional actions contemplated to be
taken by or on behalf of the Shareholders and the Related JLW Owners by the
terms of this Agreement.
NOW THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained herein, in the Purchase
Agreements and in the other Operative Agreements (as defined in each of the
Purchase Agreements, which Operative Agreements as so defined are herein
collectively referred to as the "Operative Agreements," and each, individu-
ally, as an "Operative Agreement"), the receipt and sufficiency of which
are hereby acknowledged, and intended to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
INDEMNIFICATION
Section 1.1 Indemnification by the Shareholders.
Subject to the terms and conditions and limitations set forth in this
Agreement, each of the Buyers and their respective Subsidiaries and
Affiliates (other than in each case the Europe/USA Region Companies, the
Asia Region Companies, the Australasia Region Companies and their respec-
tive Subsidiaries, but subject to the last paragraph of this Section
1.1(a)) together with their respective directors, officers, employees and
agents (collectively, the "Indemnified Persons") shall be defended,
indemnified and held harmless from and against any and all Losses and
Expenses arising out of or relating to:
(i) (x) any breach by any Article III
Entity of any representation or warranty of such Article III Entity
contained in Article III of any Purchase Agreement or in any certificate
delivered on behalf of any Article III Entity, to the Buyers or any of them
pursuant thereto, (y) except as disclosed in Section 3.23 of the Company
Disclosure Schedule to each of the Purchase Agreements, all Taxes of any
JLW Partnership, Europe/USA Region Company (or Subsidiary thereof), Asia
Region Company (or Subsidiary thereof) or Australasia Region Company (or
Subsidiary thereof) (whether or not shown as due on any Tax Return)
attributable to any taxable year or period ending on or before the Closing
Date, including any Pre-Closing Period (as defined in Section 2.3), except
for Taxes which are reserved for and shown on any Final Closing Date
Balance Sheet and (z) any claim for indemnification made pursuant to the
agreements referenced in Section 6.11 of each Purchase Agreement, but only
to the extent that the claim that gave rise to such indemnification claim
arose out of or was related to the allocation of Consideration among the
Shareholders (with a claim for indemnification based on (A) a breach
referred to in clause (x) or, (B) clause (z) above or (C) in respect of any
such Taxes referred to in clause (y) above being sometimes referred to
herein as an "Entity Misrepresentation Claim");
(ii) any intentional and wilful breach
by any Management Shareholder of any representation or warranty of such
Management Shareholder contained in Article III of any Purchase Agreement
or in any certificate delivered by such Management Shareholder pursuant to
Section 8.4 of such Purchase Agreement (with a claim for indemnification
based on such a breach being sometimes referred to herein as a "Management
Misrepresentation Claim");
(iii) any breach by any Shareholder or
Related JLW Owner of any representation or warranty of such Shareholder or
Related JLW Owner contained in any Joinder Agreement (with a claim for
indemnification based on such a breach being sometimes referred to herein
as an "Individual Shareholder Misrepresentation Claim");
(iv) any breach by any JLW Seller, Eu-
rope/USA Region Company, Asia Region Company or Australasia
Region Company of any covenant or agreement of such JLW Seller Europe/USA
Region Company, Asia Region Company or Australasia Region Company contained
in any Purchase Agreement (with a claim for indemnification based on such a
breach being sometimes referred to herein as an "Entity Covenant Claim,"
which claim, in the case of any Europe/USA Region Company, Asia Region
Company or Australasia Region Company, may only be based on a breach that
has occurred prior to the Closing);
(v) any breach by any Shareholder or
Related JLW Owner of any covenant or agreement of such Shareholder or
Related JLW Owner contained in any Joinder Agreement or other Operative
Agreement (with any claim for indemnification based on such a breach being
sometimes referred to herein as a "Shareholder Covenant Claim");
(vi) all expenses reasonably incurred
in connection with enforcing any arbitrator awards pursuant to Article VIII
hereof; and
(vii) any item specified on Schedule 2
hereto.
For purposes of this Agreement, any Losses or Expenses incurred
by any Europe/USA Region Company, Asia Region Company or Australasia Region
Company, or any of their respective Subsidiaries, shall be deemed to be
Losses or Expenses incurred by the Buyers, and the indemnification of the
Indemnified Persons provided for in this Agreement shall be provided by the
Shareholders and their Related JLW Owners pursuant to and in accordance
with the terms, conditions and limitations set forth in this Agreement;
provided that the Escrow Shares deposited with the Escrow Agent on behalf
of the ESOT (the "ESOT Escrow Shares") shall also be available in accor-
dance with the terms, conditions and limitations set forth in this Agree-
ment to satisfy the indemnification obligations of the Shareholders and
their Related JLW Owners to the extent a claim is made against the Escrow
Fund. Notwithstanding anything to the contrary contained in this Agree-
ment, (i) each Asia Region Shareholder and such Shareholder's Related JLW
Owner, if any (jointly and severally between such Shareholder and its
Related JLW Owner), shall, severally and not jointly, indemnify, defend and
hold harmless the Indemnified Persons from and against any and all Losses
and Expenses arising out of or relating to (A) any breach by any JLW Seller
of any representation or warranty of any JLW Seller under Article IIIA of
the Asia Region Agreement and (B) any breach by any JLW Seller of any
covenant or agreement of any JLW Seller under Article I (other than
Sections 1.4 through 1.9) or Article IIIA of the Asia Region Agreement and
(ii) each Australasia Region Shareholder and such Shareholder's Related JLW
Owner, if any (jointly and severally between such Shareholder and its
Related JLW Owner), shall, severally and not jointly, indemnify, defend and
hold harmless the Indemnified Persons from and against any and all Losses
and Expenses arising out of or relating to (A) any breach by any JLW Seller
of any representation or warranty of any JLW Seller under Article IIIA of
the Australasia Region Agreement and (B) any breach by any JLW Seller of
any covenant or agreement of any JLW Seller under Article I (other than
Sections 1.4 through 1.9) or Article IIIA of the Australasia Region
Agreement. For purposes of this Agreement: (i) any claim under clause
(i)(A) or clause (ii)(A) of the immediately preceding sentence shall be
deemed an Individual Shareholder's Misrepresentation Claim, (ii) any claim
under clause (i)(B) or clause (ii)(B) of the immediately preceding sentence
shall be deemed a Shareholder Covenant Claim, (iii) the several liability
of each Asia Region Shareholder (together with its Related JLW Owner, if
any) shall be based on such Asia Region Shareholder's pro rata share of the
Losses and Expenses subject to indemnification hereunder, which pro rata
share shall be based on the proportion that the number of Initial Consider-
ation Shares allocated to such Asia Region Shareholder on the Final Master
Shareholder List under the Asia Region Agreement bears to the aggregate
number of Initial Consideration Shares allocated to all Asia Region
Shareholders on such Final Master Shareholder List and (iv) the several
liability of each Australasian Region Shareholder (together with its
Related JLW Owner, if any) shall be based on its pro rata share of the
Losses and Expenses subject to indemnification, which pro rata share shall
be based on the proportion that the number of Initial Consideration Shares
allocated to such Australasia Region Shareholder on the Final Master
Shareholder List under the Australasia Region Agreement bears to the
aggregate number of Initial Consideration Shares allocated to all Austral-
asia Region Shareholders on such Final Master Shareholder List.
(b) Notwithstanding any other provision hereof, and except
with respect to any Recourse Claim, the sole monetary recourse or monetary
relief of all Indemnified Persons against any Person (including, without
limitation, any JLW Seller, Shareholder or Related JLW Owner) or asset in
respect of any and all Losses and Expenses set forth or referred to in
Section 1.1 hereof or Losses and Expenses otherwise based upon or arising
out of or under this Agreement, the Purchase Agreements or any other
Operative Agreements, or upon or arising out of the facts and circumstances
giving rise to such Losses or Expenses (regardless of the legal theory or
the nature of the claim for recovery or cause of action) shall be limited
to the indemnification provided hereunder from (and only to the extent of)
the Escrow Fund as the same may exist from time to time, provided, that
nothing contained herein shall preclude any assertion of any equitable
remedies that may exist for fraud; and provided, further, that the Escrow
Fund shall not be available for Losses or Expenses incurred as a result of
any breach of any covenant contained in any Stockholder Agreement.
(c) Notwithstanding the provisions of Section 1.1(a) hereof:
(i) with respect to any Individual Shareholder Misrep-
resentation Claim or Shareholder Covenant Claim, each Shareholder and, if
applicable, its Related JLW Owner from whom such Shareholder has received
Shares (or the right to receive Shares) breaching the applicable represen-
tation, warranty or covenant contained in the Applicable Joinder Agreement
or other Operative Agreement to which such Shareholder or such Related JLW
Owner is a party (jointly and severally between such Shareholder and such
Related JLW Owner) shall be severally liable for any Losses and Expenses
arising out of or relating to any such breach; and
(ii) with respect to any Management Misrepresentation
Claim, each Management Shareholder who has intentionally and willfully
breached the applicable representation or warranty shall be severally
liable for any Losses and Expenses arising out of or relating to any such
breach, but only to the extent that such breach, individually or in the
aggregate, would reasonably be expected to have a Company Material Adverse
Effect.
(d) Notwithstanding any other provisions hereof, the liabili-
ty of each Shareholder and, if applicable, its Related JLW Owner for
monetary damages or monetary relief, including each Management Shareholder,
under this Agreement, the Applicable Joinder Agreement and the other
Operative Agreements to which such Shareholder and, if applicable, each
Related JLW Owner is a party (whether based on a breach of any agreement,
covenant, representation or warranty contained therein or pursuant to any
indemnification obligation set forth therein or based on any other cause of
action or legal theory in respect thereof) shall not exceed the aggregate
value of the Consideration received or to be received by such Shareholder
and Related JLW Owner under the Applicable Joinder Agreement, this Agree-
ment, the SCCA or other Operative Agreements to which such Shareholder and,
if applicable, Related JLW Owner is a party (it being understood that, for
such purposes, each Consideration Share shall be valued at an amount equal
to US$32.215 (subject to appropriate adjustment in the case of stock
dividends, stock splits, combinations or other recapitalizations of Parent
effected after the date hereof). The ESOT Escrow Shares shall be available
in accordance with the terms, conditions and limitations set forth in this
Agreement to satisfy the indemnification obligations of the Shareholders
and their Related JLW Owners to the extent a claim is made against the
Escrow Fund (it being understood that, for such purposes, each ESOT Escrow
Share shall be valued at an amount equal to US$32.215 (subject to appropri-
ate adjustment in the case of stock dividends, stock splits, combinations
or other recapitalizations of Parent effected after the date hereof).
(e) Notwithstanding the provisions of Section 1.1(a)(i) or
Section 1.1(a)(vii) hereof, to the extent that Indemnified Persons incur
Losses or Expenses under such Section 1.1(a)(i) or such Section 1.1(a)(vii-
), the Indemnified Persons shall be entitled to indemnification only with
respect to any claim relating to Losses and Expenses which (as finally
determined hereunder) individually exceeds US$100,000 (each a "Minimum
Claim") and in any event only if the aggregate amount of all Minimum Claims
by all Indemnified Persons (as finally determined hereunder) exceeds
US$5,000,000, in which case, the Indemnified Persons shall be indemnified
for the full amount of all such Minimum Claims; provided, that the forego-
ing limitations do not apply with respect to a Recourse Claim or any Entity
Misrepresentation Claim arising out of or relating to any breach by any
Article III Entity of any representation or warranty of such Article III
Entity contained in Section 3.1 of any Purchase Agreement; provided that to
the extent that Parent actually receives an indemnification payment
directly from a Shareholder or the Related JLW Owner in respect of such
Recourse Claim or Entity Misrepresentation Claim, the amount of such
payment shall not be counted in determining whether the minimum Claims
exceed US$5,000,000. For purposes of determining any breach of the
representations and warranties referred to in Section 1.1(a)(i) hereof,
references to "Company Material Adverse Effect," "material" or "materially"
or any other word that is derived from the word "material" set forth
therein shall be disregarded, except as, and to the extent, set forth on
Schedule 1 hereto.
(f) Notwithstanding any other provision of this Agreement,
the Asia Region Forfeiture Shares shall be available in accordance with the
terms, conditions and limitations set forth in this Agreement solely to
satisfy the indemnification obligations of the Asia Region Shareholders and
their Related JLW Owners to the extent a claim is made against the Escrow
Fund for any Entity Misrepresentation Claim arising out of or relating to
any breach of Section 3.1 of the Asia Region Agreement (an "Asian Title
Claim").
(g) Notwithstanding any other provision of this Agreement, as
of and after the Closing, no Europe/USA Region Company, Asia Region Company
or Australasia Region Company, or any of their respective Subsidiaries,
shall have any liability under this Agreement, and no JLW Seller, JLW
Party, Asia Region Shareholder, Australasia Region Shareholder or Eu-
rope/USA Region Shareholder or Related JLW Owner of any of the foregoing,
if any, shall threaten or bring any claim or Action whatsoever against a
Europe/USA Region Company, Asia Region Company or Australasia Region
Company, or any of their respective Subsidiaries or Affiliates or any of
their respective directors, officers, employees and agents (other than
against a Europe/USA Region Shareholder, Asia Regional Shareholder, or
Australasia Region Shareholder or any Related JLW Owner of any of the
foregoing for contribution to any amounts payable by such JLW Seller, JLW
Party, Asia Region Shareholder, Australasia Region Shareholder, Europe/USA
Region Shareholder or Related JLW Owner or any of the foregoing under this
Section 1.1 or Article II hereof or otherwise under this Agreement.
(h) Notwithstanding the provisions of Section 1.1(a) hereof,
(i) no claim for indemnification may be asserted by any Indemnified Person
under this Agreement prior to the Closing Date, and no Entity Misrepresen-
tation Claim, Management Misrepresentation Claim or Entity Covenant Claim
may be asserted unless notice of such claim is properly given pursuant to
Section 1.2 hereof prior to (A) the date which is five (5) Business Days
prior to December 31, 2000 with respect to any Asian Title Claim that is
asserted in respect of the Asia Region Forfeiture Shares and (B) the 450th
day after the Closing Date with respect to all other Entity Misrepresenta-
tion Claims, Management Misrepresentation Claims and Entity Covenant Claims
and (ii) any Individual Shareholder Misrepresentation Claim, Shareholder
Covenant Claim or any claim made under Article II hereof may be asserted at
any time.
(i) Notwithstanding anything to the contrary contained
herein, each Party shall bear its own Expenses incurred in connection with
any Action, arbitration or Claim solely between the parties hereto (other
than pursuant to Section 6.5 of any Stockholder Agreement), subject to the
right of any court or arbitration panel to award Expenses to the prevailing
party (excluding Expenses incurred in connection with the enforcement of
any judgment or award).
(j) Neither Article I nor Article II of this Agreement nor,
for the avoidance of doubt, any covenant or indemnity contained in any of
the Purchase Agreements shall:-
(A) cover any Tax Liability consisting of
Transfer Taxes ("IP Transfer Taxes") arising in respect of the
Intellectual Property Rights transferred to NewCo 1 pursuant to the
Integration Agreements (so that, for the avoidance of doubt, any liability
in respect of IP Transfer Taxes shall not count towards the Transfer Tax
Threshold as defined in Section 2.1(a)(ii)); or
(B) cover any Tax Liability attributable to any
amendment, modification or tax election (including in particular any
voluntary disclaimer of the whole or part of any allowance available under
Part II of the Capital Allowances Act 1990 or the failure to make or
maintain a valid claim for any other available relief from Tax) made to or
in a Tax Return by the Indemnified Persons after the Closing Date with
respect to any Tax Return for a Pre-Closing Period without the consent of
the Shareholders' Representatives (which consent shall not be unreasonably
withheld or delayed) with respect to such Company or Company Subsidiary.
Any cash payment made to an Indemnified Person in respect of a
liability arising under this Agreement in respect of any of the Purchase
Agreements (an "Indemnity Payment") shall so far as possible constitute
repayment of any Cash Consideration paid under the Applicable Purchase
Agreement to the Person making the Indemnity Payment in question.
(k) EACH SHAREHOLDER AND ITS RELATED JLW OWNER (AS APPLICA-
BLE) ACKNOWLEDGES THAT SUCH SHAREHOLDER AND RELATED JLW OWNER HAS RECEIVED
A COPY OF THE APPLICABLE JOINDER AGREEMENT AND THE APPLICABLE PURCHASE
AGREEMENT AND HAS REVIEWED EACH SUCH AGREEMENT, INCLUDING, WITHOUT LIMITA-
TION, (I) THE REPRESENTATIONS AND WARRANTIES OF SUCH SHAREHOLDER AND
RELATED JLW OWNER (AS APPLICABLE) CONTAINED IN THE APPLICABLE JOINDER
AGREEMENT (AND (A) WITH RESPECT TO THE ASIA REGION SHAREHOLDERS, THE
REPRESENTATIONS AND WARRANTIES OF THE APPLICABLE JLW SELLERS UNDER ARTICLE
IIIA OF THE ASIA REGION PURCHASE AGREEMENT AND (B) WITH RESPECT TO THE
AUSTRALASIA REGION SHAREHOLDERS, THE REPRESENTATIONS AND WARRANTIES OF THE
APPLICABLE JLW SELLERS UNDER ARTICLE IIIA OF THE AUSTRALASIA REGION
PURCHASE AGREEMENT) AND (II) WITH RESPECT TO MANAGEMENT SHAREHOLDERS, THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE III OF EACH OF THE
PURCHASE AGREEMENTS.
Section 1.2 Notice. The parties intend that all indemni-
fication claims be made as promptly as practicable by the Indemnified
Persons. Whenever any claim shall arise for indemnification under Section
1.1(a) or Article II hereof, the Indemnified Person shall promptly notify
(i) the Shareholders' Representatives and (ii) each Shareholder, if any,
and, if applicable, the Related JLW Owner against whom a claim for indemni-
fication is being made directly, of the facts constituting the basis for
such claim and, to the extent ascertainable at that time, a good faith
estimate of the amount of Losses that are subject to such claim. Subject
to Section 1.1(e) hereof, the failure by the Indemnified Persons to so
notify shall not relieve the Indemnifying Persons of any liability that he,
she, it or they may have to the Indemnified Persons, except to the extent
the Indemnifying Persons demonstrate that the defense of such action is
materially prejudiced thereby. In the case of any Asian Title Claim, the
claim notice shall specify an allocation of such claim between the Asia
Region Forfeiture Escrow Shares and the other Escrow Shares comprising the
Escrow Fund. The applicable Indemnified Persons shall also notify the
Shareholders' Representatives (and any applicable Shareholder and, if
applicable, the Related JLW Owner) on a quarterly basis of (i) the amount
of any Expenses incurred by such Indemnified Persons during the preceding
quarter for which indemnification is to be sought and (ii) any change in
the estimated amount of Losses subject to such claim. For purposes of this
Agreement, "Indemnifying Persons" means the Person or Persons obligated to
indemnify the Indemnified Persons.
Section 1.3 Claims by Third Parties. With respect to
claims made by third parties, the Indemnified Persons shall be entitled to
control the defense of such claims and shall use commercially reasonable
efforts to defend such claims in connection therewith with counsel reason-
ably satisfactory to the Indemnifying Persons and shall conduct such
defense in good faith; provided, that:
(a) the Indemnifying Persons and the Shareholders'
Representatives shall be entitled to participate in the defense of such
claim and to employ counsel at their own expense to assist in the handling
of such claim;
(b) With respect to claims other than Tax claims, no
Indemnified Person shall consent to the entry of any judgment or enter into
any settlement without the consent of (x) the Indemnifying Person or
Persons and (y) the Shareholders' Representatives (if a claim is being made
against the Escrow Fund) (which consent shall not be unreasonably withheld
or delayed), (i) if such judgment or settlement does not include as an
unconditional term thereof the giving by each claimant or plaintiff to each
Indemnifying Person of a release from all liability with respect to such
claim, (ii) if such judgment or settlement would result in the finding or
admission of any violation of Law, (iii) if as a result of such consent or
settlement, injunctive or other equitable relief would be imposed against
the Indemnifying Party, or (iv) such settlement would result in Liabilities
not covered by the Escrow Fund; provided that, prior to settling any claim
with respect to which such consent is not required, the Indemnified Persons
shall nonetheless consult with and consider in good faith the views of the
Indemnifying Persons and the Shareholders' Representatives; and
(c) with respect to Tax claims, no Indemnified Person
shall consent to the entry of any judgment or enter into any settlement
without the consent (which consent shall not be unreasonably withheld) of
the Indemnifying Person or Persons and, if a claim is being made against
the Escrow Fund, the Shareholders' Representatives.
ARTICLE II
TAX MATTERS
Section 2.1 Special Tax and other Indemnification by the
Shareholders and Related JLW Owners. (a) Each Shareholder and, if applica-
ble, its Related JLW Owner (jointly and severally between such Shareholder
and its Related JLW Owner) severally agrees to indemnify, defend and hold
the Indemnified Persons harmless from and against,
(i) (x) all Taxes of such Shareholder
and the Related JLW Owner, if applicable, and (y) any social security,
contributions or similar employment Tax in respect of such Shareholder
and/or Related JLW Owner, if applicable, imposed on any of the Europe/USA
Region Companies, the Asia Region Companies, the Australasia Region
Companies or any of their respective Subsidiaries and any other Taxes
required to be withheld as a result of or in connection with the income of,
or the payment or transfer of Consideration to, such Shareholder and/or
Related JLW Owner (but excluding any Transfer Taxes), but in each case only
to the extent such Taxes are not reserved for and shown on the Final
Closing Date Balance Sheets;
(ii) any Transfer Taxes arising out of
or in connection with any transaction between (x) such Shareholder and/or
such Related JLW Owner and (y) the Buyers, the JLW Partnerships, the JLW
Sellers, the Europe/USA Region Companies, the Asia Region Companies, the
Australasia Region Companies or any of their respective Subsidiaries
contemplated by the Purchase Agreements (including the Integration) or this
Agreement, but only to the extent that the aggregate amount of Transfer
Taxes indemnifiable under this provision by all Shareholders and Related
JLW Owners (such aggregate indemnification amount without giving effect to
the limitation below being herein called the "Aggregate Transfer Tax
Liability") exceeds the greater of (1) US$3 million and (2) the aggregate
amount reserved for and shown on the Final Closing Date Balance Sheets (the
amount of any excess being herein called the "Excess Amount" and the
difference between the Excess Amount and the Aggregate Transfer Tax
Liability being herein called the "Transfer Tax Threshold") and provided
that the liability of any particular Shareholder (and/or its Related JLW
Owner, if applicable) in respect of any Excess Amount shall be limited to
the amount of such Excess Amount which, as a percentage, is equal to the
ratio of the Aggregate Transfer Tax Liability arising out of or in connec-
tion with transactions with such Shareholder (and/or its Related JLW Owner,
if applicable) to the Aggregate Transfer Tax Liability arising out of or in
connection with the transactions with all Shareholders (and/or their
Related JLW Owners, if applicable); and
(iii) all expenses reasonably incurred
in connection with enforcing any arbitrator awards pursuant to Article VII
hereof in respect of any indemnification claim under this Article II.
(b) The Shareholders and the Related JLW Owners
specified on Exhibit 1 to this Agreement shall, jointly and severally,
indemnify, defend and hold the Indemnified Persons harmless from and
against, all Taxes of JLW Holdings Pty Limited and JLW Australia Pty
Limited for any taxable year or taxable period ending on or before the
Closing Date, including any Pre-Closing Period (as hereinafter defined),
except to the extent reserved for and shown on the applicable Final Closing
Date Balance Sheet and (for the avoidance of doubt) taking proper account
of any Tax benefit realized after the Closing Date which is attributable to
any Tax detriment suffered prior to the Closing Date.
(c) For purposes of this Section 2.1, any reference to
a Shareholder or Related JLW Owner with respect to the Asia Region Compa-
xxxx, the Australasia Region Companies or any of their respective Subsid-
iaries shall be deemed to include any Seller in which such Shareholder or
Related JLW Owner is a direct or indirect shareholder, beneficiary or
owner. In case of any Liability under Section 2.1 attributable to this
subsection (c), each Shareholder and, if applicable, its Related JLW Owner)
agrees severally to indemnify, defend and hold the Indemnified Persons
harmless from and against all such Liabilities, Taxes, Transfer Taxes and
expenses, but in each case only for that part of such Liabilities, Taxes,
Transfer Taxes and expenses which, as a percentage, is equal to the
percentage of the issued share capital of any Seller which is a corporation
or beneficial ownership interest of any Seller which is a trust held
directly or indirectly by such Shareholder (or its Related JLW Owner)
immediately prior to the Closing.
Section 2.2 JLW Continuation. Each Shareholder and, if
applicable Related JLW Owner specified on Exhibit 2 hereto (such Sharehold-
ers and Related JLW Owners together being all of the holders of all of the
issued share capital of JLW Continuation) agrees severally (but as between
each such Shareholder and its Related JLW Owner, jointly and severally) to
indemnify, defend and hold the Indemnified Persons harmless from and
against (a) all Liabilities of JLW Continuation arising out of or in
connection with any period prior to the Closing Date, including with
respect to Taxes for any taxable year or period ending on or before the
Closing Date including any Pre-Closing Period, and (b) all expenses
reasonably incurred in connection with enforcing any arbitrator awards
pursuant to this Section 2.2, but in each case only for that part of such
Liabilities, Taxes or expenses which, as a percentage, is equal to the
percentage of the issued share capital of JLW Continuation held by such
Shareholder (or its Related JLW Owner) immediately prior to the Closing.
Section 2.3 English Partnership Deed. Each Shareholder
and, if applicable, Related JLW Owner specified on Exhibit 3 hereto shall
severally (but as between each such Shareholder and its Related JLW Owner,
jointly and severally) indemnify, defend and hold the Indemnified Persons
harmless from and against, any Liabilities arising out of or in connection
with the Xxxxx Lang Wootton Retired Partners' Deed by and among the parties
named therein, dated 18th February 1994, as amended, except to the extent
reserved for and shown on the applicable Final Closing Balance Sheet.
Section 2.4 Xxxxx Xxxx Xxxxxxx (Hong Kong) Annuity
Scheme. Each Shareholder and, if applicable, Related JLW Owner specified
on Exhibit 4 hereto shall severally (but as between each such Shareholder
and its Related JLW Owner, jointly and severally) indemnify, defend and
hold the Indemnified Persons harmless from and against, (i) any Liabilities
arising out of or in connection with the Trust Deed and Rules by and
between JLW Asia Holdings Limited and Procon Services Company, dated 1st
April 1994, establishing the Xxxxx Lang Wootton (Hong Kong) Annuity Scheme
and (ii) any Liabilities arising out of any claims by ex-directors of JLW
Hong Kong to profit shares pursuant to their rights as creditors thereof,
except to the extent reserved for and shown on the applicable Final Closing
Balance Sheet.
Section 2.5 Closing Period. For purposes of Sections
1.1, 2.1 and 2.2, any Taxes for a taxable period beginning on or before the
Closing Date and ending after the Closing Date (the "Closing Period") shall
be apportioned between the Buyers and the applicable Shareholder(s) and
Related JLW Owner(s) as if the Closing Period had ended on the Closing Date
and the portion of the Closing Period deemed to end on the Closing Date
shall be deemed to be a taxable period (the "Pre-Closing Period"). All
real property taxes, personal property taxes, intangible taxes and similar
ad valorem obligations levied with respect to the assets of any Europe/USA
Region Company, Asia Region Company or Australasia Region Company or any of
their respective Subsidiaries shall be apportioned between the Buyers and
the applicable Shareholder(s) and Related JLW Owner(s) as of the Closing
Date based on the number of days of such taxable period included in the
Pre-Closing Period and the number of days of such taxable period after the
Closing Date.
Section 2.6 Claims for Indemnification. The parties
intend that all indemnification claims under this Article II shall be made
as provided in Article I hereof.
Section 2.7 Certain Definitions. For purposes of this
Agreement, the following terms shall have the following meanings:
(a) "Tax" or "Taxes" means taxes of any kind, levies or
other like assessments, customs, duties, imposts, charges or fees, includ-
ing, without limitation, income, gross receipts, ad valorem, value added,
excise, real or personal property, asset, document, sales, use, license,
payroll, transaction, capital, net worth and franchise taxes, withholding,
employment, social security, workers compensation, utility, severance,
production, unemployment compensation, occupation, premium, windfall
profits, transfer and gains taxes or other governmental taxes imposed by or
payable to the United States, or any state, county, local or foreign
government or subdivision or agency thereof, imposed with respect to the
income, business, operations or assets of any Europe/USA Region Company,
Asia Region Company or Australasia Region Company, or any of their respec-
tive Subsidiaries, and in each instance such term shall include any
interest, penalties and additions to Tax attributable to any such Tax.
(b) "Tax Return" means any return, report, information
return, schedule or other document (including any related or supporting
information) with respect to Taxes filed or required to be filed with any
Authority.
(c) "Transfer Taxes" means any transfer, documentary,
sales, use, stamp, duties, recording, filing or other similar tax or fees
(including any penalties, interest or additions).
ARTICLE III
ESCROW PROCEDURES
Section 3.1 Acknowledgment of Receipt. On the Closing
Date, the Buyers shall deliver to the Escrow Agent the Escrow Shares,
pursuant to, and in accordance with, Sections 1.2 and 1.3 of each of the
Purchase Agreements, in the name of the Escrow Agent (or its nominee), to
be held as nominee and for the benefit of the Shareholders and the ESOT as
set forth in this Agreement. As so deposited, the Escrow Shares, together
with any distributions, property or other rights distributed (including,
without limitation, upon a stock split, stock dividend or other recapital-
ization of Parent), other than any cash dividends, with respect to or in
exchange for, or otherwise attaching to, the Escrow Shares, are herein
collectively referred to as the "Escrow Fund." Each of the parties hereto
acknowledges and agrees that the Escrow Shares will not be issued in the
name of any Shareholder until released to such Shareholder or the ESOT
Trustee pursuant to this Agreement and each Shareholder and the ESOT
Trustee agrees that such Shareholder and ESOT Trustee shall not sell,
transfer, encumber or otherwise dispose of any Escrow Shares or other
property constituting a part of the Escrow Fund deposited hereunder or any
interest therein unless and until such Escrow Shares or other property
constituting a part of the Escrow Fund are delivered to such Shareholder or
the ESOT Trustee pursuant to the terms of this Escrow Agreement, and any
purported transfer in violation of the foregoing restriction shall be null,
void and of no force or effect. The Escrow Agent shall acknowledge receipt
of the Escrow Shares in writing to the Shareholders' Representatives (on
behalf of the Shareholders) and the ESOT Trustee (on behalf of the ESOT)
and the Buyers, and agrees to hold and dispose of the Escrow Fund in
accordance with the terms and conditions set forth herein. The Escrow
Agent shall maintain for each Shareholder and the ESOT a subaccount (a
"Subaccount") reflecting such Shareholder's and the ESOT's interest in the
Escrow Shares or other property constituting the Escrow Fund from time to
time. The allocation of the Escrow Shares delivered to the Escrow Agent on
the Closing Date to the Shareholders' and the ESOT's Subaccounts shall be
made pursuant to the joint written instructions of Parent and the Share-
holders' Representatives at the time of such delivery in accordance with
the Final Master Shareholders List under each of the Purchase Agreements.
The balance of the Escrow Shares in each Subaccount shall be adjusted from
time to time by the Escrow Agent to reflect any portion of any Allowed
Claim (as hereinafter defined) debited against such Subaccount in accor-
dance with the provisions of Section 3.4(e) below, as well as any distribu-
tions of Escrow Shares and property constituting the Escrow Fund to the
relevant Shareholder or the ESOT Trustee (on behalf of the ESOT). In the
event of any stock split, stock dividend or other combination or subdivi-
sion of the Escrow Shares, or the receipt of any other dividend or distri-
bution in respect of any of the Escrow Shares, the Subaccounts of the
Shareholders and the ESOT shall be adjusted accordingly. Any cash divi-
dends received by the Escrow Agent in respect of any Escrow Shares allocat-
ed to any Subaccount shall be promptly paid over by the Escrow Agent to the
relevant Shareholder or the ESOT Trustee (on behalf of the ESOT), as
applicable.
Section 3.2 Authority of Escrow Agent. Each Shareholder,
by execution and delivery of this Agreement, and the ESOT Trustee, by
execution and delivery of the ESOT Joinder Agreement, constitutes and
appoints the Escrow Agent as his, her or its true and lawful agent and
attorney-in-fact to hold in his, her or its name (or nominee's name), and
to assign and transfer the Escrow Shares and the Escrow Fund for the ESOT
Trustee and each such Shareholder and in the place and stead of the ESOT
Trustee and each such Shareholder, as fully and to all the same extent as
the ESOT Trustee or such Shareholder could do in his, her or its own
behalf, as shall from time to time be required in accordance with the
provisions of this Agreement. In furtherance of the foregoing and not in
limitation thereof, the Escrow Agent is specifically authorized to forward
any certificates representing any of the Escrow Shares or any other
property constituting a part of the Escrow Fund to Parent's transfer agent
for purposes of having any such shares or other property surrendered to
Parent as may be necessary to comply with the terms of this Agreement.
Such authority of the Escrow Agent shall not be affected by the subsequent
bankruptcy, insolvency, death, disability or incompetence of any of the
Shareholders.
Section 3.3 Ownership of Escrow Fund; Voting. Unless
and until assigned, transferred and delivered to Parent, the Shareholders
or the ESOT Trustee (on behalf of the ESOT) in accordance with the provi-
sions hereof, the Escrow Shares and any other property constituting a part
of the Escrow Fund deposited with the Escrow Agent shall be held in trust
for the ESOT and each Shareholder in proportion to the number of Escrow
Shares allocated from time to time to the Subaccount of the ESOT and each
such Shareholder (such number of Escrow Shares being referred to herein, as
with respect to the ESOT or each such Shareholder, the ESOT's or such
Shareholder's, as the case may be, "Proportionate Share"). All distribu-
tions, property and other rights distributed (including, without limita-
tion, upon a stock split, stock dividend or other recapitalization of
Parent), other than cash dividends, with respect to or in exchange for, or
otherwise attaching to, the Escrow Shares shall attach to and run with, or
be exchanged for, as the case may be, the Escrow Shares, shall become a
part of the Escrow Fund and shall be delivered to the ESOT Trustee (on
behalf of the ESOT), the Shareholders or Parent in accordance with the
terms and conditions of this Agreement.
(b) The Escrow Agent shall (to the extent legally permissi-
ble) vote the Escrow Shares allocated to a Shareholder's Subaccount in
accordance with the applicable provisions of the Stockholder Agreement to
which such Shareholder is a party, provided that if such Stockholder
Agreement does not contain instructions as to how such Escrow Shares shall
be voted, the Escrow Agent shall vote such Escrow Shares in accordance with
the joint written instructions of Parent and such Shareholder, provided
further that if the Stockholder Agreement does not contain such instruc-
tions and Parent and such Shareholder do not provide the Escrow Agent with
joint written instructions, the Escrow Agent shall not, and shall have no
duty to, vote the Escrow Shares. The Escrow Agent shall (to the extent
legally permissible) vote the Escrow Shares allocated to the Subaccount of
the ESOT in proportion to the vote of the other Escrow Shares.
Section 3.4 Disposition of Escrow Fund. Subject to the
terms and conditions set forth in this Agreement (including, without
limitation, Section 1.1(f)) each Indemnified Person shall be entitled to
receive payment directly from the Escrow Fund in the amount which, at any
time and from time to time, such Indemnified Person is entitled to be
indemnified as provided in Sections 1.1, 2.1 or 2.2 hereof, as applicable,
in each case in accordance with the following provisions:
(a) If and whenever any Indemnified Person (the
"Claiming Party") shall assert a claim pursuant to Sections 1.1, 2.1 or 2.2
of this Agreement (the "Claim") as to which a claim against the Escrow Fund
is desired and permitted to be made, the Claiming Party shall provide the
Escrow Agent and the Shareholders' Representatives with the notice (the
"Claim Notice") contemplated by Section 1.2 hereof.
(b) If the Shareholders' Representatives receive a
Claim Notice, they may, as herein provided, respond in writing to such
Claim Notice (with a copy to the Escrow Agent) within 20 days from the date
the same was delivered (herein called the "Response Period"). If the
Shareholders' Representatives do not forward a written response to the
Escrow Agent and the Claiming Party within the Response Period, then the
Shareholders' Representatives shall be deemed to have acknowledged the
correctness of such Claim for the full amount thereof as specified in the
Claim Notice, but solely for the purpose of the Claiming Party's claim
against the Escrow Fund. If the Shareholders' Representatives acknowledge
the correctness of a Claim for such purpose in a writing to the Escrow
Agent or if the Shareholders' Representatives are deemed to have acknowl-
edged the correctness of a Claim for such purpose pursuant to the foregoing
sentence, then the Escrow Agent shall (i) immediately notify the Claiming
Party in writing, with a copy to the Shareholders' Representatives and
Parent, that the Claim described in the Claim Notice is accepted by the
Shareholders' Representatives (such notice being hereinafter referred to as
the "Acceptance Notice"); (ii) within two Business Days thereof, deliver or
cause to be delivered to Parent's transfer agent certificates representing
Escrow Shares, valued in accordance with Section 3.4(d) hereof (and/or to
Parent any other property constituting a part of the Escrow Fund), for
purposes of having any such shares or other property surrendered to Parent,
in an aggregate amount equal to the lesser of (A) the amount specified in
the Claim Notice and (B) the aggregate amount remaining in the Escrow Fund.
(c) At any time during an applicable Response Period,
the Shareholders' Representatives may notify the Claiming Party, with a
copy to the Escrow Agent, that the Claim described in the applicable Claim
Notice or any portion thereof is disputed by the Shareholders' Representa-
tives (such notice being hereinafter referred to as the "Dispute Notice").
Upon receipt of a Dispute Notice, the Escrow Agent shall immediately (i)
follow the procedures set forth in clauses (i) and (ii) of Section 3.4(b)
hereof with respect to an amount equal to that portion, if any, of the
Claim which is not disputed by the Shareholders' Representatives and (ii)
shall not distribute to the ESOT Trustee (on behalf of the ESOT) or any
Shareholders pursuant to the provisions of Section 3.6 hereof that portion
of the Escrow Fund equal to the amount of the Claim which is disputed by
the Shareholders' Representatives (the "Disputed Amount"). Thereafter, the
Escrow Agent shall not take any action with respect to such Disputed Amount
until the Escrow Agent shall have received a certified copy of a final
decision of arbitrators rendered in accordance with the provisions set
forth in Section 7.1 hereof with respect to the Disputed Amount, or the
Escrow Agent shall have received a copy of a written agreement between the
Claiming Party and the Shareholders' Representatives resolving such dispute
and setting forth the amount, if any, of the Disputed Amount which such
Claiming Party is entitled to receive. If the Claiming Party and the
Shareholders' Representatives do not resolve a dispute regarding a Claim
within 10 days after the delivery of a Dispute Notice, either party may
submit the dispute to arbitrators for resolution in accordance with the
provisions of Section 7.1 hereof. The Escrow Agent will follow the
procedures set forth in clauses (i) and (ii) of Section 3.4(b) hereof with
respect to the amount the Claiming Party is entitled to receive as set
forth in such arbitrator's decision after the expiration of two Business
Days from the receipt of such decision or, in the event that the amount to
which the Claiming Party is entitled is established pursuant to an agree-
ment between the Claiming Party and the Shareholders' Representatives,
within two Business Days after the Escrow Agent's receipt of such agree-
ment.
(d) For purposes of this Agreement, each Escrow Share
shall be valued at an amount equal to US$32.215 (subject to appropriate
adjustment in the case of stock dividends, stock splits, combinations or
other recapitalizations of Parent effected after the date hereof, in which
event Parent and the Shareholders' Representatives will provide written
notice to the Escrow Agent of such adjustment value ).
(e) In the event that any Escrow Shares or other
property forming part of the Escrow Fund is distributed by the Escrow Agent
to Parent in accordance with the provisions of this Section 3.4 in respect
of any portion of a Claim that has been finally determined by agreement of
Parent and the Shareholders' Representatives or by the decision of arbitra-
tors pursuant to the terms of this Agreement (an "Allowed Claim"), the
allocation of the deduction of such Escrow Shares or other property to the
Subaccounts of the ESOT and the Shareholders shall be made by the Escrow
Agent in accordance with the written instructions of the Shareholders'
Representatives (which instructions may, for example, indicate that such
deductions will be allocated only to certain Subaccounts and not others)
and in the absence of any such instructions shall be allocated to the
Subaccounts of the ESOT and all Shareholders on the basis of the ESOT's and
such Shareholder's Proportionate Share.
(f) Notwithstanding anything to the contrary contained
in this Agreement, the Indemnified Persons shall not be required but are
entitled to make a claim against the Escrow Fund with respect to a Share-
holder Claim or Management Misrepresentation Claim. In addition, in
respect of any single Shareholder Claim or Management Misrepresentation
Claim, Parent may bring separate claims against the applicable Shareholder
and/or the applicable Related JLW Owner and the Escrow Fund, provided that
Parent's aggregate recovery whether from the Escrow Fund or such Sharehold-
er and/or Related JLW Owner, or both, shall not exceed the aggregate value
of such Claim. In such event, unless otherwise agreed in writing at the
time by all relevant parties, no determination or finding made in a Claim
against the Escrow Fund shall have any preclusive effect (including without
limitation any claim of res judicata) in respect of a Claim against any
Shareholder and/or any Related JLW Owner, or vice versa.
(g) In order to assist in effectuating the provisions
of this Agreement, in the event that the Indemnified Persons are finally
determined to be entitled to indemnification with respect to Losses and/or
Expenses relating to a Claim made pursuant to this Agreement, the Share-
holder or Shareholders, and/or their respective Related JLW Owner or
Related JLW Owners, if applicable, consent to the entry of stop transfer
orders with Parent's transfer agent against the transfer of any Consider-
ation Shares owned by such Shareholder or Shareholders or Related JLW Owner
or Related JLW Owners, until such time as (i) Consideration Shares with a
value equal to the amount of such finally determined Losses and/or Expenses
(using the value specified in Section 3.4(d) hereof) have been surrendered
to Parent for cancellation or (ii) cash equal to the amount of such finally
determined Losses and/or Expenses has been paid to Parent, in which case
such stop transfer orders shall be withdrawn by Parent, in each case, as
soon as practicable following such surrender of Consideration Shares or
cash payment.
Section 3.5 Distribution of Escrow Fund. Notwithstanding
anything to the contrary contained in this Agreement, but subject to
Section 3.7 below:
(a) On the first business day after the 450th day after
the Closing Date (the "Distribution Date"), the Escrow Agent shall deliver
to Parent, with a copy to the Shareholders' Representatives, the Escrow
Agent's calculation (the "Distribution Notice") (which calculation, absent
manifest error, shall be final and binding as to each of the parties
hereto) of the original number of Escrow Shares placed in escrow less the
sum of (i) the number of Escrow Shares, if any, by which the Escrow Fund
has been reduced pursuant to Section 3.4(b) or 3.4(c) hereof, (ii) the
number of Escrow Shares equal to the aggregate dollar amount of all Claims,
if any, asserted pursuant to Section 1.1, 2.1 or 2.2 of this Agreement
(other than any Asian Title Claims pending in respect of the Asia Region
Forfeiture Shares) and set forth in Claim Notices that are subject to an
unexpired Response Period pending as of the Distribution Date, in each case
to which the Shareholders' Representatives have not responded pursuant to
Section 3.4(b) or (c) hereof, and (iii) the number of Escrow Shares equal
to the aggregate dollar amount of all Disputed Amounts, if any, as of the
Distribution Date with respect to Claims asserted pursuant to Section 1.1,
2.1 or 2.2 of this Agreement (other than any Asian Title Claims pending in
respect of the Asia Region Forfeiture Shares) (the Escrow Shares remaining
after the deductions described in clauses (i), (ii) and (iii) being herein
called the "Distribution Shares"). The Escrow Agent shall distribute to
the Shareholders and the ESOT Trustee (on behalf of the ESOT) their
respective Proportionate Share of the Distribution Shares (and any related
property) within two Business Days after the Distribution Date or if an
Allocation Proposal has been made, within two Business Days following the
10 Business Day period referenced in Section 3.4(e).
(b) [Intentionally Left Blank]
(c) Upon distribution of the entire Escrow Fund
pursuant to the terms of this Agreement, the obligations of the Escrow
Agent under this Agreement shall terminate.
(d) At any time prior to final termination of this
Agreement as provided in Section 3.5(c) hereof, the Escrow Agent shall, if
so instructed in a writing signed by Parent and the Shareholders' Represen-
tatives, take or omit to take such action with respect to the Escrow Fund
as is specified in such writing and delivered to the Escrow Agent.
(e) The Escrow Agent shall be authorized to withhold or
deduct from distributions or payments to the Shareholders and the ESOT and
to pay over to any applicable governmental or regulatory authority any
amounts which it reasonably determines may be required to be so withheld or
deducted pursuant to applicable law. All amounts withheld pursuant to the
provisions of any applicable law with respect to any distribution or
payments shall be treated as amounts distributed to such Shareholder or, as
the case may be, the ESOT, pursuant to this Section 3.5 for all purposes
under this Agreement.
(f) Notwithstanding the foregoing, in the event that
under any of the provisions contained herein, the Escrow Agent would be
required to deliver fractional interests in Escrow Shares to the ESOT
Trustee (on behalf of the ESOT) or any Shareholder, Parent shall purchase
from the Escrow Agent such a number of Escrow Shares (or fractional
interests therein) as shall be necessary to eliminate such fractional
interests, at a per share purchase price equal to the closing sale price
for Parent Common Stock as reported on the New York Stock Exchange Compos-
ite Transactions Tape for the second Business Day immediately preceding any
such purchase. In such event, the Escrow Agent shall distribute to the
ESOT Trustee (on behalf of the ESOT) or any such Shareholders who otherwise
would have been entitled to fractional interests in shares of Parent Common
Stock, the cash equivalent of such fractional shares (based on the purchase
price as described above).
Section 3.6 Other Distributions. After the Distribution
Date and promptly following each acceptance of a Claim (other than an Asian
Title Claim pending in respect of the Asia Region Forfeiture Shares)
pursuant to Section 3.4(b) or resolution of any Disputed Amounts pursuant
to Section 3.4(c), the Escrow Agent shall deliver to Parent, with a copy to
the Shareholders' Representatives, a notice (the "Remaining Escrow Distri-
bution Notice") of the Escrow Agent's calculation (which calculation,
absent manifest error, shall be final and binding as to each of the parties
hereto) of the remaining Escrow Shares in escrow (the "Remaining Escrow
Shares") less the sum of (i) the number of Remaining Escrow Shares equal to
the aggregate dollar amount of all Claims, if any, asserted pursuant to
Section 1.1, 2.1 or 2.2 of this Agreement (other than Asian Title Claims
pending in respect of the Asia Region Forfeiture Shares) and set forth in
Claim Notices that are subject to an unexpired Response Period pending as
of the date of the Remaining Escrow Distribution Notice, in each case to
which the Shareholders' Representatives have not responded pursuant to
Section 3.4(b) or (c) hereof, and (ii) the number of Remaining Escrow
Shares equal to the aggregate dollar amount of all Disputed Amounts, if
any, as of the date of the Escrow Distribution Notice with respect to
Claims asserted pursuant to Section 1.1, 2.1 or 2.2 of this Agreement
(other than Asian Title Claims pending in respect of the Asia Region
Forfeiture Shares) (the Escrow Shares remaining after the deductions
described in clause (i), (ii) and (iii) being herein called the "Remaining
Escrow Distribution Shares").
(b) The procedure for distributing the Remaining Escrow
Distribution Shares shall be the same as the procedure for distributing the
Distribution Shares as provided in Section 3.5 hereof.
Section 3.7 Asia Region Forfeiture Shares. Notwithstand-
ing anything to the contrary herein, for purposes of Sections 3.5 and 3.6,
the term "Escrow Shares" shall not include the Asia Region Forfeiture
Shares. No Asia Region Forfeiture Shares shall be distributed by the
Escrow Agent to the Asia Region Shareholders until the date which is five
(5) Business Days prior to December 31, 2000 which date shall be the
"Distribution Date" for purposes of distributing such Asia Region Forfei-
ture Shares (and any related property) to the Asia Region Shareholders.
Thereafter, the procedures followed for the distribution of Escrow Shares
and Remaining Escrow Shares in Sections 3.5 and Section 3.6 shall be
followed for the distribution of Asia Region Forfeiture Shares; provided
that to the extent that any Asia Region Forfeiture Shares are distributable
from the Escrow Fund, such shares shall be delivered to the Forfeiture
Shares Escrow Agent pursuant to Section 1.3 of each Purchase Agreement.
ARTICLE IV
ADJUSTMENT SHARES
Section 4.1 Acknowledgment of Receipt. On the Closing
Date, the Buyers shall deliver to the Escrow Agent the Adjustment Shares,
pursuant to, and in accordance with, Sections 1.2, 1.3 and 1.4 of each of
the Purchase Agreements, in the name of the Escrow Agent (or its nominee),
to be held as nominee and for the benefit of the ESOT and the Shareholders,
together with any distributions, property or other rights distributed
(including, without limitation, upon a stock split, stock dividend or other
recapitalization of Parent), with respect to or in exchange for, or
otherwise attaching to, the Adjustment Shares (the "Adjustment Shares
Related Property"), as set forth in this Agreement. Each of the parties
hereto acknowledges and agrees that the Adjustment Shares will not be
issued in the name of the ESOT or any Shareholder, and the Adjustment
Shares Related Property will not be distributed in the name of the ESOT or
any Shareholder, until released to the ESOT Trustee (on behalf of the ESOT)
or such Shareholder pursuant to this Agreement and Section 1.4 of the
Purchase Agreements and each Shareholder agrees that such Shareholder shall
not sell, transfer, encumber or otherwise dispose of any Adjustment Shares
or any Adjustment Shares Related Property unless and until such Adjustment
Shares are delivered, or such Adjustment Shares Related Property is
distributed, to such Shareholder pursuant to the terms of this Agreement
and Section 1.4 of the Purchase Agreements, and any purported transfer in
violation of the foregoing restriction shall be null, void and of no force
or effect. The Escrow Agent shall acknowledge receipt of the Adjustment
Shares and any Adjustment Shares Related Property in writing to the
Shareholders' Representatives and the Buyers, and agrees to hold and
dispose of such Adjustment Shares and any Adjustment Shares Related
Property in accordance with the terms and conditions set forth herein.
Section 4.2 Delivery of Adjustment Shares. The Escrow
Agent shall deliver the Adjustment Shares (together with any Adjustment
Shares Related Property) to one or more of the Buyers, the ESOT Trustee (on
behalf of the ESOT) or some or all of the Shareholders, in each case in
accordance with the joint instructions of Parent and the Shareholders'
Representatives, which instructions shall be given pursuant to Section 1.4
of the Purchase Agreements.
ARTICLE V
MATTERS RELATING TO THE ESCROW AGENT
Section 5.1 Liability of the Escrow Agent. The Escrow
Agent shall not be liable for any act it may do or omit to do hereunder as
the Escrow Agent, while acting in good faith and in the exercise of its own
best judgment and any act done or omitted by it pursuant to the written
advice of its attorneys shall be conclusive evidence of such good faith.
The Escrow Agent shall not be answerable for any action taken pursuant to
any notice, request, consent, certificate, order or other document in the
belief that the same is genuine when signed or acknowledged by a proper
person. The Escrow Agent shall not be under obligation to assure or
monitor the performance by the Buyers, the JLW Sellers, the Shareholders'
Representatives, the ESOT Trustee (on behalf of the ESOT), the Shareholders
or the Related JLW Owners under the Purchase Agreements or any other
Operative Agreements or to the performance of any duty specified herein by
any party other than the Escrow Agent. The Buyers, the Shareholders and
the Related JLW Owners agree to hold the Escrow Agent harmless and jointly
and severally indemnify the Escrow Agent against any loss, liability,
expenses (including attorney's fees and expenses), claim or demand arising
out of or in connection with the performance of its obligations in accor-
dance with the provisions of this Agreement, except for gross negligence or
willful misconduct of the Escrow Agent. The foregoing indemnities in this
paragraph shall survive the resignation of the Escrow Agent or the termina-
tion of this Agreement. The Escrow Agent's duties are only such as are
specifically provided herein and under applicable law, and the Escrow Agent
is not charged with any duties or responsibilities in connection with any
other agreements or documents, including, without limitation, the Purchase
Agreements. The Escrow Agent shall incur no liability whatsoever to the
Buyers, the ESOT, the Shareholders or the Related JLW Owners, except for
gross negligence or willful misconduct. The Escrow Agent shall have no
responsibility hereunder other than to follow faithfully the instructions
contained herein. The Escrow Agent shall be able to rely conclusively on
the instructions or actions of the Shareholders' Representatives as to the
settlement of any claims of indemnification against the Escrow Fund (as
defined in the Escrow Agreement) by any Indemnified Persons pursuant to
this Agreement or any other actions expressly required or permitted to be
taken by the Shareholders' Representatives hereunder, and no party hereun-
der shall have any cause of action against the Escrow Agent to the extent
the Escrow Agent has relied upon the instructions or actions of the
Shareholders' Representatives. The costs and expenses of enforcing this
right of indemnification shall also be paid by the Buyers and Shareholders.
Section 5.2 The Escrow Agent Fees. The Buyers agree to
pay the Escrow Agent a fee according to the fee letter attached hereto as
Exhibit 5. Fees are payable in advance as compensation for the ordinary
administrative services to be rendered hereunder, and the Buyers agree to
pay equally all expenses of the Escrow Agent, including its attorney's
reasonable fees and expenses, which it may incur in connection with the
performance of its duties under this Agreement.
Section 5.3 Resignation of Escrow Agent. The Escrow
Agent may resign at any time by giving written notice thereof to the other
parties hereto, but such resignation shall not become effective until a
successor Escrow Agent shall have been appointed and shall have accepted
such appointment in writing. Any such successor Escrow Agent shall be
selected by mutual agreement of the Shareholders' Representatives and
Parent. If an instrument of acceptance by a successor Escrow Agent shall
not have been delivered to the Escrow Agent within 30 days after the giving
of such notice of resignation, the resigning Escrow Agent may, at the
expense of the Buyers, petition any court of competent jurisdiction for the
appointment of a successor Escrow Agent. If any property subject hereto is
at any time attached, garnished or levied upon, under any court order, or
in case the payment, assignment, transfer, conveyance or delivery of any
such property shall be stayed or enjoined by any court order, or in case
any order, judgement or decree shall be made or entered by any court
affecting such property, or any part thereof, then in any such events, the
Escrow Agent is authorized, in its sole discretion, to rely upon and comply
with any such order, writ, judgement or decree, which it is advised by
legal counsel (of its own choosing) is binding upon it, and if it complies
with any such order, writ, judgment or decree, it shall not be liable to
any of the parties hereto or to any other person, firm or corporation by
reason of such compliance, even though such order, writ, judgment or decree
may be subsequently reversed, modified, annulled, set aside or vacated.
ARTICLE VI
DEFINITIONS
Section 6.1 Certain Terms. Capitalized terms used but
not defined herein have the respective meanings ascribed to them in the
Purchase Agreements and where defined in more than one Purchase Agreement
shall include the meaning ascribed to such term in each such Purchase
Agreement. When used in this Agreement, the following terms shall have the
meanings specified:
"Closing Date" shall have, for purposes of Section 2.3 hereof,
the meaning ascribed to such term in the Australasian Region Agreement and,
for all other purposes of this Agreement, the meaning ascribed to such term
in the Europe/USA Region Agreement.
"Expenses" means any and all expenses reasonably incurred in
connection with investigating, defending or asserting any claim, action,
suit or proceeding incident to any matter indemnified against hereunder
(including, without limitation, court filing fees, court costs, costs of
investigation, arbitration fees or costs, witness fees, and reasonable fees
and disbursements of legal counsel, financial advisors, consultants,
accountants and other professionals and experts and other expenses of
litigation).
"Article III Entity" means, each of the Persons making repre-
sentations and warranties under Article III of any Purchase Agreement,
excluding the Management Shareholders
"Joinder Agreement" means the Joinder Agreement in the form
attached as Annex A either to the Europe/USA Region Agreement, the Asia
Region Agreement or the Australasia Region Agreement.
"Losses" means any and all Liabilities and all claims in
respect thereof (including, without limitation, losses, damages, costs,
obligations, settlement payments, awards, judgments, fines, interest,
penalties, fees, deficiencies or other charges other than Expenses and
expenses enforcing any arbitration award).
"Recourse Claim" means, collectively: (i) any Shareholder
Claim (but subject, in the case of any deemed Individual Shareholder
Misrepresentation Claim or deemed Shareholder Covenant Claim, to the
limitations set forth in clauses (iii) and (iv) of the last paragraph of
Section 1(a) hereof) and (ii) any Management Misrepresentation Claim. In
no event shall any claim against the ESOT be deemed to be a Recourse Claim.
"Shareholder Claim" means, collectively: (i) any Individual
Shareholder Misrepresentation Claim (or deemed Shareholder Covenant Claim),
(ii) any Shareholder Covenant Claim (or deemed Individual Shareholder
Misrepresentation Claim) and (iii) any claim for indemnification pursuant
to Article II hereof.
"Shareholders' Representatives" has the meaning set forth in
the preamble and includes any successor to any Shareholders' Representa-
tive, and alternate to any Shareholders' Representative appointed in
accordance with the SCCA.
"Tax Liability" means any Losses, Expenses or other liabilities
relating to Tax for which an Indemnified Person could (subject to any
applicable limitations or restrictions in the Operative Agreements) make a
claim under Article I or Article II of this Agreement or, for the avoidance
of doubt, under any indemnity or covenant contained in any of the Purchase
Agreements.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Arbitration. (a) All controversies with
respect to any Disputed Amount or any other claims for indemnification
hereunder shall be finally settled (i) exclusively by arbitration (as
provided herein) between Parent and the Shareholders' Representatives with
respect to all claims subject to indemnification hereunder relating to the
Escrow Fund, or (ii) except with respect to claims under the Stockholder
Agreements, exclusively by arbitration (as provided herein) between Parent
and the individual Shareholder or Shareholders and/or, if applicable,
Related JLW Owner or Related JLW Owners with respect to all other claims
subject to indemnification hereunder, in each case under clause (i) or (ii)
above under the Arbitration Rules of the International Chamber of Commerce
(the "ICC"), as amended from time to time (the "Rules") and as modified by
this Agreement.
(b) The arbitration shall be held in London, England or such
other jurisdiction as the parties jointly select. The arbitration proceed-
ings shall be conducted, and the award shall be rendered, in the English
language. In the event of an arbitration involving two parties hereto,
there shall be three arbitrators of whom each the claimant and the respon-
dent shall select one in accordance with the Rules. The two arbitrators so
nominated, once confirmed by the International Court of Arbitration of the
ICC ("ICC Court"), shall nominate a third arbitrator to serve as chairman,
such nomination to be made within 30 days of the confirmation by the ICC
Court of the second arbitrator. If the first two arbitrators shall fail
to nominate a third arbitrator within said 30-day period, such third
arbitrator shall be appointed by the ICC Court. In the event of an
arbitration involving more than two parties hereto, there shall be three
arbitrators who shall be jointly nominated by the parties. If the parties
fail so to nominate the arbitrators within 30 days from the date when the
claimant(s)' notice of arbitration is communicated to the respondent(s), at
the request of any party the arbitrators shall be appointed by the ICC
Court within 30 days of such request.
(c) Any arbitration award shall be final and binding upon the
parties, and shall be the sole and exclusive remedy between and among the
parties regarding any claims, counter-claims, issues, or accounting
presented to the arbitral tribunal. The parties hereby expressly agree
that leave to appeal under Section 45 or Section 69 of the English Arbitra-
tion Xxx 0000 may not be sought with respect to any question of law arising
in the course of the arbitration or with respect to any award made.
Judgment upon any award may be entered in any court having jurisdiction
thereof but entry of such judgment will not be required to make such award
effective.
(d) Except as may otherwise be agreed in writing by the
parties or as ordered by the arbitrators upon substantial justification
shown, the hearing for any dispute will be held within 120 days after the
arbitration panel has been finally determined. The arbitrators will state
the factual and legal basis for the award. This Agreement and the rights
and obligations of the parties shall remain in full force and effect
pending the award in any arbitration proceeding hereunder.
Section 7.2 Entire Agreement; No Third Party Beneficia-
xxxx. This Agreement and, as to the parties hereto other than the Escrow
Agent, together with the Purchase Agreements and the other Operative
Agreements, the Schedules and the other writings referenced herein or
therein (a) constitute the entire understanding and agreement of the
parties with respect to the subject matter hereof and supersede all prior
and contemporaneous agreements or understandings, inducements or condi-
tions, express or implied, written or oral, between the parties with
respect hereto and (b) are not intended to confer upon any person other
than the parties any rights or remedies hereunder.
Section 7.3 Amendment, Extension and Waiver. This
Agreement may be amended only in writing signed by Parent and the Share-
holders' Representatives. Upon such amendment, the amendment shall be
binding on all Shareholders and Related JLW Owners and the other parties
hereto; provided that no such amendment shall increase the liability or
adversely affect the individual rights of an individual Shareholder or
Related JLW Owner, unless the affected Shareholder or Related JLW Owner
shall have agreed in writing to be bound by such amendment.
Section 7.4 Notices. All notices, requests, demands and
other communications made under or by reason of the provisions of this
Agreement shall be in writing and shall be given by hand-delivery, air
courier or telecopier (with a copy also sent by hand delivery or air
courier, which shall not alter the time at which the telecopier notice is
deemed received), to the parties at the addresses set forth below (or to
such other addresses or, in the case of copies, to such other Persons as
shall be set forth in notices given in accordance with the provisions
hereof). Such notices shall be deemed given: at the time personally
delivered, if delivered by hand with receipt acknowledged; upon transmis-
sion thereof by the sender and issuance by the transmitting machine of a
confirmation slip that the number of pages constituting the notice have
been transmitted without error, if telecopied; and the second business day
after timely delivery to the courier, if sent by air courier.
If (i) to any Shareholder or Related JLW Owner, if applicable,
to the address set forth on the signature page of the Applicable Joinder
Agreement for such Shareholder or (ii) to the ESOT Trustee, the address set
forth on the signature page to the ESOT Joinder Agreement.
If to the Shareholders' Representatives:
Xxxxxx Xxx
c/o Jones Lang Wootton
00 Xxxxxxx Xxxxxx
Xxxxxx XXX 0XX
Xxxxxxx
Telephone: 00-000-000-0000
Fax: 00-000-000-0000
and to:
Xxxxx Xxxxxxx
c/o Jones Lang Wootton Ltd
16th & 17th Floors
Dorset House
Taikoo Place
000 Xxxx'x Xxxx
Xxxxxx Xxx
Xxxx Xxxx
Telephone: 000-0000-0000
Fax: 000-0000-0000
and to:
Xxx Xxxxxxxxxxxxxx
c/o Jones Lang Wootton
Grosvenor Place
000 Xxxxxx Xxxxxx
Xxxxxx XXX 0000
Xxxxxxxxx
Telephone: 00-0-0000-0000
Fax: 00-0-0000-0000
With a copy (which shall not constitute notice) given in the
manner prescribed above, to:
Xxxxxxx Xxxxx
c/o Jones Xxxx Xxxxxxx
0 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Telephone: 00-000-000 6040
Fax: 00-000-000-0000
and to:
Xxxxxxxxxxx Xxxxxxx
c/o Jones Lang Wootton Ltd
16th & 17th Floors
Dorset House
Taikoo Place
000 Xxxx'x Xxxx
Xxxxxx Xxx
Xxxx Xxxx
Telephone: 000-0000-0000
Fax: 000-0000-0000
and to:
Xxxxxx Xxxxxx
c/o Jones Lang Wootton
Grosvenor Place
000 Xxxxxx Xxxxxx
Xxxxxx XXX 0000
Xxxxxxxxx
Telephone: 00-0-0000-0000
Fax: 00-0-0000-0000
With a copy (which shall not constitute notice) given in the
manner prescribed above, to:
Xxxxxxxxx and May
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X
Attn: Xxxxxx XxXxxxx, Esq.
Telephone: (0000) 000-0000
Fax: (0000) 000-0000
and to:
Sidley & Austin
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq,
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Buyer:
LaSalle Partners Incorporated
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000)000-0000
Fax: (000)000-0000
With a copy (which shall not constitute notice) given in the
manner prescribed above, to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Escrow Agent:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Escrow Division/Xxxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Section 7.5 Incorporated Provisions. The provisions of
Sections 13.2, and Sections 13.8 through 13.14 of the Purchase Agreements
shall be deemed incorporated herein, mutatis mutandis.
IN WITNESS WHEREOF, the undersigned hereby execute this
Indemnity and Escrow Agreement, by and among each Shareholder and, if
applicable, its Related JLW Owner, and the duly authorized officer of each
of the Buyers and the Escrow Agent, in each case as of the day and year
first above written.
LASALLE PARTNERS INCORPORATED
By:
Name:
Title:
JLLINT, INC.
By:
Name:
Title:
JLLIP, INC.
By:
Name:
Title:
LPI (AUSTRALIA) HOLDINGS PTY LIMITED
By:
Name:
Title:
XXXXXX TRUST AND SAVINGS BANK
By:
Name:
Title:
IN WITNESS WHEREOF, the undersigned hereby execute(s) this
Indemnity and Escrow Agreement, by and among each Shareholder and, if
applicable, its Related JLW Owner, and the duly authorized officer of each
of the Buyers and the Escrow Agent, in each case as of the day and year
first above written.
SIGNATURE CONFIRMATION SHAREHOLDER:
Name:
Address:
By:
Name:
Title: Telephone:
Fax:
Dated:
SIGNATURE CONFIRMATION* RELATED JLW OWNER:
Name:
Title:
Address:
By:
Name:
Title: Telephone:
Fax:
Dated:
