Exhibit 10.16
EXECUTION
This Consent Agreement (this "Agreement"), dated as of April 15, 1997, is
by and among DSA-LSPL, INC. ("DSA-LSPL"), DSA-LSAM, INC. ("DSA-LSAM"; and
together with DSA-LSPL, the "Dai-Ichi Entities"), DEL-LPL Limited Partnership
("DEL-LPL"), DEL-LPAML Limited Partnership ("DEL-LPAML"; and together with DEL-
LPL the "DEL Partnerships"), DEL/LaSalle Finance Company, L.L.C. ("DEL Finance";
and together with the DEL Partnerships, the "DEL Parties"), LaSalle Partners
Limited Partnership ("LPL") and LaSalle Partners Management Limited Partnership
("LPML"; and together with LPL, the "Lower Tier Partnerships").
RECITALS
WHEREAS, the DEL Parties propose to reorganize the Lower Tier Partnerships
by (i) organizing a corporation under the laws of the State of Maryland to be
names LaSalle Partners Incorporated ("LPI"), (ii) requiring each partner of the
Lower Tier Partnerships to contribute all of its respective partnership
interests in the Lower Tier Partnerships into LPI in exchange for shares of
LPI's capital stock, and (iii) transferring all of the businesses of the Lower
Tier Partnerships and their respective subsidiaries through mergers, transfers
of ownership interests and transfers of assets and liabilities, all as more
fully set forth in a Plan of Reorganization (collectively, the
"Reorganization");
WHEREAS, prior to the Reorganization, the DEL Partnerships propose to enter
into a transaction (the "Xxxxxxxxx Transaction") concerning The Xxxxxxxxx
Company and Xxxxxxxxx Company of California, Inc. (the "Xxxxxxxxx Companies")
pursuant to the terms of a Letter of Intent dated March 24, 1997 entered into by
LPL (on its behalf and on behalf of its affiliates) and Xxxxxxx Xxxxxxxxx (on
her own behalf and on behalf of the other shareholders of the Xxxxxxxxx
Companies);
WHEREAS, pursuant to Section 4.1(e) of the Amended and Restated Agreement
of Limited Partnership of LPL dated as of November 30, 1994 (the "LPL
Partnership Agreement") and Section 4.1(e) of the Amended and Restated
Agreement of Limited Partnership of LPML dated as of November 30, 1994 (the
"LPML Partnership Agreement"; and together with LPL Partnership Agreement, the
"Lower Tier Partnership Agreements"), the DEL Partnerships have a right to
purchase up to 492,291 partnership units of the Lower Tier Partnerships at
prices set forth therein, which prices are below the estimated current market
value of such partnership units (such rights, the "DEL Purchase Rights");
WHEREAS, in connection with the Reorganization, the DEL Partnerships seek
to receive certain shares (the "DEL Exchange Shares") of LPI common stock (the
"Common Stock") in exchange for the termination of the DEL Purchase Rights (such
exchange, the "Exchange");
WHEREAS, the DEL Parties and the Xxxxxxxxx Companies have agreed that the
value of the Xxxxxxxxx Companies is equal to a percentage amount (the "Xxxxxxxxx
Companies Percentage Value") up to 18% of the fully diluted value of the Lower
Tier Partnerships and the Xxxxxxxxx Companies combined;
WHEREAS, the DEL Parties and the Xxxxxxxxx Companies have agreed that, in
the event the Xxxxxxxxx Transaction has been consummated, upon the issuance of
the DEL Exchange Shares to the DEL Parties, in order to avoid dilution to the
interest in the Lower Tier Partnerships held by the Xxxxxxxxx Companies, LPI
shall issue additional shares in connection with the Xxxxxxxxx Transaction (the
"Addition Xxxxxxxxx Shares") equal to the Xxxxxxxxx Companies Percentage Value
multiplied by the sum of (x) the number of DEL Exchange Shares and (y) the
number of the Additional Xxxxxxxxx Shares (such issuance, the "Additional
Xxxxxxxxx Issuance");
WHEREAS, the DEL Parties propose to consummate an underwritten initial
public offering of certain shares of common stock of LPI immediately after the
Reorganization (the "IPO") and propose to use Xxxxxx Xxxxxxx & Co. and Xxxxxxx
Xxxxx & Company as underwriters in connection with the IPO (the "Underwriters");
WHEREAS, the DEL Parties have requested the consent of the Dai-Ichi
Entities to the proposed Reorganization, Exchange, Additional Xxxxxxxxx Issuance
and IPO; and
WHEREAS, the Dai-Ichi Entities are willing to provide such consent subject
to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual provisions and covenants
hereinafter contained and for other good and valuable consideration, the parties
hereto agree as follows:
1. Consent. Each of the Dai-Ichi Entities hereby consents to the
Reorganization, Exchange, Additional Xxxxxxxxx Issuance and IPO, subject to the
terms and conditions provided herein.
2. Plan of Reorganization. The Plan of Reorganization and other documents
relating to the reorganization (the "Reorganization Documents") shall provide
that the Dai-Ichi Entities shall receive (x) not less than 20.03% (in the event
the Xxxxxxxxx Transaction has been consummated) and (y) not less than 24.43% (in
the event the Xxxxxxxxx Transaction has not been consummated) of the aggregate
number of shares of Common Stock outstanding after the Reorganization (in each
case, not taking into account the Exchange, the Additional Xxxxxxxxx Issuance or
the IPO). The Reorganization Documents shall otherwise be in form and substance
reasonably satisfactory to the Dai-Ichi Entities.
2
3. Capital Account Adjustment. Prior to the Reorganization, the
correlation between the Capital Account (as such term is used in the Lower Tier
Partnership Agreements) and the percentage of shares of Common Stock the
Dai-Ichi Entities shall receive in connection with the Reorganization shall be
satisfactory to the Dai-Ichi Entities.
4. Exchange. The number of DEL Exchange Shares issued pursuant to the
Exchange shall not exceed the number determined in accordance with the formula
set forth in Attachment I hereto.
5. Organizational Documents of LPI. The Certificate of Incorporation and
the By-Laws of LPI shall be in form and substance reasonably satisfactory to the
Dai-Ichi Entities.
6. Effectiveness of Reorganization, Etc. The Reorganization shall become
effective only after the Underwriters have agreed to purchase Common Stock in
connection with the IPO in accordance with the terms and conditions set forth
herein. The Reorganization shall not cause any adverse tax or other adverse
consequences (except as otherwise expressly consented to hereunder) to either of
the Dai-Ichi entities or any of its affiliates.
7. IPO Terms. The IPO shall be completed on or prior to November 15, 1997,
shall result in the listing of the Common Stock on The New York Stock Exchange
and shall raise net proceeds in an amount not less than the aggregate
outstanding principal and interest on the Second Amended and Restated Class A
Subordinated Promissory Notes and the Amended and Restated Class B Subordinated
Promissory Notes each dated August 27, 1996 and issued by LPL and LPML to
DSA-LSPL and DSA-LSAM, respectively (the "Class A Notes" and the "Class B Notes"
respectively; collectively, the "Notes"). The net proceeds from the IPO shall
first be applied toward repayment of the outstanding principal and interest on
the Notes. The public offering price per share of Common Stock shall not be less
than a price equivalent to a per unit value of the partnership units of the
combined Lower Tier Partnerships of (x) $82.61 (in the event the Xxxxxxxxx
Transaction has been consummated) and (y) $81.78 (in the event the Xxxxxxxxx
Transaction has not been consummated). Upon completion of the IPO, the Dai-Ichi
Entities shall hold in the aggregate (x) no less than 13.30% (in the event the
Xxxxxxxxx Transaction has been consummated) and (y) no less than 15.15% (in the
event the Xxxxxxxxx Transaction has not been consummated) of the outstanding
number of shares of Common Stock. No shareholder of LPI may participate in any
secondary offering of its shares of Common Stock in connection with the IPO,
except that DEL Finance may, pursuant to any exercise of each Underwriter's
"greenshoe" option, if any, sell to the Underwriters additional shares of Common
Stock held by DEL Finance in an amount not exceeding 15% of the number of shares
issued by LPI pursuant to the IPO. All net proceeds of any such secondary
offering of Common Stock by DEL Finance shall be applied toward repayment of
indebtedness owed by DEL Finance to Dresdner Bank AG. The only class of shares
that LPI may issue pursuant to the Reorganization or the IPO shall be the Common
Stock.
3
8. Registration Rights. Prior to the Reorganization, the Dai-Ichi
Entities and LPI shall have entered into an agreement (the "Registration Rights
Agreement") reasonably satisfactory to such parties which agreement shall
include customary terms and conditions and provide that upon completion of the
IPO, the Dai-Ichi Entities shall have the following rights with respect to the
Common Stock held by them:
(i) Demand: two demand registration rights exercisable at any time
after eighteen months from the date of the IPO, at the cost of
LPI, with priority over holders of piggyback registration
rights;
(ii) Piggyback: unlimited piggyback registration rights providing for
LPI to use its best efforts to include shares of Common Stock
held by the Dai-Ichi Entities in any registration of Common
Stock after the IPO, pro rata with all stockholders exercising
piggyback registration rights; and
(iii) Rule 144 Rights: rights to sell Common Stock pursuant to Rule
144 under the Securities Act of 1933, as amended, subject to
contractual lock-up agreements applicable to the Dai-Ichi
Entities and the DEL Parties.
9. Transfers. Except as may be consented to by the parties hereto or as
may be required by law or pursuant to a contractual lock-up agreement applicable
to the Dai-Ichi Entities and the DEL Parties (which agreement shall not provide
any restriction after six months from the completion of the IPO as required by
the Underwriters and LPI), there shall be no restriction on the ability of the
Dai-Ichi Entities to transfer their shares of Common Stock. Notwithstanding the
foregoing there shall be no restriction on the right of the Dai-Ichi Entities to
transfer all or a portion of the Common Stock held by them to Dai-Ichi Life
(U.S.A.), Inc. or any one or more of its direct or indirect wholly owned
subsidiaries.
10. Periodic Meetings. Prior to the Reorganization, LPI and the Dai-Ichi
Entities shall have entered into an agreement reasonably satisfactory to such
parties pursuant to which the Dai-Ichi Entities and its advisors shall be
provided an opportunity to hold periodic meetings with such offers of LPI as the
Dai-Ichi Entities shall request for the purpose of discussing matters relating
to the operation and financial condition of LPI.
11. Trainees. Prior to the Reorganization, LPI and the Dai-Ichi Entities
shall have entered into an agreement reasonably satisfactory to such parties
providing employees of The Dai-Ichi Mutual Life Insurance Company and/or its
affiliates with the right to place employee-trainees at LPI in accordance with
the terms of Article VIII of the Lower Tier Partnership Agreements.
12. Assignment by Dai-Ichi Entities. Each of the Dai-Ichi Entities may
assign its rights hereunder to any of its affiliates. Each of the DEL Parties
may assign its
4 EXECUTION
rights hereunder to any of its affiliates, provided that neither DEL Party may
delegate any of its obligations hereunder without the express written consent of
the Dai-Ichi Entities. Neither Lower Tier Partnership may assign its rights or
obligations hereunder without the express written consent of the Dai-Ichi
Entities.
13. Law to Govern: Other Provisions. This Agreement shall be governed and
construed in accordance with the internal laws of the State of Illinois. No
failure or delay by any party or any of its representatives in exercising any
right, power or privilege shall operate as a waiver thereof nor shall any single
or partial exercise preclude any other or further exercise of any right, power
or privilege. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
* * * * * * *
5 EXECUTION
DEL-LPL LIMITED PARTNERSHIP
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
DEL-LPAML LIMITED PARTNERSHIP
By:
------------------------
DSA-LSPL, INC.
By:
------------------------
Name:
Title:
DSA-LSAM, INC.
By:
------------------------
Name:
Title:
LASALLE PARTNERS LIMITED
PARTNERSHIP
By: DEL-LPL LIMITED PARTNERSHIP,
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
LASALLE PARTNERS MANAGEMENT
LIMITED PARTNERSHIP
By: DEL-LPAML LIMITED PARTNERSHIP,
Its General Partner
By:
------------------------
S-1 EXECUTION
