0000898430-01-501489.txt : 20011018
0000898430-01-501489.hdr.sgml : 20011018
ACCESSION NUMBER: 0000898430-01-501489
CONFORMED SUBMISSION TYPE: SC 13D
PUBLIC DOCUMENT COUNT: 6
FILED AS OF DATE: 20010730
GROUP MEMBERS: FS & CO INTERNATIONAL LP
GROUP MEMBERS: FS CAPITAL PARTNERS LP
GROUP MEMBERS: FS EQUITY PARTNERS INT'L LP
GROUP MEMBERS: FS HOLDINGS INC
GROUP MEMBERS: FS INT'L HOLDINGS LIMITED
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: FS EQUITY PARTNERS III LP
CENTRAL INDEX KEY: 0000906706
STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000]
STATE OF INCORPORATION: CA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D
BUSINESS ADDRESS:
STREET 1: 111000 SANTA MONICA BOULEVARD SUITE 1900
CITY: LOS ANGELES
STATE: CA
ZIP: 90025
BUSINESS PHONE: 310-444-1822
MAIL ADDRESS:
STREET 1: 11100 SANTA MONICA BLVD
STREET 2: SUITE 1900
CITY: LOS ANGELES
STATE: CA
ZIP: 90025
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: CBRE HOLDING INC
CENTRAL INDEX KEY: 0001138118
STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500]
IRS NUMBER: 943391143
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-61805
FILM NUMBER: 1692760
BUSINESS ADDRESS:
STREET 1: 3330 HILLVIEW AVE
CITY: PALO ALTO
STATE: CA
ZIP: 94304
BUSINESS PHONE: 6502515000
MAIL ADDRESS:
STREET 1: 3330 HILLVIEW AVE
CITY: PALO ALTO
STATE: CA
ZIP: 94304
SC 13D
1
dsc13d.txt
SCHEDULE 13D
--------------------------------
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____)*
CBRE Holding, Inc.
________________________________________________________________________________
(Name of Issuer)
Class A Common Stock, $0.01 par value
________________________________________________________________________________
(Title of Class of Securities)
None
_______________________________________________________________
(CUSIP Number)
William M. Wardlaw
11100 Santa Monica Blvd., Suite 1900
Los Angeles, California 90025
Telephone: (310) 444-1822
________________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
July 20, 2001
_______________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of (S)(S)240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [_].
Note: Schedules filed in paper format shall include a signed original and five
copies of this schedule, including all exhibits. See (S)240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a currently
valid OMB control number.
1
-----------------------
CUSIP NO. None
-----------------------
------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
F.S. Equity Partners III, L.P., a Delaware limited partnership
------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
------------------------------------------------------------------------------
SEC USE ONLY
3
------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO (See Item 3)
------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0-
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
3,402,463 (See Item 5)
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
3,402,463 (See Item 5)
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
3,402,463 (See Item 5)
------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
68.2% (See Item 5)
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
2
-----------------------
CUSIP NO. None
-----------------------
------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
FS Capital Partners L.P., a California limited partnership
------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
------------------------------------------------------------------------------
SEC USE ONLY
3
------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
CC (See Item 3)
------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
California
------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0-
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
3,402,463 (See Item 5)
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
3,402,463 (See Item 5)
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
3,402,463 (See Item 5)
------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
68.2% (See Item 5)
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
3
-----------------------
CUSIP NO. None
-----------------------
------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
FS Holdings, Inc., a California corporation
------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
------------------------------------------------------------------------------
SEC USE ONLY
3
------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO (See Item 3)
------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
California
------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0-
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
3,402,463 (See Item 5)
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
3,402,463 (See Item 5)
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
3,402,463 (See Item 5)
------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
68.2% (See Item 5)
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
4
-----------------------
CUSIP NO. None
-----------------------
------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY).
FS Equity Partners International, L.P., a Delaware limited partnership
------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
------------------------------------------------------------------------------
SEC USE ONLY
3
------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO (See Item 3)
------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0-
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
3,402,463 (See Item 5)
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
3,402,463 (See Item 5)
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
3,402,463 (See Item 5)
------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
68.2% (See Item 5)
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
5
-----------------------
CUSIP NO. None
-----------------------
------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
FS & Co. International, L.P., a Cayman Islands exempted limited
partnership
------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
------------------------------------------------------------------------------
SEC USE ONLY
3
------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
CO (See Item 3)
------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Cayman Islands
------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0-
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
3,402,463 (See Item 5)
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
3,402,463 (See Item 5)
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
3,402,463 (See Item 5)
------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
68.2% (See Item 5)
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
6
-----------------------
CUSIP NO. None
-----------------------
------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
FS International Holdings Limited, a Cayman Islands exempted company
------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
------------------------------------------------------------------------------
SEC USE ONLY
3
------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
CO (See Item 3)
------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Cayman Islands
------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0-
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
3,402,463 (See Item 5)
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
3,402,463 (See Item 5)
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
3,402,463 (See Item 5)
------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
68.2% (See Item 5)
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
7
Item 1. Security and Issuer
This statement on Schedule 13D (this "Schedule 13D") relates to shares
of Class A Common Stock, par value $.01 per share (the "Class A Common") CBRE
Holding, Inc., a Delaware corporation (the "Issuer"). In addition, references
are made in this Schedule 13D to the Class B Common Stock of the Issuer (the
"Class B Common"), which is currently convertible into shares of Class A Common
on a one-for-one basis, but is not registered under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). The Class A Common and the Class B
Common may be collectively referred to in this Schedule 13D as the "Issuer
Common Stock." The Issuer has its principal executive offices at 909 Montgomery
Street, Suite 400, San Francisco, CA 94133.
Item 2. Identity and Background
This Schedule 13D is being filed pursuant to a Joint Reporting
Agreement dated July 27, 2001, a copy of which is attached as Exhibit 1 hereto,
---------
among and on behalf of FS Equity Partners III, L.P., a Delaware limited
partnership ("FSEP III"), FS Capital Partners, L.P., a California limited
partnership ("Capital Partners"), FS Holdings, Inc., a California corporation
("FS Holdings"), FS Equity Partners International, L.P., a Delaware limited
partnership ("FSEP International"), FS & Co. International, L.P., a Cayman
Islands exempted limited partnership ("FS & Co. International"), and FS
International Holdings Limited, a Cayman Islands exempted company limited by
shares ("International Holdings" and, together with FSEP III, Capital Partners,
FS Holdings, FSEP International and FS & Co. International, the "Reporting
Persons").
FS Holdings is the general partner of Capital Partners, which is the
general partner of FSEP III. International Holdings is the general partner of
FS&Co. International which is the general partner of FSEP International.
FSEP III, Capital Partners and FS Holdings each has its principal
business address and its principal office at 11100 Santa Monica Boulevard, Suite
1900, Los Angeles, California 90025. FSEP III was formed to make private equity
investments. Capital Partners and FS Holdings were each formed to organize and
manage the transactions in which FSEP III is the principal investor.
FSEP International, FS&Co. International and International Holdings
each has its principal business address and its principal office at c/o Paget-
Brown & Company Ltd., West Winds Building, Third Floor, P.O. Box 1111, Grand
Cayman, Cayman Islands, B.W.I. FSEP International was formed to make private
equity investments. FS& Co. International and International Holdings were each
formed to organize and manage the transactions in which FSEP International is
the principal investor.
During the last five years, none of FSEP III, Capital Partners, FS
Holdings, FSEP International, FS &Co. International or International Holdings
has been convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgement, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to federal laws or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
Pursuant to an Amended and Restated Contribution and Voting Agreement
dated as of May 31, 2001 (the "Contribution Agreement"), among the Issuer, FSEP
III, FSEP International and certain other stockholders of the Issuer, a copy of
which is attached as Exhibit 2 hereto, the Reporting Persons agreed to transfer
---------
and deliver to Issuer 3,402,463 shares of common stock of CB Richard Ellis
Services, Inc. ("CBRE"), $.01 par value per share, in exchange for which Issuer
agreed to issue to the Reporting Persons 3,402,463 shares of Class B Common.
The Contribution Agreement was amended pursuant to an amendment dated as of July
19, 2001 attached as Exhibit 5 hereto. Pursuant to a Warrant Agreement dated as
---------
of July 20, 2001 (the "Warrant Agreement"), among the Issuer, FSEP III and FSEP
International, a copy of which is attached as Exhibit 4 hereto, warrants to
---------
purchase up to an aggregate of 364,884 shares of the Common Stock of CBRE (the
"CBRE Warrant Shares") were cancelled and the Issuer agreed to issue a warrant
to purchase that number of shares of Class B Common that represents the same
percentage of total outstanding shares of Issuer Common Stock as the percentage
of total outstanding shares of CBRE common stock represented by the CBRE Warrant
Shares.
Item 4. Purpose of Transaction
The Reporting Persons acquired the Class B Common pursuant to the
Contribution Agreement for investment purposes only.
In connection with the acquisition by the Reporting Persons of the
Class B Common, and pursuant to the terms of a Securityholder's Agreement dated
as of July 20, 2001 (the "Securityholder's Agreement"), among the Issuer, FSEP
III, FSEP
8
International and certain other stockholders of the Issuer, a copy of which is
attached as Exhibit 3 hereto, the Issuer has granted certain management,
investment monitoring and other rights to the Reporting Persons. In addition,
the Reporting Persons have agreed that at all times prior to and following the
initial public offering of the Issuer (the "IPO"), it will vote all of the
shares of voting capital stock owned or held of record by it, or cause all of
the shares of voting capital stock of the Issuer beneficially owned by it to be
voted to elect directors designated pursuant to the terms of the
Securityholder's Agreement, including at least one designee of the Reporting
Persons. The Reporting Persons will retain this director designation right so
long as the Reporting Persons and their affiliates, collectively, beneficially
own common stock representing not less than 7.5% of the outstanding Issuer
Common Stock. Each committee of the Board will include at least one director
designated by the Reporting Persons. If the Reporting Persons notify other
holders of the Issuer's common stock (the "Securityholders") in writing of their
desire to remove, with or without cause, any director of the Issuer previously
designated by the Reporting Persons, each Securityholder will vote (to the
extent eligible to vote ) all of the shares of voting capital stock of the
Issuer beneficially owned or held of record by it, him or her so as to remove
such director. If any director previously designated by the Reporting Persons
ceases to serve on the Board (whether by reason of death, resignation, removal
or otherwise), the Reporting Persons will be entitled to designate a successor
director to fill the vacancy created thereby, and each Securityholder will vote
all shares of voting capital stock beneficially owned or held of record by it or
him or her in favor of such designation. In addition, prior to an IPO, the
Reporting Persons are collectively entitled to have two observers at all regular
meetings of the Board as long as the Reporting Persons, collectively,
beneficially own common stock representing at least 7.5% of the outstanding
Issuer Common Stock.
Pursuant to the Securityholder's Agreement, the Reporting Persons agree,
prior to the IPO, to vote all of the shares of voting capital stock of the
Issuer owned by them, in the same manner as the group of shareholders comprised
of RCBA Strategic Partners, L.P. and its affiliates ("Blum") votes the shares of
capital stock it beneficially owns in all matters to be voted on by the Issuer's
stockholders, subject to certain exceptions as set forth in the Securityholder's
Agreement. The Reporting Persons granted Blum an irrevocable proxy, coupled
with an interest, to vote, during the period preceding the IPO, all of the
shares of voting capital stock of the Issuer owned by the Reporting Persons in
accordance with the terms of the Securityholder's Agreement.
Neither the Issuer nor any of its subsidiaries is permitted to engage in
certain transactions without the prior affirmative vote or written consent of
(i) a majority of the directors of the company and (ii) a majority of the
directors not designated by Blum. These transactions include any transaction
between Blum or any of its affiliates and the Issuer or any of its subsidiaries,
any amendment to the Certificate of Incorporation or Bylaws of the Issuer that
adversely affects any Securityholder relative to Blum, or any repurchase,
redemption, declaration, dividend payment or distribution upon any shares of
capital stock of the Issuer beneficially owned by Blum or any of its affiliates.
All of these requirements are subject to certain exceptions, as more fully
described in the Securityholder's Agreement. These consent rights terminate
upon the completion of the IPO.
The Issuer is prohibited from engaging in certain other transactions
without the prior affirmative vote of (i) a majority of the directors of the
Issuer and (ii) the director designated by the Reporting Persons. These include
the acquisition by purchase or otherwise, in any single or series of related
transactions, of any business or assets for a purchase price in excess of $75
million; the sale or disposition, in any single or series of related
transactions, of assets of the Issuer or its subsidiaries for aggregate
consideration in excess of $75 million; the incurrence of indebtedness; the
issuance of capital stock of the Issuer to employees, directors, or consultants
of the Issuer or any of its subsidiaries if such issuances, in the aggregate,
are greater than 75% of the total amount of outstanding capital stock of the
Issuer immediately after the closing of the merger transaction in which, among
other things, Blum CB Corp. merged with and into CBRE (the "Merger"). These
limitations are subject to certain exceptions, as more fully described in the
Securityholder's Agreement.
Except to the extent the foregoing may be deemed a plan or proposal, none
of the Reporting Persons has any plans or proposals which relate to, or could
result in, any of the matters referred to in paragraphs (a) through (j),
inclusive, of the instructions to Item 4 of Schedule 13D. The Reporting Persons
may, at any time and from time to time, review or reconsider their position
and/or change their purpose and/or formulate plans or proposals with respect
thereto.
The information set forth in this Item 4 is qualified in its entirety by
reference to the Contribution Agreement (attached hereto as Exhibit 2) and the
Securityholder's Agreement (attached hereto as Exhibit 3), each of which is
expressly incorporated herein by reference.
Item 5. Interest in Securities of the Issuer
(a) Amount Beneficially Owned by each Reporting Person and Percent of
-----------------------------------------------------------------
Class:
-----
Each Reporting Person is deemed to be the beneficial owner (within the
meaning of Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended) of
3,402,463 shares of Class A Common issuable upon conversion of 3,402,463 shares
of Class B Common into shares of Class A Common.
9
The aggregate number of shares of Issuer Common Stock beneficially owned
by the Reporting Persons constitutes approximately 68.2% of the shares of such
class outstanding as of July 20, 2001. Such percentages are based upon a total
of 1,589,774 shares of Class A Common issued and outstanding as of July 20,
2000, as provided by the Issuer to the Reporting Persons in connection with the
closing of the transactions contemplated by the Voting and Contribution
Agreement, and was calculated in accordance with Rule 13d-3(d)(1)(i).
(b) Voting and Dispositive Power:
----------------------------
The Reporting Persons may be deemed to have (i) sole voting and
dispositive power with respect to no shares of Common Stock and (ii) shared
voting and dispositive power with all other Reporting Persons with respect to
3,402,463 shares of Common Stock.
FS Holdings, by virtue of being the sole general partner of Capital
Partners, and Capital Partners, by virtue of being the sole general partner of
FSEP III may be deemed to have (i) sole voting and dispositive power with
respect to no shares of common stock and (ii) shared voting and dispositive
power with all other Reporting Persons with respect to 3,278,448 shares of
Class B Common.
International Holdings, by virtue of being the sole general partner of
FS&Co. International and FS International, by virtue of being the sole general
partner of FSEP International may be deemed to have (i) sole voting and
dispositive power with respect to no shares of common stock and (ii) shared
voting and dispositive power with all other Reporting Persons with respect to
124,015 shares of Class B Common.
(c) Other Transactions:
------------------
The Reporting Persons have not effected any transactions other than
as described in this Schedule 13D.
(d) Interests of Other Persons:
--------------------------
Not Applicable.
(e) Date Upon Which the Reporting Person Ceased to be the Beneficial
----------------------------------------------------------------
Owner of More Than Five Percent of Class:
----------------------------------------
Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Pursuant to the Contribution Agreement, the Reporting Persons transferred
and delivered to the Issuer 3,402,463 shares of common stock of CB Richard Ellis
Services, Inc., $.01 value per share, in exchange for which Issuer agreed to
issue to the Reporting Persons 3,402,463 shares of Class B Common. The Issuer
also entered into a Warrant Agreement with FSEP III and FSEP International. A
copy of each of the Contribution Agreement and the Warrant Agreement is attached
as Exhibit 2 and Exhibit 4 hereto, respectively, which describes more fully the
--------- ---------
terms thereof.
Pursuant to the Securityholder's Agreement, a copy of which is attached as
Exhibit 3 hereto, the Reporting Persons are subject to certain limitations
---------
regarding the transfer and voting of the Reporting Persons' shares. Among other
restrictions, the Reporting Persons may not directly or indirectly transfer any
shares of common stock or warrants unless the Reporting Persons comply with the
provisions of the Securityholder's Agreement.
If after three years following the completion of the Merger the Reporting
Persons desire to transfer all or any portion of its common stock or warrants to
a party not designated a "Permitted Transferee" under the Securityholder's
Agreement, the Reporting Persons must provide Blum with written notice of the
proposed transfer. The notice constitutes an irrevocable offer by the Reporting
Persons to sell the common stock or warrants being offered to Blum at the same
price and on the same terms and conditions as the proposed transfer.
If Blum and/or its affiliates agree to transfer a majority of the shares
of common stock beneficially owned by them to a third-party (other than in a
public offering), the Reporting Persons agree that, if requested by Blum or its
affiliates, the Reporting Persons will transfer to the third-party on the same
terms and conditions the same portion of such
10
common stock as is to be transferred by Blum. If Blum approves any merger,
consolidation or other business combination involving the Issuer or its
subsidiaries, then the Reporting Persons agree (i) to vote all shares of common
stock held by them to approve the contemplated transaction and (ii) exercising
any appraisal or dissenter's rights available to them in connection with such
transactions. In addition to such drag-along rights in favor of Blum, the
Securityholder's Agreement grants the Reporting Persons tag-along rights on
transfers of common stock by Blum. Before an IPO, with respect to any proposed
transfer by Blum and/or its affiliates of its shares of common stock to a third
party, whether pursuant to a stock sale, merger, consolidation, tender or
exchange offer or other transaction, the Reporting Persons have the right, to
require the proposed acquirer to purchase from the Reporting Persons a pre-
defined portion of the Reporting Persons' common stock, as described more fully
in the Securityholder's Agreement. Blum is required to give notice to the
Reporting Persons of the aforementioned sale at least fifteen (15) business days
prior to the proposed consummation of such sale.
Pursuant to the Securityholder's Agreement, the Issuer has also granted
certain participation, piggyback and demand registration rights to the Reporting
Persons. The Issuer will not issue additional equity securities after the date
of the Merger to any party without first notifying the Reporting Persons and
granting the Reporting Persons the right to subscribe for a pro rata share of
these equity securities prior to their issuance. Under the terms of the
Securityholder's Agreement, the Reporting Persons may include shares of Issuer
Common Stock in any proposed registration of securities of the Issuer for resale
under the Securities Act of 1933, as amended (the "Securities Act"), either for
the account of the Issuer or for the account of other Securityholders exercising
registration rights. In addition, the Reporting Persons may exercise up to 3
demand registration rights to require the Issuer to register the Reporting
Persons' Issuer Common Stock under the Securities Act. These registration
rights are subject to certain limitations and conditions as set forth in the
Securityholder's Agreement.
The Reporting Persons are also subject to voting requirements described
more fully in Item 4 hereto.
The information set forth in this Item 6 is qualified in its entirety by
reference to the Contribution Agreement (attached hereto as Exhibit 2), the
Securityholder's Agreement (attached hereto as Exhibit 3), and the Warrant
Agreement (attached hereto as Exhibit 4), each of which is expressly
incorporated herein by reference.
Item 7. Material to Be Filed as Exhibits
Exhibit 1 Joint Reporting Agreement dated July 27, 2001, among the
Reporting Persons.
Exhibit 2 Amended and Restated Contribution and Voting Agreement dated
as of May 31, 2001, by and among the Issuer, FSEP III, FSEP
International and certain other stockholders of the Issuer.
Exhibit 3 Securityholder's Agreement dated as of July 20, 2001, by and
among the Issuer, FSEP III, FSEP International and certain
other stockholders of the Issuer.
Exhibit 4 Warrant Agreement dated as of July 20, 2001, by and among
the Issuer and the Reporting Persons.
Exhibit 5 Amendment to Contribution and Voting Agreement, dated as of
July 19, 2001, by and among the Issuer, FSEP III, FSEP
International and certain other stockholders of the Issuer.
11
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: July 27, 2001
FS EQUITY PARTNERS III, L.P.,
a Delaware limited partnership
By: FS Capital Partners, L.P.
Its: General Partner
By: FS Holdings, Inc.
Its: General Partner
By: /s/ J. Frederick Simmons
-------------------------
J. Frederick Simmons
Title: Vice President
FS CAPITAL PARTNERS, L.P.,
a California limited partnership
By: FS Holdings, Inc.
Its: General Partner
By: /s/ J. Frederick Simmons
-------------------------
J. Frederick Simmons
Title: Vice President
FS HOLDINGS, INC.,
a California corporation
By: /s/ J. Frederick Simmons
-------------------------
J. Frederick Simmons
Title: Vice President
FS EQUITY PARTNERS INTERNATIONAL, L.P.,
a Delaware limited partnership
By: FS&Co. International, L.P.,
Its: General Partner
By: FS International Holdings Limited
Its: General Partner
By: /s/ J. Frederick Simmons
-------------------------
J. Frederick Simmons
Title: Vice President
12
FS&CO. INTERNATIONAL, L.P.,
a Cayman Islands exempted limited partnership
By: FS International Holdings Limited
Its: General Partner
By: /s/ J. Frederick Simmons
-------------------------
J. Frederick Simmons
Title: Vice President
FS INTERNATIONAL HOLDINGS LIMITED,
a Cayman Islands exempted company limited by
shares
By: /s/ J. Frederick Simmons
-------------------------
J. Frederick Simmons
Title: Vice President
13
EX-1
3
dex1.txt
JOINT REPORTING AGREEMENT DATED JULY 27, 2001
EXHIBIT 1
---------
JOINT REPORTING AGREEMENT
-------------------------
In consideration of the mutual covenants herein contained, pursuant to
Rule 13d-1(k)(1), each of the parties hereto represents to and agrees with the
other parties as follows:
1. Such party is eligible to file a statement or statements on
Schedule 13D pertaining to the Class A Common Stock, $.01 par value per share,
of CBRE Holding, Inc., a Delaware corporation, to which this Joint Reporting
Agreement is an exhibit, for filing of the information contained herein.
2. Such party is responsible for the timely filing of such statement
and any amendments thereto, and for the completeness and accuracy of the
information concerning such party contained therein, PROVIDED that no such party
is responsible for the completeness or accuracy of the information concerning
any other party making the filing, unless such party knows or has reason to
believe that such information is inaccurate.
3. Such party agrees that such statement is being filed by and on
behalf of each of the parties identified herein, and that any amendment thereto
will be filed on behalf of each such party.
This Joint Reporting Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original instrument, but
all of such counterparts together shall constitute but one agreement.
Dated: July 27, 2000
FS EQUITY PARTNERS III, L.P.,
a Delaware limited partnership
By: FS Capital Partners, L.P.
Its: General Partner
By: FS Holdings, Inc.
Its: General Partner
By: /s/ J. Frederick Simmons
--------------------------------------
J. Frederick Simmons
Title: Vice President
FS CAPITAL PARTNERS, L.P.,
a California limited partnership
By: FS Holdings, Inc.
Its: General Partner
By: /s/ J. Frederick Simmons
------------------------------------------
J. Frederick Simmons
Title: Vice President
FS HOLDINGS, INC.,
a California corporation
By: /s/ J. Frederick Simmons
----------------------------------------------
J. Frederick Simmons
Title: Vice President
FS EQUITY PARTNERS INTERNATIONAL, L.P.,
a Delaware limited partnership
By: FS&Co. International, L.P.,
Its: General Partner
By: FS International Holdings Limited
Its: General Partner
By: /s/ J. Frederick Simmons
--------------------------------------
J. Frederick Simmons
Title: Vice President
FS&CO. INTERNATIONAL, L.P.,
a Cayman Islands exempted limited partnership
By: FS International Holdings Limited
Its: General Partner
By: /s/ J. Frederick Simmons
------------------------------------------
J. Frederick Simmons
Title: Vice President
-2-
FS INTERNATIONAL HOLDINGS LIMITED,
a Cayman Islands exempted company limited by
shares
By: /s/ J. Frederick Simmons
----------------------------------------------
J. Frederick Simmons
Title: Vice President
-3-
EX-2
4
dex2.txt
AMENDED & RESTATED CONTRIBUTION & VOTING AGREEMENT
Exhibit 2
---------
EXECUTION COPY
--------------
AMENDED AND RESTATED CONTRIBUTION AND VOTING AGREEMENT
------------------------------------------------------
AMENDED AND RESTATED CONTRIBUTION AND VOTING AGREEMENT, dated as of
May 31, 2001 (this "Agreement"), among CBRE Holding, Inc., a Delaware
---------
corporation ("Holding"), BLUM CB Corp., a Delaware corporation and wholly owned
-------
subsidiary of Holding ("Newco"), RCBA Strategic Partners, L.P., a Delaware
-----
limited partnership (together with its respective permitted assigns as provided
herein, "BLUM"), FS Equity Partners III, L.P., a Delaware limited partnership
----
("FSEP"), and FS Equity Partners International, L.P., a Delaware limited
------
partnership ("FSEP International", and together with FSEP, "Freeman Spogli"),
------------------ --------------
Raymond E. Wirta ("Wirta"), W. Brett White ("White"), those other investors who
----- -----
are signatories to this agreement (collectively with Wirta and White, the "Other
-----
Investors") and Donald M. Koll ("Koll"). BLUM, Freeman Spogli and the Other
--------- ----
Investors are herein collectively referred to as the "Investors." Unless
---------
expressly provided otherwise in this Agreement, capitalized terms defined in the
Merger Agreement when used in this Agreement shall have the same meanings set
forth in the Merger Agreement (defined below).
WHEREAS, Newco has entered into an Agreement and Plan of Merger, dated
as of February 23, 2001 (as amended, the "Merger Agreement"), with CB Richard
----------------
Ellis Services, Inc., a Delaware corporation ("CBRE"), pursuant to which and
----
subject to the terms and conditions thereof, Newco shall merge with and into
CBRE (the "Merger"), such that CBRE shall thereafter be a wholly owned
------
subsidiary of Holding;
WHEREAS, in connection with the consummation of the Merger and the
receipt by the Investors of common stock of Holding, each of the Investors shall
become parties to a stockholders' agreement in the form attached hereto as
Exhibit A (the "Securityholders' Agreement");
--------------------------
WHEREAS, in connection with the financing of the Merger and the
related transactions, Newco is offering for issuance and sale $229 million
aggregate principal amount of its senior subordinated notes (the "Newco Senior
------------
Subordinated Notes") and, upon the closing of such offering, the proceeds from
------------------
such issuance and sale (the "Senior Subordinated Notes Proceeds") will be
----------------------------------
deposited in an escrow account, together with an additional amount of cash (the
"Pre-Funded Interest") sufficient to pay the special mandatory redemption price
-------------------
for the Newco Senior Subordinated Notes as described in the Preliminary
Confidential Offering Circular used in connection with the offering of the Newco
Senior Subordinated Notes;
WHEREAS, in connection with the financing of the Merger and the
related transactions, Holding is offering for issuance and sale at least
3,236,613 shares of Class A common stock, par value $.01 per share ( "Holding
-------
Class A Common Stock"), of Holding (including shares underlying stock fund units
--------------------
in the CB Richard Ellis Services, Inc. Deferred Compensation Plan) to eligible
employees and independent contractors of CBRE (the "Employee Offering");
-----------------
WHEREAS, in connection with the execution of the Merger Agreement,
Newco has received certain financing agreements and documents from Credit Suisse
First Boston ("CSFB") and DLJ Investment Funding, Inc. ("DLJ") with respect to
---- ---
the provision of debt
financing to effect the Merger (the "Debt Financing Documents");
------------------------
WHEREAS, the parties hereto desire to make certain agreements,
representations, warranties and covenants in connection with the Merger, the
Merger Agreement, the Securityholders' Agreement, the Debt Financing Documents
and the transactions contemplated hereby and thereby (collectively, the
"Transactions"); and
-------------
WHEREAS, the parties to this Agreement previously entered into a
Contribution and Voting Agreement, dated as of February 23, 2001 (the "Original
--------
Agreement"), and this Agreement constitutes an amendment and restatement of the
---------
Original Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions as hereinafter set forth, the parties hereto do hereby agree as
follows:
I CONTRIBUTIONS
- -------------
1.1. BLUM Contribution. At the Contribution Closing (as defined
---- -----------------
below), on the terms and subject to the conditions of this Agreement, BLUM
hereby agrees to (i) transfer and deliver to Holding 3,423,886 shares of common
stock, par value $.01 per share (the "CBRE Common Stock"), of CBRE (the "BLUM
----------------- ----
Stock Contribution"), and (ii) make an aggregate cash contribution to Holding of
------------------
approximately $40.9 million to approximately $92.6 million (as determined by
Holding no less than twelve business days prior to the Contribution Closing,
which amount shall be equal to approximately $92.6 million minus (A) the total
number of shares of Class A common stock and stock fund units in the CB Richard
Ellis Services, Inc. Deferred Compensation Plan subscribed for in the Employee
Offering multiplied by $16.00, minus (B) the amount of the Pre-Funded Interest
Contribution, minus (C) the amount of the Initial BLUM Contribution, plus (D)
the aggregate amount of full-recourse notes delivered to Holding as
consideration for shares of Class A common stock subscribed for in the Employee
Offering) in immediately available funds to an account of Holding (the "BLUM
----
Cash Contribution," and together with the BLUM Stock Contribution, the "BLUM
----------------- ----
Contribution"). In connection with such BLUM Contribution, Holding hereby
------------
agrees to issue to BLUM at the Contribution Closing (a) 3,423,886 shares of
Class B common stock, par value $.01 per share ("Holding Class B Common Stock"),
----------------------------
of Holding in exchange for the BLUM Stock Contribution and (b) a number of
shares of Holding Class B Common Stock in exchange for the BLUM Cash
Contribution equal to the quotient obtained by dividing (x) the amount of the
BLUM Cash Contribution by (y) $16.00 (the shares of Holding Class B Common Stock
being issued to BLUM in accordance with clauses (a) and (b) are collectively
referred to as the "BLUM Shares").
-----------
1.2. Freeman Spogli Contributions. At the Contribution Closing, on
---- ----------------------------
the terms and subject to the conditions of this Agreement, Freeman Spogli hereby
agrees to transfer and deliver to Holding 3,402,463 shares of CBRE Common Stock
(the "Freeman Spogli Contribution"). In connection with such Freeman Spogli
---------------------------
Contribution, Holding hereby agrees to issue to Freeman Spogli at the
Contribution Closing 3,402,463 shares (the "Freeman Spogli Shares") of Holding
---------------------
Class B Common Stock.
1.3. Other Investors Contribution. At the Contribution Closing, on
---- ----------------------------
the terms and subject to the conditions of this Agreement, each of the Other
Investors hereby agrees to transfer and deliver to
Holding the total number of shares of CBRE Common Stock set forth opposite his
or her name on Schedule I hereto (each, an "Other Investor Contribution"). In
---------------------------
connection with each such Other Investor Contribution, Holding hereby agrees to
issue to such Other Investor at the Contribution Closing the total number of
shares (the "Other Investor Shares") of Holding Class B Common Stock set forth
---------------------
opposite his or her name on Schedule I hereto.
1.4. Delivery of Funds and Certificates. Subject to the satisfaction
---- ----------------------------------
(or waiver by the parties entitled to the benefit thereof) of the conditions set
forth in Section 1.5 of this Agreement, the closing of the transactions
contemplation hereby (the "Contribution Closing") will take place at the offices
--------------------
of Simpson Thacher & Bartlett, 3330 Hillview Avenue, Palo Alto, California
94304, or at such other location as the parties may mutually agree, immediately
prior to the closing under the Merger Agreement. At the Contribution Closing,
Holding will deliver to the Investors duly executed certificates, registered in
the Investors' respective names, representing the BLUM Shares, the Freeman
Spogli Shares and each of the Other Investor Shares, as the case may be, against
the transfer and payment (including, to the extent applicable, the delivery of
certificates evidencing the applicable number of shares of CBRE Common Stock
duly endorsed to Holding), to Holding of the BLUM Contribution, the Freeman
Spogli Contribution and each of the Other Investor Contributions, respectively,
which shall represent payment in full for the BLUM Shares, the Freeman Spogli
Shares and each of the Other Investor Shares.
1.5. Conditions to the Obligations of the Parties Hereunder. The
---- ------------------------------------------------------
respective obligations of the Investors to consummate the transactions
contemplated by this Agreement shall be subject to the following conditions,
each of which is for the benefit of and any of which may be waived by the
Investors:
(a) Subject to Section 4.9, Holding shall have determined that all
the conditions to the consummation of the Merger (as set forth in the Merger
Agreement) have been satisfied or waived by the necessary party to the Merger
Agreement; and
(b) the representations and warranties of Holding and Newco
contained herein shall be correct and complete in all material respects as of
the Contribution Closing to the same extent as though made on and as of such
date.
1.6. Termination. This Agreement may be terminated and the
---- -----------
Transactions may be abandoned at any time prior to the Contribution Closing by
any of the parties hereto if the Merger Agreement shall have been terminated in
accordance with its terms. In the event of any termination of the Agreement as
provided in this Section 1.6, this Agreement shall forthwith become wholly void
and of no further force or effect (except Section 4.4 and Article V) and there
shall be no liability on the part of any parties hereto or their respective
officers or directors, except as provided in such Section 4.4 and Article V.
Notwithstanding the foregoing, no party hereto shall be relieved from liability
for any willful breach of this Agreement.
II REPRESENTATIONS AND WARRANTIES
-- ------------------------------
2.1. Representations and Warranties of Holding and Newco. Each of
---- ---------------------------------------------------
Holding and Newco represents and warrants to the Investors as follows:
(a) Each of Holding and Newco is a corporation duly incorporated,
validly existing and in good
standing under the laws of the state of Delaware and has all requisite corporate
power and authority to execute and deliver this Agreement and the agreements
contemplated hereby and to perform its obligations hereunder and thereunder. The
execution and delivery by each of Holding and Newco of this Agreement and the
agreements contemplated hereby, the performance by each of Holding and Newco of
its obligations hereunder and thereunder, and the consummation by each of
Holding and Newco of the transactions contemplated hereby and thereby have been
duly authorized by all requisite corporate action. This Agreement has been duly
executed and delivered by each of Holding and Newco and, assuming the due
authorizations, executions and deliveries thereof by the Investors, constitutes
a legal, valid and binding obligation of each of Holding and Newco, enforceable
against each of Holding and Newco in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors rights generally and by the effect of general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or in
law).
(b) As of the date hereof, the authorized capital stock of Holding
consists of 2000 shares of common stock, par value $.01 per share ("Holding
-------
Common Stock"), 10 of which are issued and outstanding and held by BLUM as of
------------
the date hereof (each such share having been purchased by BLUM for a cash price
of $16.00 per share (such initial contribution, in the aggregate, the "Initial
-------
BLUM Contribution")). As of the date hereof, the authorized capital stock of
-----------------
Newco consists of 2000 shares of common stock, par value $.01 per share
("Acquiror Common Stock"), 10 of which are issued and outstanding and held by
---------------------
Holding as of the date hereof (each such share having been purchased by Holding
for a cash price of $16.00 per share).
(c) The BLUM Shares, the Freeman Spogli Shares and the Other Investors
Shares, when issued and delivered in accordance with the terms hereof and upon
receipt of payment required to be made hereunder, will be duly authorized,
validly issued, fully paid and nonassessable and free and clear of any mortgage,
pledge, security interest, claim, encumbrance, lien or charge of any kind (each,
a "Lien").
----
(d) The execution, delivery and performance by each of Holding and
Newco of this Agreement and the agreements contemplated hereby and the
consummation by each of Holder and Newco of the transactions contemplated hereby
and thereby do not and will not, with or without the giving of notice or the
passage of time or both, (i) violate the provisions of any law, rule or
regulation applicable to either Holding or Newco or its properties or assets;
(ii) violate the provisions of the certificate of incorporation or bylaws of
either Holding or Newco, as amended to date; or (iii) violate any judgment,
decree, order or award of any court, governmental or quasi-governmental agency
or arbitrator applicable to either Holding or Newco or their properties or
assets.
(e) Except to the extent required pursuant to (i) the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder, (ii) any Non-U.S. Competition Laws and (iii)
any similar applicable Laws, no consent, approval, exemption or authorization is
required to be obtained from, no notice is required to be given to and no filing
is required to be made with any third party (including, without limitation,
governmental and quasi-governmental agencies, authorities and instrumentalities
of competent jurisdiction) by Holding or Newco, in order (i) for this Agreement
to constitute a legal, valid and binding obligation of Holding and Newco or (ii)
to authorize or permit the consummation by Holding of the issuance
of the BLUM Shares, the Freeman Spogli Shares and the Other Investor Share.
(f) Each of Holding and Newco was organized solely for the purpose
of effecting the Transactions and has engaged in no activity other than in
connection therewith.
2.2. Representations and Warranties of the Investors. Each of the
---- -----------------------------------------------
Investors represents and warrants, severally and not jointly, to Holding and
Newco and to the other Investors that:
(a) The execution and delivery by such Investor of this Agreement
and the documents contemplated hereby, the performances by such Investor of its,
his or her obligations hereunder and thereunder and the consummations by such
Investor of the transactions contemplated hereby and thereby have been duly
authorized by all requisite action on the part of such Investor, and this
Agreement has been duly executed and delivered by such Investor and, assuming
the due authorization, execution and delivery thereof by Holding and Newco,
constitutes a legal, valid and binding obligation of such Investor, enforceable
against such Investor in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors rights generally and by the
effect of general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or in law).
(b) The execution, delivery and performance by such Investor of this
Agreement and the agreements contemplated hereby and the consummation by such
Investor of the transactions contemplated hereby and thereby does not and will
not, with or without the giving of notice or the passage of time or both, (i)
violate the provisions of any law, rule or regulation applicable to such
Investor or its, his or her respective properties or assets; (ii) violate the
provisions of the constituent organizational documents or other governing
instruments applicable to such Investor, as amended to date; or (iii) violate
any judgment, decree, order or award of any court, governmental or quasi-
governmental agency or arbitrator applicable to such Investor or its, his or her
respective properties or assets.
(c) Such Investor (i) is an "accredited investor" within the
definition of Regulation D promulgated by the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), (ii)
--------------
is experienced in evaluating and investing in private placement transactions of
securities of companies in a similar stage of development and acknowledges that
he, she or it is able to fend for himself, herself or itself, can bear the
economic risk of the Investor's investment in Holding, and has such knowledge
and experience in financial and business matters that the Investor is capable of
evaluating the merits and risks of the investment in the Holding Class B Common
Stock and can afford a complete loss of its, his or her investment, (iii) if
other than an individual, has not been organized for the purpose of acquiring
the Holding Class B Common Stock, (iv) understands that no public market now
exists for the Holding Class B Common Stock and there is no assurance that a
pubic market will ever exist for the Holding Class B Common Stock and (v)
understands that the Holding Class B Common Stock may not be sold, transferred,
or otherwise disposed of without registration under the Securities Act or an
exemption therefrom, and that in the absence of an effective registration
statement covering the Holding Class B Common Stock or an available exemption
from registration under the Securities Act, the Holding Class B Common Stock
must be held indefinitely.
(d) Such Investor's, together with its Affiliates' (as defined in
the Merger Agreement), total beneficial ownership of shares of outstanding CBRE
Common Stock as of the date hereof is accurately set forth opposite such
Investor's name on Schedule I hereto, and each of such shares when transferred
and delivered to Holding will be free and clear of all Liens.
(e) Such Investor has no plan or intention to transfer its shares of
Holding Class B Common Stock following the Contribution Closing.
III VOTING AND EXCLUSIVITY
--- ----------------------
3.1. Voting. Each of the Investors agrees to vote or consent (or
---- ------
cause to be voted or consented), in person or by proxy, any shares of CBRE
Common Stock beneficially owned or held of record by such Investor or to which
such party has, directly or indirectly, the right to vote or direct the voting
(the "Subject Shares") in favor of the Transactions and any other matter
--------------
required to effect the Transactions at any meeting (whether annual or special
and whether or not an adjourned or postponed meeting) of stockholders of CBRE
called to consider such matters. In order to effectuate this section 3.1, each
of the Investors hereby grants to Holding an irrevocable proxy, which proxy is
coupled with an interest, to vote all of the Subject Shares owned by such
Investor in favor of the Transactions and any other matter required to effect
the Transactions at any meeting of stockholders of CBRE called to consider such
matters.
3.2. Exclusivity. Prior to the earlier of the Contribution Closing
---- -----------
or the termination of this Agreement, unless otherwise mutually agreed in
writing by BLUM and Freeman Spogli, each of the Investors (in their individual
capacities as stockholders of CBRE and not in their capacities as officers or
directors of CBRE, if applicable) will (i) not, directly or indirectly, make,
participate in or agree to, or initiate, solicit, encourage or knowingly
facilitate any inquiries or the making of, any proposal or offer with respect
to, or a transaction to effect, a merger, reorganization, share exchange,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving CBRE or any of its subsidiaries, or any
purchase or sale of 20% or more of the consolidated assets (including without
limitation stock of its subsidiaries) of CBRE and its subsidiaries, taken as a
whole, or any purchase or sale of, or tender or exchange offer for, the equity
securities of CBRE that, if consummated, would result in any person or entity
beneficially owning securities representing 20% or more of the total voting
power of CBRE (or of the surviving parent entity in such transaction) or any of
its subsidiaries, in each case other than the Transactions (any such proposal,
offer or transaction (other than the Transactions) being hereinafter referred to
as a "Competing Acquisition Proposal"), (ii) vote or consent (or cause to be
------------------------------
voted or consented), in person or by proxy, any Subject Shares against any
Competing Acquisition Proposal at any meeting (whether annual or special and
whether or not an adjourned or postponed meeting) of stockholders of CBRE, (iii)
not, directly or indirectly, sell, transfer or otherwise dispose of any shares
of CBRE Common Stock beneficially owned by such party (including, without
limitation, in the case of Freeman Spogli, the warrant to acquire 364,884 shares
of CBRE Common Stock held by Freeman Spogli) and (iv) not enter into any
agreement, commitment or arrangement that is inconsistent with any of the
foregoing.
IV OTHER COVENANTS
-- ---------------
4.1. Merger Agreement. The parties hereto acknowledge and agree
---- ----------------
that Holding will have sole
discretion with respect to (a) determining whether the conditions set forth in
the Merger Agreement have been satisfied by the appropriate parties thereto
and/or whether to waive any of such conditions pursuant to the terms of the
Merger Agreement, and (b) the manner and timing of its and CBRE's compliance
with the covenants applicable to it and CBRE under the Merger Agreement. Subject
to the immediately preceding sentence, Holding may not amend, or agree to amend,
the Merger Agreement without the prior written consent of both BLUM and Freeman
Spogli, and each of BLUM and Freeman Spogli hereby consents to all amendments to
the Merger Agreement that have occurred on or prior to the date hereof. BLUM
agrees to amend, or cause the amendment of, the certificates of incorporation of
each of Holding and Acquiror, at or prior to the Contribution Closing, to (i)
create three classes of Holding capital stock consisting of Holding Class B
Common Stock and Holding Class A Common Stock, (ii) authorize a total number of
shares of Holding Class B Common Stock and Holding Class A Common Stock and
Acquiror Common Stock, respectively, that are sufficient to permit the
consummation of the transactions contemplated hereby and by the Merger Agreement
and (iii) elect for Holding not to be governed by Section 203 of the General
Corporation Law of the State of Delaware. In connection with such amendment of
the certificate of incorporation of Holding, each share of outstanding Holding
Common Stock on the date thereof shall be exchanged for one share of Holding
Class B Common Stock.
4.2. Issuance of Shares for Pre-Funded Interest; Financing Documents.
---- ---------------------------------------------------------------
(a) The parties hereto acknowledge and agree that, in the event that
the offering of the Newco Senior Subordinated Notes shall be consummated, in
connection with such consummation Holding will issue and sell to BLUM or its
affiliate, in consideration for a cash contribution to Holding equal to the Pre-
Funded Interest (the "Pre-Funded Interest Contribution"), a number of shares of
--------------------------------
Holding Class B Common Stock equal to (i) the amount of the Pre-Funded Interest
divided by (ii) $16.00 (the "Pre-Funded Interest Shares"). Holding shall
--------------------------
contribute the Pre-Funded Interest Contribution to Newco in exchange for the
issuance and sale to Holding of a number of shares of Acquiror Common Stock
equal to (x) the Pre-Funded Interest Contribution divided by (y) $16.00.
(b) The parties hereto acknowledge and agree that Holding will have
sole discretion with respect to the negotiation of definitive debt financing
documents with CSFB and DLJ (or any other lending person) and any supporting
lenders (i) based upon the Debt Financing Documents and (ii) in connection with
the offering of the Newco Senior Subordinated Notes.
4.3. Agreement to Cooperate; Further Assurances. Subject to the
---- ------------------------------------------
terms and conditions of this Agreement, each of the parties hereto shall use all
reasonable best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the Transactions,
including providing information and using reasonable best efforts to obtain all
necessary or appropriate waivers, consents and approvals, and effecting all
necessary registrations and filings.
4.4. Fees and Expenses.
---- -----------------
(a) Subject to Section 4.4(b), in the event that this Agreement is
terminated prior to the Contribution Closing, the costs incurred by any party
hereto in preparing this Agreement and in pursuing and
negotiating the Transactions (including all attorneys' fees and costs relating
thereto) (the "Transaction Expenses") will be paid by the party incurring such
--------------------
Transaction Expenses.
(b) In the event that the Merger Agreement is terminated and BLUM
shall receive any payment from CBRE pursuant to Section 10.2 of the Merger
Agreement (the "Termination Fee"), promptly after receipt of such Termination
---------------
Fee, BLUM shall allocate and pay the Termination Fee, in part or in whole, as
applicable, as follows: (i) first, to BLUM and the Other Investors in an amount
equal to their Transaction Expenses (to the extent such Transaction Expenses
shall exceed the Termination Fee, then each such party shall receive a pro rata
amount of such Termination Fee based upon such party's Transaction Expenses
incurred), (ii) second, if available, any amounts required to be paid to CSFB
and DLJ in the Debt Financing Documents and (iii) lastly, subject to Section
4.4(c) hereto, the remaining amount of the Termination Fee to BLUM or its
Affiliate (as defined in Section 5.3 hereto).
(c) If (i) the Merger Agreement is terminated because of the
Company's consummation of an Acquisition Proposal (as defined in the Merger
Agreement), (ii) Holding is entitled to receive any payment from CBRE pursuant
to Section 10.2 of the Merger Agreement, and (iii) (x) Wirta is not offered
continued employment on comparable terms with CBRE (or the parent or surviving
company in such Acquisition Proposal) following the consummation of such other
Acquisition Proposal for a period of at least 12 months (unless such shorter
period is requested by Wirta), then Wirta will be entitled to receive 5.7% of
the portion of the Termination Fee, if any, paid to BLUM or its Affiliate
pursuant to Section 4.4(b)(iii), or (y) White is not offered continued
employment on comparable terms with CBRE (or the parent or surviving company in
such Acquisition Proposal) following the consummation of such other Acquisition
Proposal for a period of at least 12 months (unless such shorter period is
requested by White), then White will be entitled to receive 4.3% of the portion
of the Termination Fee, if any, paid to BLUM or its Affiliate pursuant to
Section 4.4(b)(iii).
(d) In the event that the closing under the Merger Agreement occurs,
the Surviving Corporation in the Merger shall, simultaneously with such closing,
pay (i) to RCBA GP, L.L.C. (or an affiliate designated by it) a transaction fee
of $3 million in immediately available funds and (ii) to Freeman Spogli & Co.
Incorporated (or an affiliate designated by it) a transaction fee of $2 million
in immediately available funds. In addition, simultaneously with such closing,
the Surviving Corporation shall reimburse each of the parties hereto for all
Transaction Expenses incurred by such party.
4.5. Notification of Certain Matters. Each party to this Agreement
---- -------------------------------
shall give prompt notice to each other party of (i) the occurrence or non-
occurrence of any event, the occurrence or non-occurrence of which is likely to
cause any representation or warranty of such party contained in this Agreement
to be untrue or inaccurate at or prior to the Contribution Closing and (ii) any
failure of such party to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
-------- -------
that the delivery of any notice pursuant to this Section 4.5 shall not limit or
otherwise affect any remedies available to the party receiving such notice. No
disclosure by any party pursuant to this Section 4.5 shall prevent or cure any
misrepresentations, breach of warranty or breach of covenant.
4.6. Public Statements. Before any party to this Agreement, other
---- -----------------
than BLUM, Holding or Newco, or
any Affiliate of such party shall release any statements concerning this
Agreement, the Merger Agreement, the Securityholders' Agreement, the Debt
Financing Documents, the Transactions or any of the matters contemplated hereby
and thereby which is intended for or may result in public dissemination thereof,
such party shall cooperate with the other parties and provide the other parties
the reasonable opportunity to review and comment upon any such statements and,
unless otherwise required by law or as may be required to be disclosed by any
party in any Schedule 13D filing, shall not release or permit release of any
such information without the consent of the other parties, which shall not be
unreasonably withheld.
4.7. Execution of Securityholders' Agreement. At the time of the
---- ---------------------------------------
Contribution Closing, each of the Investors agrees to execute and deliver to the
other parties thereto the Securityholders' Agreement.
4.8. Freeman Spogli Warrant. Holding agrees to issue to Freeman
---- ----------------------
Spogli or its Affiliate immediately after the closing under the Merger Agreement
a warrant in the form attached hereto as Exhibit B (the "Warrant Agreement").
-----------------
Freeman Spogli agrees that at the time of the closing under the Merger
Agreement, the warrants to acquire 364,884 shares of Common Stock, par value
$.01 per share ("CBRE Common Stock"), of CBRE beneficially owned by Freeman
-----------------
Spogli shall be cancelled by CBRE without any payment to Freeman Spogli.
4.9. Consultation. In connection with (a) exercising its discretion
---- ------------
under Sections 1.5 and 4.1 and (b) any negotiations contemplated by Section
4.2, BLUM and Holding will use their good faith efforts to (i) promptly
communicate with the other parties hereto concerning the relevant issues and
terms, (ii) permit the other parties hereto to participate in the negotiation of
such terms, if applicable, and (iii) consider the views of the other parties
hereto in the making of any decisions or conduct of any negotiations, as
applicable.
4.10. Waiver of Certain Rights in KRES Merger Agreement. Effective
----- -------------------------------------------------
upon the Closing, each of FSEP, FSEP International, Koll Holding Company and
Wirta (collectively, the "Former KRES Shareholders") irrevocably and
------------------------
unconditionally waives any rights that it or he may have under (i) Section 10.13
of the Agreement and Plan of Merger, dated as of May 14, 1997 (the "KRES Merger
-----------
Agreement"), by and among CBRE, Koll Real Estate Services, the Former KRES
---------
Shareholders and the other parties thereto, and (ii) the Registration Rights
Agreement, dated as of May 14, 1997, by and among CBRE, the Former KRES
Shareholders and the other parties thereto.
4.11. Conversion of Koll Warrants. Each of Wirta, Koll and The Koll
----- ---------------------------
Holding Company ("TKHC") agrees that at the time of the closing under the Merger
----
Agreement, the warrants to acquire 84,988 shares of CBRE Common Stock
beneficially owned by Wirta, Koll or TKHC (which total includes warrants to
acquire 55,936 shares of CBRE Common Stock beneficially owned by each of Wirta,
Koll and TKHC as a result of the Amended and Restated Option Agreement, dated as
of August 27, 1997 (the "Wirta-Koll Option Agreement"), by and among The Koll
---------------------------
Company, TKHC, Wirta and Koll Real Estate Services) shall each be converted into
the right to receive $1.00 and shall not thereafter represent the right to
receive any securities of, or other consideration from, Holding or CBRE.
4.12. Transfers. Each Investor agrees not to enter into any plan,
----- ---------
agreement, arrangement or
understanding to transfer its shares of Holding Class B Common Stock prior to
and including the Contribution Closing.
V MISCELLANEOUS
- -------------
5.1. Notices. All notices, requests and demands to or upon the
---- -------
respective parties hereto to be effective shall be in writing (including by
telecopy, telegraph or telex), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or three
days after being deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when received, or, in the case of telegraphic notice, when
delivered to the telegraph company, or, in the case of telex notice, when sent,
answerback received, addressed as follows to Holding, Newco and the Investors,
or to such other address as may be hereafter notified by the parties hereto:
(a) If to Holding or Newco, to it at the following address:
c/o BLUM Capital Partners, L.P.
909 Montgomery Street, Suite 400
San Francisco, California 94133
Attn: Claus Moller
Telephone: (415) 288-7262
Telecopy: (415) 434-3130
with a copy to:
Simpson Thacher & Bartlett
3330 Hillview Avenue
Palo Alto, California 94304
Attn: Richard Capelouto
Telephone: (650) 251-5060
Telecopy: (650) 251-5002
(b) If to an Investor, to it at its address set forth in Section 6.3
of the Securityholders' Agreement.
(c) If to Koll, to him at the address for TKHC set forth in Section
6.3 of the Securityholders' Agreement.
5.2. Governing Law. This Agreement shall be governed by and
---- -------------
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts executed and to be performed entirely within that state.
Each of the parties by its execution hereof hereby (i) irrevocably submits to
the jurisdiction of the federal and state courts located in the County of San
Francisco in the State of California for the purpose of any suit, action or
other proceeding arising out of or based upon this Agreement or any other
agreement contemplated hereby or relating to the subject matter hereof or
thereof and (ii) waives to the extent not prohibited by applicable law, and
agrees not to assert by way of motion, as a defense or otherwise, that its
property is exempt or immune from attachment or execution, that any such
proceeding brought in one of the above-named courts is improper, or that any
right or remedy relating to this Agreement or any other agreement contemplated
hereby, or the subject matter hereof or thereof, may not be enforced in
or by such court. Each of the parties hereby consents to service of process in
any such proceeding in any manner permitted by the laws of the state of
California, and agrees that service of process by registered or certified mail,
return receipt requested, at its address specified pursuant to Section 5.2
hereof is reasonably calculated to give actual notice.
5.3. Assignment. This Agreement may not be assigned by any party
---- ----------
hereto, except that the rights and obligations of BLUM to provide the BLUM Cash
Contribution may be assigned by BLUM in whole or in part to any affiliate of
BLUM provided that no such assignment will relieve BLUM of any of its
obligations hereunder. Any assignment or delegation in derogation of this
provision shall be null and void. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, executors and
administrators of the parties hereto.
5.4. Amendment. No amendment, modification or supplement to this
---- ---------
Agreement shall be enforced against any party hereto unless such amendment,
modification or supplement is in writing and signed by Holding and such party.
5.5. Counterparts. This Agreement may be executed in two or more
---- ------------
counterparts, and by different parties on separate counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
5.6. Integration. This Agreement, the Merger Agreement, the
---- -----------
Securityholders' Agreement, the Warrant Agreement, the letter agreement between
BLUM and an affiliate of Freeman Spogli and the documents referred to herein and
therein or delivered pursuant hereto or thereto contain the entire understanding
of the parties with respect to the subject matter hereof and thereof. There are
no agreements, representations, warranties, covenants or undertakings with
respect to the subject matter hereof and thereof other than those expressly set
forth herein and therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to this subject matter,
including, without limitation, the letter agreement dated as of November 10,
2000 among the Investors.
5.7. Specific Performance. The parties hereto agree that irreparable
---- --------------------
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement in
addition to any other remedy to which they are entitled at law or in equity.
5.8. Amendment and Restatement; Effectiveness of Representations and
---- ---------------------------------------------------------------
Warranties and Agreements.
-------------------------
(a) This Agreement amends certain provisions of the Original Agreement
and restates the terms of the Original Agreement in their entirety so as to
reflect and give effect to such amendments. All amendments to the Original
Agreement effected by this Agreement, and all other covenants, agreements, terms
and provisions of this Agreement, shall have effect from the date of the
Original Agreement.
(b) Each of the representations and warranties of each party hereto made
in this Agreement shall be deemed (i) to be made on the date of the Original
Agreement and as of the Contribution Closing and (ii) not made on the date
hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CBRE HOLDING, INC.
By:
Name:
Title:
BLUM CB CORP.
By:
Name:
Title:
RCBA STRATEGIC PARTNERS, L.P.
By: RCBA GP, L.L.C., its general partner
By:
Name:
Title:
FS EQUITY PARTNERS III, L.P.
By: FS Capital Partners, L.P., its general
Partner
By: FS Holdings, Inc., its general partner
By:
Name:
Title:
FS EQUITY PARTNERS INTERNATIONAL, L.P.
By: FS&Co. International, L.P., its general
Partner
By: FS International Holdings Limited,
its general partner
By:
Name:
Title:
THE KOLL HOLDING COMPANY
______________________________
By: Donald M. Koll
______________________________
Frederic V. Malek
______________________________
Raymond E. Wirta
______________________________
W. Brett White
______________________________
Donald M. Koll
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Contribution and
Voting Agreement among CBRE Holding, Inc., BLUM CB Corp., RCBA Strategic
Partners, L.P., FS Equity Partners III, L.P., FS Equity Partners International,
L.P., The Koll Holding Company, Frederic V. Malek, Raymond E. Wirta, W. Brett
White and Donald M. Koll, I, _______________________, the spouse of Raymond E.
Wirta, do hereby join with my spouse in executing the foregoing Contribution and
Voting Agreement and do hereby agree to be bound by all of the terms and
provisions thereof.
Dated as of ________ __, 2001
[Spouse]
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Contribution and
Voting Agreement among CBRE Holding, Inc., BLUM CB Corp., RCBA Strategic
Partners, L.P., FS Equity Partners III, L.P., FS Equity Partners International,
L.P., The Koll Holding Company, Frederic V. Malek, Raymond E. Wirta, W. Brett
White and Donald M. Koll, I, _______________________, the spouse of W. Brett
White, do hereby join with my spouse in executing the foregoing Contribution and
Voting Agreement and do hereby agree to be bound by all of the terms and
provisions thereof.
Dated as of ________ __, 2001
[Spouse]
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Contribution and
Voting Agreement among CBRE Holding, Inc., BLUM CB Corp., RCBA Strategic
Partners, L.P., FS Equity Partners III, L.P., FS Equity Partners International,
L.P., The Koll Holding Company, Frederic V. Malek, Raymond E. Wirta, W. Brett
White and Donald M. Koll, I, _______________________, the spouse of Frederic V.
Malek, do hereby join with my spouse in executing the foregoing Contribution and
Voting Agreement and do hereby agree to be bound by all of the terms and
provisions thereof.
Dated as of ________ __, 2001
[Spouse]
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Contribution and
Voting Agreement among CBRE Holding, Inc., BLUM CB Corp., RCBA Strategic
Partners, L.P., FS Equity Partners III, L.P., FS Equity Partners International,
L.P., The Koll Holding Company, Frederic V. Malek, Raymond E. Wirta, W. Brett
White and Donald M. Koll, I, _______________________, the spouse of Donald M.
Koll, do hereby join with my spouse in executing the foregoing Contribution and
Voting Agreement and do hereby agree to be bound by all of the terms and
provisions thereof.
Dated as of ________ __, 2001
[Spouse]
EXECUTION COPY
--------------
Schedule I
----------
Total Shares of
Outstanding Common
Stock Beneficially Owned
BLUM 3,423,886
Freeman Spogli 3,402,463
Raymond E. Wirta 35,000
W. Brett White 58,575
Frederic V. Malek 397,873
The Koll Holding Company 734,290/1/
_______________
/1/ The shares listed as beneficially owned by Raymond E. Wirta do not include
currently exercisable options (the "Wirta-Koll Options") granted to Mr.
------------------
Wirta by The Koll Holding Company (which is the wholly-owned subsidiary of
The Koll Company, which is wholly-owned by the Don Koll Separate Property
Trust, a trust for which Donald M. Koll is trustee) to acquire 521,590
shares of CBRE Common Stock held by The Koll Holding Company. The shares
listed as beneficially owned by The Koll Holding Company include the shares
of CBRE Common Stock underlying the Wirta-Koll Options. To the extent that
the Wirta-Koll Options are exercised prior to the Contribution Closing,
such underlying shares of CBRE Common Stock received by Mr. Wirta shall be
contributed to Holding at the Contribution Closing pursuant to Section 1.3
hereto by Mr. Wirta instead of The Koll Holding Company and Mr. Wirta shall
receive the corresponding number of shares of Holding Common Stock at the
Contribution Closing in respect thereof pursuant to Section 1.3 hereto
instead of The Koll Holding Company.
EXECUTION COPY
--------------
Exhibit A
[Insert final form of Securityholders' Agreement]
EXECUTION COPY
--------------
Exhibit B
[Insert final form of Warrant Agreement]
EX-3
5
dex3.txt
SECURITYHOLDER'S AGREEMENT DATED AS OF 07/20/2001
EXHIBIT 3
---------
SECURITYHOLDERS' AGREEMENT
among
RCBA STRATEGIC PARTNERS, L.P.,
BLUM STRATEGIC PARTNERS II, L.P.
FS EQUITY PARTNERS III, L.P.,
FS EQUITY PARTNERS INTERNATIONAL, L.P.,
THE KOLL HOLDING COMPANY,
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM,
FREDERIC V. MALEK,
DLJ INVESTMENT FUNDING, INC.,
CREDIT SUISSE FIRST BOSTON CORPORATION,
THE MANAGEMENT INVESTORS,
CB RICHARD ELLIS SERVICES, INC.,
and
CBRE HOLDING, INC.
Dated as of July 20, 2001
I INTRODUCTORY MATTERS.................................................. 4
1.1. Defined Terms................................................... 4
1.2. Construction.................................................... 13
II TRANSFERS............................................................. 13
2.1. Limitations on Transfer......................................... 13
2.2. Right of First Offer............................................ 15
2.3. Certain Permitted Transfers..................................... 16
2.4. Tag-Along Rights................................................ 17
2.5. Drag-Along Rights............................................... 18
2.6. Participation Right............................................. 19
III REGISTRATION RIGHTS................................................... 20
3.1. Demand Registration............................................. 20
3.2. Piggyback Registrations......................................... 22
3.3. Expenses of Registration........................................ 23
3.4. Effective Registration Statement................................ 24
3.5. Selection of Counsel............................................ 24
3.6. Obligations of the Company...................................... 24
3.7. Termination of Registration Rights.............................. 27
3.8. Delay of Registration; Furnishing Information................... 27
3.9. Indemnification................................................. 28
3.10. Assignment of Registration Rights............................... 30
3.11. Amendment of Registration Rights................................ 30
3.12. Limitation on Subsequent Registration Rights.................... 31
3.13. "Market Stand-Off" Agreement; Agreement to Furnish Information.. 31
3.14. Rule 144 Reporting.............................................. 32
IV GOVERNANCE............................................................ 32
4.1. The Board Prior to an Initial Public Offering................... 32
4.2. The Board Subsequent to an Initial Public Offering.............. 34
4.3. Observers....................................................... 35
4.4. Advisors........................................................ 36
4.5. Voting.......................................................... 37
4.6. General Consent Rights.......................................... 37
4.7. Consent Rights of FS Director................................... 38
4.8. Board of Directors of CBRE...................................... 39
V OTHER AGREEMENTS...................................................... 40
5.1. Financial Information........................................... 40
5.2. Inspection Rights............................................... 40
5.3. Confidentiality of Records...................................... 40
5.4. Indemnification................................................. 41
VI MISCELLANEOUS......................................................... 43
6.1. Additional Securities Subject to Agreement...................... 43
6.2. Term............................................................ 43
6.3. Notices......................................................... 44
6.4. Further Assurances.............................................. 46
6.5. Non-Assignability............................................... 46
6.6. Amendment; Waiver............................................... 47
6.7. Third Parties................................................... 48
6.8. Governing Law................................................... 48
6.9. Specific Performance............................................ 48
6.10. Entire Agreement................................................ 48
6.11. Titles and Headings............................................. 48
6.12. Severability.................................................... 48
6.13. Counterparts.................................................... 49
6.14. Ownership of Shares............................................. 49
SECURITYHOLDERS' AGREEMENT, dated as of July 20, 2001 (this
"Agreement"), among (i) CB Richard Ellis Services, a Delaware corporation
---------
("CBRE") and CBRE Holding, Inc. (the "Company"), (ii) RCBA Strategic Partners,
---- -------
L.P., a Delaware limited partnership (together with its successors, "BLUM"),
----
(iii) Blum Strategic Partners II, L.P., a Delaware limited partnership and
Affiliate (as defined below) of BLUM (together with its successors, "Blum
----
Strategic" and collectively with BLUM, the "BLUM Funds"), (iv) FS Equity
--------- ----------
Partners III, L.P., a Delaware limited partnership ("FSEP"), and FS Equity
----
Partners International, L.P., a Delaware limited partnership ("FSEP
----
International," and together with FSEP and their respective successors, the "FS
------------- --
Entities"), (v) DLJ Investment Funding, Inc. ("DLJ") and Credit Suisse First
-------- ---
Boston Corporation ("CSFB" and together with DLJ, the "Note Investors"), (vi)
---- --------------
California Public Employees' Retirement System (together with its successors,
"CalPERS"), (vii) The Koll Holding Company, a California corporation (together
-------
with its successors, "Koll"), Frederic V. Malek ("Malek", and together with
---- -----
CalPERS and Koll, the "Other Non-Management Investors"), and (viii) the
------------------------------
individuals identified on the signature pages hereto as "Management Investors"
(together, the "Management Investors"; collectively with the FS Entities, the
--------------------
Note Investors and the Other Non-Management Investors, the "Non-BLUM
--------
Investors").
---------
RECITALS:
A. CBRE, the Company and BLUM CB Corp., a Delaware Corporation
("Newco"), are parties to an Amended and Restated Agreement and Plan of Merger,
-----
dated as of May 31, 2001 (the "Merger Agreement"), pursuant to which, among
----------------
other things, Newco merged with and into CBRE on the date hereof (the "Merger")
------
and CBRE became a wholly-owned subsidiary of the Company;
B. As a result of the Merger, on the date hereof, BLUM is the
largest holder of the outstanding shares of Common Stock (as defined below) and
the Non-BLUM Investors also hold outstanding shares of the Common Stock; and
C. The parties hereto wish to provide for certain matters relating
to their respective holdings of the Common Stock.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
INTRODUCTORY MATTERS
1.1. Defined Terms.
-------------
The following terms have the following meanings when used herein with
initial capital letters:
"Advisory Services" has the meaning set forth in Section 4.4.
-----------------
"Affiliate" means, with respect to any Person, any Person that
---------
directly or indirectly controls, is controlled by or is under common
control with, such Person. As used in this definition of "Affiliate" and
the definition of "Subsidiary," "control" (including, with correlative
-------
meanings, "controlled by" and "under common control with")
------------- -------------------------
shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of management or policies, whether through the
ownership of securities or partnership or other ownership interests, by
contract or otherwise. Notwithstanding anything to the contrary stated
herein, the Company shall not be considered an Affiliate of any
Securityholder.
"Agreement" means this Agreement, as the same may be amended,
---------
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"Anti-Dilution Agreement" means the Anti-Dilution Agreement, dated as
-----------------------
of July 20, 2001, among the Company and the Note Investors, as amended,
supplemented or otherwise modified from time to time.
"Approved Sale" has the meaning set forth in Section 2.5(c).
-------------
"Assumption Agreement" means an agreement in the form attached hereto
--------------------
as Exhibit A whereby a transferee of Restricted Securities becomes a party
to, and agrees to be bound by, the terms of this Agreement in the manner
set forth in Section 6.5 hereto.
"BLUM" has the meaning set forth in the Preamble.
----
"BLUM Directors" has the meaning set forth in Section 4.1(c)(i).
--------------
"BLUM Funds" has the meaning set forth in the Preamble.
----------
"BLUM Holder" means (i) BLUM, (ii) Blum Strategic and (iii) any Person
-----------
to whom BLUM or Blum Strategic Transfers Registrable Securities (but only
to the extent of the Registrable Securities acquired from BLUM or Blum
Strategic) and, in the case of clause (iii), which Person becomes bound by
the provisions of this Agreement in the manner set forth in Section 6.5
hereto.
"BLUM Sale" has the meaning set forth in Section 2.4(a).
---------
"Board" means the Board of Directors of the Company.
-----
"Bylaws" means the Bylaws of the Company as of the Closing, as the
------
same may be amended from time to time.
"Cause" has the meaning set forth in Section 4.1(j).
-----
"CBRE" has the meaning set forth in the Preamble.
----
"Certificate of Incorporation" means the Certificate of Incorporation
----------------------------
of the Company as of the Closing, as the same may be amended from time to
time.
"Claim Notice" has the meaning set forth in Section 5.4(b).
------------
"Class A Common Stock" means Class A common stock, par value $.01 per
--------------------
share, of the Company.
"Class B Common Stock" means Class B common stock, par value $.01 per
--------------------
share, of the Company.
"Class B Securityholder" means any Securityholder that beneficially
----------------------
owns shares of Class B Common Stock.
"Closing" means the Closing of the Merger.
-------
"Common Stock" means Class A Common Stock and Class B Common Stock,
------------
collectively.
"Company" has the meaning set forth in the Preamble.
-------
"Consolidated EBITDA" means, for any period, the consolidated net
-------------------
income of the Company and its subsidiaries for such period as set forth in
the consolidated financial statements of the Company, plus the following of
the Company and its subsidiaries to the extent deducted in calculating such
consolidated net income: (i) consolidated interest expense, (ii)
consolidated income tax expense, (iii) consolidated depreciation expense
and (iv) consolidated amortization expenses. (v) any non-recurring fees,
expenses or charges related to any equity issuance, investment or
acquisition or incurrence of Indebtedness, in an amount not exceeding
$5,000,000 for all such non-recurring fees, expenses and charges, (vi) any
non-recurring charges that are associated with the CBRE 2001 Cost Reduction
Plan announced prior to the Closing and implemented within 90 days
thereafter, in an aggregate amount not exceeding $4,000,000, and (vii) all
other non-cash losses, expenses and charges of the Company and its
consolidated subsidiaries (excluding (x) the write-down of current assets
and (y) any such non-cash charge to the extent that it represents an
accrual of or reserve for cash expenditures in any future period) and minus
(b) without duplication (i) all cash payments made during such period on
account of reserves, restructuring charges and other non-cash charges added
to consolidated net income pursuant to clause (a)(vi) above in a previous
period and (ii) to the extent included in determining such consolidated net
income, any extraordinary gains for such period, all determined on a
consolidated basis in accordance with GAAP. For purposes of calculating
Consolidated EBITDA for any period that includes the fiscal quarters ended
March 31, 2001, or June 30, 2001, pro forma effect shall be given to the
CBRE 2001 Cost Reduction Plan (to the extent implemented but without
duplication) as if such plan (to the extent implemented) had been
implemented January 1, 2001.
"Contribution Agreement" means that certain Amended and Restated
----------------------
Contribution and Voting Agreement, dated as May 31, 2001, among CBRE
Holding, Inc., BLUM CB Corp., RCBA Strategic Partners, L.P., FS Equity
Partners III, L.P., FS Equity Partners International, L.P., Wirta, White
and the other investors who are signatories thereto.
"DLJ Investors" means (i) DLJ, (ii) any Person to whom DLJ Transfers
-------------
Registrable Securities (but only to the extent of the Registrable
Securities acquired from DLJ) and, in the case of clause (ii), which Person
becomes bound by the provisions of this Agreement in the manner set forth
in Section 6.5 hereto.
"Drag-Along Notice" has the meaning set forth in Section 2.5(b).
-----------------
"Dragging Party" has the meaning set forth in Section 2.5(a).
--------------
"Equity Securities" means (i) any Common Stock or other equity
-----------------
security of the Company, (ii) any security convertible, with or without
consideration, into Common Stock or any other equity security of the
Company (including any option or other right to purchase or acquire such a
convertible security) and (iii) any option, warrant or other right to
purchase or acquire Common Stock or any other equity security of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
or any similar federal statute then in effect, and a reference to a
particular section thereof shall be deemed to include a reference to the
comparable section, if any, of any such similar federal statute.
"Fair Market Value" means (i) with respect to cash consideration, the
-----------------
total amount of such cash consideration in United States dollars, (ii) with
respect to non-cash consideration consisting of publicly-traded securities,
the average daily closing sales price of such securities for the ten
consecutive trading days preceding the date of Fair Market Value of such
securities is required to be determined hereunder (with the closing price
for each day being the last reported sales price regular way or, in case no
such reported sale takes place on such day, the average of the reported
closing bid and asked prices regular way, in either case on the principal
national securities exchange on which such securities are listed and
admitted to trading, or, if not listed and admitted to trading on any such
exchange on the NASDAQ National Market System, or if not quoted on the
NASDAQ National Market System, the average of the closing bid and asked
prices in the over-the-counter market as furnished by any New York Stock
Exchange member firm selected from time to time by the Company for that
purpose) and (iii) with respect to non-cash consideration not consisting of
publicly-traded securities, such amount as is determined to be the fair
market value of the non-cash consideration as of the date such Fair Market
Value is required to be determined hereunder as determined in good faith by
the Board.
For the purposes of Section 2.2(a), if the Transferring Securityholder
or BLUM disputes in good faith the determination by the Board pursuant to
the above clause (iii) of the Fair Market Value of the non-cash
consideration to be paid for the Transfer Securities, then the Transferring
Securityholder or BLUM, as applicable, may require that an investment bank
selected by the Company and reasonably acceptable to the Transferring
Securityholder and BLUM determine such Fair Market Value for the purposes
of clause (iii).
For the purposes of Section 4.7(a)(ii), if the FS Director believes in
good faith that the Fair Market Value, determined pursuant to the above
clause (iii), of the consideration to be received for the assets of the
Company or its Subsidiaries to be sold under that Section exceeds $75
million, then the FS Director may require that such Fair Market Value be
determined by an independent investment bank selected by the Company and
reasonably acceptable to the FS Director.
The Company shall pay the fees and expenses of the investment bank in
making any Fair Market Value determination; provided, however that in the
-------- -------
case of the second paragraph of this definition of "Fair Market Value", if
the Transferring Securityholder does not have a good faith belief that the
Fair Market Value of the non-cash consideration to be paid for the Transfer
Securities, as determined pursuant to the above clause (iii), is greater
than or equal to $5 million, then the fees and expenses of the investment
bank in making any Fair Market Value determination at the request of such
Transferring Securityholder under such circumstances shall be paid by such
Transferring Securityholder.
"FS Director" has the meaning set forth in Section 4.1(c)(ii).
-----------
"FS Entities" has the meaning set forth in the Preamble.
-----------
"FS Holder" means (i) each of the FS Entities and (ii) any Person to
---------
whom either of the FS Entities Transfers Registrable Securities or
Restricted Securities (but only to the extent of the Registrable Securities
or Restricted Securities acquired from such FS Entity) and, in the case of
clause (ii), which Person becomes bound by the provisions of this Agreement
as a FS Party in the manner set forth in Section 6.5 hereto.
"FS Parties" means (i) each of the FS Entities and (ii) any Person to
----------
whom either of the FS Entities Transfers Restricted Securities and, in the
case of clause (ii), which Person becomes bound by the provisions of this
Agreement in the manner set forth in Section 6.5 hereto.
"FS Warrants" means (i) the warrants to acquire Common Stock acquired
-----------
by the FS Entities pursuant to the Contribution Agreement and (ii) any
shares of Common Stock received upon exercise of such warrants.
"Holder" means any Person owning of record Registrable Securities who
------
(i) is a party to this Agreement on the date hereof or (ii) subsequently
agrees in writing to be bound by the provisions of this Agreement in
accordance with the terms of Section 6.5 of this Agreement.
"Indebtedness" means any indebtedness for borrowed money.
------------
"Indemnified Party" has the meaning set forth in Section 5.4(b).
-----------------
"Initiating Holder" means, with respect to any registration effected
-----------------
pursuant to Section 3.1, (i) the BLUM Holders in the event that the Holder
or Holders from whom a notice is received pursuant to Section 3.1(a) that
initiates such registration is a BLUM Holder, (ii) the FS Holders in the
event that the Holder or Holders from whom a notice is received pursuant to
Section 3.1(a) that initiates such registration is a FS Holder, and (iii)
the Note Investor Holders in the event that the Holder or Holders from whom
a notice is received pursuant to Section 3.1(a) that initiates such
registration is a Note Investor Holder.
"IPO" or "Initial Public Offering" means the completion of an
--- -----------------------
underwritten
Public Offering of Common Stock pursuant to which the Company
becomes listed on a national securities exchange or on the NASDAQ Stock
Market.
"Issuance" has the meaning set forth in Section 2.6(a).
--------
"Legend" has the meaning set forth in Section 2.1(d).
------
"Losses" has the meaning set forth in Section 3.9(d).
------
"Losses and Expenses" has the meaning set forth in Section 5.4(a).
-------------------
"Management Investors" has the meaning set forth in the Preamble.
--------------------
"Management Parties" means (i) each of the Management Investors and
------------------
(ii) any Person to whom any of the Management Investors Transfers
Restricted Securities and, in the case of clause (ii), which Person becomes
bound by the provisions of this Agreement in the manner set forth in
Section 6.5 hereto.
"Material Securityholder" means BLUM, Blum Strategic, each of the FS
-----------------------
Entities, each of the Note Investor Parties that holds at least 1% of the
total outstanding Common Stock as of such date, DLJ so long as it and its
affiliates, in the aggregate, hold at least 1% of the total outstanding
Common Stock as of such date, Malek, Koll, CalPERS and any Securityholder
who (as determined on a particular date) beneficially owns, together with
its Affiliates, greater than 10% of the total outstanding Common Stock as
of such date.
"Merger" has the meaning set forth in the Recitals.
------
"Merger Agreement" has the meaning set forth in the Recitals.
----------------
"Newco" has the meaning set forth in the Recitals.
-----
"Non-BLUM Investors" has the meaning set forth in the Preamble.
------------------
"Non-BLUM Parties" means the FS Parties, the Note Investor Parties,
----------------
the Other Non-Management Parties and the Management Parties, collectively.
"Notes" means the Company's 16.0% Senior Notes due July 20, 2011.
-----
"Note Investor Holder" means (i) any Note Investors and (ii) any
--------------------
Person to whom any Note Investor Transfers Registrable Securities (but only
to the extent of the Registrable Securities acquired from a Note Investor)
and, in the case of clause (ii), which Person becomes bound by the
provisions of this Agreement as an Investor Party in the manner set forth
in Section 6.5 hereto.
"Note Investor Parties" means (i) any Note Investor and (ii) any
---------------------
Person to whom a Note Investor Transfers Restricted Securities and, in the
case of clause (ii), which Person becomes bound by the provisions of this
Agreement in the manner set forth in Section 6.5
hereto.
"Notice Period" has the meaning set forth in Section 5.4(b).
-------------
"Observer" has the meaning set forth in Section 4.3(a).
--------
"Offer Price" has the meaning set forth in Section 2.2(a).
-----------
"Offer Notice" has the meaning set forth in Section 2.2(a).
------------
"Other Holder" means any Holder other than a BLUM Holder, a FS Holder
------------
or a Note Investor Holder.
"Other Non-Management Investors" has the meaning set forth in the
------------------------------
Preamble.
"Other Non-Management Parties" means (i) each of the Other Non-
----------------------------
Management Investors and (ii) any Person to whom either of the Other Non-
Management Investors Transfers Restricted Securities and, in the case of
clause (ii), which Person becomes bound by the provisions of this Agreement
in the manner set forth in Section 6.5 hereto.
"Ownership" means, with respect to any Person, all matters related to
---------
such Person's and such Person's Affiliates' (i) beneficial ownership of
Restricted Securities, (ii) due authorization of a Transfer of such
Restricted Securities, (iii) power to Transfer such Restricted Securities,
and (iv) non-violation of agreements, laws, etc. relating to such Transfer
of such Restricted Securities.
"Permitted Third Party Transfer Date" means the three year anniversary
-----------------------------------
of the date hereof.
"Permitted Transferees" means any Person to whom Restricted Securities
---------------------
are Transferred by a Non-BLUM Party in a Transfer in accordance with
Section 2.3 and not in violation of this Agreement and who is required to,
and does, enter into an Assumption Agreement, and includes any Person to
whom a Permitted Transferee of a Non-BLUM Party (or a Permitted Transferee
of a Permitted Transferee) so further Transfers Restricted Securities and
who is required to, and does, execute and deliver to the Company and BLUM
an Assumption Agreement.
"Person" means any individual, corporation, limited liability company,
------
partnership, trust, joint stock company, business trust, unincorporated
association, joint venture, governmental authority or other legal entity of
any nature whatsoever.
"Proposed Transferee" has the meaning set forth in Section 2.4(a).
-------------------
"Public Offering" means the sale of shares of any class of the Common
---------------
Stock to the public pursuant to an effective registration statement (other
than a registration statement on Form S-4 or S-8 or any similar or
successor form) filed under the Securities Act in connection with an
underwritten offering.
"Purchase Agreement" means that certain Purchase Agreement, dated as
------------------
of the date hereof, between the Company and Credit Suisse First Boston
Corporation, pursuant to which, among other things, the Company issued and
sold to Credit Suisse First Boston Corporation, and Credit Suisse First
Boston Corporation, purchased from the Company, the Notes.
"Purchase Price" means the Fair Market Value of the consideration paid
--------------
by the Company or any of its Subsidiaries.
"Qualified Purchaser" means any Person to whom any Transferring
-------------------
Securityholder wishes to sell Restricted Securities pursuant to Section
2.2; provided that such Person (i) shall be acceptable to BLUM (such
--------
acceptance to be evidence in writing and to not be unreasonably withheld;
it is understood that, if the proposed Qualified Purchaser is a nationally-
recognized private equity sponsor or institutional equity investor, such
consent will not be withheld unless BLUM's decision to withhold consent
results from BLUM's or any of its Affiliate's direct experience with such
proposed Qualified Purchaser in connection with another actual or proposed
transaction) and (ii) execute and deliver to the Company and BLUM an
Assumption Agreement.
"Registrable Securities" means any shares of Common Stock held by the
----------------------
Securityholders, including as a result of the exercise of options or
warrants to acquire Common Stock. For purposes of this Agreement, any
Registrable Securities held by any Person will cease to be Registrable
Securities when (A) a registration statement covering such Registrable
Securities has been declared effective and such Registrable Securities have
been disposed of pursuant to such effective registration statement, (B) the
registration rights of the holder of such Registrable Securities have
terminated pursuant to Section 3.7 hereto, or (C) such Registrable
Securities cease to be outstanding.
"Registration Expenses" means all expenses incident to performance of
---------------------
or compliance with Sections 3.1 and 3.2 hereof, including, without
limitation, all registration and filing fees, printing, messenger and
delivery expenses, fees and expenses of listing the Registrable Securities
on any securities exchange, rating agency fees, fees and disbursements of
counsel for the Company and of its independent public accountants,
reasonable fees and disbursements of a single special counsel for the
Holders selected in accordance with Section 3.5, blue sky fees and expenses
and the expense of any special audits incident to or required by any such
registration (including "cold comfort" letters), fees and disbursements of
underwriters customarily paid by the issuers or sellers of securities
(including liability insurance but excluding Selling Expenses), and other
reasonable out-of-pocket expenses of Holders (but excluding the
compensation of regular employees of the Company which shall be paid in any
event by the Company).
"Related Party" has the meaning set forth in Section 5.3.
-------------
"Relevant Period" has the meaning set forth in Section 3.1(c)(iv).
---------------
"Restricted Period" means the period beginning on the date hereof and
-----------------
ending on the earlier of (i) the ten year anniversary of the date hereof
and (ii) the date of the Initial
Public Offering.
"Restricted Securities" has the meaning set forth in Section 2.1(a).
---------------------
"Right" has the meaning set forth in Section 2.6(a).
-----
"Rule 144" means Rule 144 of the Securities Act.
--------
"SEC" or "Commission" means the Securities and Exchange Commission.
--- ----------
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated thereunder, as the same may be amended
from time to time.
"Securityholder" means each of the holders of Common Stock or the FS
--------------
Warrants who are parties to this Agreement or an Assumption Agreement.
"Selling Expenses" means all underwriting discounts and selling
----------------
commissions and transfer taxes applicable to the sale.
"Subsidiary" means, with respect to any Person, any other Person (i)
----------
of which (or in which) such first Person beneficially owns, directly or
indirectly, 50% or more of the outstanding capital stock or other equity
interests having ordinary voting power to elect the Board of Directors or
any equivalent body of such other Person or (ii) of which such first Person
or its Subsidiary is a general partner, managing member or an equivalent.
"Tagging Securityholder" has the meaning set forth in Section 2.4(a).
----------------------
"Third Party" has the meaning set forth in Section 2.4(a).
-----------
"Transfer" means a transfer, sale, assignment, pledge, hypothecation
--------
or other disposition (including, without limitation, by operation of law),
whether directly or indirectly pursuant to the creation of a derivative
security, the grant of an option or other right; provided, however, that a
-------- -------
Transfer shall not include a pledge by a Securityholder that is a fund that
invests in bank loans to its trustee.
"Transfer Offer" means the offer to sell the Transfer Securities owned
--------------
by the Transferring Securityholder to BLUM or one or more of its assignees
in accordance with Section 2.2(a).
"Transfer Period" has the meaning set forth in Section 2.2(c).
---------------
"Transfer Securities" has the meaning set forth in Section 2.2(a).
-------------------
"Transferring Securityholder" has the meaning set forth in Section
---------------------------
2.2(a).
"Twelve-Month Normalized EBITDA" means, as of any date, the
------------------------------
Consolidated EBITDA for the 12-month period ending on the last day of the
most recent quarter for which consolidated financial statements of the
Company have been filed with the SEC (or, if the Company is not then filing
such statements with the SEC, the most recent
quarter for which such statements are available); provided, however that
-------- -------
such determination of Consolidated EBITDA shall be adjusted for such period
to (i) include the pro forma effects for the entire period of any
acquisitions or dispositions by the Company since the beginning of such
period and (ii) disregard any extraordinary or similar one-time charges or
revenues of the Company.
"Violation" has the meaning set forth in Section 3.9(a).
---------
"White" means W. Brett White.
-----
"Wirta" means Raymond E. Wirta.
-----
1.2. Construction.
------------
The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against any party. Unless the context otherwise
requires: (a) "or" is disjunctive but not exclusive, (b) words in the singular
include the plural, and in the plural include the singular, and (c) the words
"hereof," "herein," and "hereunder" and words of similar import when used in
this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section references are to this Agreement unless
otherwise specified.
II TRANSFERS
2.1. Limitations on Transfer.
-----------------------
(a) Each Securityholder hereby agrees that it will not, directly or
indirectly, Transfer any shares of Common Stock or FS Warrants (collectively,
the "Restricted Securities") unless such Transfer complies with the provisions
---------------------
hereof and (i) such Transfer is pursuant to an effective registration statement
under the Securities Act and has been registered under all applicable state
securities or "blue sky" laws or (ii) (A) such Securityholder shall have
furnished the Company with a written opinion of counsel in form and substance
reasonably satisfactory to the Company to the effect that no such registration
is required because of the availability of an exemption from registration under
the Securities Act and (B) the Company shall be reasonably satisfied that no
such registration is required because of the availability of exemptions from
registration under all applicable state securities or "blue sky" laws.
(b) During the Restricted Period,
(i) each of the Non-BLUM Parties may not Transfer any Restricted
Securities other than (x) pursuant to Sections 2.3, 2.4 or 2.5, and (y)
with respect to the FS Parties, the Note Investor Parties and the Other
Non-Management Parties only, Transfers after the Permitted Third Party
Transfer Date to Persons other than a Permitted Transferee of the
Securityholder making the Transfer (subject to prior compliance in full
with Section 2.2 and such Persons executing and delivering Assumption
Agreements to the Company); and
(ii) BLUM and its Affiliates will not Transfer any Restricted
Securities in a
transaction subject to Section 2.4 unless Section 2.4 is complied with in
full prior to such Transfer.
(c) In the event of any purported Transfer by any of the Securityholders of any
Restricted Securities in violation of the provisions of this Agreement, such
purported Transfer will be void and of no effect and the Company will not give
effect to such Transfer.
(d) Each certificate representing Restricted Securities issued to the
Securityholders will bear a legend on the face thereof substantially to the
following effect (with such additions thereto or changes therein as the Company
may be advised by counsel are required by law or necessary to give full effect
to this Agreement, the "Legend"):
------
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
SECURITYHOLDERS' AGREEMENT AMONG CBRE HOLDING, INC., RCBA STRATEGIC
PARTNERS, L.P., BLUM STRATEGIC PARTNERS II, L.P., FS EQUITY PARTNERS III,
L.P., FS EQUITY PARTNERS INTERNATIONAL, L.P., THE KOLL HOLDING COMPANY,
CALPERS, FREDERIC V. MALEK, DLJ INVESTMENT FUNDING, INC., CERTAIN
MANAGEMENT INVESTORS, THE OTHER INVESTORS NAMED THEREIN AND CB RICHARD
ELLIS SERVICES, INC., A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS' AGREEMENT.
THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES
TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH SECURITYHOLDERS' AGREEMENT."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE."
The Legend will be removed by the Company by the delivery of substitute
certificates without such Legend in the event of (i) a Transfer permitted by
this Agreement in which the Permitted Transferee is not required to enter into
an Assumption Agreement or (ii) the termination of Article II pursuant to the
terms hereof; provided, however, that the second paragraph of the Legend will
-------- -------
only be removed if at such time it is no longer required for purposes of
applicable securities laws and, if requested by the Company, the Company
receives an opinion to such effect of counsel to the applicable Securityholder
in form and substance reasonably satisfactory to the Company.
2.2. Right of First Offer.
---- --------------------
(a) If, following the Permitted Third Party Transfer Date, any of the FS
Parties, the Note Investor Parties or the Other Non-Management Parties (each, a
"Transferring Securityholder") desires to
---------------------------
Transfer all or any portion of the Restricted Securities (the "Transfer
--------
Securities") then owned by such Transferring Securityholder to a Person that is
----------
not a Permitted Transferee of the Transferring Securityholder, such Transferring
Securityholder shall provide BLUM with a written notice (the "Offer Notice")
------------
setting forth: (i) the number of shares of Common Stock proposed to be
Transferred and (ii) the material terms and conditions of the proposed transfer
including the minimum price (the "Offer Price") at which such Transferring
-----------
Securityholder proposes to Transfer such shares. The Offer Notice shall also
constitute an irrevocable offer to sell the Transfer Securities to BLUM or, at
BLUM's option following receipt of the Offer Notice, to one or more assignees of
BLUM (subject to such assignee's or assignees' delivery of an Assumption
Agreement in compliance with Section 6.5 hereof) (x) at the Offer Price and on
the same terms and conditions as the Transfer Offer or (y) if the Transfer Offer
includes any consideration other than cash, at the option of BLUM or such
assignee, at a cash price equal to the Fair Market Value of such non-cash
consideration (the "Transfer Consideration").
----------------------
(b) If BLUM or its assignee wishes to accept the offer set forth in the Offer
Notice, BLUM or such assignee shall deliver within 15 business days of receipt
of the Offer Notice (such period, the "Election Period") an irrevocable notice
---------------
of acceptance to the Transferring Securityholder (the "Acceptance Notice"),
-----------------
which Notice shall indicate the form of Transfer Consideration chosen (to the
extent that the Transfer Offer includes any consideration other than cash). BLUM
or its assignee may accept such offer for any or all of the Transfer Securities,
provided, however, that if BLUM or its assignee agrees to purchase less than all
-----------------
of the Transfer Securities specified in the Offer Notice, then the Transferring
Securityholder can choose not to sell any shares to BLUM or its assignee, as
applicable, by delivering written notice thereof to BLUM or such assignee within
five Business Days of the Transferring Securityholder's receipt of the
Acceptance Notice. In the event that the Transferring Securityholder elects not
to sell any shares to BLUM or its assignee pursuant to the proviso in the
immediately preceding sentence, such Transferring Shareholder may transfer the
Transfer Securities to one or more Qualified Purchasers pursuant to Section
2.2(c) only if such Qualified Purchasers purchase in the aggregate at least as
many shares of the Transfer Securities as BLUM had agreed to purchase.
(c) If the option to purchase the Transfer Securities represented by the Offer
Notice is accepted on a timely basis by BLUM or its assignee, in accordance with
all the terms specified in Section 2.2(b) and such acceptance (if it is for less
than all of the Transfer Securities) has not been rejected by the Transferring
Securityholder, no later than the later of (x) 30 business days after the date
of the receipt by BLUM of the Offer Notice or (y) the second business day after
the receipt of any necessary governmental approvals (including, without
limitation, the expiration or early termination of any applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended), BLUM (or its assignee), as applicable, shall deliver payment by wire
transfer of immediately available funds, to the extent the Transfer
Consideration is cash, and/or by delivery of the non-cash Transfer Consideration
(to the extent chosen by BLUM or its assignee), to such Transferring
Securityholder against delivery of certificates or other instruments
representing the Common Stock so purchased, appropriately endorsed by such
Transferring Securityholder. Each Transferring Securityholder shall deliver its
shares of Common Stock free and clear of all liens, claims, options, pledges,
encumbrances and security interests. To the extent BLUM or its assignee (i) has
not given notice of its acceptance of the offer represented by the Offer Notice
to purchase all of the Transfer Securities prior to the expiration of the
Election Period, (ii) has accepted as to less than all of the Transfer
Securities
and such acceptance has been rejected by the Transferring Securityholder, (iii)
has accepted as to less than all of the Transfer Securities and such acceptance
has not been rejected by the Transferring Securityholder, or (iv) has not
tendered the Purchase Price for the Transfer Securities in the manner and within
the period set forth above in this Section 2.2(c), such Transferring
Securityholder shall be free (subject to the last sentence of Section 2.2(b))
for a period of 120 days from the end of the Election Period to transfer the
Transfer Securities (or in the case of the foregoing clause (iii), such
remaining portion of the Transfer Securities) to a Qualified Purchaser at a
price equal to or greater than the Offer Price and otherwise on terms which are
no more favorable in any material respect to such Qualified Purchaser than the
terms and conditions set forth in the Offer Notice. If for any reason such
Transferring Securityholder does not transfer the Transfer Securities (or in the
case of the foregoing clause (iii), such remaining portion of the Transfer
Securities) to a Qualified Purchaser on such terms and conditions or if such
Transferring Securityholder wishes to Transfer the Transfer Securities (or in
the case of the foregoing clause (iii), such remaining portion of the Transfer
Securities) at a lower Purchase Price or on terms which are more favorable in
any material respect to a Qualified Purchaser than those set forth in the Offer
Notice, the provisions of this Section 2.2 shall again be applicable to the
Transfer Securities (or in the case of the foregoing clause (iii), such
remaining portion of the Transfer Securities); provided that if the Transferring
-------------
Securityholder does not transfer all of the Transfer Securities (or in the case
of the foregoing clause (iii), such remaining portion of the Transfer
Securities) to a Qualifying Purchaser within 120 days from the end of the
Election Period (the "Transfer Period") then such Transferring Securityholder
may not deliver another Offer Notice until 90 days have elapsed since the end of
the Transfer Period.
2.3. Certain Permitted Transfers.
---- ---------------------------
Notwithstanding any other provision of this Agreement to the contrary,
each Non-BLUM Party shall be entitled from time to time to Transfer any or all
of the Restricted Securities held by it to (i) any of its Affiliates, (ii) in
the case of each of the Note Investor Parties, its employees, (iii) in the case
of each of the Note Investor Parties, to a transferee of Notes in connection
with the Transfer of such Notes (or an affiliate of such transferee), (iv) in
the case of the FS Entities, beginning on April 12, 2003, on a pro rata basis to
the partners of such Transferor, (v) in the case of any Non-BLUM Party
(including any transferee that receives shares from an FS Entity pursuant to
clause (iv) of this Section 2.3) who is an individual, (A) such Transferor's
spouse or direct lineal descendants (including adopted children) or antecedents,
(B) a charitable remainder trust or trust, in each case the current
beneficiaries of which, or to a corporation or partnership, the stockholders or
limited or general partners of which, include only such transferor and/or such
transferor's spouse and/or such transferor's direct lineal descendants
(including adopted children) or antecedents, or (C) the executor, administrator,
testamentary trustee, legatee or beneficiary of any deceased transferor holding
Restricted Securities or (vi) in the case of a transferee from an FS Entity
pursuant to clause (iv) of this Section 2.3 that is a corporation, partnership,
limited liability company, trust or other entity, pro rata without payment of
consideration, to its shareholders, partners, members, beneficiaries or other
entity owners, as the case may be; provided that with respect to each of the
--------
foregoing (x) any such transferee duly executes and delivers an Assumption
Agreement, (y) each such transferee pursuant to clause (i) or (v) shall, and
each such Transferring Non-BLUM Party shall cause such transferee (and, if
applicable, such transferee's spouse) to, Transfer back to such Transferring
Non-BLUM Party any Restricted Securities it owns prior to such transferee
ceasing to satisfy any of the foregoing
clause (i) or (v) of this Section 2.3 with respect to its relationship to such
Transferring Non-BLUM Party, and (z) (1) if requested by the Company the Company
has been furnished with an opinion of counsel in connection with such Transfer,
in form and substance reasonably satisfactory to the Company, that such Transfer
is exempt from or not subject to the provisions of Section 5 of the Securities
Act and (2) the Company shall be reasonably satisfied that such Transfer is
exempt from or not subject to any other applicable securities laws.
2.4. Tag-Along Rights.
---- ----------------
(a) Prior to an Initial Public Offering, with respect to any proposed Transfer
by BLUM and its Affiliates of shares of Common Stock to any Person other than
BLUM and its Affiliates (each a "Third Party") (other than in a Public Offering,
-----------
which shall be subject to Article III), whether pursuant to a stock sale,
merger, consolidation, a tender or exchange offer or any other transaction (any
such transaction, a "BLUM Sale"), BLUM and its Affiliates will have the
---------
obligation, and each of the Non-BLUM Parties will have the right, to require the
proposed transferee or acquiring Person (a "Proposed Transferee") to purchase
-------------------
from each of the Non-BLUM Parties who exercises its rights under Section 2.4(b)
(a "Tagging Securityholder") a number of shares of Common Stock up to the
----------------------
product (rounded to the nearest whole number of shares) of (i) the quotient
determined by dividing (A) the aggregate number of outstanding shares of Common
Stock owned by such Tagging Securityholder by (B) the aggregate number of
outstanding shares of Common Stock and (ii) the total number of shares of Common
Stock proposed to be directly or indirectly Transferred to the Proposed
Transferee, at the same price per share and upon the same terms and conditions
(including, without limitation, time of payment and form of consideration) as to
be paid by and given to BLUM and/or its Affiliates (as applicable). In order to
be entitled to exercise its right to sell shares of Common Stock to the Proposed
Transferee pursuant to this Section 2.4, each Tagging Securityholder must agree
to make to the Proposed Transferee the same covenants, indemnities (with respect
to all matters other than BLUM's and/or its Affiliates' Ownership of Common
Stock) and agreements as BLUM and/or its Affiliate (as applicable) agrees to
make in connection with the BLUM Sale and such representations and warranties
(and related indemnification) as to its Ownership of its Common Stock as are
given by BLUM and/or its Affiliate (as applicable) with respect to such party's
Ownership of Common Stock; provided, that all such covenants, indemnities and
--------
agreements shall be made by each Tagging Securityholder, severally and not
jointly, and that the liabilities thereunder (other than with respect to
Ownership, which shall be borne entirely by the Securityholder making the
representation) shall be borne on a pro rata basis based on the number of shares
Transferred by each of BLUM, and its Affiliates and the Tagging Securityholders;
provided, however, that in no event shall any Tagging Securityholder's
-------- -------
liabilities exceed the total net proceeds from such Transfer received by such
Tagging Securityholder. Each Tagging Securityholder will be responsible for its
proportionate share of the reasonable out-of-pocket costs incurred by BLUM and
its Affiliates in connection with the BLUM Sale to the extent not paid or
reimbursed by the Company or the Proposed Transferee.
(b) BLUM will give notice to each Tagging Securityholder of each proposed BLUM
Sale at least 15 business days prior to the proposed consummation of such BLUM
Sale, setting forth the number of shares of Common Stock proposed to be so
Transferred, the name and address of the Proposed Transferee, the proposed
amount and form of consideration (and if such consideration consists in part or
in whole of property other than cash, BLUM will provide such information, to the
extent
reasonably available to BLUM, relating to such consideration as the Tagging
Securityholder may reasonably request in order to evaluate such non-cash
consideration) and other terms and conditions of payment offered by the Proposed
Transferee. The tag-along rights provided by this Section 2.4 must be exercised
by each Tagging Securityholder within 10 business days following receipt of the
notice required by the preceding sentence by delivery of an irrevocable written
notice to BLUM indicating such Tagging Securityholder's exercise of its, her or
his rights and specifying the number of shares of Common Stock it, she or he
desires to sell. The Tagging Securityholder will be entitled under this Section
2.4 to Transfer to the Proposed Transferee the number of shares of Common Stock
determined in accordance with Section 2.4(a).
(c) If any Tagging Securityholder exercises its, her or his rights under Section
2.4(a), the closing of the purchase of the Common Stock with respect to which
such rights have been exercised is subject to, and will take place concurrently
with, the closing of the sale of BLUM's or its Affiliate's Common Stock to the
Proposed Transferee.
2.5. Drag-Along Rights.
---- -----------------
(a) If BLUM and/or its Affiliates (in such capacity, the "Dragging Party") agree
--------------
to Transfer to a Third Party or a group of Third Parties (other than in a Public
Offering) a majority of the shares of Common Stock beneficially owned by BLUM
and its Affiliates at the time of such Transfer, then each of the Non-BLUM
Parties hereby agrees that, if requested by the Dragging Party, it will Transfer
to such Third Party on the same terms and conditions (including, without
limitation, time of payment and form of consideration, but subject to Section
2.5(b)) as to be paid and given to the Dragging Party, the same portion (as
determined by the immediately succeeding sentence) of such Non-BLUM Party's
Restricted Securities as is being Transferred by BLUM and its Affiliates. Each
Non-BLUM Party can be required to sell pursuant to this Section 2.5 that number
of Restricted Securities equal to the product obtained by multiplying (i) a
fraction, (A) the numerator of which is the aggregate number of shares of Common
Stock to be Transferred by BLUM and its Affiliates and (B) the denominator of
which is the aggregate number of shares of Common Stock owned by BLUM and its
Affiliates at the time of the Transfer by (ii) the aggregate number of shares of
Common Stock owned by such Non-BLUM Party (including for these purposes all
shares of Common Stock issuable upon exercise, exchange or conversion of other
Equity Securities).
(b) The Dragging Party will give notice (the "Drag-Along Notice") to each of the
-----------------
Non-BLUM Parties of any proposed Transfer giving rise to the rights of the
Dragging Party set forth in Section 2.5(a) at least ten (10) calendar days prior
to such Transfer. The Drag-Along Notice will set forth the number of shares of
Common Stock proposed to be so Transferred, the name of the Proposed Transferee,
the proposed amount and form of consideration (and if such consideration
consists in part or in whole of property other than cash, the Dragging Party
will provide such information, to the extent reasonably available to the
Dragging Party, relating to such consideration as the Non-BLUM Parties may
reasonably request in order to evaluate such non-cash consideration), the number
of Restricted Securities sought and the other terms and conditions of the
proposed Transfer. In connection with any such Transfer, such Non-BLUM Parties
shall be obligated only to (i) make representations and warranties (and provide
related indemnification) as to their respective individual Ownership of
Restricted Securities (and then only to the same extent such representations and
warranties are given by the Dragging Party with
respect to its Ownership of Common Stock), (ii) agree to pay its pro rata share
(based on the number of shares transferred by each stockholder in such
transaction) of any liability arising out of any representations, warranties,
covenants or agreements of the selling Securityholders that survive the closing
of such transaction and do not relate to Ownership of Restricted Securities;
provided, however, that in no event shall any Non-BLUM Party's liabilities
-------- -------
exceed the total net proceeds from such Transfer received by such Non-BLUM
Party; provided, further that this Section 2.5(b)(ii) shall not apply if, no
--------- -------
later than five (5) calendar days after receipt of the Drag-Along Notice by the
FS Entities, the FS Entities deliver to BLUM a certificate signed by the FS
Entities certifying in good faith that they (x) do not desire to Transfer any of
the Restricted Securities beneficially owned by them in the proposed Transfer
set forth in the Drag-Along Notice and (y) would not exercise their rights
pursuant to Section 2.4 hereto in connection with such proposed Transfer if BLUM
had not otherwise delivered a Drag-Along Notice with respect thereto, and (iii)
agree to pay their proportionate share of the reasonable costs incurred in
connection with such transaction to the extent not paid or reimbursed by the
Company or the Proposed Transferee. If the Transfer referred to in the Drag-
Along Notice is not consummated within 120 days from the date of the Drag-Along
Notice, the Dragging Party must deliver another Drag-Along Notice in order to
exercise its rights under this Section 2.5 with respect to such Transfer or any
other Transfer.
(c) If BLUM approves (i) any merger, consolidation, amalgamation or other
business combination involving the Company or any of its Subsidiaries or (ii)
the sale of all of the business or assets of, or substantially all of the assets
of, the Company or any of its Subsidiaries (any of the foregoing events, a
"Transaction"), then each of the Non-BLUM Parties agrees to vote all shares of
-----------
Common Stock held by it or its Affiliates to approve such Transaction and not to
exercise any appraisal or dissenters' rights available to such Non-BLUM Parties
under any rule, regulation, statute, agreement among the stockholders, the
Certificate of Incorporation, the Bylaws or otherwise.
2.6. Participation Right.
---- -------------------
(a) The Company shall not issue (an "Issuance") additional Equity
--------
Securities of the Company after the date hereof to any Person (other than (i)
Equity Securities issued upon the exchange, exercise or conversion of other
Equity Securities in accordance with the terms thereof, (ii) Equity Securities
issued in connection with any stock split, stock dividend or recapitalization of
the Company, as long as the same is fully proportionate for each class of
affected security and entails equal treatment for all shares or units of such
class, (iii) Equity Securities issued by the Company pursuant to the acquisition
by the Company or its Subsidiaries of another Person or a material portion of
the assets thereof, by merger, purchase of assets or otherwise in consideration
for the assets and/or equity securities so acquired, (iv) Equity Securities
issued to employees, officers, directors, or consultants of the Company or its
Subsidiaries, (v) Equity Securities issued in connection with a Public Offering,
(vi) Equity Securities issued to customers, venders, lenders, and other non-
equity financing sources, lessors of equipment and other providers of goods or
services to the Company or its Subsidiaries or (vii) Equity Securities issued
pursuant to the Anti-Dilution Agreement, each of which will not be subject to
this Section 2.6), unless, prior to such Issuance, the Company notifies each
Securityholder party hereto in writing of the Issuance and grants to each such
Securityholder or, at such Securityholder's election, one of its Affiliates, the
right (the "Right") to subscribe for and purchase such Securityholder's pro rata
-----
share (determined
as provided below) of such additional Equity Securities so issued at the same
price and upon the same terms and conditions as issued in the Issuance. Each
Securityholder's pro rata share is equal to the ratio of (A) the number of
shares of Common Stock owned by such Securityholder (including for these
purposes all shares of Common Stock issuable upon exercise, exchange or
conversion of other Equity Securities) to (B) the total number of shares of the
Company's outstanding Common Stock (including for these purposes all shares of
Common Stock issuable upon exercise, exchange or conversion of other Equity
Securities) immediately prior to the issuance of the Equity Securities.
(b) The Right may be exercised by each Securityholder party hereto or its
Affiliates at any time by written notice to the Company received by the Company
within 10 business days after receipt of notice from the Company of the
Issuance, and the closing of the purchase and sale pursuant to the exercise of
the Right shall occur at least 20 business days after the giving of the notice
of the Issuance by the Company and prior to or concurrently with the closing of
the Issuance. Notwithstanding the foregoing (i) the Right shall not apply to
any Issuance, pro rata, to all holders of Common Stock and (ii) the Company
--- ----
shall not be required to offer or sell any Equity Security to any Securityholder
who is not an "accredited investor" as defined in Regulation D of the rules and
regulations promulgated by the SEC under the Exchange Act or who would cause the
Company to be in violation of applicable federal securities laws by virtue of
such offer or sale.
III REGISTRATION RIGHTS
3.1. Demand Registration.
---- --------------------
(a) Subject to the conditions of this Section 3.1, if the Company shall
receive a written request from (i) BLUM Holders holding not less than 25% of the
Registrable Securities then outstanding held by the BLUM Holders, (ii) FS
Holders holding not less than 25% of the Registrable Securities then outstanding
held by the FS Holders or (iii) Note Investor Holders holding not less than 25%
of the Registrable Securities then outstanding held by the Note Investor
Holders, that the Company file a registration statement under the Securities Act
covering the registration of Registrable Securities, then the Company shall,
within five (5) days of the receipt thereof, give written notice of such request
to all Holders, who must respond in writing within fifteen (15) days requesting
inclusion in the registration. The request must specify the amount and intended
disposition of such Registrable Securities. The Company, subject to the
limitations of this Section 3.1, must use its best efforts to effect, as soon as
practicable, the registration under the Securities Act of all Registrable
Securities that the Holders request to be registered in accordance with this
Section 3.1 together with any other securities of the Company entitled to
inclusion in such registration.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 3.1
and the Company shall include such information in the written notice referred to
in Section 3.1(a). In such event, the right of any Holder to include its
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such
Holder) to the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders (which
underwriter or underwriters shall be reasonably acceptable to the Company).
Notwithstanding any other provision of this Section 3.1, if the managing
underwriter advises the Company in writing that marketing factors require a
limitation of the number of securities to be underwritten (including Registrable
Securities) because the number of securities to be underwritten is likely to
have an adverse effect on the price, timing or the distribution of the
securities to be offered, then the Company shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares that may be included in the underwriting shall be
allocated among participating Holders, (i) first among the Initiating Holders,
and, if any Initiating Holder is BLUM, CalPERS as nearly as possible on a pro
rata basis based on the total number of Registrable Securities held by all such
Initiating Holders and, if applicable, CalPERS, and (ii) second to the extent
all Registrable Securities requested to be included in such underwriting by the
Initiating Holders have been included, among the Holders requesting inclusion of
Registrable Securities in such underwritten offering (other than the Initiating
Holders and, if applicable, CalPERS), as nearly as possible on a pro rata basis
based on the total number of Registrable Securities held by all such Holders.
Any Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration. To facilitate the allocation of shares in
accordance with the foregoing, the Company or the underwriters may round the
number of shares allocated to any Holder to the nearest 100 shares.
(c) The Company shall not be required to effect a registration pursuant to
this Section 3.1:
(i) prior to the date one hundred eighty (180) days following the
effective date of the registration statement pertaining to the Initial
Public Offering;
(ii) in the case of (x) a registration requested by BLUM Holders
pursuant to Section 3.1(a)(i), after the Company has effected six (6)
registrations requested by BLUM Holders pursuant to such Section, (y) a
registration requested by FS Holders pursuant to Section 3.1(a)(ii), after
the Company has effected three (3) registrations requested by FS Holders
pursuant to such Section, and (z) a registration requested by Note Investor
Holders pursuant to Section 3.1(a)(iii), after the Company has effected one
(1) registration requested by Note Investor Holders pursuant to such
Section;
(iii) if the anticipated aggregate gross proceeds to be
received by such Holders are less than $2,000,000;
(iv) if within five (5) days of receipt of a written request from
the Initiating Holders pursuant to Section 3.1(a), the Company in good
faith gives notice to the Initiating Holders of the Company's intention to
make a public offering within ninety (90) days in which case Section 3.2
shall govern; provided that if the Company does not file a registration
statement under the Securities Act relating to such public offering within
such ninety (90) day period (such 90 day period being referred to herein as
the "Relevant Period") the Company shall be prohibited from delivering
---------------
additional notices pursuant to this Section 3.1(c)(iv) until the 181/st/
day following the last day of the
Relevant Period; or
(v) if the Company shall furnish to Holders requesting a registration
statement pursuant to this Section 3.1, a certificate signed by the
Chairman of the Board stating that in the good faith judgment of the Board,
it would be seriously detrimental to the Company for such registration
statement to be effected at such time, in which event the Company shall
have the right to defer such filing for a period of not more than ninety
(90) days after receipt of the request of the Initiating Holders; provided
--------
that the Company shall not defer filings pursuant to this clause (v) more
than an aggregate of ninety (90) days in any twelve (12) month period.
(d) The Company shall select the registration statement form for any
registration pursuant to Section 3.1, but shall cooperate with the requests of
the Initiating Shareholders or managing underwriters selected by them as to the
inclusion therein of information not specifically required by such form.
3.2. Piggyback Registrations.
---- ------------------------
(a) The Company shall notify all Holders of Registrable Securities in
writing at least fifteen (15) days prior to the filing of any registration
statement under the Securities Act for purposes of a public offering of
securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding (i) registration statements relating to employee benefit plans or with
respect to corporate reorganizations or other transactions under Rule 145 of the
Securities Act; (ii) any registration statement filed pursuant to Section 3.1
(with respect to which the Holders rights to participate in such registered
offering shall be governed by Section 3.1); and (iii) any registration statement
relating to the Initial Public Offering unless Registrable Securities of BLUM or
its Affiliates are to be sold in an IPO) and, subject to Section 3.13(a), will
use its best efforts to afford each such Holder an opportunity to include in
such registration statement all or part of such Registrable Securities held by
such Holder. Each Holder desiring to include in any such registration statement
all or any part of the Registrable Securities held by it shall, within fifteen
(15) days after the above-described notice from the Company, so notify the
Company in writing. Such notice shall state the intended method of disposition
of the Registrable Securities by such Holder. If a Holder decides not to include
all of its Registrable Securities in any registration statement thereafter filed
by the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.
(b) If the registration statement under which the Company gives notice
under this Section 3.2 is for an underwritten offering, the Company shall so
advise the Holders of Registrable Securities as part of the written notice
provided to the Holders pursuant to Section 3.2(a). In such event, the right of
any such Holder to be included in a registration pursuant to this Section 3.2
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this
Agreement, if the managing underwriter advises the Company in writing that
marketing factors require a limitation of the number of securities to be
underwritten (including Registrable Securities) in an offering subject to this
Section 3.2 because the number of securities to be underwritten is likely to
have an adverse effect on the price, timing or the distribution of securities to
be offered, then the Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of shares that may be included in the underwriting shall be allocated, first, to
the Company and second, to the Holders on a pro rata basis based on the total
number of Registrable Securities held by the Holders. No such reduction shall
(i) reduce the securities being offered by the Company for its own account to be
included in the registration and underwriting, or (ii) reduce the amount of
securities of the selling Holders included in the registration below twenty-five
percent (25%) of the total amount of securities included in such registration,
unless such offering does not include shares of any other selling shareholders,
in which event any or all of the Registrable Securities of the Holders may be
excluded in accordance with the immediately preceding sentence.
(c) The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 3.2 prior to the effectiveness
of such registration whether or not any Holder has elected to include securities
in such registration. The Registration Expenses of such withdrawn registration
shall be borne by the Company in accordance with Section 3.3 hereof.
3.3. Expenses of Registration.
---- -------------------------
Except as specifically provided herein, all Registration Expenses
incurred in connection with any registration, qualification or compliance
pursuant to Section 3.1 or Section 3.2 herein shall be borne by the Company. All
Selling Expenses incurred in connection with any registrations hereunder, shall
be borne by the Holders of the Registrable Securities so registered pro rata on
the basis of the number of shares so registered. The Company shall not, however,
be required to pay for expenses of any registration proceeding begun pursuant to
Section 3.1, the request of which has been subsequently withdrawn by the
Initiating Holders unless (a) the withdrawal is based upon material adverse
information concerning the Company of which the Initiating Holders were not
aware at the time of such request or (b) (x) BLUM Holders holding not less than
50% of the Registrable Securities then outstanding held by all BLUM Holders, in
the case of a registration requested pursuant to Section 3.1(a)(i), (y) FS
Holders holding not less than 50% of the Registrable Securities then outstanding
held by all FS Holders, in the case of a registration requested pursuant to
Section 3.1(a)(ii), or (z) Note Investor Holders holding not less than 50% of
the Registrable Securities then outstanding held by all Note Investor Holders,
in the case of a registration requested pursuant to Section 3.1(iii), agree to
forfeit their right to one requested registration pursuant to Section 3.1, as
applicable, in which event such right shall be forfeited by all BLUM Holders, in
the case of clause (x), all FS Holders in the case of clause (y) and all Note
Investor Holders in the case of clause (z). If the Holders are required to pay
the Registration Expenses, such expenses shall be borne by the holders of
securities (including Registrable Securities) requesting such registration in
proportion to the number of shares for which registration was requested. If the
Company is required to pay the Registration Expenses of a withdrawn offering
pursuant to clause (a) above, then the Holders shall not forfeit their rights
pursuant to Section 3.1 to a demand registration.
3.4. Effective Registration Statement.
---- ---------------------------------
A registration requested pursuant to Section 3.1 will not be deemed to
have been effected unless it has become effective and all of the Registrable
Securities registered thereunder have been sold; provided, that if within 180
--------
days after it has become effective, the offering of Registrable Securities
pursuant to such registration is interfered with by any stop order, injunction
or other order or requirement of the Commission or other governmental entity,
such registration shall be deemed not to have been effected.
3.5. Selection of Counsel.
---- ---------------------
In connection with any registration of Registrable Securities pursuant
to Sections 3.1 or 3.2 hereof, the Holders of a majority in interest of the
Initiating Holders (or the Holders of a majority of the Registrable Securities
covered by the registration pursuant to Section 3.2) may select one counsel to
represent all Holders of Registrable Securities covered by such registration;
provided, however, that in the event that the counsel selected as provided above
-------- -------
is also acting as counsel to the Company in connection with such registration,
the remaining Holders shall be entitled to select one additional counsel to
represent all such remaining Holders.
3.6. Obligations of the Company.
---- ---------------------------
Whenever required to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:
(a) (1) in the case of a registration initiated under Section 3.1 prepare and,
in any event within ninety (90) days after the receipt of the notice
contemplated by Section 3.1(a), file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, (2) in the case of any
registration effected under Section 3.1, upon the request of the Holders of a
majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to one hundred and eighty (180) days or,
if earlier, until the Holder or Holders have completed the distribution related
thereto.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement; provided, that before filing a registration statement or
--------
prospectus, or any amendments or supplements thereto, the Company will furnish
to counsel (selected pursuant to Section 3.5 hereof) for the Holders of
Registrable Securities copies of all documents proposed to be filed, which
documents will be subject to the review of such counsel.
(c) Furnish to each Holder such number of copies of such registration statement
and of each amendment and supplement thereto (in each case including all
exhibits filed therewith including any documents incorporated by reference),
such number of copies of the prospectus included in such registration statement
(including each preliminary prospectus and summary prospectus), in conformity
with the requirements of the Securities Act, and such other documents as such
Holder may reasonably request in order to facilitate the disposition of
Registrable Securities owned by such Holder.
(d) Use its best efforts to register and qualify the securities covered by such
registration statement under such other securities or blue sky laws of such
jurisdictions as shall be reasonably requested by the Holders, request, and do
any and all other acts and things which may be reasonably necessary or advisable
to enable such Holder to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such Holder; provided, that the Company shall
--------
not be required in connection therewith or as a condition thereto to qualify to
do business or to file a general consent to service of process in any such
states or jurisdictions unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act.
(e) Use its best efforts to cause such Registrable Securities covered by such
registration statement to be registered with or approved by such other
governmental entities as may be necessary to enable the Holders thereof to
consummate the disposition of such Registrable Securities.
(f) Enter into such customary agreements (including an underwriting agreement in
customary form), which may include indemnification provisions in favor of
underwriters and other Persons in addition to, or in substitution for the
provisions of Section 3.9 hereof, and take such other actions as Holders of a
majority of shares of such Registrable Securities or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities.
(g) Notify each Holder of Registrable Securities covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing, and prepare and
furnish to each Holder any supplement or amendment necessary so that the
supplemented or amended prospectus no longer includes such untrue or misleading
statements or omissions of material fact.
(h) Otherwise comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable (but not more than 18 months) after the effective date of the
registration statement, an earnings statement which shall satisfy the provisions
of Section 11(a) of the Securities Act.
(i) Use its best efforts to list such Registrable Securities on any securities
exchange on which the Common Stock is then listed if such Registrable Securities
are not already so listed and if such listing is then permitted under the rules
of such exchange, and use its best efforts to provide a transfer agent and
registrar for such Registrable Securities covered by such registration statement
not later than the effective date of such registration statement.
(j) Furnish, at the request of the Holders of a majority of the Registrable
Securities being registered in the registration, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering and reasonably satisfactory in form, substance
and scope to a majority in interest of the Initiating Holders (or Holders
requesting registration in the case of a registration pursuant to Section 3.2),
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a "cold comfort" letter dated as
of such date, from the independent certified public accountants of the Company,
in form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Initiating Holders (or Holders
requesting registration in the case of a registration pursuant to Section 3.2),
addressed to the underwriters, if any, and if permitted by applicable accounting
standards, to the Holders requesting registration of Registrable Securities.
(k) Make available for inspection by any Holder of such Registrable Securities
covered by such registration statement, by any underwriter participating in any
disposition to be effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by any such Holder or any such
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the Company's
officers, directors and employees to supply all information reasonably requested
by any such Holder, underwriter, attorney, accountant or agent in connection
with such registration statement.
(l) Notify counsel (selected pursuant to Section 3.5 hereof) for the Holders of
Registrable Securities included in such registration statement and the managing
underwriter or agent, immediately, and confirm the notice in writing (i) when
the registration statement, or any post-effective amendment to the registration
statement, shall have become effective, or any supplement to the prospectus or
any amendment prospectus shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request of the Commission to amend
the registration statement or amend or supplement the prospectus or for
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the registration statement for offering or
sale in any jurisdiction, or of the institution or threatening of any legal
actions for any of such purposes.
(m) Make every reasonable effort to prevent the issuance of any stop order
suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus and, if any such
order is issued, to obtain the withdrawal of any such order at the earliest
possible moment.
(n) If requested by the managing underwriter or agent or any Holder of
Registrable Securities covered by the registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or agent or such Holder reasonably
requests to be included therein, including, with respect to the number of
Registrable Securities being sold by such Holder to such underwriter or agent,
the Purchase Price being paid therefor by such underwriter or agent and with
respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable after
being notified of the matters incorporated in such prospectus supplement or
post-effective amendment.
(o) Cooperate with the Holders of Registrable Securities covered by the
registration statement and
the managing underwriter or agent, if any, to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legends) representing
securities to be sold under the registration statement, and enable such
securities to be in such denominations and registered in such names as the
managing underwriter or agent, if any, or such Holders may request.
(p) Cooperate with each Holder of Registrable Securities and each underwriter or
agent participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.
(q) Make available the executive officers of the Company to participate with the
Holders of Registrable Securities and any underwriters in any "road shows" or
other selling efforts that may be reasonably requested by the Holders in
connection with the methods of distribution for the Registrable Securities.
3.7. Termination of Registration Rights.
---- -----------------------------------
A Holder's registration rights pursuant to this Article III shall
expire if (i) the Company has completed its Initial Public Offering and is
subject to the provisions of the Exchange Act, (ii) such Holder (together with
its Affiliates, partners and former partners) holds less than 2% of the
Company's outstanding Common Stock and (iii) all Registrable Securities held by
such Holder (and its Affiliates, partners and former partners) may be sold under
Rule 144 during any ninety (90) day period. Upon expiration of a Holder's
registration rights pursuant to this Section 3.7, the obligations of the Company
under this Article III to give such Holder notice of registrations or take any
other actions under this Article III with respect to the registration of
securities held by such Holder shall also terminate.
3.8. Delay of Registration; Furnishing Information.
---- ----------------------------------------------
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to Section 3.1 or 3.2 that the selling Holders shall
furnish to the Company upon written request of the Company such information
regarding themselves, the Registrable Securities held by them and the intended
method of disposition of such securities as shall reasonably be required to
effect the registration of their Registrable Securities.
3.9 Indemnification.
--- ----------------
(a) The Company will indemnify and hold harmless each Holder, each Affiliate of
each Holder and their respective partners, officers and directors (and any
director, officer, Affiliate, employee, agent or controlling Person of any of
the foregoing), legal counsel and accountants of each Holder, any underwriter
(as defined in the Securities Act) for such Holder and each Person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or
the Exchange Act, against any losses, claims, damages, liabilities (joint or
several) or expenses, as incurred, to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) or
expenses arise out of or are based upon any of the following statements,
omissions or violations (collectively, a "Violation") by the Company: (i) any
---------
untrue statement or alleged untrue statement of a material fact contained in any
registration statement, including any preliminary prospectus, summary prospectus
or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement; and the Company will reimburse each such
Holder, partner, officer or director, underwriter, legal counsel, accountants or
controlling Person for any legal or other expenses, as incurred, reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
-------- -------
agreement contained in this Section 3.9(a) shall not apply (x) to amounts paid
in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling Person of such Holder, and (y) to indemnify underwriters in the
offering or sale of Registrable Securities or any other Person, if any, who
controls such underwriter within the meaning of the Securities Act with respect
to preliminary, final or summary prospectus, or any amendments or supplement
thereto, to the extent that it is established that any such action, loss,
damage, liability or expense of such underwriter or controlling Person resulted
from the fact that such underwriter sold Registrable Securities to a Person whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the final prospectus (including any documents incorporated by
reference therein) or of the final prospectus, as then amended or supplemented
(including any documents incorporated by reference therein), whichever is most
recent, if the Company has previously furnished copies thereof to such
underwriter.
(b) Each Holder will, severally but not jointly, if Registrable Securities held
by such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify and hold harmless the
Company, each of its directors, its officers, legal counsel, accountants and
each Person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder's partners, directors or
officers, legal counsel, accountants or any Person who controls such Holder,
against any losses, claims, damages, liabilities (joint or several) or expenses
to which the Company or any such director, officer, controlling Person,
underwriter or other such Holder, or partner, director, officer, legal counsel,
accountants or controlling Person of such other Holder may become subject under
the Securities Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereto) or
expenses arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder under an
instrument duly executed by such Holder and stated to be specifically for use in
connection with such registration; and each such Holder will reimburse any legal
or other expenses reasonably incurred by the Company or any such director,
officer, controlling Person, underwriter or other Holder, or partner, officer,
director or controlling Person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however,
-------- -------
that the indemnity agreement
contained in this Section 3.9(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holder, which consent shall not be
unreasonably withheld; provided, further, that in no event shall any indemnity
-------- -------
under this Section 3.9 exceed the total net proceeds from the offering received
by such Holder.
(c) Promptly after receipt by an indemnified party hereunder of written notice
of the commencement of any action or proceeding with respect to which a claim
for indemnification may be made pursuant to this Section 3.9, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action;
provided that the failure of the indemnified party to give notice as provided
herein shall relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 3.9 only to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim or there
may be a legal defense available to such indemnified party different from or in
addition to those available to the identifying party, the indemnifying party
will be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation.
(d) In order to provide for just and equitable contribution in circumstances in
which the indemnity provided for in this Section 3.9 is unavailable to an
indemnified party, the indemnifying party shall contribute to the aggregate
losses, damages, liabilities and expenses (collectively, "Losses") of the nature
------
contemplated by such indemnity incurred by any indemnified party, (i) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified parties on the other, in connection
with the statements or omissions which resulted in such Losses or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative fault of but
also the relative benefits to the indemnifying party on the one hand and each
such indemnified party on the other, in connection with the statements or
omissions which resulted in such Losses, as well as any other relevant equitable
considerations. The relative benefits to the indemnifying party and the
indemnified party shall be determined by reference to, among other things, the
total proceeds received by the indemnifying party and the indemnified party in
connection with the offering to which such losses relate. The relative fault of
the indemnifying party and the indemnified party shall be determined by
reference to, among other things, whether the action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or related to information
supplied by, the indemnifying party or the indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The parties hereto agree that it would be not be just or
equitable if contribution pursuant to this Section 3.9 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 3.10, no indemnified
party shall be required to
contribute any amount in excess of the amount of total net proceeds to such
indemnified party from sales of the Registrable Securities of such indemnified
party pursuant to the offering that gave rise to such Losses.
(e) The obligations of the Company and Holders under this Section 3.9 shall
survive completion of any offering of Registrable Securities in a registration
statement and the termination of this Agreement.
3.10. Assignment of Registration Rights.
---- ----------------------------------
The rights to cause the Company to register Registrable Securities
pursuant to this Article III may be assigned by a Holder to a transferee of such
Registrable Securities; provided, however, that in each case (i) such Transfer
-------- -------
of Registrable Securities shall comply with the provisions of Article II hereto,
(ii) the Transferor shall, within ten (10) days after such Transfer, furnish
to the Company written notice of the name and address of such transferee and the
securities with respect to which such registration rights are being Transferred
and (iii) such transferee shall execute and deliver to BLUM and the Company an
Assumption Agreement and become bound by the provisions of this Agreement in the
manner set forth in Section 6.5 hereto.
3.11. Amendment of Registration Rights.
---- ---------------------------------
Any provision of this Article III may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company,
BLUM and the Holders of at least a majority of the Registrable Securities then
outstanding; provided that no such amendment shall adversely affect the rights
--------
of the FS Holders relative to the rights of the BLUM Holders without the written
consent of the Holders of a majority of the Registrable Securities then
outstanding held by the FS Holders, provided, further that no such amendment
-------- -------
shall adversely affect the rights of the Note Investor Holders relative to the
rights of the BLUM Holders without the written consent of the Holders of a
majority of the Registrable Securities then outstanding held by all Note
Investor Holders and provided, further that no such amendment shall adversely
-------- -------
affect the rights of the Other Holders relative to the rights of the BLUM
Holders without the written consent of the Holders of a majority of the
Registrable Securities then outstanding held by all Other Holders. No such
amendment shall adversely affect the rights of the Note Investor Holders
relative to the rights of the FS Holders or the Other Holders without the
written consent of the Holders of a majority of the Registrable Securities then
outstanding held by the Note Investor Holders. No such amendment shall
adversely affect the rights of the Other Holders relative to the rights of the
FS Holders or the Note Investor Holders without the written consent of the
Holders of a majority of the Registrable Securities then outstanding held by the
Other Holders. Each Holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment authorized by this
Section, whether or not such Registrable Securities shall have been marked to
indicate such amendment.
3.12. Limitation on Subsequent Registration Rights.
----- ---------------------------------------------
After the date of this Agreement, the Company shall not, without the
prior written consent of the Holders of a majority of the Registrable Securities
then outstanding, enter into any
agreement with any holder or prospective holder of any securities of the Company
that would grant such holder registration rights senior to or otherwise more
favorable than those granted to the Holders hereunder.
3.13. "Market Stand-Off" Agreement; Agreement to Furnish Information.
----- --------------------------------------------------------------
(a) Subject to the condition that all Holders holding at least 2% of the
outstanding shares of Common Stock are subject to the same restrictions, each
Holder hereby agrees that such Holder shall not sell, transfer, make any short
sale of, grant any option for the purchase of, or enter into any hedging or
similar transaction with the same economic effect as a sale, regarding any
Common Stock (or other securities) of the Company held by such Holder (other
than those included in the registration) for a period specified by the
representative of the underwriters of Common Stock (or other securities) of the
Company not to exceed one hundred eighty (180) days following the effective date
of a registration statement of the Company filed under the Securities Act
pursuant to which an Initial Public Offering is effected. The Company may
impose stop-transfer instructions with respect to the Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period. For the avoidance of doubt such agreement
shall apply only to the Initial Public Offering.
(b) Each Holder agrees to execute and deliver such other agreements as may
be reasonably requested by the Company or the underwriter which are consistent
with the foregoing or which are necessary to give further effect thereto. In
addition, if requested by the Company or the representative of the underwriters
of Common Stock (or other securities) of the Company, each Holder shall provide,
within ten (10) days of such request, such information concerning such Holder as
may be required by the Company or such representative in connection with the
completion of any public offering of the Company's securities pursuant to a
registration statement filed under the Securities Act. The obligations
described in this Section 3.13 shall not apply to a registration relating solely
to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be
promulgated in the future, or a registration relating solely to a Commission
Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the
future. Each Holder further agrees the foregoing restriction shall be binding
on any transferee from the Holder.
3.14. Rule 144 Reporting.
----- -------------------
With a view to making available to the Holders the benefits of certain
rules and regulations of the SEC which may permit the sale of the Registrable
Securities to the public without registration, the Company agrees to use its
best efforts to:
(a) File, make and keep public information available, as those terms are
understood and defined in Rule 144 or any similar or analogous rule promulgated
under the Securities Act, at all times after the effective date of the first
registration filed by the Company for an offering of its securities pursuant to
the Securities Act or pursuant to the requirements of Section 12 of the Exchange
Act;
(b) File with the SEC, in a timely manner, all reports and other documents
required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities, furnish to such
Holder forthwith upon
request: a written statement by the Company as to its compliance with the
reporting requirements of Rule 144 of the Securities Act, and of the Exchange
Act (at any when it is subject to such reporting requirements); a copy of the
most recent annual or quarterly report of the Company; and such other reports
and documents as a Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing it to sell any such securities without
registration.
IV GOVERNANCE
4.1. The Board Prior to an Initial Public Offering.
---- ---------------------------------------------
The following provisions shall apply with respect to the Board prior
to an Initial Public Offering:
(a) Immediately after the Closing, the Board shall consist of eight (8)
directors, unless BLUM exercises its right pursuant to Section 4.1(f) hereof, in
which case the Board shall then consist of between nine (9) and eleven (11)
directors.
(b) Each of the Company and the Class B Securityholders agrees to take all
action necessary to cause each of the designees described in Section 4.1(c)
below to be elected or appointed to the Board concurrently with the Closing,
including without limitation, seeking and accepting resignations of incumbent
directors.
(c) Each Class B Securityholder agrees that at all times prior to an IPO, it
will vote, or execute a written consent in lieu thereof with respect to, all of
the shares of voting capital stock of the Company owned or held of record by it,
or cause all of the shares of voting capital stock of the Company beneficially
owned by it to be voted, or cause a written consent in lieu thereof to be
executed, to elect and, during such period, to continue in office a Board
consisting solely of the following (subject to the other provisions of this
Section 4.1):
(i) three (3) designees of the BLUM Funds, subject to Section
4.1(d) below (including any director designees of BLUM pursuant to Section
4.1(f) below, the "BLUM Directors"), two (or three if the BLUM Directors
--------------
are increased to four (4) pursuant to Section 4.1(c)(v) below) of whom
shall be designated by BLUM and one of whom shall be designated by Blum
Strategic;
(ii) one designee of the FS Entities, collectively (the "FS
--
Director");
(iii) White for so long as he is employed by the Company or,
if Wirta is no longer employed by the Company, the Chief Executive Officer
of the Company at such time;
(iv) White for so long as he is employed by the Company or, if White
is no longer employed by the Company, the Chairman of the Americas of the
Company at such time; provided, however that in the event that any Person
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other than White shall hold such title, BLUM shall have the option to
reduce the size of the Board by one director and eliminate this clause
(iv); and
(v) immediately after the Closing and for so long as a majority of
the
members of the Board shall agree, an employee (the "Production
----------
Director") of the Company or CBRE involved in CBRE's "Transaction
Management" business (as described in the Company 10-K (as defined in the
Merger Agreement)); provided, however that, during any period in which the
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Production Director is a member of the Board, the number of BLUM Directors
set forth in Section 4.1(c)(i) shall be increased to four (4) during such
period (which number does not include the director designees of BLUM
pursuant to Section 4.1(f) below).
provided that each of the foregoing designation rights will be subject to the
--------
following provisions of this Section 4.1.
(d) The director designation right of the BLUM Funds in Section 4.1(c) will
reduce (i) to three (or two if there shall not be a Production Director as a
member of the Board at such time), two or one of whom, as the case may be, shall
be designated by BLUM and one of whom shall be designated by Blum Strategic, if
BLUM and its Affiliates, collectively, beneficially own Common Stock
representing less than 22.5% of the outstanding Common Stock, (ii) to two (or
one if there shall not be a Production Director as a member of the Board at such
time), one of whom shall be designated by BLUM and one of whom, if the number of
BLUM Directors is reduced to two pursuant to this subsection, shall be
designated by Blum Strategic, if BLUM and its Affiliates, collectively,
beneficially own Common Stock representing less than 15% of the outstanding
Common Stock, and (iii) to zero if BLUM and its Affiliates, collectively,
beneficially own Common Stock representing less than 7.5% of the outstanding
Common Stock.
(e) The director designation right of the FS Entities in Section 4.1(c)(ii)
will reduce to zero if the FS Entities and their Affiliates, collectively,
beneficially own Common Stock representing less than 7.5% of the outstanding
Common Stock.
(f) At the request of BLUM (provided that the BLUM Funds are then entitled
to designate at least three BLUM Directors pursuant to this Section 4.1), the
number of BLUM Directors will be increased such that the BLUM Funds thereafter
have the right to designate a majority of the entire Board, and the size of the
Board will be expanded to the extent necessary to create director vacancies in
connection therewith (subject to subsequent reduction in the number of BLUM
Directors pursuant to Section 4.1(d) hereof). BLUM shall have the right to
designate any directors required to fill vacancies created at BLUM's request
pursuant to this Section 4.1(f). In the event that the size of the Board will
exceed the board size specified by the Company's Certificate of Incorporation or
Bylaws, each of the Company and the Class B Securityholders will take all
necessary steps to expand the size of the Board.
(g) Each committee of the Board will include at least one BLUM Director and
the FS Director (provided that at least one such director position is then
filled and unless the Securityholder appointing such director(s) shall otherwise
agree), unless otherwise agreed in writing by BLUM or Freeman Spogli,
respectively.
(h) If either the BLUM Funds or the FS Entities notifies the other Class B
Securityholders in writing of its desire to remove, with or without cause, any
director of the Company previously designated by it, each Class B Securityholder
will vote (to the extent eligible to vote) all of the shares of voting capital
stock of the Company beneficially owned or held of record by it, him or
her so as to remove such director or, upon request, each Class B Securityholder
will promptly execute and return to the Company any written resolution or
consent to such effect. In the event that any of such Persons is no longer
entitled pursuant to this Section 4.1 to designate a director previously
designated by such Securityholder(s), such director promptly will be removed
from the Board, and each Class B Securityholder will vote (to the extent
eligible to vote) all of the shares of voting capital stock of the Company
beneficially owned or held of record by it so as to remove such director or,
upon request, each Class B Securityholder will promptly execute and return to
the Company any written resolution or consent to such effect.
(i) If any director previously designated by the BLUM Funds or the FS Entities
ceases to serve on the Board (whether by reason of death, resignation, removal
or otherwise), the Person who designated such director will be entitled to
designate a successor director to fill the vacancy created thereby, and each
Class B Securityholder will vote (to the extent eligible to vote) all of the
shares of voting capital stock of the Company beneficially owned or held of
record by it or him or her in favor of such designation or, upon request, each
Class B Securityholder will promptly execute and return to the Company any
written resolution or consent to such effect.
4.2. The Board Subsequent to an Initial Public Offering.
-------------------------------------------------------
Following an IPO, (a) BLUM shall be entitled to nominate a percentage
of the total number of directors on the Board that is equivalent to the
percentage of the outstanding Common Stock beneficially owned by BLUM and its
Affiliates, collectively (such percentage of directors nominated by BLUM and its
Affiliates to be rounded up to the nearest whole number of directors) and (b)
the FS Entities shall be entitled to nominate one director as long as the FS
Entities own in the aggregate at least 7.5% of the outstanding Common Stock. The
Company hereby agrees that, at all times after an IPO, at and in connection with
each annual or special meeting of stockholders of the Company at which directors
of the Company are to be elected, the Company, the Board and the nominating
committee thereof will (A) nominate and recommend to stockholders for election
or re-election as part of the management slate of directors each such individual
and (B) provide the same type of support for the election of each such
individual as a director of the Company as provided by the Company, its
directors, its management and its Affiliates to other Persons standing for
election as directors of the Company as part of the management slate. Each
Securityholder that is a Class B Securityholder immediately prior to an IPO
hereby agrees that, at all times after an IPO, such Securityholder will, and
will cause each of its Affiliates to, vote all shares of Common Stock owned or
held of record by it, at each annual or special meeting of stockholders of the
Company at which directors of the Company are to be elected, in favor of the
election or re-election as a member of the Board of each such individual
nominated by any Securityholder pursuant to this Section 4.2.
4.3. Observers.
--------------
(a) Prior to an IPO, the FS Entities, collectively, shall be entitled to have
two observers in addition to the FS Director (the "FS Observers") at all regular
------------
and special meetings of the Board for so long as the FS Entities, collectively,
beneficially own Common Stock representing at least 7.5% of the outstanding
Common Stock.
(b) Prior to an IPO and solely for so long as needed by DLJ, upon the advice of
counsel, to maintain
its qualification as a "Venture Capital Operating Company" pursuant to Section
29 C.F.R. (S) 2510.3, the DLJ Investors, by vote of a majority of the
outstanding Restricted Securities held by the DLJ Investors, shall be entitled
to have one observer (the "DLJ Observer", and together with the FS Observers and
------------
the CalPERS Observer referred to below, the "Observers") at all regular and
---------
special meetings of the Board for so long as the DLJ Investors, collectively,
beneficially own (i) Restricted Securities representing at least 1.0% of the
outstanding Common Stock or (ii) a majority in principal amount of the Notes.
(c) Prior to an IPO, CalPERS shall be entitled to have one observer (the
"CalPERS Observer") at all regular and special meetings of the Board for so long
----------------
as CalPERS or its Affiliates beneficially own any shares of Common Stock.
(d) The Company shall reimburse each Observer for out-of-pocket expenses, if
any, relating to attendance at such meetings and shall reimburse each Material
Securityholder for the out-of-pocket expenses, if any , relating to one
representative of such Material Securityholder attending each shareholder
meeting of the Company. Each Observer shall be entitled to receive the same
notice of any such meeting as any director, and shall have the right to
participate therein, but shall not have the right to vote on any matter or to be
counted for purposes of determining whether a quorum is present thereat. In
addition, each Observer shall have the right to receive copies of any action
proposed to be taken by written consent of the Board without a meeting.
Notwithstanding the foregoing, no action of the Board duly taken in accordance
with the laws of the State of Delaware, the Certificate of Incorporation and the
By-Laws shall be affected by any failure to have provided notice to any Observer
of any meeting of the Board or the taking of action by the Board without a
meeting. Any Observer may be required by the Board to temporarily leave a
meeting of the Board if the presence of such Observer at the meeting at such
time would prevent the Company from asserting the attorney-client or other
privilege with respect to matters discussed before the Board at such time. The
FS Entities agree to cause the FS Observers to keep any matters observed or
materials received by them at any meeting of the Board strictly confidential,
subject to applicable law. The DLJ Investors agree to cause the DLJ Observer to
keep any matters observed or materials received by him or her at any meeting of
the Board strictly confidential, subject to applicable law. CalPERS agrees to
cause the CalPERS Observer to keep any matters observed or materials received by
him or her at any meeting of the Board strictly confidential, subject to
applicable law.
(e) With respect to each committee of the Board for which BLUM or the FS
Entities agrees in writing to waive its right set forth in Section 4.1(g)
hereto, BLUM or the FS Entities, as the case may be, shall be entitled to have
one observer at all meetings of such committee (provided that BLUM or the FS
Entities, as the case may be, shall at such time be entitled to designate at
least one director to the Board pursuant to Section 4.1 hereto). Each such
observer shall be entitled to receive the same notice of any such meeting as any
director that is a member thereof, and shall have the right to participate
therein, but shall not have the right to vote on any matter or to be counted for
purposes of determining whether a quorum is present thereat. In addition, each
such observer shall have the right to receive copies of any action proposed to
be taken by written consent of such committee without a meeting.
Notwithstanding the foregoing, no action of the such committee duly taken in
accordance with the laws of the State of Delaware, the Certificate of
Incorporation and the By-Laws shall be affected by any failure to have provided
notice to any observer of any meeting of such committee or the taking of action
by such committee without a
meeting. Any such observer may be required by such committee to temporarily
leave a meeting of the committee if the presence of such observer at the meeting
at such time would prevent the Company from asserting the attorney-client or
other privilege with respect to matters discussed before the committee at such
time. BLUM agrees to cause any observer designated by it to keep any matters
observed or materials received by him or her at any meeting of such committee
strictly confidential. The FS Entities agree to cause the any observer
designated by it to keep any matters observed or materials received by them at
any meeting of such committee strictly confidential.
4.4. Advisors.
-------------
For so long as each Other Non-Management Investor shall be a
Securityholder, such Other Non-Management Investor shall have the right to
provide, and at the reasonable request of the Board or the management of the
Company, shall provide, advice with respect to the Company's industry, business
and operations ("Advisory Services"), which advice the Board or the management
-----------------
of the Company, as applicable, will consider in good faith. With respect to the
provision of such Advisory Services at the request of the Board or the
management of the Company, the Company shall reimburse each Other Non-Management
Investor for any reasonable out-of-pocket expenses incurred by such Other Non-
Management Investor in connection therewith.
4.5. Voting.
-----------
(a) Except as otherwise provided in this Section 4.5 or this Article IV, prior
to an Initial Public Offering, each of the Non-BLUM Parties that is a Class B
Securityholder agrees to vote at any stockholders meeting (or in any written
consent in lieu thereof) all of the shares of voting capital stock of the
Company owned or held of record by it, or cause all of the shares of voting
capital stock of the Company beneficially owned by it to be voted at any
stockholders meeting (or in any written consent in lieu thereof), in same the
manner as BLUM votes the shares of voting capital stock of the Company
beneficially owned by it at such meeting (or in such written consent in lieu
thereof), except with respect to the following actions by the Company or any of
its Subsidiaries:
(i) any transaction between (x) BLUM or any of its Affiliates and (y)
the Company or any of its Subsidiaries, other than a transaction (A) with
another portfolio company of BLUM or any of its Affiliates that has been
negotiated on arms-length terms in the ordinary course of business between
the managements of the Company or any of its Subsidiaries and such other
portfolio company, (B) with respect to which the Securityholders may
exercise their rights under Section 2.6 of this Agreement or (C)
specifically contemplated by the Merger Agreement; or
(ii) any amendment to the Certificate of Incorporation or Bylaws of
the Company that adversely affects such Securityholder relative to BLUM,
other than (x) an increase in the authorized capital stock of the Company,
or (y) amendments made in connection with any reorganization of the Company
effected to facilitate an Initial Public Offering or the acquisition of the
Company by merger or consolidation (provided that in such reorganization or
acquisition each share of each class or series of capital stock held by the
Non-BLUM Parties is treated the same as each share of the same class or
series of
capital stock held by BLUM; provided, however that, subject to compliance
-------- -------
with applicable law, in the event that the one or more of the other
corporations or entities that is a party to such an acquisition notifies
the Company that it will require the structure of such acquisition to be
treated as a recapitalization for financial accounting purposes and that it
will require the Company to no longer be subject to the reporting
requirements or Section 14 of the Exchange Act after the closing date of
the acquisition, then, solely to the extent deemed necessary by such other
corporation or entity to satisfy such requirements, the consideration per
share the Non-BLUM Parties shall be entitled to receive with respect may be
a different kind than the consideration per share BLUM shall be entitled to
receive).
(b) In order to effectuate Section 4.5(a), each Non-BLUM Party that is a
Class B Securityholder hereby grants to BLUM an irrevocable proxy, coupled with
an interest, to vote, during the period specified in Section 4.5(a) above, all
of the shares of voting capital stock of the Company owned by the grantor of the
proxy in the manner set forth in Section 4.5(a).
4.6. General Consent Rights.
----------------------------
Notwithstanding anything to the contrary stated herein, prior to an
Initial Public Offering, neither the Company nor any of its Subsidiaries shall
take any of the following actions without the prior affirmative vote or written
consent of (a) a majority of the directors of the Company, and (b) a majority of
the directors of the Company that are not BLUM Directors:
(i) any transaction between (x) BLUM or any of its Affiliates and (y)
the Company or any of its Subsidiaries, other than a transaction (A) with
another portfolio company of BLUM of any of its Affiliates that has been
negotiated on arms-length terms in the ordinary course of business between
the managements of the Company or any of its Subsidiaries and such other
portfolio company, (B) with respect to which the Securityholders may
exercise their rights under Section 2.6 of this Agreement or (C)
specifically contemplated by the Merger Agreement;
(ii) any amendment to the Certificate of Incorporation or Bylaws of
the Company that adversely affects any Securityholder relative to either
BLUM Fund, other than (x) an increase in the authorized capital stock of
the Company, or (y) amendments made in connection with any reorganization
of the Company effected to facilitate an Initial Public Offering or the
acquisition of the Company by merger or consolidation (provided that in
such reorganization or acquisition each share of each class or series of
capital stock held by the Non-BLUM Parties is treated the same as each
share of the same class or series of capital stock held by either BLUM
Fund; provided, however that, subject to compliance with applicable law, in
-------- -------
the event that the one or more of the other corporations or entities that
is a party to such an acquisition notifies the Company that it will require
the structure of such acquisition to be treated as a recapitalization for
financial accounting purposes and that it will require the Company to no
longer be subject to the reporting requirements or Section 14 of the
Exchange Act after the closing date of the acquisition, then, solely to the
extent deemed necessary by such other corporation or entity to satisfy such
requirements, the consideration per share the Non-BLUM Parties shall be
entitled to receive with respect may be a different kind than the
consideration per share either BLUM Fund shall be entitled to receive); or
(iii) repurchase or redeem, or declare or pay a dividend with respect
to or make a distribution upon, any shares of capital stock of the Company
beneficially owned by BLUM or any of its Affiliates, unless (x) such
repurchase, redemption dividend or distribution is made pro rata among all
holders of such class of capital stock (or, in the case of a repurchase or
redemption, all of the Non-BLUM Parties are given a proportionate right to
participate in such repurchase or redemption (to the extent they own shares
of such class of capital stock)) or (y) if such capital stock is not Common
Stock, such repurchase, redemption or dividend is required by the terms of
such capital stock.
4.7. Consent Rights of FS Director.
----------------------------------
Notwithstanding anything to the contrary stated herein, prior to an
Initial Public Offering, for so long as the FS Entities shall be entitled to
appoint the FS Director pursuant to Section 4.1 hereto, neither the Company nor
any of its Subsidiaries shall take any of the following actions without the
prior affirmative vote or written consent of (x) a majority of the directors of
the Company, and (y) the FS Director:
(a) the acquisition by purchase or otherwise, in any single or series
of related transactions, of any business or assets for a Purchase Price in
excess of $75 million; provided, however that this Section 4.7(a) shall not
-------- -------
apply to (i) the acquisition of any business or asset by an investment fund
that is controlled by the Company or any of its Subsidiaries in connection
with the ordinary course conduct of the investment advisory and management
business of the Company or any of its Subsidiaries, or (ii) acquisitions in
connection with the origination of mortgages by the Company or any of its
Subsidiaries;
(b) the sale or other disposition, in any single or series of related
transactions, of assets of the Company or its Subsidiaries for aggregate
consideration having a Fair Market Value in excess of $75 million;
provided, however that this Section 4.7(b) shall not apply to (i) the sale
-------- -------
of other disposition of any business or asset by an investment fund that is
controlled by the Company or any of its Subsidiaries in connection with the
ordinary course conduct of the investment advisory and management business
of the Company or any of its Subsidiaries, or (ii) sales or dispositions in
connection with the origination of mortgages by the Company or any of its
Subsidiaries;
(c) incur Indebtedness, unless such Indebtedness would (i) be
permitted pursuant to the terms of the documents governing the senior and
senior subordinated Indebtedness entered into by the Company and CBRE in
connection with the closing of the Merger as in effect on the Closing Date
of the Merger (including any refinancing or replacement of such
Indebtedness in an equal or lesser aggregate principal amount) or (ii)
immediately following such incurrence the ratio of (x) the consolidated
Indebtedness of the Company and its subsidiaries determined in accordance
with United States generally accepted accounting principles applied in a
manner consistent with the Company's consolidated financial statements to
(y) the Twelve-Month Normalized EBITDA, does not exceed
4.5:1; or
(d) issue capital stock of the Company (or options, warrants or other
securities to acquire capital stock of the Company) to employees, directors
or consultants of the Company or any of its Subsidiaries if such issuances,
in the aggregate, exceed 5% of the total amount of outstanding capital
stock of the Company immediately after the Closing on a fully diluted basis
(i.e., assuming the exercise, exchange or conversion of all Equity
Securities that are exercisable, exchangeable or convertible into Common
Stock), other than (i) issuances to employees, directors or consultants of
the Company and its Subsidiaries of up to 25% of the capital stock of the
Company on a fully-diluted basis within six (6) months of the closing of
the Merger and (ii) issuances in amounts equal to the capital stock of the
Company repurchased by the Company from, or the options, warrants or other
securities to acquire capital stock cancelled by the Company or its
Subsidiaries or terminated or expired without prior exercise with respect
to, Persons who, at the time of such repurchase, cancellation, termination
or expiration, were current or former employees, directors or consultants
of the Company or its Subsidiaries.
4.8. Board of Directors of CBRE.
-------------------------------
Prior to an Initial Public Offering, the Company agrees to cause the
Board of Directors of CBRE (the "CBRE Board") to be comprised of the same
----------
individuals as comprise the Board pursuant to Section 4.1 of this Agreement.
V OTHER AGREEMENTS
5.1. Financial Information.
--------------------------
(a) Within 90 days after the end of each fiscal year of the Company, the
Company will furnish each Securityholder who is a Material Securityholder a
consolidated balance sheet of the Company, as at the end of such fiscal year,
and a consolidated statement of income and a consolidated statement of cash
flows of the Company, for such year, all prepared in accordance with generally
accepted accounting principles consistently applied and setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail. Such financial statements shall be accompanied by a report
and opinion thereon by independent public accountants of national standing
selected by the Board.
(b) The Company will furnish each Securityholder who is a Material
Securityholder within 45 days after the end of the first, second and third
quarterly accounting periods in each fiscal year of the Company, a consolidated
balance sheet of the Company as of the end of each such quarterly period, and a
consolidated statement of income and a consolidated statement of cash flows of
the Company for such period and for the current fiscal year to date, prepared in
accordance with generally accepted accounting principles, with the exception
that no notes need be attached to such statements and year-end audit adjustments
may not have been made.
(c) The Company will furnish each Securityholder who is a Material
Securityholder any monthly financial statements of the Company that are provided
to the Board no later than five (5) days after the day upon which first
furnished to the Board.
5.2. Inspection Rights.
----------------------
Each Securityholder who is a Material Securityholder shall have the
right to visit and inspect any of the books, records and properties of the
Company or any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Company or any of its Subsidiaries with its officers and
independent aviators, and to review such information as is reasonably requested,
all at such reasonable times and as often as may be reasonably requested.
5.3. Confidentiality of Records.
-------------------------------
Each Securityholder agrees to use, and to use all reasonable efforts
to insure that its authorized representatives use, the same degree of care as
such Securityholder uses to protect its own confidential information to keep
confidential any information furnished to it which the Company identifies as
being confidential or proprietary (so long as such information is not in the
public domain); provided, however, that any Securityholder may disclose such
-------- -------
confidential or proprietary information without the prior written consent of the
other parties hereto (i) to any "Related Party" (as defined below) for the
purpose of evaluating an investment in the Company so long as such Related Party
is advised of the confidentiality provisions of this Section 5.3 and agrees to
comply with such provisions, (ii) if such information is publicly available or
(iii) if disclosure is requested or compelled by legal proceedings, subpoena,
civil investigative demands or similar proceedings, (iv) if such information was
obtained by such Securityholder either independently without breaching this
Section 5.3, or from a party not known to such Securityholder to be subject to a
confidentiality agreement or (v) to any proposed transferee of Restricted
Securities from a Securityholder for the purpose of evaluating an investment in
the Company so long as such proposed transferee either executes and delivers to
the Company a confidentiality agreement with terms no less favorable to the
Company than those set forth in this Section 5.3 or is advised of the
confidentiality provisions of this Section 5.3 and agrees in a signed writing
delivered to the Company to comply with such provisions. Any Securityholder who
provides proprietary or confidential information to a Related Party shall be
liable for any breach by such Related Party of the confidentiality provisions of
this Section 5.3. For purposes of this Section 5.3, "Related Party" shall mean,
-------------
with respect to any Securityholder, (A) any partner, member, director, officer
or employee of such Securityholder or (B) any Affiliate of such Securityholder.
5.4. Indemnification.
--------------------
(a) The Company shall indemnify and hold harmless (x) each Securityholder
and each of their respective Affiliates and any controlling Person of any of the
foregoing, (y) each of the foregoing's respective directors, officers, employees
and agents and (z) each of the heirs, executors, successors and assigns of any
of the foregoing from and against any and all damages, claims, losses, expenses,
costs, obligations and liabilities including, without limiting the generality of
the foregoing, liabilities for all reasonable attorneys' fees and expenses
(including attorney and expert fees and expenses incurred to enforce the terms
of this Agreement) (collectively, "Losses and Expenses"), but excluding in each
-------------------
case any special or consequential damages except to the extent part of any
governmental or other third party claims against the indemnified party, suffered
or incurred by any such indemnified Person or entity to the extent arising from,
relating to or otherwise in respect of, any governmental or other third party
claim
against such indemnified Person that arises from, relates to or is otherwise in
respect of (i) the business, operations, liabilities or obligations of the
Company or its Subsidiaries or (ii) the ownership by such Securityholder or any
of their respective Affiliates of any equity securities of the Company (except
to the extent such Losses and Expenses (x) arise from any claim that such
indemnified Person's investment decision relating to the purchase or sale of
such securities violated a duty or other obligation of the indemnified Person to
the claimant or (y) are finally determined in a judicial action by a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Securityholder or its Affiliates) including, without
limitation, any Losses and Expenses arising from or under any federal, state or
other securities law. The indemnification provided by the Company pursuant to
this Section 5.4 is separate from and in addition to any other indemnification
by the Company to which the indemnified Person may be entitled, including,
without limitation, pursuant to the Certificate of Incorporation, the Bylaws,
any indemnification agreements with the Company and Section 3.9 hereto.
(b) With respect to third-party claims, all claims for indemnification by
an indemnified Person (an "Indemnified Party") hereunder shall be asserted and
-----------------
resolved as set forth in this Section 5.4. In the event that any written claim
or demand for which the Company would be liable to any Indemnified Party
hereunder is asserted against or sought to be collected from any Indemnified
Party by a third party, such Indemnified Party shall promptly notify the Company
in writing of such claim or demand (the "Claim Notice"), provided that the
------------
failure to promptly provide a Claim Notice will not affect an Indemnified
Party's right to indemnification except to the extent such failure materially
prejudices the Company. The Company shall have twenty (20) days from the date
of receipt of the Claim Notice (the "Notice Period") to notify the Indemnified
-------------
Party (i) whether or not the Company disputes the liability of the Company to
the Indemnified Party hereunder with respect to such claim or demand and (ii)
whether or not it desires to defend the Indemnified Party against such claim or
demand. All costs and expenses incurred by the Company in defending such claim
or demand shall be a liability of, and shall be paid by, the Company. Except as
hereinafter provided, in the event that the Company notifies the Indemnified
Party within the Notice Period that it desires to defend the Indemnified Party
against such claim or demand, the Company shall have the right to defend the
Indemnified Party by appropriate proceedings and shall have the sole power to
direct and control such defense; provided, however, that (1) if the Indemnified
Party reasonably determines that there may be a conflict between the positions
of the Company and of the Indemnified Party in conducting the defense of such
claim or that there may be legal defenses available to such Indemnified Party
different from or in addition to those available to the Company, then counsel
for the Indemnified Party shall be entitled to conduct the defense at the
expense of the Company to the extent reasonably determined by such counsel to be
necessary to protect the interests of the Indemnified Party and (2) in any
event, the Indemnified Party shall be entitled at its cost and expense to have
counsel chosen by such Indemnified Party participate in, but not conduct, the
defense. The Indemnified Party shall not settle a claim or demand without the
consent of the Company. The Company shall not, without the prior written consent
of the Indemnified Party, settle, compromise or offer to settle or compromise
any such claim or demand on a basis which would result in the imposition of a
consent order, injunction or decree which would restrict the future activity or
conduct of the Indemnified Party or any Subsidiary or Affiliate thereof or if
such settlement or compromise does not include an unconditional release of the
Indemnified Party for any liability arising out of such claim or demand. If the
Company elects not to defend the
Indemnified Party against such claim or demand, whether by not giving the
Indemnified Party timely notice as provided above or otherwise, then the amount
of any such claim or demand or, if the same be contested by the Indemnified
Party, that portion thereof as to which such defense is unsuccessful (and the
reasonable costs and expenses pertaining to such defense) shall be the liability
of the Company hereunder. The Indemnified Party and Company shall each render to
each other such assistance as may reasonably be requested in order to insure the
proper and adequate defense of any such claim or proceeding.
(c) If the indemnification provided for in this Section 5.4 is unavailable
or insufficient to hold harmless an Indemnified Party under this Section 5.4,
then the Company, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of the Losses and Expenses referred to in this Section 5.4: (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Indemnified Party from the matter giving rise to indemnification
hereunder or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Indemnified Party in connection with the matter
that resulted in such Losses and Expenses, as well as any other relevant
equitable considerations. Relative fault shall be determined by reference to,
among other things, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent the matter giving rise to such
Losses and Expenses.
(d) The parties agree that it would not be just and equitable if
contributions pursuant to Section 5.4(c) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of Section
5.4(c). The amount paid by any indemnified party as a result of the losses,
claims, damages or liabilities, or actions in respect thereof, referred to in
the first sentence of Section 5.4(c) shall be deemed to include any legal or
other expenses reasonably incurred by such Indemnified Party in connection with
investigation, preparing to defend or defending against any claim which is the
subject of Section 5.4.
(e) As long as it is reasonably attainable at a reasonable price, the Company
will maintain directors' and officers' insurance in an amount to be determined
in good faith by the Company's board of directors to be consistent with
insurance provided to officers and directors of comparable companies.
VI MISCELLANEOUS
6.1. Additional Securities Subject to Agreement.
-----------------------------------------------
(a) Subject to the following sentence, each Securityholder agrees that any
other equity securities of the Company which they hereafter acquire by means of
a stock split, stock dividend, distribution, exercise or conversion of
securities or otherwise will be subject to the provisions of this Agreement to
the same extent as if held on the date hereof. Notwithstanding anything to the
contrary stated herein, this Agreement (other than Article IV, it being
understood that Wirta and White will vote all such equity securities in
accordance with Article IV even if they are not otherwise subject to this
Agreement) shall not apply to any shares of Common Stock or any
options to acquire Common Stock granted to, or purchased by, Wirta or White,
which are subject to the terms of a subscription agreement with the Company (the
"Management Securities"), and any references to Common Stock or Equity
----------------------
Securities held or beneficially owned by Wirta or White shall not include any
Management Securities other than for purposes of Article IV hereof.
6.2. Term.
---------
This Agreement will be effective from and after the date hereof and
will terminate with respect to the provisions referred to below as follows: (i)
with respect to Sections 4.1, 4.3, 4.4, 4.5, 4.6, 4.7, 5.1 and 5.2, upon
completion of an IPO; (ii) with respect to Sections 2.1(b), 2.2, 2.3, 2.4, 2.5
and 2.6, upon the expiration of the Restricted Period; (iii) with respect to
Article III (other than Sections 3.9 and 3.14) at such time as set forth in
Section 3.7; (iv) with respect to Sections 3.9 and 5.4, upon the expiration of
the applicable statutes of limitations; and (iv) with respect to all Sections
(other than Sections 3.9, 3.14 and 5.4), upon (A) the sale of all or
substantially all of the equity interests in the Company to a Third Party
whether by merger, consolidation or securities or otherwise, or (B) approval in
writing by BLUM, the FS Parties and the holders of a majority of the shares of
Common Stock owned by the following Persons voting as a group: the Management
Parties, the Note Investor Parties and the Other Non-Management Parties.
6.3. Notices.
------------
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given or made (and shall be deemed to
have been duly given or made upon receipt) by delivery in person, by courier
service, by cable, by telecopy, by telegram, by telex or registered or certified
mail (postage prepaid, return receipt requested) to the respective parties at
the addresses set forth below (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 6.3):
(a) If to the Company or to CBRE:
CB Richard Ellis Services, Inc.
200 North Sepulveda Blvd.
El Segundo, CA 90245-4380
Attn: Walter Stafford, General Counsel
Fax: (415) 733-5555
with a copy to (which copy shall not be deemed notice pursuant to
this Section 6.3):
Simpson Thacher & Bartlett
3330 Hillview Avenue
Palo Alto, CA 94304
Attn: Richard Capelouto
Fax: (650) 251-5002
(b) If to BLUM or any of its Affiliates:
c/o BLUM Capital Partners, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133
Attn: Murray A. Indick, General Counsel
Fax: (415) 434-3130
with a copy to (which copy shall not be deemed notice
pursuant to this Section 6.3):
Simpson Thacher & Bartlett
3330 Hillview Avenue
Palo Alto, CA 94304
Attn: Richard Capelouto
Fax: (650) 251-5002
If to any of the FS Parties or any of their Affiliates:
c/o Freeman Spogli & Co., Inc.
11100 Santa Monica Blvd., Suite 1900
Santa Monica, CA 90025
Attn: J. Frederick Simmons
Fax: (310) 444-1870
with a copy to (which copy shall not be deemed notice
pursuant to this Section 6.3):
Riordan & McKinzie
California Plaza
29th Floor, 300 South Grand Ave.
Los Angeles, CA 90071
Attn: Roger H. Lustberg
Fax: (213) 229-8550
If to any of the Management Parties or Koll, to the address set forth below
their name on the signature pages to this Agreement, with a copy to (which
copy shall not be deemed notice pursuant to this Section 6.3):
O'Melveny & Myers LLP
610 Newport Center Drive, 17/th/ Floor
Newport Beach, CA 92660-6429
Attn: Gary J. Singer
Fax: (949) 823-6994
If to Malek:
c/o Thayer Capital Partners
1455 Pennsylvania Avenue, N.W., Suite 350
Washington, D.C. 20004
Fax: (202) 371-0391
with a copy to (which copy shall not be deemed notice
pursuant to this Section 6.3):
Kirkland & Ellis
655 Fifteenth Street, N.W.
Suite 1200
Washington, D.C. 20005
Attn: Terrance Bessey
Fax: (202) 879-5200
If to any of the Note Investor Parties:
DLJ Investment Funding, Inc.
277 Park Avenue
New York, New York 10172
Attn: Joseph Ehrlich
Fax: (212) 892-0064
with a copy to (which copy shall not be deemed notice
pursuant to this Section 6.3):
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005-1702
Attn: John J. Schuster
Fax: (212) 269-5420
If to CalPERS:
CalPERS
Lincoln Plaza
400 P Street, Rm. 3492
Sacramento, CA 95814
Attn: Rick Hayes
Leon Shahinian
Marte Castanos
Fax: (916) 326-3344
With a copy to:
Pacific Corporate Group
1200 Prospect Street
La Jolla, CA 92037
Attn: Walter Fitzsimmons
Fax: (858) 456-6018
6.4. Further Assurances.
---- ------------------
The parties hereto will sign such further documents, cause such
meetings to be held, resolutions passed, exercise their votes and do and perform
and cause to be done such further acts and things as may be necessary in order
to give full effect to this Agreement and every provision hereof.
6.5. Non-Assignability.
---- -----------------
This Agreement will inure to the benefit of and be binding on the
parties hereto and their respective successors and permitted assigns. This
Agreement may not be assigned by any party hereto without the express prior
written consent of the other parties, and any attempted assignment, without such
consents, will be null and void; provided, however, that with respect to any
-------- -------
Person who acquires any Restricted Securities from any Securityholder in
compliance with the terms hereunder: (a) such Securityholder making such
Transfer shall, prior to such Transfer, furnish to the Company written notice of
the name and address of such transferee, and (b)(i) in the case of any Transfer
from BLUM or Blum Strategic, (A) if such Person acquires a majority of the
Common Stock beneficially owned by BLUM or Blum Strategic respectively, BLUM or
Blum Strategic, as the case may be, shall have the right to assign to such
Person all of the rights and obligations of BLUM or Blum Strategic, as the case
may be, hereunder, (B) if such Person acquires less than a majority of the
Common Stock beneficially owned by BLUM or Blum Strategic, such Person shall
assume and be entitled to all of the rights and obligations of a BLUM Holder
under Article III hereof, and (C) in any case, such Person shall execute and
deliver to the Company an Assumption Agreement and assume and be entitled to all
of the rights and obligations of a Holder hereunder, (ii) in the case of an
assignment by BLUM of its rights pursuant to Section 2.2 hereto, such assignee
or assignees shall assume and be entitled to all of the rights and obligations
of a BLUM Holder under Article III hereof and shall execute and deliver to the
Company an Assumption Agreement and assume and be entitled to all of the rights
and obligations of a Holder hereunder, (iii) in the case of any Transfer from
any of the FS Parties, (A) such Person shall assume all of the rights and
obligations of an FS Party hereunder and shall execute and deliver to the
Company an Assumption Agreement, and (B) in addition, if such Person acquires a
majority of the Common Stock beneficially owned by the FS Entities at the time
of such transfer and following such acquisition such Person beneficially owns at
least 10% of the outstanding Common Stock, the FS Entities shall have the right
to assign to such Person all of the rights and obligations of the FS Entities
under Section IV of this Agreement, (iv) in the case of any Transfer from a Note
Investor Party, such Person shall assume and be entitled to all of the rights
and obligations of a Note Investor Party hereunder and execute and deliver to
the Company an Assumption Agreement, (v) in the case of any Transfer from an
Other Non-Management Party, such Person shall assume and be entitled to all of
the rights and obligations of an Other Non-Management Party hereunder and
execute and deliver to the Company an Assumption Agreement, and (vi) in the case
of any Transfer from a Management Party, such Person shall assume and be
entitled to all of the rights and obligations of a Management Party hereunder
and execute and deliver to the Company an Assumption Agreement.
6.6. Amendment; Waiver.
---- -----------------
This Agreement may be amended, supplemented or otherwise modified only
by a written instrument executed by (a) the Company, (b) BLUM, so long as BLUM
and its Affiliates own in the aggregate more Common Stock than the aggregate
amount of Common Stock owned by any other Person and its Affiliates, and (c) the
holders of a majority of the Restricted Securities held by the Securityholders;
provided, however that no such amendment, supplement or modification shall
-------- -------
adversely affect (i) the FS Parties relative to either BLUM fund without the
prior written consent of the holders of a majority of the Restricted Securities
held by the FS Parties at such time, (ii) the Note Investor Parties relative to
either BLUM Fund without the prior written consent of the holders of a majority
of the shares of the Restricted Securities held by the Note Investor Parties at
such time, (iii) the Other Non-Management Parties relative to either BLUM Fund
without the prior written consent of the holders of a majority of the shares of
Common Stock held by the Other Non-Management Parties at such time, and (iv) the
Management Parties relative to either BLUM Fund without the prior written
consent of the holders of a majority of the shares of Common Stock held by the
Management Parties at such time; provided, further that no such amendment,
-------- -------
supplement or modification shall amend or modify in a manner adverse to Note
Investors the agreements herein to which the Class B Securityholders are subject
with respect to the voting of shares of voting capital stock without the prior
written consent of the holders of a majority of the Restricted Securities held
by the Note Investor Parties at such time. No waiver by any party of any of the
provisions hereof will be effective unless explicitly set forth in writing and
executed by the party so waiving. Except as provided in the preceding sentence,
no action taken pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, will be deemed to constitute a
waiver by the party taking such action of compliance with any covenants or
agreements contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach.
6.7. Third Parties.
---- -------------
This Agreement does not create any rights, claims or benefits inuring
to any Person that is not a party hereto nor create or establish any third party
beneficiary hereto.
6.8. Governing Law.
---- -------------
This Agreement will be governed by, and construed in accordance with,
the laws of the State of Delaware, applicable to contracts executed and to be
performed entirely within that state.
6.9. Specific Performance.
---- --------------------
Without limiting or waiving in any respect any rights or remedies of
the parties hereto under this Agreement now or hereinafter existing at law or in
equity or by statute, each of the parties hereto will be entitled to seek
specific performance of the obligations to be performed by the other in
accordance with the provisions of this Agreement.
6.10. Entire Agreement.
----- ----------------
This Agreement sets forth the entire understanding of the parties
hereto with respect to the subject matter hereof.
6.11. Titles and Headings.
----- -------------------
The section headings contained in this Agreement are for reference
purposes only and will not affect the meaning or interpretation of this
Agreement.
6.12. Severability.
----- ------------
If any provision of this Agreement is declared by any court of
competent jurisdiction to be illegal, void or unenforceable, all other
provisions of this Agreement will not be affected and will remain in full force
and effect.
6.13. Counterparts.
----- ------------
This Agreement may be executed in any number of counterparts, each of
which will be deemed to be an original and all of which together will be deemed
to be one and the same instrument.
6.14. Ownership of Shares.
----- -------------------
Whenever a provision of this Agreement refers to shares of Common
Stock owned by a Securityholder or owned by a Securityholder and its Affiliates,
such provision shall be deemed to refer to those shares owned of record by such
Securityholder or such Securityholder and its Affiliates, as applicable, and
shall not be deemed to include other Restricted Securities that such
Securityholder (or such Securityholder and its Affiliates, if applicable) may be
deemed to beneficially own due to the provisions of this Agreement and/or any
other agreements, arrangements or understandings among the parties hereto
relating to the voting or Transfer of Restricted Securities.
6.15 BLUM Affiliates.
---- ---------------
BLUM and Blum Strategic hereby acknowledge that they are Affiliates of
each other for purposes of this Agreement.
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
CBRE HOLDING, INC.
By:
Name:
Title:
CB RICHARD ELLIS SERVICES, INC.
By:
Name:
Title:
RCBA STRATEGIC PARTNERS, L.P.
By: RCBA GP, L.L.C., its general partner
By:
Name:
Title:
BLUM STRATEGIC PARTNERS II, L.P.
By: Blum Strategic GP II, L.L.C., its general
partner
By:
Name:
Title:
DLJ INVESTMENT FUNDING, INC.
By:
Name:
Title:
FS EQUITY PARTNERS III, L.P.
By: FS Capital Partners, L.P., its general
partner
By: FS Holdings, Inc., its general partner
By:
Name:
Title:
FS EQUITY PARTNERS INTERNATIONAL, L.P.
By: FS&Co. International, L.P., its general
partner
By: FS International Holdings Limited,
its general partner
By:
Name:
Title:
THE KOLL HOLDING COMPANY
______________________________
By:
______________________________
Frederic V. Malek
MANAGEMENT INVESTORS:
______________________________
Raymond E. Wirta
______________________________
W. Brett White
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
______________________________
By:
OTHER NOTE INVESTORS:
CREDIT SUISSE FIRST BOSTON CORPORATION
By:
Name:
Title:
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Securityholders'
Agreement among CBRE Holding, Inc., CB Richard Ellis Services, Inc., RCBA
Strategic Partners, L.P., Blum Strategic Partner, L.P., FS Equity Partners III,
L.P., FS Equity Partners International, L.P., DLJ Investment Funding, Inc.,
Credit Suisse First Boston Corporation, The Koll Holding Company, CalPERS,
Frederic V. Malek and the Management Investors named therein, I, Kathi Koll, the
spouse of Donald M. Koll, do hereby join with my spouse in executing the
foregoing Securityholders' Agreement and do hereby agree to be bound by all of
the terms and provisions thereof.
Dated as of July 20, 2001
Kathi Koll
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Securityholders'
Agreement among CBRE Holding, Inc., CB Richard Ellis Services, Inc., RCBA
Strategic Partners, L.P., Blum Strategic Partners, L.P., FS Equity Partners III,
L.P., FS Equity Partners International, L.P., DLJ Investment Funding, Inc.,
Credit Suisse First Boston Corporation, The Koll Holding Company, CalPERS,
Frederic V. Malek and the Management Investors named therein, I, Marlene Malek,
the spouse of Frederic V. Malek, do hereby join with my spouse in executing the
foregoing Securityholders' Agreement and do hereby agree to be bound by all of
the terms and provisions thereof.
Dated as of July 20, 2001
Marlene Malek
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Securityholders'
Agreement among CBRE Holding, Inc., CB Richard Ellis Services, Inc., RCBA
Strategic Partners, L.P., Blum Strategic Partners, L.P., FS Equity Partners III,
L.P., FS Equity Partners International, L.P., DLJ Investment Funding, Inc.,
Credit Suisse First Boston Corporation, The Koll Holding Company, CalPERS,
Frederic V. Malek and the Management Investors named therein, I, Sandra Wirta,
the spouse of Raymond E. Wirta, do hereby join with my spouse in executing the
foregoing Securityholders' Agreement and do hereby agree to be bound by all of
the terms and provisions thereof.
Dated as of July 20, 2001
Sandra Wirta
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Securityholders'
Agreement among CBRE Holding, Inc., CB Richard Ellis Services, Inc., RCBA
Strategic Partners, L.P., Blum Strategic Partners, L.P., FS Equity Partners III,
L.P., FS Equity Partners International, L.P., DLJ Investment Funding, Inc.,
Credit Suisse First Boston Corporation, The Koll Holding Company, CalPERS,
Frederic V. Malek and the Management Investors named therein, I, Danielle White,
the spouse of W. Brett White, do hereby join with my spouse in executing the
foregoing Securityholders' Agreement and do hereby agree to be bound by all of
the terms and provisions thereof.
Dated as of July 20, 2001
Danielle White
Exhibit A
FORM OF ASSUMPTION AGREEMENT
[DATE]
To the Parties to the Securityholders' Agreement dated as of July 20, 2001
Dear Sirs or Madams:
Reference is made to the Securityholders' Agreement, dated as of July 20,
2001 (the "Securityholders' Agreement"), among CBRE Holding, Inc., CB Richard
Ellis Services, Inc., RCBA Strategic Partners, L.P., Blum Strategic Partners,
L.P., FS Equity Partners III, L.P., FS Equity Partners International, DLJ
Investment Funding, Inc., The Koll Holding Company, CalPERS, Frederic V. Malek,
and the individuals identified on the signature pages thereto as "Other Note
Purchasers" and "Management Investors."
In consideration of the representations, covenants and agreements
contained in the Securityholders' Agreement, the undersigned hereby confirms and
agrees that it shall be bound by all or certain of the provisions thereof in the
manner set forth in Section 6.5 thereto.
This Assumption Agreement will be governed by, and construed in
accordance with, the laws of the State of Delaware, applicable to contracts
executed and to be performed entirely within that state.
Very truly yours,
[Transferee]
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Assumption
Agreement with respect to the Securityholders' Agreement among CBRE Holding,
Inc., CB Richard Ellis Services, Inc., RCBA Strategic Partners, L.P., Blum
Strategic Partners, L.P., FS Equity Partners III, L.P., FS Equity Partners
International, L.P., DLJ Investment Funding, Inc., [Other Note Purchasers], The
Koll Holding Company, CalPERS, Frederic V. Malek and the Management Investors
named therein,
I, _______________________, the spouse of [Transferee], do hereby join with my
spouse in executing the foregoing Assumption Agreement and do hereby agree to be
bound by all of the terms and provisions thereof.
Dated as of ______________ ____, 20__
[Spouse]
EX-4
6
dex4.txt
WARRANT AGREEMENT DATED AS OF 07/20/2001
EXHIBIT 4
---------
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") is made and entered into as
---------
of July 20, 2001 between CBRE Holding, Inc., a Delaware corporation (the
"Company") and FS Equity Partners III, L.P., a Delaware limited partnership
-------
("FSEP"), and FS Equity Partners International, L.P., a Delaware limited
----
partnership ("FSEP International," and together with FSEP, the "FS Parties").
------------------ ----------
WHEREAS, pursuant to that certain Agreement and Plan of
Reorganization, dated as of May 14, 1997 by and among CB Richard Ellis Services,
Inc. (successor to CB Commercial Real Estate Services Group, Inc.) ("CBRE"),
----
Koll Real Estate Services ("KRES") and the other parties listed therein, KRES
----
merged with a subsidiary of CBRE and the holders of shares of common stock of
KRES, including the FS Parties, and options exercisable into shares of common
stock of KRES received warrants (the "Old Warrants") to purchase up to an
------------
aggregate of 500,000 shares of the Common Stock of CBRE;
WHEREAS, pursuant to that certain Amended and Restated Agreement and
Plan of Merger (the "Merger Agreement"), dated as of May 31, 2001, by and among,
----------------
CBRE, the Company and BLUM CB Corp., a Delaware corporation and wholly owned
subsidiary of the Company (the "Acquiror"), the Acquiror will merge with and
--------
into CBRE, such that CBRE shall become a wholly owned subsidiary of the Company;
and
WHEREAS, pursuant to that certain Amended and Restated Contribution
and Voting Agreement, dated as of May 31, 2001, by and among, the Company, the
FS Parties and the other parties thereto, upon the Closing, among other things,
(i) the Company shall cancel the Old Warrants, and (ii) the FS Parties shall
receive, in the aggregate, warrants, evidenced by a Warrant Certificate in
substantially the form attached hereto as Exhibit A (the "Warrants"), to
--------
purchase up to an aggregate of [number of shares of Common Stock equal to the
number that represents the same percentage of the total outstanding shares of
Common Stock immediately after consummation of the Merger (with respect to the
Company) as the warrants to acquire 364,884 shares of CBRE Common Stock entitled
Freeman Spogli immediately prior to the consummation of the Merger (with respect
to CBRE)] shares (the "Warrant Shares") of the Class B Common Stock, par value
--------------
$.01 per share (the "Common Stock"), of the Company.
------------
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows (capitalized
terms used herein and not otherwise defined have the meanings ascribed thereto
in the Merger Agreement):
Optional Exercise of Warrant.
----------------------------
Subject to the terms of this Agreement, each holder of a Warrant may,
at any time on and after August 26, 2007, but not later than August 27, 2007
(the "Expiration Date"), exercise this Warrant in whole at any time or in part
---------------
from time to time for the number of Warrant Shares which such holder is then
entitled to purchase hereunder.
Each holder of a Warrant may exercise such Warrant, in whole or in
part by either of the following methods:
delivering to the Company at its office maintained for such purpose pursuant to
Section 12(d): (i) a written notice of such holder's election to exercise such
Warrant, which notice shall specify the number of Warrant Shares to be
purchased, (ii) the Warrant and (iii) a sum equal to the Exercise Price (as set
forth in the Warrant) therefor payable in immediately available funds; or
The holder of a Warrant may also exercise such Warrant, in whole or in part, in
a "cashless" or "net-issue" exercise by delivering to the Company at its office
maintained for such purpose pursuant to Section 12(d): (i) a written notice of
such holder's election to exercise such Warrant, which notice shall specify the
number of Warrant Shares to be delivered to such holder and the number of
Warrant Shares with respect to which such Warrant is being surrendered in
payment of the aggregate Exercise Price for the Warrant Shares to be delivered
to the holder, and (ii) the Warrant. For purposes of this provision, all Warrant
Shares as to which the Warrant is surrendered will be attributed a value equal
to (x) the current market price per share of Common Stock (determined in the
manner set forth in Section 7(f)) minus (y) the current Exercise Price per share
of Common Stock.
Such notice may be in the form of Election to Purchase substantially
in the form of Exhibit B attached hereto. Upon delivery thereof, together with
the Warrant and the Exercise Price, as applicable, and such holder becoming a
party to the Securityholders' Agreement, dated as of the date hereof (the
"Securityholders' Agreement"), by and among the Company, the FS Parties and the
--------------------------
other parties thereto if such holder shall not already be a party thereto, the
Company shall cause to be executed and delivered to such holder within five
business days a certificate or certificates representing the aggregate number of
fully-paid and nonassessable shares of Common Stock issuable upon such exercise.
The stock certificate or certificates for Warrant Shares so delivered
shall be in such denominations as may be specified in said notice and shall be
registered in the name of such holder or such other name or names as shall be
designated in said notice. Such certificate or certificates shall be deemed to
have been issued and such holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares,
including to the extent permitted by law the right to vote such shares or to
consent or to receive notice as a stockholder (subject to the terms of the
Securityholders' Agreement), as of the time said notice is delivered to the
Company as aforesaid; provided that such shares shall be subject to the
--------
provisions of the Securityholders' Agreement. If a Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of said
certificate or certificates, deliver to such holder a new Warrant dated the date
it is issued, evidencing the rights of such holder to purchase the remaining
Warrant Shares called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant, or, at the request of such holder,
appropriate notation may be made on this Warrant and the Warrant shall be
returned to such holder.
All Warrant Shares issuable upon the exercise of a Warrant shall be
validly issued, fully paid and nonassessable and free from all liens and other
encumbrances thereon, other than liens or other encumbrances created by the
holder thereof or the restrictions set forth in the Securityholders' Agreement.
The Company will not close its books against the transfer of a Warrant
or of any
Warrant Shares in any manner which interferes with the timely exercise of a
Warrant. The Company will from time to time take all such action as may be
necessary to assure that the par value per share of the unissued Common Stock
acquirable upon exercise of a Warrant is at all times equal to or less than the
Exercise Price then in effect.
Automatic Exercise of Warrant.
-----------------------------
Notwithstanding the prior delivery of a notice pursuant to Section 1
hereto, in the event an Automatic Exercise Event (as defined below) occurs prior
to the Expiration Date, without any action by the Company or the FS Parties, the
Warrants shall automatically be exercised in a "cashless" or "net issue"
exercise pursuant to which (i) the Exercise Price shall be paid to the Company
entirely in Warrant Shares (or such other consideration as set forth in Section
7(l) hereto), which for purposes of this provision, will be attributed a value
equal to (x) the current market price per share of Common Stock (determined in
the manner set forth in Section 7(f)) to the holders thereof minus (y) the
current Exercise Price per share of Common Stock, and (ii) the Company, subject
to the following paragraph of this Section 2, shall deliver to the holders
thereof the number of Warrant Shares remaining after subtracting the Exercise
Price; provided, however that if, upon an Automatic Exercise Event, the amount
-------- -------
set forth in subclause (y) of the foregoing clause (i) shall be equal to or
greater than the amount set forth in subclause (x) of the foregoing clause (i),
then the Warrants, without any action by the Company or the FS Parties, shall be
cancelled and shall cease to represent the right to receive any Warrant Shares
or other security, property or asset of the Company or any surviving entity.
As soon as practicable after an Automatic Exercise Event, the Company
shall deliver a notice of such Automatic Exercise Event to each of the holders
of the Warrants. Upon delivery of the Warrants to the Company by a holder
thereof and such holder becoming a party to the Securityholders' Agreement, if
such holder shall not already be a party thereto, the Company shall cause to be
executed and delivered to such holder within five business days a certificate or
certificates representing the aggregate number of fully-paid and nonassessable
shares of Common Stock issuable as a result of such Automatic Exercise Event.
The stock certificate or certificates for Warrant Shares so delivered
shall be in such denominations as may be specified by the Warrant holders and
shall be registered in the name of such holder or such other name or names as
shall be designated by the Warrant holders . Such certificate or certificates
shall be deemed to have been issued and such holder or any other person so
designated to be named therein shall be deemed to have become a holder of record
of such shares, including to the extent permitted by law the right to vote such
shares or to consent or to receive notice as a stockholder (subject to the terms
of the Securityholders' Agreement), as of the time of the Automatic Exercise
Event; provided that such shares shall be subject to the provisions of the
--------
Securityholders' Agreement.
All Warrant Shares issuable upon an Automatic Exercise Event shall be
validly issued, fully paid and nonassessable and free from all liens and other
encumbrances thereon, other than liens or other encumbrances created by the
holder thereof or the restrictions set forth in the Securityholders' Agreement.
The Company will not close its books against the transfer of a Warrant
or of any
Warrant Shares in any manner which interferes with the exercise of a Warrant
pursuant to an Automatic Exercise Event. The Company will from time to time take
all such action as may be necessary to assure that the par value per share of
the unissued Common Stock acquirable upon exercise of a Warrant pursuant to an
Automatic Exercise Event is at all times equal to or less than the Exercise
Price then in effect.
For purposes of this Agreement, an "Automatic Exercise Event" shall
------------------------
mean either (a) the completion of a sale of shares of any class of the Common
Stock to the public pursuant to an effective registration statement (other than
a registration statement on Form S-8 or any similar or successor form) filed
under the Securities Act pursuant to which the Company becomes listed on a
national securities exchange or on the NASDAQ Stock Market (the "Initial Public
--------------
Offering"), (b) any "person" or "group," (each as defined in Rules 13d-3 and
--------
13d-5 under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act")) other than BLUM Capital Partners, L.P. ("BLUM") and its affiliates, is or
----
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of more than 50% of the total voting
power of the outstanding voting stock of the Company, including by way of
merger, consolidation or otherwise, and BLUM and its affiliates cease to control
the Company's Board of Directors, (c) any sale of all or substantially all of
the assets of the Company and its subsidiaries to any "person" or "group," (each
as defined in Rules 13d-3 and 13d-5 under the Exchange Act) other than BLUM and
its affiliates, or (d) any merger, consolidation or other transaction or series
or related transactions after the consummation of which the shares owned by the
holders of the Company's outstanding voting stock possessing a majority of the
voting power to elect the Company's Board of Directors immediately prior to the
occurrence of such transaction or transactions cease to constitute a majority of
the Company's outstanding voting stock possessing the voting power to elect the
Company's Board of Directors (or equivalent governing body).
Transfer, Division and Combination.
----------------------------------
Subject to the Securityholders' Agreement, the Warrants are, and all
rights thereunder are, transferable, in whole or in part, on the books of the
Company to be maintained for such purpose, upon (a) surrender of a Warrant at
the office of the Company maintained for such purpose pursuant to Section 12(d),
together with a written assignment of such Warrant duly executed by the holder
thereof or its agent or attorney and payment of funds sufficient to pay any
stock transfer taxes payable upon the making of such transfer, and (b) a signed
agreement by the assignee or assignees to become a party to the Securityholders'
Agreement prior to the exercise of such Warrant, provided, that, if Warrants are
transferred to any person or entity that is entitled to hold only Class A Common
Shares, par value $0.01, of the Company ("Class A Common Shares") pursuant to
---------------------
the terms of the Company's Amended and Restated Certificate of Incorporation or
the Securityholders' Agreement then such transferred Warrants shall only be
exercisable for Class A Common Shares. Upon such surrender and, if required,
such payment, the Company shall, execute and deliver a new Warrant or Warrants
in the name of the assignee or assignees and in the denominations specified in
such instrument of assignment, and the surrendered Warrant shall promptly be
canceled. If and when a Warrant is assigned in blank, the Company may (but shall
not be obligated to) treat the bearer thereof as the absolute owner of such
Warrant for all purposes and the Company shall not be affected by any notice to
the contrary. A Warrant, if properly assigned in compliance with this Section 3,
may be exercised by an assignee for the purchase of shares of Common Stock or
Class A Common Stock, as the
case may be, without having a new Warrant issued.
A Warrant may, be divided or combined with other Warrants upon
presentation at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued, signed by the holder hereof or its agent or attorney. Subject to
compliance with the preceding paragraph, as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.
The Company agrees to maintain at its aforesaid office books for the
registration and transfer of the Warrants.
Payment of Taxes.
----------------
The Company will pay all documentary stamp taxes attributable to the
initial issuance of Warrant Shares upon the exercise of Warrants; provided,
--------
however, that the Company shall not be required to pay any tax or taxes which
-------
may be payable in respect of any transfer involved in the issue of any Warrants
or any certificates for Warrant Shares in a name other than that of the
registered holder of a Warrant surrendered upon the exercise of a Warrant, and
the Company shall not be required to issue or deliver such Warrant unless or
until the person or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.
Mutilated or Missing Warrants.
-----------------------------
In case any of the Warrant shall be mutilated, lost, stolen or
destroyed, the Company may in its discretion issue, in exchange and substitution
for and upon cancellation of the mutilated Warrant, or in lieu of and
substitution for the Warrant lost, stolen or destroyed, a new Warrant of like
tenor and representing an equivalent number of Warrants, but only upon receipt
of evidence satisfactory to the Company of such loss, theft or destruction of
such Warrant and indemnity, if requested, also satisfactory to them. Applicants
for such substitute Warrants shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
Reservation of Warrant Shares.
-----------------------------
The Company will at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Common
Stock or its authorized and issued Common Stock held in its treasury, for the
purpose of enabling it to satisfy any obligation to issue Warrant Shares upon
exercise of Warrants, the maximum number of shares of Common Stock which may
then be deliverable upon the exercise of all outstanding Warrants.
The Company or, if appointed, the transfer agent for the Common Stock
(the "Transfer Agent") and every subsequent transfer agent for any shares of the
--------------
Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be required for such purpose.
The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Company will furnish such Transfer Agent a copy
of all notices of adjustments and certificates related thereto transmitted to
each holder pursuant to Section 9 hereof.
Adjustment of Exercise Price.
----------------------------
The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 7. For purposes of this
Section 7, "Common Stock" means shares now or hereafter authorized of any class
of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount.
Adjustment for Change in Capital Stock.
--------------------------------------
If the Company:
pays a dividend or makes a distribution on its Common Stock in shares of its
Common Stock;
subdivides its outstanding shares of Common Stock into a greater number of
shares;
combines its outstanding shares of Common Stock into a smaller number of shares;
makes a distribution on its Common Stock in shares of its capital stock other
than Common Stock; or
issues by reclassification of its Common Stock any shares of its capital stock;
then the Exercise Price in effect immediately prior to such action and the
number and kind of shares into which a Warrant is exercisable shall all be
adjusted appropriately so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which he would have owned immediately following such action if such
Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If after an adjustment a holder of a Warrant upon exercise of it may
receive shares of two or more classes of capital stock of the Company, the Board
of Directors of the Company shall determine the allocation of the adjusted
Exercise Price between the classes of capital stock. After such allocation, the
exercise privilege and the Exercise Price of each class of capital stock shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section.
Such adjustment shall be made successively whenever any event listed
above
shall occur.
Adjustment for Rights Issue.
---------------------------
If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them for a period expiring within 60 days
after the record date for such distribution to purchase shares of Common Stock
at a price per share less than the current market price per share on that record
date, the Exercise Price shall be adjusted in accordance with the formula:
O + N x P
---------
E' = E x M
---------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the
record date.
N = the number of additional shares of Common Stock offered
pursuant to such rights issue.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the
record date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
Adjustment for Other Distributions.
----------------------------------
If the Company distributes to all holders of its Common Stock any
assets (excluding cash) or debt securities or any rights or warrants to purchase
debt securities, assets or other securities, the Exercise Price shall be
adjusted in accordance with the formula:
E' = E x M - F
---------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share of Common Stock on the
record date mentioned below.
F = the aggregate fair market value on the record date of the
assets, securities, rights or warrants divided by the
number of outstanding shares of Common Stock on the record
date for such distribution. The Board of Directors of the
Company shall determine the fair market value.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
Adjustment for Common Stock Issue:
---------------------------------
If the Company issues shares of Common Stock for a consideration per
share less than the current market price per share on the date the Company fixes
the offering price of such additional shares, the Exercise Price shall be
adjusted in accordance with the formula:
P
-
E' = E x O + M
-------
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the issuance of
such additional shares.
M = the current market price per share on the date of issuance
of such additional shares.
A = the number of shares outstanding immediately after the
issuance of such additiona| shares.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
any of the transactions described in subsections (b) and (c) of this Section 7,
the exercise of Warrants, or the conversion or exchange of other securities
convertible into, or exchangeable or exercisable for, Common Stock,
Common Stock issued to the Company's employees under bona fide employee benefit
plans adopted by the Board of Directors and approved by the holders of Common
Stock when required by law, if such Common Stock would otherwise be covered by
this subsection (d),
Common Stock issued upon the exercise of rights or warrants issued to the
holders of Common Stock,
Common Stock issued to shareholders of any person which merges into the Company
in proportion to their stock holdings of such person immediately prior to such
merger, upon such merger,
Common Stock issued in a bona fide public offering pursuant to a firm commitment
underwriting,
Common Stock issued in a bona fide private placement to, or through a placement
agent which is, a member firm of the National Association of Securities Dealers,
Inc., or
Common Stock issued as a dividend on any preferred stock in accordance with the
stated terms of such preferred stock and in lieu of cash dividends otherwise
payable on such preferred stock pursuant to the instrument under which the
preferred stock was issued.
Adjustment for Convertible Securities Issue.
-------------------------------------------
If the Company issues any securities convertible into or exchangeable
or exercisable for Common Stock (other than securities issued in transactions
described in subsections (b) and (c) of this Section 7) for a consideration per
share of Common Stock initially deliverable upon conversion or exchange of such
securities less than the current market price per share on the date of issuance
of such securities, the Exercise Price shall be adjusted in accordance with this
formula:
P
-
E' = E x O + M
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such securities.
P = the aggregate consideration received for the issuance of
such securities.
M the current market price per share of Common Stock on the
date of issuance of such securities.
D = the maximum number of shares deliverable upon conversion or
in exchange for such securities at the
initial conversion or exchange rate.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange of
such securities has not been issued when such securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.
This subsection (e) does not apply to:
convertible securities issued to shareholders of any person which merges into
the Company, or with a subsidiary of the Company, in proportion to their stock
holdings of such person immediately prior to such merger, upon such merger,
convertible securities issued in a bona fide public offering pursuant to a firm
commitment underwriting,
convertible securities issued in a bona fide private placement through a
placement agent which is a member firm of the National Association of Securities
Dealers, Inc.,
rights, warrants and convertible and exchangeable securities outstanding on or
prior to the date of issuance of the Warrant, or
convertible securities or warrants issued in connection with the incurrence of
debt by the Company or any of its subsidiaries, so long as the fair value
allocable to such convertible securities or warrants (taking into account the
terms of the debt), together with any consideration payable to the Company upon
conversion or exercise of such convertible securities or warrants, treating such
convertible securities or warrants on an as converted basis, is no less than the
then current market price of Common Stock on the date of issuance of such
convertible securities or warrants.
Current Market Price.
--------------------
Subject to the last two sentences of this subsection (f), in
subsections (b), (c), (d) and (e) of this Section 7, the current market price
per share of Common Stock on any date is the average of the Quoted Prices of the
Common Stock for 30 consecutive trading days commencing 45 trading days before
the date in question. The "Quoted Price" of the Common Stock is the last
------------
reported sales price of the Common Stock as reported by NASDAQ National Market,
or if the Common Stock is listed on a securities exchange, the last reported
sales price of the Common Stock on such exchange which shall be for consolidated
trading if applicable to such exchange, or if neither so reported or listed, the
last reported bid price of the Common Stock. In the absence of one or more such
quotations (including, without limitation, during the period prior to the
Initial Public Offering), the Board of Directors of the Company shall determine
the current market price on the basis of such quotations, if available, or other
valuation information as it in good faith considers appropriate. In the event of
the Initial Public Offering, the current market price per share of Common Stock
shall be the Quoted Price on the day of such Initial Public Offering.
Consideration Received.
----------------------
For purposes of any computation respecting consideration received
pursuant to subsections (d) and (e) of this Section 7, the following shall
apply:
in the case of the issuance of shares of Common Stock for cash, the
consideration shall be the amount of such cash, provided that in no case shall
any deduction be made for any commissions, discounts or other expenses incurred
by the Company for any underwriting of the issue or
otherwise in connection therewith;
in the case of the issuance of shares of Common Stock for a consideration in
whole or in part other than cash, the consideration other than cash shall be
deemed to be the fair market value thereof as determined in good faith by the
Board of Directors (irrespective of the accounting treatment thereof), whose
determination shall be conclusive; and
in the case of the issuance of securities convertible into or exchangeable for
shares, the aggregate consideration received therefor shall be deemed to be the
consideration received by the Company for the issuance of such securities plus
the additional minimum consideration, if any, to be received by the Company upon
the conversion or exchange thereof (the consideration in each case to be
determined in the same manner as provided in clauses (1) and (2) of this
subsection).
When De Minimis Adjustment May Be Deferred.
------------------------------------------
No adjustment in the Exercise Price need be made unless the adjustment
would require on increase or decrease of at least 1% in the Exercise Price. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment.
All calculations under this Section shall be made to the nearest cent
or nearest 1/100th of a share as the case may be.
When No Adjustment Required.
---------------------------
No adjustment need be made for a transaction referred to in subsection
(a), (b), (c), (d) or (e) of this Section 7 if Warrant holders are permitted to
participate in the transaction (without being required to exercise their
Warrants in order to do so) on a basis and with notice that the Board of
Directors of the Company determines to be fair and appropriate in light of the
basis and notice on which holders of Common Stock participate in the
transaction.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
Notice of Adjustment.
--------------------
Whenever the Exercise Price is adjusted, the Company shall provide the
notices required by Section 9 hereof.
Voluntary Reduction.
-------------------
The Company from time to time may reduce the Exercise Price by any
amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the
period; provided, however, that in no event may the Exercise Price be less than
-------- -------
the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail to
Warrant holders a notice of the reduction. The Company shall mail the notice at
least 15 days before the date the reduced Exercise Price takes effect. The
notice shall state the reduced Exercise Price and the period it will be in
effect.
A reduction of the Exercise Price pursuant to this clause (k) does not
change or adjust the Exercise Price otherwise in effect for purposes of
subsections (a), (b), (c), (d) and (e) of this Section 7.
Reorganization of Company.
-------------------------
If the Company consolidates or merges with or into, or sells,
transfers or leases all or substantially all of its assets to, any person
(including, without limitation, in a transaction that is an Automatic Exercise
Event), upon consummation of such transaction the Warrants shall automatically
become exercisable (or, in the event of an Automatic Exercise Event, be
exercised) for the kind and amount of securities, cash or other assets which the
holder of a Warrant would have owned immediately after the consolidation,
merger, sale, transfer or lease if the holder had exercised the Warrant
immediately before the effective date of the transaction. Unless such
transaction shall have been an Automatic Exercise Event, concurrently with the
consummation of such transaction, the corporation formed by or surviving any
such consolidation or merger, if other than the Company, or the person to which
such transfer, sale or lease shall have been made, shall enter into a
supplemental Warrant Agreement so providing and further providing for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Section. The successor Company shall mail to
warrant holders a notice describing the supplemental Warrant Agreement.
If the issuer of securities deliverable upon exercise of Warrants
under the supplemental Warrant Agreement is an affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement.
If this subsection (l) applies, subsections (a), (b), (c), (d) and (e)
of this Section 7 do not apply.
Determinations Conclusive.
-------------------------
Any determination that the Company or the Board of Directors of the
Company must make pursuant to subsection (a), (c), (d), (e), (f), (g) or (i) of
this Section 7 is conclusive, provided the Board of Directors has acted
reasonably.
When Issuance or Payment May Be Deferred.
----------------------------------------
In any case in which this Section 7 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event (i)
issuing to the holder of any Warrant exercised after such record date the
Warrant Shares and such securities or assets, if any, issuable upon such
exercise
over and above the Warrant Shares and such securities or assets, if any,
issuable upon such exercise on the basis of the Exercise Price and (ii) paying
to such holder any amount in cash in lieu of a fractional share pursuant to
Section 8; provided, however, that the Company shall deliver to such holder a
-------- -------
due bill or other appropriate instrument evidencing such holder's right to
receive such additional warrant Shares, other capital stock and cash upon the
occurrence of the event requiring such adjustment.
Adjustment in Number of Shares.
------------------------------
Upon each adjustment of the Exercise Price pursuant to this Section 7,
each Warrant outstanding prior to the making of the adjustment in the Exercise
Price shall thereafter evidence the right to receive upon payment of the
adjusted Exercise Price that number of shares of Common Stock (calculated to the
nearest hundredth) obtained from the following formula:
N' = N x E
---
E'
where:
N' = the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted
Exercise Price.
N = payment of the Exercise Price prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
Fractional Interests.
--------------------
The Company shall not be required to issue fractional Warrant Shares
on the exercise of Warrants. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full Warrant
Shares which shall be issuable upon the exercise thereof shall be computed on
the basis of the aggregate number of Warrant Shares purchasable on exercise of
the Warrants so presented. If any fraction of a Warrant Share would, except for
the provisions of this Section 8 be issuable on the exercise of any Warrants (or
specified portion thereof), the Company shall pay an amount in cash equal to the
current Exercise Price, multiplied by such fraction.
Notices to Warrant Holders.
--------------------------
Upon any adjustment of the Exercise Price pursuant to Section 7, the
Company shall promptly thereafter cause to be given to each of the registered
holders of the Warrants at its address appearing on the Warrant register written
notice of such adjustment by first-class mail, postage prepaid. Where
appropriate, such notice may be given in advance and included as a part of the
notice required to be mailed under the other provisions of this Section 7.
In case:
the Company shall authorize the issuance to all holders of shares of Common
Stock of rights, options or warrants to subscribe for or purchase shares of
Common Stock or of any other subscription rights or warrants; or
the Company shall authorize the distribution to all holders of shares of Common
Stock of evidences of indebtedness or assets, including cash dividends or cash
distributions payable out of consolidated current or retained earnings, but not
including dividends payable in shares of Common Stock or distributions referred
to in subsection (a) of Section 7 hereof; or
of any consolidation or merger to which the Company is a party and of which
approval of any shareholders of the Company is required, or of the conveyance,
sale, transfer or lease of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of Common
Stock issuable upon exercise of the Warrants (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or a tender offer or exchange offer for
shares of Common Stock; or
of the voluntary or involuntary dissolution, liquidation or winding up of the
Company; or
the Company proposes to take any action (other than actions of the character
described in Section 7(a)) that would require an adjustment of the Exercise
Price pursuant to Section 7;
then the Company shall cause to be given to each of the registered holders of
the Warrants at his address appearing on the Warrant register, at least 20 days
(or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record date hereinafter specified, or promptly in the case of events
for which there is no record date, by first-class mail, postage prepaid, a
written notice stating (i) the date as of which the holders of record of shares
of Common Stock to be entitled to receive any such rights, options, warrants or
distribution are to be determined, or (ii) the initial expiration date set forth
in any tender offer or exchange offer for shares of Common Stock, or (iii) the
date on which any such consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up is expected to become effective or consummated, and
the date as of which it is expected that holders of record of shares of Common
Stock shall be entitled to exchange such shares for securities or other
property, if any, deliverable upon such reclassification, consolidation, merger,
conveyance, sale, transfer, lease, dissolution, liquidation, winding up or other
action. The failure to give the notice required by this Section 9 or any defect
therein shall not affect the legality or validity of any distribution, right,
option, warrant, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up, or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrants shall be
construed as conferring upon the holders thereof the right to vote or to consent
or to receive notice as shareholders in respect of the meetings of shareholders
or the election of directors of the Company or any other matter or any rights
whatsoever as shareholders of the Company.
Amendments.
----------
The terms of this Warrant Agreement and the Warrants may be amended by
the Company, and the observance of any term herein or therein may be waived, but
only with the written consent of the holders of Warrants representing a majority
in number of the total Warrant
Shares at the time purchasable upon the exercise of all then outstanding
Warrants, provided that no such action may change the Exercise Price (other than
in accordance with Section 7(k) hereof) without the written consent of all
holders of Warrants affected thereby.
Miscellaneous.
-------------
Issue Date. The provisions of this Warrant shall be construed and shall be given
----------
effect in all respects as if it had been issued and delivered by the Company on
the date hereof.
Successors. This Warrant shall be binding upon any successors or assigns of the
----------
Company.
Governing Law. This Warrant shall be governed by and construed in accordance
-------------
with the laws of the State of Delaware.
Office of the Company. So long as the Warrants remain outstanding, the Company
---------------------
shall maintain an office where the Warrants may be presented for exercise,
transfer, division and combination. Such office shall be at 200 North Sepulveda
Boulevard, El Segundo, California 90245-4380, unless and until the Company shall
designate and maintain another office for such purposes, in which case the
Company shall deliver notice of such change to all holders of outstanding
Warrants in the manner set forth herein.
Headings. The headings used in this Warrant are used for convenience only and
--------
are not to be considered in construing or interpreting this agreement.
Notices. Unless otherwise provided, any notice required or permitted under this
-------
Warrant shall be given in writing and shall be deemed effectively given upon
personal delivery to the party to be notified or three days after being sent via
air courier, in all cases addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten days advance written notice to the other
party. Notwithstanding the foregoing, notice may be given by telex or facsimile
provided that appropriate confirmation of receipt is received.
Saturdays, Sundays, Holidays. If the last or appointed day for the taking of
----------------------------
any action or the expiration of any right required or granted herein shall be a
Saturday or a Sunday or shall be a legal holiday in the State of California,
then such action may be taken or such right may be exercised on the next
succeeding day not a legal holiday.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
CBRE HOLDING, INC.
By: /s/ Walter V. Stafford
----------------------
Name: Walter V. Stafford
Title: Secretary
FS EQUITY PARTNERS III, L.P.
By: FS Capital Partners, L.P.
Its: General Partner
By: FS Holdings, Inc.
Its: General Partner
By: /s/ James F. Simmons
--------------------
Name: James F. Simmons
Title: Chief Financial Officer
FS EQUITY PARTNERS INTERNATIONAL, L.P.
By: FS&Co. International, L.P.
Its: General Partner
By: FS International Holdings Limited
Its: General Partner
By: /s/ James F. Simmons
--------------------
Name: James F. Simmons
Title: Vice President
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FRONT]
EXERCISABLE ON OR AFTER AUGUST 26, 2007
AND ON OR BEFORE AUGUST 27, 2007
OR UPON AN AUTOMATIC EXERCISE EVENT
No. ___ _________ Warrants
WARRANT CERTIFICATE
CBRE HOLDING, INC.
This Warrant Certificate certifies that ________________________, or
registered assigns, is the registered holder of ___________________ Warrants
expiring ___________________ (the "Warrants") to purchase shares of Class B
--------
Common Stock (the "Common Stock") of CBRE Holding, Inc. (the "Company"). Each
------------ -------
Warrant entitles the holder, (i) unless an Automatic Exercise Event shall occur
on or prior to August 27, 2007, upon exercise to receive from the Company on or
after August 26, 2007 and on or before 5:00 p.m. Los Angeles Time on August 27,
2007 one fully paid and nonassessable share of Common Stock (a "Warrant Share")
-------------
at the initial exercise price (the "Exercise Price") of $30.00, payable in
--------------
lawful money of the United States of America or in Warrant Shares by "cashless
exercise," upon surrender of this Warrant Certificate and payment of the
Exercise Price at the principal office of the Company, but only subject to the
conditions set forth herein and in the Warrant Agreement referred to on the
reverse hereof, or (ii) upon the occurrence of an Automatic Exercise Event on or
prior to August 27, 2007, to receive automatically from the Company a Warrant
Share at the Exercise Price, payable by "cashless exercise," upon surrender of
this Warrant Certificate and payment of the Exercise Price at the principal
office of the Company, but only subject to the conditions set forth herein and
in the Warrant Agreement referred to on the reverse hereof. The Exercise Price
and number of Warrant Shares issuable upon exercise of the Warrants are subject
to adjustment upon the occurrence of certain events set forth in the Warrant
Agreement.
Except in connection with an Automatic Exercise Event, no warrant may
be exercised before August 26, 2007 or after 5:00 PM, Los Angeles time, on
August 27, 2007 and to the extent not exercised by, or an Automatic Exercise
Event shall not have occurred by, such time, such Warrants shall become void.
This Warrant Certificate shall be governed and construed in accordance
with the internal laws of the State of Delaware.
IN WITNESS WHEREOF, CBRE Holding, Inc. has caused this Warrant
Certificate to be signed by its President and by its Secretary, each by his
signature or a facsimile of his signature.
Dated:
By:
President
By:
Secretary
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring August 27, 2007 entitling the holder on
exercise to receive shares of Class B Common Stock, of the Company (the "Common
------
Stock"), $.01 par value, and are issued or to be issued pursuant to a Warrant
-----
Agreement dated as of _________ ____, 2001 (the "Warrant Agreement"), duly
-----------------
executed and delivered by the Company, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
------- ------
the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Company.
Unless an Automatic Exercise Event shall occur on or prior to August
27, 2007, warrants may be exercised at any time on or after August 26, 2007 and
on or before August 27, 2007. The holder of Warrants evidenced by this Warrant
Certificate may exercise them, subject to the limitations set forth in the
Warrant Agreement, by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price in cash or immediately available funds or in
Warrant Shares by "cashless exercise," at the principal office of the Company.
In the event that upon any exercise of Warrants evidenced hereby the number of
Warrants exercised shall be less than the total number of Warrants evidenced
hereby, there shall be issued to the holder hereof or his assignee a new Warrant
Certificate evidencing the number of Warrants not exercised.
Upon the occurrence of an Automatic Exercise Event on or prior to
August 27, 2007, the Warrants evidenced by this Warrant Certificate shall
automatically be exercised, subject to the limitations set forth in the Warrant
Agreement, and the holder thereof shall be entitled to receive, upon
surrendering this Warrant Certificate, together with payment of the Exercise
Price in Warrant Shares by "cashless exercise," at the principal office of the
Company, the number of Warrant Shares resulting after subtracting such Exercise
Price.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the number of Warrant Shares into which this
Warrant is exercisable set forth on the face hereof may, subject to certain
conditions, be adjusted. No fractions of a share of Common stock will be issued
upon the exercise of any Warrant, but the Company will pay the cash value
thereof determined as provided in the Warrant Agreement. No adjustment shall be
made for any dividends on any Common Stock issuable upon exercise of this
Warrant.
Warrant Certificates, where surrendered at the principal office of the
Company by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the
principal office of the Company a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement
(including, without limitation, delivery to the Company of the written agreement
of such transferee(s) to become party to the Securityholders' Agreement, dated
as of _______ ___, 2001, by and among the Company and the other parties thereto,
if such transferee(s) are not already party thereto, prior to receipt from the
Company of any Warrant Shares as a result of the exercise of the Warrants
represented by such Warrant Certificate), without charge except for any tax or
other governmental charge imposed in connection therewith.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitle any holder hereof to
any rights of a stockholder of the Company.
EXHIBIT B
ELECTION TO PURCHASE
(To Be Executed Upon Exercise Of Warrant Pursuant To Section 1)
The undersigned hereby irrevocably elects to exercise the right
represented by this Warrant, to receive __________ shares of Class B Common
Stock and hereby tenders payment for such shares [to the order of BLUM CB
Holding Corp. by cash or immediately available funds in the amount of $ _______]
[by delivery to the Company of __________ Warrant Shares with respect to which
this Warrant is being surrendered in payment of the aggregate Exercise Price for
the Warrant Shares to be delivered to the holder] in accordance with the terms
hereof. The undersigned requests that a certificate for such shares be
registered in the name of __________________, whose address is
__________________. If said number of shares is less than all of the shares of
Common Stock purchasable hereunder, the undersigned requests that a new Warrant
representing the remaining balance of such shares be registered in the name
of____________________, whose address is ______________________, and that such
Warrant be delivered to __________________, whose address
is____________________.
Date:
Print Name
Signature Guaranteed
__________________________
The signature must be guaranteed by a bank or trust company having an office in
Los Angeles, California, or by a firm having membership on the New York Stock
Exchange.
EX-5
7
dex5.txt
AMENDMENT TO CONTRIBUTION & VOTING AGREEMENT
EXHIBIT 5
---------
AMENDMENT, dated as of July 19, 2001 (this "Amendment"), to the
---------
Amended and Restated Contribution and Voting Agreement, dated as of May 31, 2001
(the "Agreement"), among the parties listed on the signature pages hereto.
---------
Capitalized terms defined in the Agreement when used in this Amendment shall
have the same meanings set forth in the Agreement.
Each of the parties hereto agrees that anything in the Agreement to
the contrary notwithstanding, the amount of the BLUM Cash Contribution will be
reduced by the gross cash proceeds (not to exceed $10 million) received by
Holding from the purchase by California Public Employees' Retirement System of
Holding Class A Common Stock on the date of the Contribution Closing pursuant to
a Subscription Agreement in the form of Annex I hereto (and there will be a
corresponding reduction in the number of shares of Holding Class B common stock
issued to BLUM).
Each of the parties hereto agrees that (i) the number of shares
contributed by The Koll Holding Company will be reduced to 656,052 shares, a
reduction of 78,238 shares and (ii) the BLUM Cash Contribution will be increased
by $1,251,808 (and there shall be a corresponding increase in the number of
shares of Holding Class B Common Stock issued to BLUM).
Each of the parties hereto agrees that the number of shares
contributed by Raymond E. Wirta will be reduced to 30,000 shares, and that Mr.
Wirta will contribute to Holding $80,000 in cash at the Contribution Closing so
that the total number of shares of Holding Class B Common Stock issued to Mr.
Wirta under the Contribution and Voting Agreement will remain at 35,000 shares.
Each of the parties hereto agrees that (i) the number of shares
contributed by W. Brett White will be reduced to 57,500 shares; and (ii) the
BLUM Cash Contribution will be increased by $17,200 (and there shall be a
corresponding increase in the number of shares of Holding Class B Common Stock
issued to BLUM).
Each of the parties hereto agrees that a portion of the BLUM Stock
Contribution may be made by Blum Strategic Partners II, L.P.
Each of the parties hereto agrees that the Securityholders Agreement
will be in the form of Annex II hereto.
This Amendment shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts
executed and to be performed entirely within that state.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CBRE HOLDING, INC.
By:
Name: Claus J. Moller
Title: President
BLUM CB CORP.
By:
Name: Claus J. Moller
Title: President
RCBA STRATEGIC PARTNERS, L.P.
By: RCBA GP, L.L.C., its general partner
By:
Name: Claus J. Moller
Title: Member
FS EQUITY PARTNERS III, L.P.
By: FS Capital Partners, L.P., its general
partner
By: FS Holdings, Inc., its general partner
By:
Name:
Title:
FS EQUITY PARTNERS INTERNATIONAL, L.P.
By: FS&Co. International, L.P., its general
partner
By: FS International Holdings Limited, its
general partner
By:
Name:
Title:
THE KOLL HOLDING COMPANY
By:
Frederic V. Malek
Raymond E. Wirta
W. Brett White
Donald M. Koll