-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KXExjJ5BhWxaf3QcPnMWZsfWJWRlF2lU7303QI57nZ5QAz7RGawAwHF6IHSFs2UL TkR2wxmcfC26mDoDsaHVaw== 0001021408-01-501692.txt : 20010606 0001021408-01-501692.hdr.sgml : 20010606 ACCESSION NUMBER: 0001021408-01-501692 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20010605 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CB RICHARD ELLIS SERVICES INC CENTRAL INDEX KEY: 0000852203 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 521616016 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-46943 FILM NUMBER: 1654509 BUSINESS ADDRESS: STREET 1: 200 NORTH SEPULVEDA BLVD CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3105638600 MAIL ADDRESS: STREET 1: 200 NORTH SEPULVEDA BLVD CITY: EL SEGUNDO STATE: CA ZIP: 90245 FORMER COMPANY: FORMER CONFORMED NAME: CB COMMERCIAL HOLDINGS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CB ACQUISITION CORP DATE OF NAME CHANGE: 19890731 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BLUM CAPITAL PARTNERS LP CENTRAL INDEX KEY: 0000938775 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 943205364 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 909 MONTGOMERY STREET # 400 CITY: SAN FRANCISCO STATE: CA ZIP: 94133 BUSINESS PHONE: 4154341111 MAIL ADDRESS: STREET 1: 909 MONTGOMERY STREET STREET 2: SUITE 400 CITY: SAN FRANCISCO STATE: CA ZIP: 94133 FORMER COMPANY: FORMER CONFORMED NAME: BLUM RICHARD C & ASSOCIATES L P DATE OF NAME CHANGE: 19970219 SC 13D/A 1 dsc13da.txt SCHEDULE 13D AMENDMENT #7 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 7)* CB RICHARD ELLIS SERVICES, INC. ------------------------------- (Name of Issuer) Common Stock, $0.01 par value ----------------------------------- (Title of Class of Securities) 12489L108 --------- (CUSIP Number) Murray A. Indick BLUM Capital Partners, L.P. 909 Montgomery Street, Suite 400 San Francisco, CA 94133 (415) 434-1111 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 31, 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 which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. *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). - -------------------------------------------------------------------------------- CUSIP No. 12489L108 13D Page 2 of 6 - -------------------------------------------------------------------------------- This Amendment No. 7 amends the Statement on Schedule 13D filed with the Securities and Exchange Commission (the "Commission") with respect to CB ---------- Richard Ellis Services, Inc. (the "Issuer") on November 18, 1999, Amendment No. ------ 1 as filed with the Commission on January 13, 2000, Amendment No. 2 as filed with the Commission on November 13, 2000, Amendment No. 3 as filed with the Commission on December 4, 2000, Amendment No. 4 as filed with the Commission on February 28, 2001, Amendment No. 5 as filed with the Commission on April 25, 2001, and Amendment No. 6 as filed with the Commission on May 24, 2001 (as amended, the "Schedule 13D") by BLUM CB Corp, a Delaware corporation; CBRE ------------ Holding, Inc., a Delaware corporation formerly known as BLUM CB Holding Corp.; BLUM Capital Partners, L.P., a California limited partnership; Richard C. Blum & Associates, Inc., a California corporation; RCBA Strategic Partners, L.P., a Delaware limited partnership; RCBA GP, L.L.C., a Delaware limited liability company; and Richard C. Blum. Unless otherwise defined herein, all capitalized terms shall have the meanings ascribed to them in the Schedule 13D. Items 2, 3, 4, 6 and 7 of the Schedule 13D are hereby amended and supplemented as follows: Item 2. Identity and Background. Item 2 of the Schedule 13D is hereby amended by adding the following paragraph: As described in Item 4 below, CBRE Holding, Inc., a Delaware corporation formerly known as BLUM CB Holding Corp. ("Holding"), and its ------- subsidiary Newco entered into an Amended and Restated Agreement and Plan of Merger with the Issuer dated as of May 31, 2001 (as amended, the "Agreement") (attached hereto as Exhibit 1), pursuant to which, on the --------- terms and conditions set forth therein, Newco, a wholly owned subsidiary of Holding, would be merged with and into the Issuer (the "CBRE Merger"), and ----------- holders of Common Stock (other than certain holders described in Item 4 below) would receive consideration of $16.00 per share in cash (the "CBRE ---- Merger Consideration") in exchange for their shares. -------------------- Item 3. Source of Funds and Other Consideration. Item 3 of the Schedule 13D is hereby amended by adding the following paragraphs: In connection with the Agreement, Holding has entered into an Amended and Restated Contribution and Voting Agreement, dated as of May 31, 2001 (as amended, the "Contribution Agreement") (attached hereto as Exhibit 2), ---------------------- with Newco, Strategic, FSEP III, FSEP International, Koll Holding, Malek, Wirta and White in order to provide a portion of the capital necessary to fund the Agreement. Pursuant to the Contribution Agreement, each of Strategic, FSEP III, FSEP International, Koll Holding, Malek, Wirta and White have agreed to contribute all of the Common Stock that they beneficially own to Holding immediately prior to the closing of the CBRE Merger. Such shares of Common Stock will be cancelled at the effective time of the CBRE Merger. In addition, - -------------------------------------------------------------------------------- CUSIP No. 12489L108 13D Page 3 of 9 - -------------------------------------------------------------------------------- concurrent with such contributions of Common Stock to Holding, Strategic has agreed to contribute to Holding between $40.9 million and $96.2 million of cash (as determined by Holding no less than twelve business days prior to the closing of the transaction contemplated by the Contribution Agreement). In addition to the financing discussed above with respect to the Contribution Agreement, Newco entered into a Purchase Agreement, dated as of May 31, 2001 (the "Purchase Agreement") (attached hereto as Exhibit 12), ------------------ with Credit Suisse First Boston ("CSFB") and the other parties thereto ---- (together with CSFB in such capacity, the "Initial Purchasers"), pursuant ------------------ to which Newco has agreed to issue and sell, and the Initial Purchasers have agreed to purchase, upon the terms and subject to the conditions set forth therein, $229,000,000 aggregate principal amount of 11 1/4% Senior Subordinated Notes due 2011 (the "Senior Subordinated Notes") of Newco. ------------------------- The completion of the issuance and sale of the Senior Subordinated Notes is scheduled to occur on June 7, 2001 and is subject to certain customary conditions contained in the Purchase Agreement. In the event that the issuance and sale of the Senior Subordinated Notes is completed, the Initial Purchasers will purchase the Senior Subordinated Notes for an aggregate purchase price of $225,629,000, which proceeds will be deposited in an escrow account. If the CBRE Merger is not completed prior to the 75th day after the initial issuance of the Senior Subordinated Notes or the Agreement is terminated prior to the completion of the CBRE Merger, then Newco will be required to redeem the Senior Subordinated Notes for cash. If the CBRE Merger is completed within 75 days after the completion of the initial issuance of the Senior Subordinated Notes, the Issuer will assume all of the obligations of Newco under the Senior Subordinated Notes. This Schedule 13D shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Senior Subordinated Notes to be offered and sold will not be registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. In addition to the financing discussed above with respect to the Contribution Agreement, CSFB provided Newco with a Commitment Letter on February 23, 2001, which was amended on May 31, 2001 (as amended, the "CSFB ---- Commitment Letter") (attached hereto as Exhibits 5 and 13) and DLJ ----------------- Investment Funding, Inc. ("DLJ") has provided Holding with a Commitment --- Letter on February 23, 2001, which was amended on May 31, 2001 (as amended, the "DLJ Commitment Letter" and together, the "Commitment Letters") --------------------- ------------------ (attached hereto as Exhibits 6 and 14), each with respect to certain debt financing contemplated by the Agreement. Subject to the terms and conditions of the CSFB Commitment Letter, CSFB has committed to provide to Newco at least $225 million of term loan debt financing (subject to reduction as provided in the CSFB Commitment Letter, the "Term Loans") and ---------- a $100 million revolving credit facility (the "Revolving Loan"). Subject -------------- to the terms and conditions of the DLJ Commitment Letter, DLJ has committed to purchase from Holding at least $65 million of 16% Senior Notes of Holding, together with common stock of Holding representing 3.0% of Holding's total common stock including any options granted by Holding to - -------------------------------------------------------------------------------- CUSIP No. 12489L108 13D Page 4 of 9 - -------------------------------------------------------------------------------- management of Holding and the Issuer (the "Mezzanine Financing", and ------------------- together with the Term Loans and the Revolving Loan, the "Financings"). ---------- The Commitment Letters have been obtained, subject to the terms and conditions thereof, to pay, together with the proceeds received pursuant to the Contribution Agreement and the Purchase Agreement, the aggregate CBRE Merger Consideration pursuant to the CBRE Merger, to refinance indebtedness of the Issuer that will become due as a result of the transactions contemplated by the Agreement, to pay all related fees and expenses and to provide additional financing for future working capital and general corporate needs of the Issuer and its subsidiaries. CSFB's and DLJ's commitments to provide the Financings are subject to execution of definitive agreements with respect thereto and other conditions as set forth in the applicable Commitment Letters. The information set forth in this Item 3 is qualified in its entirety by reference to the Agreement (attached hereto as Exhibit 1), the Contribution Agreement (attached hereto as Exhibit 2), the CSFB Commitment Letter (attached hereto as Exhibit 5), the DLJ Commitment Letter (attached hereto as Exhibit 6), the Purchase Agreement (attached hereto as Exhibit 12), the Amendment to the CSFB Commitment Letter (attached hereto as Exhibit 13) and the Amendment to the DLJ Commitment Letter (attached hereto as Exhibit 14), each of which is expressly incorporated herein by reference. Item 4. Purpose of Transaction. Item 4 of the Schedule 13D is hereby amended by adding the following paragraphs: On May 31, 2001, Newco, Holding and the Issuer entered into the Agreement (attached hereto as Exhibit 1) pursuant to which, on the terms and subject to the conditions set forth therein, Newco will be merged with and into the Issuer, and holders of Common Stock (other than certain holders described in Item 4) will receive the CBRE Merger Consideration in exchange for each of their shares. Consummation of the transactions contemplated by the Agreement are subject to, among other things: (a) the affirmative approval of the Agreement by holders of two-thirds of the outstanding Common Stock held by stockholders other than the Reporting Persons, FSEP III, FSEP International, Malek, Koll Holding, Wirta, White and their respective affiliates; (b) the proceeds from the sale of the Senior Subordinated Notes shall have been released to Newco from the escrow account into which they were deposited in connection with the closing of the offering of such Senior Subordinated Notes; (c) funding contemplated by the Commitment Letters shall have been obtained on - -------------------------------------------------------------------------------- CUSIP No. 12489L108 13D Page 5 of 9 - -------------------------------------------------------------------------------- substantially the terms set forth in the Commitment Letters or the funding of alternative debt financing contemplated by Section 7.7 of the Agreement shall have been obtained on substantially comparable terms; (d) the receipt of required consents from the holders of the Issuer's 8-7/8% Senior Subordinated Notes due 2006 as set forth in the Agreement; (e) receipt of any material governmental and third party approvals (including expiration or early termination of all applicable waiting periods under the Hart- Scott-Rodino Antitrust Improvements Act of 1976, as amended); (f) the declaration of effectiveness by the SEC of a Registration Statement on Form S-1 or comparable form, together with any supplements thereto, registering shares of common stock of Holding for issuance to employees of the Issuer under the Securities Act of 1933, as amended (the "Securities Act"); and -------------- (g) the delivery to the Board of Directors of Issuer of a letter as to the solvency of the Issuer and its subsidiaries after giving effect to the CBRE Merger, the transactions contemplated by the Contribution Agreement and the Financings. The Contribution Agreement provides that each of Wirta and Koll and Koll Holding agrees that at the time of the closing under the Agreement, the warrants to acquire 84,988 shares of Common Stock beneficially owned by Wirta, Koll and Koll Holding will be converted into the right to receive $1.00 per share underlying such warrants and shall not thereafter represent the right to receive any securities of, or other consideration from, Holding or the Issuer. The information set forth in this Item 4 is qualified in its entirety by reference to the Agreement (attached hereto as Exhibit 1), the Contribution Agreement (attached hereto as Exhibit 2), the Securityholders' Agreement (attached hereto as Exhibit 3), the Warrant Agreement (attached hereto as Exhibit 4), the Amendment to the CSFB Commitment Letter (attached hereto as Exhibit 13) and the Amendment to the DLJ Commitment Letter (attached hereto as Exhibit 14), each of which is expressly incorporated herein by reference. - -------------------------------------------------------------------------------- CUSIP No. 12489L108 13D Page 6 of 9 - -------------------------------------------------------------------------------- Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer Item 6 of the Schedule 13D is hereby amended by adding the following paragraphs: As described in Items 2 and 4 hereof, Holding and Newco have entered into the Agreement (attached hereto as Exhibit 1) with the Issuer dated as of May 31, 2001, whereby, among other things, Newco will merge with and into the Issuer. In connection with the Agreement, each share of the Common Stock (other than as described in Item 4) will be converted into the right to receive the CBRE Merger Consideration. As described in Items 3 and 4 hereof, on May 31, 2001, Newco, Holding, Strategic, FSEP III, FSEP International, Wirta, White, Koll Holding and Malek entered into the Contribution Agreement (attached hereto as Exhibit 2), which sets forth certain understandings among the parties thereto with respect to certain contributions of Common Stock and cash to be made to Holding in connection with the consummation of the transactions under the Agreement. The Contribution Agreement also includes, among other things, certain agreements by the parties thereto with respect to (i) the voting of Common Stock held by them regarding the Agreement and the CBRE Merger and any potential competing acquisition proposals and (ii) the reimbursement of expenses incurred by such parties and (iii) the allocation among certain of such parties of fees received from the Issuer under the Agreement. As described in Item 3 hereof, Newco entered into a Purchase Agreement with CSFB (attached hereto as Exhibit 12) with respect to the Financings. In addition, as described in Items 3 and 4 hereof, CSFB and DLJ have provided Newco and Holding, respectively, with the Commitment Letters (together with their respective amendments, attached hereto as Exhibits 5, 6, 13 and 14) with respect to the Financings. The Financings will be used, together with the proceeds received by Holding pursuant to the Contribution Agreement, to pay the CBRE Merger Consideration to the holders of Common Stock (other than as described in Item 4), to refinance indebtedness of the Issuer that will become due as a result of the transactions contemplated by the Agreement, to pay all related fees and expenses and to provide additional financing for future working capital and general corporate needs of the Issuer and its subsidiaries. The information set forth in this Item 6 is qualified in its entirety by reference to the Agreement (attached hereto as Exhibit 1), the Contribution Agreement (attached hereto as Exhibit 2), the Securityholders' Agreement (attached hereto as Exhibit 3), the Warrant Agreement (attached hereto as Exhibit 4), the CSFB Commitment Letter (attached hereto as Exhibit 5), the DLJ Commitment Letter (attached hereto as Exhibit 6), - -------------------------------------------------------------------------------- CUSIP No. 12489L108 13D Page 7 of 9 - -------------------------------------------------------------------------------- the Confidentiality Agreement (attached hereto as Exhibit 7), the BLUM Agreement (attached hereto as Exhibit 8), the FSEP Agreement (attached hereto as Exhibit 9), the Purchase Agreement (attached hereto as Exhibit 12), the Amendment to the CSFB Commitment Letter (attached hereto as Exhibit 13) and the Amendment to the DLJ Commitment Letter (attached hereto as Exhibit 14), each of which is expressly incorporated herein by reference. Item 7. Material to be Filed as Exhibits Item 4 of the Schedule 13D is hereby amended by replacing it with the following: 1. Amended and Restated Agreement and Plan of Merger, dated as of May 31, 2001 by and among CBRE Holding, Inc., BLUM CB Corp., and CB Richard Ellis Services, Inc. (filed herewith). 2. Amended and Restated Contribution Agreement, dated as of May 31, 2001 by and among CBRE Holding, Inc., BLUM CB Corp., RCBA Strategic Partners, L.P., FS Equity Partners III, L.P., FS Equity Partners International, L.P., Raymond E. Wirta, W. Brett White, Donald M. Koll and the other parties thereto (filed herewith). 3. Form of Securityholders' Agreement (filed herewith). 4. Form of Warrant Agreement (filed with Amendment No. 4 to the Schedule 13D on February 28, 2001). 5. CSFB Commitment Letter, dated as of February 23, 2001 by and between Credit Suisse First Boston and BLUM CB Corp. (filed with Amendment No. 4 to the Schedule 13D on February 28, 2001). 6. DLJ Commitment Letter, dated as of February 23, 2001 by and between DLJ Investment Funding, Inc. and BLUM CB Holding Corp. (filed with Amendment No. 4 to the Schedule 13D on February 28, 2001). 7. Confidentiality Agreement dated December 15, 2001 and the Amendment to the Confidentiality Agreement dated February 23, 2001 by and among CB Richard Ellis Services, Inc., BLUM Capital Partners, L.P., FS Equity Partners III, L.P., FS Equity Partners International, L.P., Raymond E. Wirta, W. Brett White, Frederic V. Malek and The Koll Holding Company (filed with Amendment No. 4 to the Schedule 13D on February 28, 2001). 8. BLUM Agreement dated February 23, 2001 by and between RCBA Strategic Partners, L.P., and CB Richard Ellis Services, Inc. (filed with Amendment No. 4 to the Schedule 13D on February 28, 2001). - -------------------------------------------------------------------------------- CUSIP No. 12489L108 13D Page 8 of 9 - -------------------------------------------------------------------------------- 9. FSEP Agreement dated February 23, 2001 by and among FS Equity Partners III, L.P., FS Equity Partners International, L.P. and RCBA Strategic Partners, L.P. (filed with Amendment No. 4 to the Schedule 13D on February 28, 2001). 10. Joint Filing Agreement, dated as of June 5, 2001 (filed herewith). 11. Power of Attorney dated August 26, 1997 (filed with Amendment No. 2 to the Schedule 13D on February 28, 2001). 12. Purchase Agreement dated as of May 31, 2001, by and among BLUM CB Corp, Credit Suisse First Boston and the other parties thereto (filed herewith). 13. Amendment to the CSFB Commitment Letter dated as of May 31, 2001 by and between Credit Suisse First Boston and BLUM CB Corp. (filed herewith). 14. Amendment to the DLJ Commitment Letter dated as of May 31, 2001 by and between DLJ Investment Funding, Inc. and CBRE Holding, Inc. (filed herewith). - -------------------------------------------------------------------------------- CUSIP No. 12489L108 13D Page 9 of 9 - -------------------------------------------------------------------------------- SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: June 5, 2001 RCBA GP, L.L.C. RCBA STRATEGIC PARTNERS, L.P. By: RCBA GP, L.L.C. its general partner By: /s/ Murray A. Indick By: /s/ Murray A. Indick --------------------------------- ------------------------------ Murray A. Indick, Member Murray A. Indick, Member RICHARD C. BLUM & ASSOCIATES, INC. BLUM CAPITAL PARTNERS, L.P. By: Richard C. Blum & Associates, Inc. its general partner By: /s/ Murray A. Indick By: /s/ Murray A. Indick --------------------------------- ------------------------------ Murray A. Indick Murray A. Indick Partner, General Counsel Partner, General Counsel and Secretary and Secretary BLUM CB CORP. /s/ Murray A. Indick By: /s/ Murray A. Indick --------------------------------- ------------------------------ RICHARD C. BLUM Murray A. Indick Vice President, Secretary and By: Murray A. Indick, Attorney-in-Fact Assistant Treasurer CBRE HOLDING, INC. By: /s/ Murray A. Indick --------------------------------- Murray A. Indick Vice President, Secretary and Assistant Treasurer EX-1 2 dex1.txt AMENDED AND RESTATED AGMT. & PLAN OF MERGER Exhibit 1. =============================================================================== AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER by and among CB RICHARD ELLIS SERVICES, INC., CBRE HOLDING, INC. and BLUM CB CORP. May 31, 2001 =============================================================================== TABLE OF CONTENTS
Page ARTICLE 1 DEFINITIONS........................................................... 1 1.1. Definitions........................................................... 1 ARTICLE 2 THE MERGER............................................................ 7 2.1. The Merger............................................................ 7 2.2. Organizational Documents.............................................. 7 2.3. Directors and Officers................................................ 8 ARTICLE 3 CONVERSION OF SECURITIES AND RELATED MATTERS.......................... 8 3.1. Capital Stock of Acquiror............................................. 8 3.2. Cancellation of Treasury Stock and Acquiror Owned Shares.............. 8 3.3. Conversion of Company Shares.......................................... 8 3.4. Exchange of Certificates.............................................. 8 3.5. Company Stock Options................................................. 10 3.6. Deferred Compensation Plan............................................ 10 3.7. Capital Accumulation Plan............................................. 11 3.8. Dissenting Shares..................................................... 11 ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................... 12 4.1. Corporate Existence and Power......................................... 12 4.2. Corporate Authorization............................................... 12 4.3. Governmental Authorization............................................ 13 4.4. Non-Contravention..................................................... 13 4.5. Capitalization........................................................ 13 4.6. Subsidiaries.......................................................... 14 4.7. Company SEC Documents................................................. 15 4.8. Financial Statements; No Material Undisclosed Liabilities............. 15 4.9. Absence of Certain Changes............................................ 16 4.10. Litigation............................................................ 16 4.11. Taxes................................................................. 17 4.12. Employee Benefits..................................................... 17 4.13. Compliance with Laws; Licenses, Permits and Registrations............. 20 4.14. Title to Properties................................................... 20 4.15. Intellectual Property................................................. 20
-i- 4.16. Finders' Fees; Opinions of Financial Advisor......................... 21 4.17. Labor Matters........................................................ 21 4.18. Material Contract Defaults........................................... 21 4.19. Required Vote; Board Approval........................................ 22 4.20. Information to Be Supplied........................................... 22 4.21. Disclaimer of Other Representations and Warranties................... 23 ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF HOLDING AND ACQUIROR............... 23 5.1. Corporate Existence and Power........................................ 23 5.2. Corporate Authorization.............................................. 23 5.3. Governmental Authorization........................................... 24 5.4. Non-Contravention.................................................... 24 5.5. Financing............................................................ 24 5.6. Information to Be Supplied........................................... 25 5.7. No Breach............................................................ 26 5.8. Disclaimer of Other Representations and Warranties................... 26 ARTICLE 6 COVENANTS OF THE COMPANY............................................. 26 6.1. Company Interim Operations........................................... 26 6.2. Stockholder Meeting.................................................. 29 6.3. Acquisition Proposals; Board Recommendation.......................... 29 ARTICLE 7 COVENANTS OF HOLDING AND ACQUIROR.................................... 31 7.1. Director and Officer Liability....................................... 31 7.2. Employee Benefits.................................................... 33 7.3. Severance Plan....................................................... 34 7.4. Conduct of Holding and Acquiror...................................... 34 7.5. Transfer Taxes....................................................... 34 7.6. Investment Banking Fee............................................... 34 7.7. Financing Arrangements............................................... 34 7.8. Contribution and Voting Agreement.................................... 35 7.9. Board Member......................................................... 35 ARTICLE 8 COVENANTS OF HOLDING, ACQUIROR AND THE COMPANY....................... 35 8.1. Efforts and Assistance............................................... 35 8.2. Proxy Statement and Schedule 13E-3................................... 37
-ii- 8.3. Public Announcements................................................. 38 8.4. Access to Information; Notification of Certain Matters............... 38 8.5. Further Assurances................................................... 39 8.6. Registration Statement............................................... 39 8.7. Disposition of Litigation............................................ 40 8.8. Confidentiality Agreements........................................... 40 8.9. Resignation of Directors............................................. 40 8.10. Senior Subordinated Notes............................................ 40 ARTICLE 9 CONDITIONS TO MERGER................................................. 42 9.1. Conditions to the Obligations of Each Party.......................... 42 9.2. Conditions to the Obligations of the Company......................... 42 9.3. Conditions to the Obligations of Acquiror............................ 43 ARTICLE 10 TERMINATION.......................................................... 44 10.1. Termination.......................................................... 44 10.2. Effect of Termination................................................ 45 10.3. Fees and Expenses.................................................... 46 ARTICLE 11 MISCELLANEOUS........................................................ 46 11.1. Notices.............................................................. 46 11.2. Amendment and Restatement; Effectiveness of Representations and Warranties and Agreements............................................ 47 11.3. Survival of Representations, Warranties and Covenants after the Effective Time....................................................... 47 11.4. Amendments; No Waivers............................................... 47 11.5. Successors and Assigns............................................... 47 11.6. Counterparts; Effectiveness; Third Party Beneficiaries............... 48 11.7. Governing Law........................................................ 48 11.8. Jurisdiction......................................................... 48 11.9. Enforcement.......................................................... 48 11.10. Entire Agreement..................................................... 48 11.11. Authorship........................................................... 48 11.12. Severability......................................................... 48 11.13. Waiver of Jury Trial................................................. 49 11.14. Headings; Construction............................................... 49
-iii- AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER This AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and entered into this 31st day of May 2001, by and among CB Richard Ellis Services, Inc., a Delaware corporation (the "Company"), CBRE Holding, Inc. a Delaware corporation formerly known as BLUM CB Holding Corp. ("Holding"), and BLUM CB Corp., a Delaware corporation wholly owned by Holding ("Acquiror"). WHEREAS, a Special Committee of the Board of Directors of the Company has (i) determined that the Merger (as defined herein) is advisable and in the best interest of the Company's stockholders (other than the members of the Buying Group (as defined herein)), and (ii) approved the Merger and recommended approval of the Merger by the Board of Directors of the Company; WHEREAS, the Board of Directors of the Company, subsequent to the recommendation of the Special Committee, has (i) determined that the Merger is advisable and in the best interest of the Company's stockholders (other than the members of the Buying Group), and (ii) approved the Merger; WHEREAS, the Board of Directors of each of Holding and Acquiror has determined that the Merger is advisable and in the best interest of its stockholders; WHEREAS, Holding, Acquiror and certain stockholders of the Company (the "Buying Group") have entered into an amended and restated contribution and voting agreement, a copy of which is attached hereto as Exhibit A (the --------- "Contribution and Voting Agreement"), pursuant to which, among other things, those stockholders have agreed to vote their Company Shares in favor of adopting and approving this Agreement and the Merger; WHEREAS, by resolutions duly adopted, the respective Boards of Directors of the Company, Holding and Acquiror have approved and adopted this Agreement and the transactions and other agreements contemplated hereby; and WHEREAS, the parties to this Agreement previously entered into an Agreement and Plan of Merger, dated as of February 23, 2001 (the "Original Agreement"), and an Amended and Restated Plan and Agreement of Merger, dated as of April 24, 2001 (the "First Amended and Restated Agreement"), and this Agreement constitutes an amendment and restatement of the First Amended and Restated Agreement. NOW, THEREFORE, in consideration of the premises and promises contained herein, and intending to be legally bound, the parties hereto agree as set forth below. ARTICLE 1 DEFINITIONS 1.1. Definitions (a) As used herein, the following terms have the meanings ----------- set forth below: "Acquiror Common Share" means one share of Common Stock of Acquiror, $0.01 par value per share. "Acquiror Preferred Share" means one share of Participating Preferred Stock of Acquiror, $0.01 par value per share. "Acquisition Proposal" means any offer or proposal (whether or not in writing) from any Third Party regarding any of the following: (a) a transaction pursuant to which a Third Party acquires or would acquire beneficial ownership of more than fifteen percent (15%) of the outstanding shares of any class of Equity Interests of the Company, whether from the Company or pursuant to a tender offer or exchange offer or otherwise, (b) a merger, consolidation, business combination, reorganization, sale of substantially all assets, recapitalization, liquidation, dissolution or similar transaction involving the Company, or (c) any transaction which would result in a Third Party acquiring 15% or more of the fair market value on a consolidated basis of the assets (including, without limitation, the capital stock of Subsidiaries) of the Company and its Subsidiaries immediately prior to such transaction (whether by purchase of assets, acquisition of stock of a Subsidiary or otherwise). "Affiliate" means, with respect to any Person, any other Person, directly or indirectly, controlling, controlled by, or under common control with, such Person. For purposes of this definition, the term "control" (including the correlative terms "controlling", "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. "Business Day" means any day, other than a Saturday, Sunday or one on which banks are authorized by Law to close in New York, New York. "Capital Accumulation Plan" means the Capital Accumulation Plan of the Company as amended through the date of this Agreement. "Code" means the U.S. Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder. "Company Balance Sheet" means the Company's consolidated balance sheet included in the Company 10-K relating to its year ended on December 31, 1999. "Company Material Adverse Effect" means any material adverse effect on (a) the business, assets, liabilities, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, or (b) the ability of the Company to perform its obligations under -2- this Agreement or the other agreements and transactions contemplated hereby; provided, however, that this definition shall exclude any material adverse effect arising out of any change or development resulting from (v) U.S. or global general economic or political conditions, (w) conditions generally affecting the industry in which the Company and its Subsidiaries operate, (x) changes in U.S. or global financial markets or conditions, (y) any generally applicable change in Law or GAAP or interpretation of any thereof and/or (z) the announcement of this Agreement or the transactions contemplated hereby or the Company's performance of its obligations under this Agreement and compliance with the covenants set forth herein. "Company Share" means one share of common stock of the Company, $0.01 par value per share. "Company SEC Documents" means (a) the annual report on Form 10-K of the Company (the "Company 10-K"), for the years ended December 31, 1998 and 1999, (b) the quarterly reports on Form 10-Q of the Company for the quarters ended March 31, June 30 and September 30, 1999 and 2000, (c) the Company's proxy statements relating to meetings of, or actions taken without a meeting by, the Company Stockholders, since January 1, 1999, and (d) all other reports, filings, registration statements and other documents filed by the Company with the SEC since January 1, 1999; in each case including all exhibits, appendices and attachments thereto, whether filed therewith or incorporated by reference therein. "Company Stockholders" or "Stockholders" means the stockholders of the Company as of the date hereof, as of the record date for the Company Stockholder Meeting and as of the Closing Date, as applicable. "Deferred Compensation Plan" means the Deferred Compensation Plan of the Company, as amended and restated as of November 1, 1999, and as further amended through the date of this Agreement. "Equity Interest" means with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting or non-voting) of, such Person's capital stock or other equity interests (including, without limitation, partnership or membership interests in a partnership or limited liability company or any other interest or participation that confers on a Person the right to receive a share of the profits and losses, or distributions of assets, of the issuing Person) whether outstanding on the date hereof or issued after the date hereof. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "Governmental Entity" means any federal, state or local governmental authority, any transgovernmental authority or any court, administrative or regulatory agency or commission or other governmental authority or agency, domestic or foreign. "Holding Material Adverse Effect" means any change or effect that would prevent or materially impair the ability of Holding or Acquiror to consummate the Merger and the other transactions contemplated by this Agreement. -3- "Joint Venture" means, with respect to any Person, any corporation or other entity (including a division or line of business of such corporation or other entity) (a) of which such Person and/or any of its Subsidiaries beneficially owns a portion of the Equity Interests that is insufficient to make such corporation or other entity a Subsidiary of such Person, and (b) that is engaged in the same business as such Person or its Subsidiaries or in a related or complementary business. "Company Joint Venture" means a Joint Venture of the Company. "Knowledge" means, with respect to the matter in question, if any of the executive officers of the Company listed in Section 1.1 of the Company Disclosure Schedule has actual knowledge of the matter. "Law" means any federal, state, local or foreign law, rule, regulation, judgment, code, ruling, statute, order, decree, injunction or ordinance or other legal requirement. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of an asset; provided, however, that the term "Lien" shall not include (a) liens for utilities and current Taxes not yet due and payable, (b) mechanics', carriers', workers', repairers', materialmen's, warehousemen's and other similar liens arising or incurred in the ordinary course of business or (c) liens for Taxes being contested in good faith. "Material Joint Venture" means a Company Joint Venture in which the Company and the Company Subsidiaries, collectively, have invested, or committed to invest, at least $3.0 million. "Material Subsidiary" means a Company Subsidiary with more than $25.0 million in consolidated revenue during the Company's fiscal year ended December 31, 2000. "Non-U.S. Competition Laws" means all (a) non-U.S. Laws intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade, (b) antitrust Laws by antitrust authorities outside of the United States and (c) takeover Laws of jurisdictions outside of the United States. "Person" means an individual, corporation, limited liability company, partnership, association, trust or any other entity or organization, including any Governmental Entity. "Prospectus" means the prospectus included in the Registration Statement, together with any amendments or supplements thereto. "Proxy Statement" means the proxy statement relating to the Company Stockholder Meeting, together with any amendments or supplements thereto. "RCBA" means RCBA Strategic Partners, L.P., a Delaware limited partnership and the sole stockholder of Holding as of the date hereof. "Registration Statement" means the Registration Statement on Form S-1 or comparable form, together with any supplements thereto, registering shares of common stock of Holding for issuance to employees of the Company under the Securities Act. -4- "Schedule 13E-3" means the Statement on Schedule 13E-3 to be filed by the Company and Holding concurrently with the filing of the Proxy Statement pursuant to the Exchange Act, together with any amendments or supplements thereto. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "Special Committee" means the Special Committee of the Board of Directors appointed by resolution of the Company's Board of Directors adopted on November 10, 2000. "Subsidiary" means, with respect to any Person, any corporation or other entity (including joint ventures) of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are directly or indirectly owned, by such Person. "Company Subsidiary" means a Subsidiary of the Company. "Superior Proposal" means any of the transactions described in the definition of Acquisition Proposal (with all of the percentages included in the definition of Acquisition Proposal increased to 51% for purposes of this definition) that is on terms which a majority of the disinterested members of the Company's Board of Directors or the Special Committee determines in good faith, after considering the advice of outside legal counsel and financial advisors (a) represents a financially superior transaction for the Company's Stockholders (other than Holding, Acquiror and the members of the Buying Group and each of their respective Affiliates) to the transactions contemplated hereby; (b) would result in a transaction, if consummated, that would be more favorable to the Company's Stockholders (other than Holding, Acquiror and the members of the Buying Group and each of their respective Affiliates) (taking into account all facts and circumstances, including all legal, financial, regulatory and other aspects of the proposal and the identity of the offeror) than the transactions contemplated hereby; and (c) is reasonably capable of being consummated (including, without limitation, the availability of committed financing). "Taxes" means all United States federal, state, local or foreign income, profits, estimated gross receipts, windfall profits, environmental (including taxes under Section 59A of the Code), severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, capital stock, employment, withholding, social security (or similar), disability, transfer, registration, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, estimated, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect therefore imposed by any Governmental Entity, whether disputed or not. "Third Party" means a Person (or group of Persons) other than Holding, Acquiror or any of their Affiliates (excluding the Company and its controlled Affiliates). -5- (b) Each of the following terms is defined in the Section set forth opposite such term: Terms Section ----- ------- Acquiror Preamble Acquiror Senior Subordinated Notes 5.5(b) Agreement Preamble Buying Group Preamble Certificate of Merger 2.1(b) Certificates 3.4(a) Claim 7.1(b) Closing 2.1(d) Closing Date 2.1(d) Commitment Letter Financing 5.5(a) Commitment Letters 5.5(a) Company Preamble Company Employee Plans 4.12(a) Company Intellectual Property 4.15 Company Option 3.5(a) Company Preferred Stock 4.5(a) Company Recommendation 6.2 Company Returns 4.11 Company Securities 4.5(b) Company Stockholder Approval 4.19(a) Company Stockholder Meeting 6.2 Confidentiality Agreement 8.4(a) Contribution and Voting Agreement Preamble CSFB 5.5(a) Debt Offer 8.10(a) DGCL 2.1(a) DLJ 5.5(a) Dissenting Shares 3.8(a) Effective Time 2.1(b) End Date 10.1(b)(i) ERISA 4.12(a) ERISA Affiliate 4.12(a) Exchange Agent 3.4(a) Exchange Fund 3.4(a) Financing 5.5(b) Financing Agreements 7.7(a) Foreign Plan 4.12(i) GAAP 4.8(a) Holding Preamble Holding Shares 3.7(a) HSR Act 4.3 Indemnified Parties 7.1(b) Indenture 8.10(a) -6- Letter of Transmittal 8.10(c) Loan Shares 4.5(a) Material Contracts 4.18 Merger 2.1(a) Merger Consideration 3.3 Multiemployer Plan 4.12(b) Note Purchase Agreement 5.5(b) Notes 8.10(a) Offer Documents 8.10(c) Offer to Purchase 8.10(c) Permits 4.13(b) Permitted Actions 6.3(a) Phantom Shares 4.5(a) Plan Proceeds 3.7(a) Purchase Agreement Financing 5.5(b) Retirement Plan 4.12(b) Secretary of State 2.1(b) Senior Subordinated Notes Proceeds 5.5(b) Share Limit 3.7(a) Stock Fund Participant 3.7(a) Surviving Corporation 2.1(a) Termination Fee 10.2(b) Transfer Taxes 7.5 Vested CBRE Stock Fund Units 3.6(a) ARTICLE 2 THE MERGER 2.1. The Merger ---------- (a) At the Effective Time, Acquiror shall be merged with and into the Company (the "Merger") in accordance with the terms and conditions of this Agreement and the Delaware General Corporation Law (the "DGCL"), at which time the separate corporate existence of Acquiror shall cease and the Company shall continue its existence. In its capacity as the corporation surviving the Merger, this Agreement sometimes refers to the Company as the "Surviving Corporation". (b) As soon as practicable on or after the Closing Date, the Company and Acquiror will file a certificate of merger or other appropriate documents (the "Certificate of Merger") with the Delaware Secretary of State (the "Secretary of State") and make all other filings or recordings required by the DGCL in connection with the Merger. The Merger shall become effective at the time when the Certificate of Merger is duly filed with and accepted by the Secretary of State, or at such later time as is agreed upon by the parties and specified in the Certificate of Merger (such time as the Merger becomes effective is referred to herein as the "Effective Time"). -7- (c) From and after the Effective Time, the Merger shall have the effects set forth in Section 259 of the DGCL. (d) The closing of the Merger (the "Closing") shall be held at the offices of Simpson Thacher & Bartlett, 3330 Hillview Avenue, Palo Alto, California 94304 (or such other place as agreed by the parties) on the later of (a) the date of the Company Stockholder Meeting, or (b) the day on which all of the conditions set forth in Article 9 are satisfied or waived, unless the parties hereto agree to another date. The date upon which the Closing occurs is hereinafter referred to as the "Closing Date". 2.2. Organizational Documents. The Certificate of Merger shall provide -------------------------- that at the Effective Time, by virtue of the Merger and without any action on the part of the holder of any Company Share, (a) the Company's certificate of incorporation in effect immediately prior to the Effective Time shall be the Surviving Corporation's certificate of incorporation and Article FOURTH of the Surviving Corporation's certificate of incorporation shall be amended and restated as set forth in Exhibit B hereto, and (b) the Company's by-laws in --------- effect immediately prior to the Effective Time shall be the Surviving Corporation's by-laws, in each case until amended in accordance with applicable Law. 2.3. Directors and Officers. From and after the Effective Time (until ---------------------- successors are duly elected or appointed and qualified), (a) Acquiror's directors at the Effective Time shall be the Surviving Corporation's directors and (b) the Company's officers immediately prior to the Effective Time shall be the Surviving Corporation's officers ARTICLE 3 CONVERSION OF SECURITIES AND RELATED MATTERS 3.1. Capital Stock of Acquiror. As of the Effective Time, by virtue of ------------------------- the Merger and without any action on the part of the holder of any Company Share or Acquiror Common Share or Acquiror Preferred Share: (a) each Acquiror Common Share issued and outstanding immediately prior to the Effective Time shall be converted into one share of Common Stock, $0.01 par value per share, of the Surviving Corporation; and (b) each Acquiror Preferred Share issued and outstanding immediately prior to the Effective Time shall be converted into one share of Series A Convertible Participating Preferred Stock, $0.01 par value per share, of the Surviving Corporation. 3.2. Cancellation of Treasury Stock and Acquiror Owned Shares. As of the -------------------------------------------------------- Effective Time, by virtue of the Merger and without any action on the part of the holder of any Company Share or Acquiror Share, each Company Share held by the Company as treasury stock or owned by Holding, Acquiror or any Company Subsidiary immediately prior to the Effective Time shall be canceled and retired, and no payment shall be made or consideration delivered in respect thereof. -8- 3.3. Conversion of Company Shares. As of the Effective Time, by virtue of ---------------------------- the Merger and without any action on the part of the holder of any Company Share or Acquiror Share, each Company Share issued and outstanding immediately prior to the Effective Time (other than (a) shares to be cancelled in accordance with Section 3.2 and (b) Dissenting Shares) shall be converted into the right to receive in cash from Acquiror, without interest, an amount equal to $16.00 (the "Merger Consideration"). 3.4. Exchange of Certificates. ------------------------ (a) Exchange Agent. Promptly after the date hereof, Acquiror shall --------------- appoint a bank or trust company reasonably acceptable to the Company as an agent (the "Exchange Agent") for the benefit of holders of Company Shares for the purpose of exchanging, pursuant to this Article 3, certificates representing the Company Shares (the "Certificates"). Acquiror will make available to the Exchange Agent, as needed, the Merger Consideration to be paid in respect of Company Shares pursuant to this Article 3 (the "Exchange Fund"), and except as contemplated by Section 3.4(f) or Section 3.4(g) hereof, the Exchange Fund shall not be used for any other purpose. The Exchange Agent shall invest the Merger Consideration as directed by the Acquiror or the Surviving Corporation, as the case may be, on a daily basis. Any interest and other income resulting from such investments shall be paid to the Surviving Corporation. (b) Exchange Procedures. As promptly as practicable after the Effective ------------------- Time, the Surviving Corporation shall send, or shall cause the Exchange Agent to send, to each record holder of Certificates a letter of transmittal and instructions (which shall be in customary form and specify that delivery shall be effected, and risk of loss and title shall pass, only upon delivery of the Certificates to the Exchange Agent), for use in the exchange contemplated by this Section 3.4. Upon surrender of a Certificate to the Exchange Agent, together with a duly executed letter of transmittal, the holder shall be entitled to receive in exchange therefor the Merger Consideration as provided in this Article 3 in respect of the Company Shares represented by the Certificate (after giving effect to any required withholding Tax). Until surrendered as contemplated by this Section 3.4, each Certificate shall be deemed after the Effective Time to represent only the right to receive the Merger Consideration. (c) No Further Rights in Company Shares. All cash paid upon surrender of ----------------------------------- Certificates in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to Company Shares represented thereby. From and after the Effective Time, the holders of Certificates shall cease to have any rights with respect to Company Shares, except as otherwise provided herein or by Law. As of the Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers on the Company's stock transfer books of any Company Shares, other than transfers that occurred before the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Section 3.4. (d) Alternate Endorsement. If payment of the Merger Consideration in --------------------- respect of Company Shares is to be made to a Person other than the Person in whose name a surrendered Certificate is registered, it shall be a condition to such payment that the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and that the Person requesting such payment shall have paid any transfer and other Taxes required by -9- reason of such payment in a name other than that of the registered holder of the Certificate surrendered or shall have established to the satisfaction of the Surviving Corporation or the Exchange Agent that such Tax either has been paid or is not payable. (e) Return of Merger Consideration. Upon demand by the Surviving ------------------------------ Corporation, the Exchange Agent shall deliver to the Surviving Corporation any portion of the Merger Consideration made available to the Exchange Agent pursuant to this Section 3.4 that remains undistributed to holders of Company Shares six (6) months after the Effective Time. Holders of Certificates who have not complied with this Section 3.4 prior to the demand by the Surviving Corporation shall thereafter look only to the Surviving Corporation for payment of any claim to the Merger Consideration. (f) No Liability. None of Holding, the Surviving Corporation or the ------------ Exchange Agent shall be liable to any Person in respect of any Company Shares (or dividends or distributions with respect thereto) for any amounts paid to a public official pursuant to any applicable abandoned property, escheat or similar Law. (g) Withholding Rights. Each of the Surviving Corporation and Acquiror ------------------ shall be entitled to deduct and withhold from the Merger Consideration otherwise payable hereunder to any Person any amounts which it is required to deduct and withhold with respect to payment under any provision of federal, state or local income tax Law. To the extent that the Surviving Corporation or Acquiror withholds those amounts, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Company Shares in respect of which deduction and withholding was made by the Surviving Corporation or Acquiror, as the case may be. (h) Lost Certificates. If any Certificate has been or is claimed to have ----------------- been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming that a Certificate has been lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such Person of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity against any claim that may be made against it with respect to that Certificate, the Exchange Agent will deliver in exchange for such lost, stolen or destroyed Certificate, the proper amount of the Merger Consideration. 3.5. Company Stock Options. --------------------- (a) At the Effective Time, each option to purchase Company Shares (each, a "Company Option") outstanding under any stock option or compensation plan or arrangement of the Company, whether or not vested, shall be canceled and in consideration of such cancellation, the Surviving Corporation shall pay to each holder of a canceled Company Option, as soon as practicable following the Effective Time, an amount per Company Share subject to such canceled Company Option equal to the greater of (i) the excess, if any, of (A) the Merger Consideration over (B) the exercise price per Company Share subject to such canceled Company Option and (ii) $1.00. (b) Prior to the Effective Time, the Company, Holding and Acquiror shall take all commercially reasonable actions to (i) obtain all necessary consents from the holders of -10- Company Options and (ii) take such other actions (including, without limitation, amending the terms of any Company stock option or compensation plan or arrangement), necessary to give effect to the transactions contemplated by Section 3.5(a). 3.6. Deferred Compensation Plan. -------------------------- (a) At the Effective Time, the Deferred Compensation Plan shall be amended so that each CBRE Stock Fund Unit (as defined in the Deferred Compensation Plan) shall thereafter represent the right to receive a share of the common stock of Holding in accordance with the terms and conditions set forth in the Deferred Compensation Plan. Each participant in the Deferred Compensation Plan who has CBRE Stock Fund Units that are vested as of the Effective Time and are credited to his or her account as of the Effective Time ("Vested CBRE Stock Fund Units") will be required, prior to the Effective Time, to make one of the following elections with respect to such Vested CBRE Stock Fund Units: (i) convert the value of his or her Vested CBRE Stock Fund Units (based upon the Merger Consideration) into any of the insurance mutual fund or interest index fund alternatives provided under the Deferred Compensation Plan as of the Effective Time, or (ii) continue to hold the Vested CBRE Stock Fund Units in his or her account under the Deferred Compensation Plan; provided, however, that the election set forth in the foregoing clause (ii) shall only be available to participants in the Deferred Compensation Plan who have Vested CBRE Stock Fund Units and are United States employees of the Company or any of its Subsidiaries or independent contractors of the Company or its Subsidiaries in the states of California, New York, Illinois or Washington, in each of the foregoing cases as of the Effective Time. (b) Prior to the Effective Time, the Company, Holding and Acquiror shall take all commercially reasonable actions (including, without limitation, amending the terms of the Deferred Compensation Plan) necessary to give effect to the transactions contemplated by Section 3.6(a). 3.7. Capital Accumulation Plan. ------------------------- (a) In accordance with Section 3.3, at the Effective Time, each participant in the Company's Capital Accumulation Plan with an account balance invested in the Company Stock Fund (as defined in the Company's Capital Accumulation Plan) (a "Stock Fund Participant") shall receive, in consideration for such participant's Company Shares in the Company Stock Fund, the product of (i) the number of Company Shares held in the Company Stock Fund at such time multiplied by (ii) the Merger Consideration (the "Plan Proceeds"). As of the Effective Time, provided that the Registration Statement shall have been declared effective by the SEC prior thereto, each participant in the Company's Capital Accumulation Plan who is a United States employee of the Company or any of its Subsidiaries as of the Effective Time (the "Eligible Participants"), may invest, pursuant to the terms of the Capital Accumulation Plan, in shares of the Class A Common Stock of Holding, par value $0.01 per share (the "Holding Shares"), based on a per share price equal to the Merger Consideration; provided, however, that the aggregate number of Holding Shares that all Eligible Participants will be entitled to purchase shall not exceed fifty percent of the total number of Company Shares held in the Company Stock Fund by all Stock Fund Participants as of April 1, 2001 (the "Share Limit"); provided, further, -11- that Holding may increase the Share Limit in its sole discretion. In the event that the Eligible Participants request to purchase an aggregate number of Holding Shares in excess of the Share Limit, the amount subscribed to by each Eligible Participant shall be reduced pro rata based on the number of shares of Holding each Eligible Participant initially requested to purchase. Notwithstanding anything to the contrary stated herein, no Eligible Participant will be entitled to have greater than 50% of his or her total account balance in the Capital Accumulation Plan invested in Holding Shares as of the Effective Time (with all other investments in the Capital Accumulation Plan account of such Eligible Participant being valued as of the month end immediately preceding the effectiveness of the Registration Statement). (b) Prior to the Effective Time, the Company and Holding shall take all commercially reasonable actions (including, without limitation, amending the terms of the Capital Accumulation Plan) necessary to give effect to the transactions contemplated by Section 3.7(a). 3.8. Dissenting Shares. ----------------- (a) Notwithstanding any provision of this Agreement to the contrary, Company Shares that are outstanding immediately prior to the Effective Time and which are held by Persons who shall have properly demanded in writing appraisal for such shares in accordance with Section 262 (or any successor provision) of the DGCL (the "Dissenting Shares") shall not be converted into or represent the right to receive the Merger Consideration as provided hereunder and shall only be entitled to such rights and consideration as are granted by Section 262 (or any successor provision) of the DGCL. Such Persons shall be entitled to receive payment of the appraised value of such Company Shares in accordance with the provisions of Section 262 (or any successor provision) of the DGCL, except that all Dissenting Shares held by Persons who shall have failed to perfect or who effectively shall have withdrawn or lost their right to appraisal of such shares under Section 262 (or any successor provision) of the DGCL shall thereupon be deemed to have been converted into the Merger Consideration pursuant to Section 3.3 hereto as of the Effective Time or the occurrence of such event, whichever occurs later. (b) The Company shall give Acquiror (i) prompt notice of any demands for appraisal received by the Company, withdrawals of such demands and any other instruments served pursuant to the DGCL and received by the Company and (ii) the opportunity to participate in all negotiations and proceedings with respect to demands for appraisal or the payment of the fair cash value of any such shares under the DGCL. The Company shall not, except with the prior written consent of Acquiror, make any payment with respect to any demands for appraisal or the payment of the fair cash value of any such shares or offer to settle or settle any such demands. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as disclosed in (i) the Company Disclosure Schedule attached hereto or (ii) the Company SEC Documents filed prior to the date hereof or except as specifically contemplated by this Agreement, the Company represents and warrants to Acquiror as set forth below. -12- 4.1. Corporate Existence and Power. The Company is a corporation, duly ----------------------------- incorporated, validly existing and in good standing under the Laws of the State of Delaware, and has all corporate powers and authority required to own, lease and operate its properties and to carry on its business as now conducted. The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the property owned, leased or operated by it or the nature of its activities makes qualification necessary, except where the failure to be qualified would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. 4.2. Corporate Authorization. The execution, delivery and performance by ----------------------- the Company of this Agreement and the consummation by the Company of the Merger and the other transactions contemplated hereby are within the Company's corporate powers and, except for the Company Stockholder Approval, have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby (other than the Company Stockholder Approval and the filing and recordation of the appropriate documents with respect to the Merger in accordance with the DGCL). The Board of Directors of the Company has approved this Agreement and has resolved to recommend that its stockholders vote their shares in favor of the adoption of this Agreement and the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company, and assuming that this Agreement constitutes the valid and binding obligation of Holding and Acquiror, constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. 4.3. Governmental Authorization. The execution, delivery and performance -------------------------- by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby will not require any consent, approval, action, order, authorization, or permit of, or registration or filing with, any Governmental Entity, other than (a) the filing of (i) the Certificate of Merger in accordance with the DGCL and (ii) the appropriate documents with respect to the Company's qualification to do business with the relevant authorities of other states or jurisdictions in which the Company is qualified to do business; (b) compliance with any applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") and any Non-U.S. Competition Laws; (c) compliance with any applicable requirements of the Securities Act and the Exchange Act; (d) such as may be required under any applicable state securities or blue sky Laws; and (e) other consents, approvals, actions, orders, authorizations, registrations, declarations, filings and permits which, if not obtained or made, would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. The consummation of the Merger and the other transactions contemplated hereby will not result in the lapse of any Permit of the Company or its Subsidiaries or the breach of any authorization or right to use any Permit of the Company or its Subsidiaries or other right that the Company or any of its Subsidiaries has from a Third Party, except where such lapses or breaches would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. 4.4. Non-Contravention. The execution, delivery and performance by the ----------------- Company of this Agreement and the consummation by the Company of the Merger and the other transactions contemplated hereby do not and will not (a) contravene or conflict with the Company's certificate -13- of incorporation or by-laws, (b) assuming compliance with the matters referred to in Section 4.3, contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to the Company or its Subsidiaries or by which any of their respective properties is bound or affected, (c) constitute a default under (or an event that with notice or lapse of time or both could reasonably be expected to become a default) or give rise (with or without notice or lapse of time or both) to a right of termination, amendment, cancellation or acceleration under any agreement, contract, note, bond, mortgage, indenture, lease, franchise, Permit or other similar authorization or joint venture, limited liability or partnership agreement or other instrument binding upon the Company or any Company Subsidiary, or (d) result in the creation or imposition of any Lien on any asset of the Company or any Company Subsidiary, other than, in the case of clauses (b), (c) and (d), any items that would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. 4.5. Capitalization. -------------- (a) The authorized capital stock of the Company consists of 100,000,000 Company Shares and 8,000,000 shares of preferred stock, $0.01 par value per share ("Company Preferred Stock"). As of February 19, 2001, (i) 21,678,125 Company Shares were issued and outstanding (1,380,094 Company Shares were held in treasury), all of which have been duly authorized and validly issued and are fully paid and nonassessable and were issued free of preemptive or similar rights, including (x) 804,911 shares issued pursuant to the Company's 1999 Equity Incentive Plan and 1996 Equity Incentive Plan (the "Loan Shares") and (y) 1,781,837 shares held by the Company's Capital Accumulation Plan, (ii) no Company Shares were held by Subsidiaries of the Company, (iii) 2,679,893 Company Shares were issuable upon the exercise of Company Options then outstanding, (iv) 1,841,233 Company Shares were issuable as a result of elections made under the Company's Deferred Compensation Plan (the "Phantom Shares"), of which 996,338 were vested, (v) 598,147 Company Shares were issuable upon the exercise of Company Warrants then outstanding and (vi) no shares of Company Preferred Stock were issued and outstanding. Since September 30, 2000, the Company has not declared or paid any dividend or distribution in respect of any of its Equity Interests and has not repurchased or redeemed any shares of its Equity Interests, and its Board of Directors has not resolved to do any of the foregoing. (b) As of the date hereof, except (i) as set forth in this Section 4.5 and (ii) for changes since February 19, 2001, resulting from the exercise of stock options outstanding on that date, the Company has not issued, or reserved for issuance, any (x) Equity Interests of the Company, (y) securities of the Company convertible into or exchangeable for Equity Interests of the Company or (z) options, warrants or other rights to acquire from the Company, or obligations of the Company to issue, any Equity Interests of the Company or securities convertible into or exchangeable for Equity Interests of the Company (the items in clauses (x), (y) and (z) being referred to collectively as the "Company Securities"). There are no outstanding agreements or other obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any Company Securities. (c) Section 4.5(c) of the Company Disclosure Schedule sets forth a complete and accurate list of all outstanding Company Options, Company Warrants and Loan Shares as of February 19, 2001, which list sets forth the name of the holders thereof and, to the extent -14- applicable, the exercise price or purchase price thereof, the number of Company Shares subject thereto, the governing Company Employee Plan with respect thereto and the expiration date thereof. 4.6. Subsidiaries. ------------ (a) Each Subsidiary of the Company (i) is a corporation duly incorporated or an entity duly organized, and is validly existing and in good standing under the Laws of its jurisdiction of incorporation or organization, and has all powers and authority required to own, lease or operate its properties and to carry on its business as now conducted, and (ii) has all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and is duly qualified to do business as a foreign corporation or entity and is in good standing in each jurisdiction where the character of the property owned, leased or operated by it or the nature of its activities makes such qualification necessary, in each case with exceptions which would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. (b) All of the outstanding Equity Interests in each Material Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable and free of preemptive or similar rights. All of the Equity Interests in each of its Material Subsidiaries are beneficially owned, directly or indirectly, by the Company. Such Equity Interests are owned free and clear of any Lien and free of any other limitation or restriction (including any limitation or restriction on the right to vote, sell or otherwise dispose of the stock or other ownership interests) and were issued in compliance with Federal and state securities laws, in each case with exceptions which would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. There are no outstanding (i) securities of the Company or any of its Material Subsidiaries convertible into or exchangeable or exercisable for Equity Interests in any of its Material Subsidiaries, (ii) options, warrants or other rights to acquire from the Company or any of its Material Subsidiaries, or obligations of the Company or any of its Material Subsidiaries to issue, any Equity Interests in, or any securities convertible into or exchangeable or exercisable for any Equity Interests in, any of its Material Subsidiaries or (iii) agreements, obligations or arrangements of the Company or any of its Material Subsidiaries to issue, sell, repurchase, redeem or otherwise acquire any Equity Interests of any of its Material Subsidiaries. (c) Neither the Company, any of its Material Subsidiaries nor, to the Knowledge of the Company, any Material Joint Venture is in violation of any provision of its articles or certificate of incorporation or bylaws or equivalent organizational documents, in each case with exceptions which would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. 4.7. Company SEC Documents. --------------------- (a) The Company has made available to Acquiror the Company SEC Documents. The Company has filed all reports, filings, registration statements and other documents required to be filed by it with the SEC since January 1, 1999. No Company Subsidiary is required to file any form, report, registration statement or prospectus or other document with the SEC. -15- (b) As of its filing date, each Company SEC Document complied as to form in all material respects with the applicable requirements of the Securities Act and/or the Exchange Act, as the case may be. (c) No Company SEC Document filed since January 1, 1999 pursuant to the Exchange Act contained, as of its filing date, any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No Company SEC Document, as amended or supplemented, if applicable, filed since January 1, 1999 pursuant to the Securities Act contained, as of the date on which the document or amendment became effective, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading. 4.8. Financial Statements; No Material Undisclosed Liabilities. --------------------------------------------------------- (a) Each of the audited consolidated financial statements and unaudited consolidated interim financial statements of the Company included in the Company SEC Documents were prepared in conformity with generally accepted accounting principles applied on a consistent basis ("GAAP") (except as may be indicated in the notes thereto) throughout the periods involved, and each fairly presents, in all material respects, the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and their consolidated results of operations and changes in financial position for the periods then ended (subject to normal year-end adjustments in the case of any unaudited interim financial statements). (b) There are no liabilities or obligations of the Company or any Company Subsidiary, which, individually or in the aggregate, would be material to the Company and its Subsidiaries, taken as a whole, of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise and, in each case, that are required by GAAP to be set forth on a consolidated balance sheet of the Company, other than: (i) liabilities or obligations disclosed or provided for (A) in the Company Balance Sheet or disclosed in the notes thereto or (B) in the Company's consolidated balance sheet or disclosed in the notes thereto included in the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2000; (ii) liabilities or obligations incurred after September 30, 2000 in the ordinary course of business consistent with past practice; and (iii) liabilities or obligations under this Agreement or incurred in connection with the transactions contemplated hereby. 4.9. Absence of Certain Changes. Since September 30, 2000, except as -------------------------- otherwise expressly contemplated by this Agreement, the Company and each of its Subsidiaries have conducted their business in the ordinary course consistent with past practice and there has not been (a) any damage, destruction or other casualty loss (whether or not covered by insurance) affecting the business or assets of the Company or any of its Subsidiaries that has had or would be reasonably likely to have a Company Material Adverse Effect; (b) any amendment or change in the Company's certificate of incorporation or by-laws; (c) any material change by the -16- Company in its accounting methods, principles or practices (other than changes required by GAAP after the date of this Agreement); (d) other than in the ordinary course of business, any sale of a material amount of assets of the Company and its Subsidiaries; (e) any material Tax election, any material change in method of accounting with respect to Taxes or any compromise or settlement of any proceeding with respect to any material Tax liability or (f) any action, event, occurrence, development or state of circumstances or facts that has had or would be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. 4.10. Litigation. There is no action, suit, claim, investigation, ---------- arbitration or proceeding pending, or to the Knowledge of the Company threatened, against the Company or any of its Subsidiaries or any of their respective assets or properties before any arbitrator or Governmental Entity that would be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect (it being understood that the mere filing of litigation, or mere existence of litigation, by or on behalf of Company Stockholders or any other Person, that challenges or otherwise seeks damages with respect to the transactions contemplated hereby shall not in and of itself be deemed to have such effect). Neither the Company nor any of its Subsidiaries nor any of their respective properties is or are subject to any order, writ, judgment, injunction, decree, determination or award having, or which would be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. 4.11. Taxes. Except for matters which would not have or would not be ----- reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, (a) all material Tax returns, statements, reports and forms (collectively, the "Company Returns") required to be filed with any taxing authority by, or with respect to, the Company and the Company Subsidiaries have been filed in accordance with all applicable Laws; (b) the Company and the Company Subsidiaries have timely paid all Taxes due and payable whether or not shown as being due on any Company Return (other than Taxes which are being contested in good faith and for which reserves are reflected on the Company Balance Sheet), and, as of the time of filing, the Company Returns correctly reflected the facts regarding the income, business, assets, operations, activities and status of the Company and the Company Subsidiaries; (c) the charges, accruals and reserves for Taxes with respect to the Company and the Company Subsidiaries reflected on the Company Balance Sheet are adequate under GAAP to cover the Tax liabilities accruing through the date thereof; (d) there is no action, suit, proceeding, audit or claim now proposed or pending against the Company or any Company Subsidiary in respect of any Taxes; (e) neither the Company nor the Company Subsidiaries are party to, bound by or have any obligation under, any tax sharing agreement or similar contract or arrangement or any agreement that obligates them to make any payment computed by reference to the Taxes, taxable income or taxable losses of any other Person; (f) there are no Liens with respect to Taxes on any of the assets or properties of the Company or the Company Subsidiaries other than with respect to Taxes not due and payable; (g) neither the Company nor any of the Company Subsidiaries (i) is, or has been a member of an affiliated, consolidated, combined or unitary group, other than one of which the Company was the common parent and (ii) has any liability for the Taxes of any Person (other than the Company and the Company Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), or as a transferee or successor, by contract or otherwise; (h) no consent under Section 341(f) of the Code has been filed with respect to the Company or any of the Company Subsidiaries; (i) neither the Company nor any of the Company Subsidiaries has ever entered into a closing agreement pursuant to Section 7121 of the Code; and -17- (j) neither the Company nor the Company Subsidiaries has agreed to make or is required to make any adjustment under Section 481(a) of the Code by reason of a change in accounting method or otherwise. 4.12. Employee Benefits. ----------------- (a) Except as set forth on the Company Disclosure Schedule and except for any Foreign Plans, neither the Company nor any ERISA Affiliate (as defined below) maintains, administers or contributes to any material "employee benefit plan", as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"), or any material employment, severance or similar contract, plan, arrangement or policy or any other material plan or arrangement (written or oral) providing for compensation, bonuses, profit-sharing, stock option or other stock related rights or other forms of incentive or deferred compensation, vacation benefits, insurance coverage (including any self-insured arrangements), health or medical benefits, disability benefits, workers' compensation, supplemental unemployment benefits, severance benefits and post-employment or retirement benefits (including compensation, pension, health, medical or life insurance benefits) which covers any employee or former employee or director of the Company or any Company Subsidiary. The Company has delivered or made available (i) current, accurate and complete copies (or to the extent no such copy exists, an accurate description) of each Company Employee Plan (as defined below and, if applicable, related trust agreements), (ii) all amendments thereto and written interpretations and (iii) for the two most recent years (A) the Form 5500 and attached schedules, (B) audited financial statements and (C) actuarial valuation reports. The material plans (other than the Foreign Plans) listed on Section 4.12 of the Company Disclosure Schedule are referred to collectively herein as the "Company Employee Plans." An "ERISA Affiliate" of any Person means any other Person which, together with such Person, would be treated as a single employer under Section 414 of the Code. (b) Except as would not have or would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, (i) with respect to each Company Employee Plan (other than a plan that constitutes a "multiemployer plan", as defined in Section 3(37) of ERISA (a "Multiemployer Plan")), subject to Title IV of ERISA (a "Retirement Plan"), no "accumulated funding deficiency", as defined in Section 412 of the Code (whether or not waived and no "reportable event", as defined in Section 4043 of ERISA, has been incurred with respect to any Company Employee Plan which is a Retirement Plan, whether or not waived, (ii) no condition exists and no event has occurred that would constitute grounds for termination of any Company Employee Plan which is a Retirement Plan or, with respect to any Company Employee Plan which is a Multiemployer Plan, presents a risk of a complete or partial withdrawal under Title IV of ERISA, (iii) neither the Company nor any of its ERISA Affiliates has incurred any liability under Title IV of ERISA arising in connection with the termination of, or complete or partial withdrawal from, any plan covered or previously covered by Title IV of ERISA and neither the Company nor any ERISA Affiliate would be subject to any withdrawal liability if, as of the Effective Time, the Company, the Company Subsidiaries or any ERISA Affiliate were to engage in a complete withdrawal (as defined in ERISA section 4203) or partial withdrawal (as defined in ERISA section 4205) from any such Multiemployer Plan, (iv) nothing has been done or omitted to be done and no transaction or holding of any asset under or in connection with any Company Employee Plan has occurred that will make the Company or any -18- Subsidiary, or any officer or director of the Company or any Subsidiary, subject to any liability under Title I of ERISA or liable for any Tax pursuant to Section 4975 of the Code (assuming the taxable period of any such transaction expired as of the date hereof) and (v) neither the Company nor any ERISA Affiliate has engaged in, or is a successor or parent corporation to an entity that has engaged in, a transaction described in Section 4069 or 4212(c) of ERISA. (c) Each Company Employee Plan which is intended to be qualified under Section 401(a) of the Code is so qualified and has been so qualified during the period from its adoption to date, and each trust forming a part thereof is exempt from Tax pursuant to Section 501(a) of the Code, except as would not have or would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has furnished to Acquiror copies of the most recent Internal Revenue Service determination letters with respect to each Company Employee Plan. Each Company Employee Plan has been maintained in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations, including ERISA and the Code, which are applicable to such Company Employee Plan, except as would not have or would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. (d) Except as would not have or would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, (i) no Company Employee Plan exists that could result in the payment to any present or former employee of the Company Subsidiaries of any money or other property or accelerate or provide any other rights or benefits to any present or former employee of the Company or any Company Subsidiaries as a result of the transaction contemplated by this Agreement and (ii) there is no contract, agreement, plan or arrangement covering any employee or former employee of the Company that, individually or collectively, would be reasonably likely to give rise to the payment of any amount that would not be deductible pursuant to the terms of Sections 162(m) or 280G of the Code. (e) Except as would not have or would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, there has been no amendment to, written interpretation or announcement (whether or not written) relating to, or change in employee participation or coverage under, any Company Employee Plan which would increase the expense of maintaining such Company Employee Plan above the level of the expense incurred in respect thereof for the year ended December 31, 1999. (f) Except as would not have or would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any Company Subsidiary has any obligations to provide retiree health and life insurance or other retiree death benefits under any Company Employee Plan, other than benefits mandated by Section 4980B of the Code or under applicable Law, and each such Company Employee Plan may be amended or terminated without incurring any material liability thereunder. (g) Except as would not have or would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, (i) no Company Employee Plan is under audit or is the subject of an audit or investigation by the Internal Revenue Service, the Department of Labor, the Pension Benefit Guaranty Corporation or any other Governmental Entity, nor, to the Knowledge of the Company, is any such audit or investigation threatened or -19- pending and (ii) with respect to any Company Employee Plan, (A) no actions, suits or claims (other than routine claims for benefits in the ordinary course) are pending or, to the Knowledge of the Company, threatened and (B) no facts or circumstances exist that could reasonably be expected to give rise to any such actions, suits or claims. (h) Except as would not have or would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, with respect to each Retirement Plan, as of the Effective Time, the assets of each such Retirement Plan are at least equal in value to the present value of the accrued benefits (vested and unvested) of the participants in such Retirement Plan on a termination and projected benefit obligation basis, based on the actuarial methods and assumptions indicated in the most recent actuarial valuation reports. (i) Except as would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, (i) all contributions required to be made by the Company or any Material Subsidiary with respect to a Foreign Plan have been timely made, (ii) each Foreign Plan has been maintained in substantial compliance with its terms and with the requirements of any and all applicable Laws and has been maintained, where required, in good standing with the applicable Governmental Entity and (iii) neither the Company nor any Material Subsidiary has incurred any obligation in connection with the termination or withdrawal from any Foreign Plan. For purposes hereof, the term "Foreign Plan" shall mean any plan, program, policy, arrangement or agreement maintained or contributed to by, or entered into with, the Company or any Material Subsidiary with respect to employees (or former employees) employed outside the United States. 4.13. Compliance with Laws; Licenses, Permits and Registrations. --------------------------------------------------------- (a) Neither the Company nor any of its Subsidiaries is in violation of, or has violated, any applicable provisions of any Laws, except for violations which would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. (b) The Company and each of its Subsidiaries has all permits, licenses, easements, variances, exemptions, consents, certificates, approvals, authorizations of and registrations (collectively, "Permits") with and under all federal, state, local and foreign Laws, and from all Governmental Entities required by the Company and each of its Material Subsidiaries to carry on their respective businesses as currently conducted, except where the failure to have the Permits would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. 4.14. Title to Properties. ------------------- (a) The Company and each of its Subsidiaries have good title to, or valid leasehold interests in, all their properties and assets, except for (i) those which are no longer used or useful in the conduct of their businesses and (ii) defects in title, easements, restrictive covenants and similar Liens, encumbrances or impediments that, in the aggregate, would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. All of these assets and properties, other than assets and properties in which the Company or any of its Subsidiaries has leasehold interests, are free and clear of all Liens, except for Liens that would -20- not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. (b) Except as would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, (i) the Company and each of its Material Subsidiaries are in substantial compliance with the terms of all leases of their properties or assets to which they are a party, and all such leases are in full force and effect and (ii) the Company and each of its Material Subsidiaries enjoy peaceful and undisturbed possession under all such leases. 4.15. Intellectual Property. Except as would not be reasonably likely to --------------------- have, individually or in the aggregate, a Company Material Adverse Effect, the Company and each of its Subsidiaries own or have a valid license or other right to use each trademark, service mark, trade name, domain name, mask work, invention, patent, trade secret, copyright, know-how (including any registrations or applications for registration of any of the foregoing) or any other similar type of proprietary intellectual property right (collectively, the "Company Intellectual Property") necessary to carry on the business of the Company and its Subsidiaries, taken as a whole, as currently conducted. To the Knowledge of the Company, neither the Company nor any of its Subsidiaries has received any written notice of infringement of or challenge to, and there are no claims pending with respect to the rights of others to the use of, any Company Intellectual Property that, in any such case would be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. 4.16. Finders' Fees; Opinions of Financial Advisor. -------------------------------------------- (a) Except for Morgan Stanley & Co. Incorporated, whose fees and expenses will be borne by the Company, there is no investment banker, financial advisor, broker, finder or other intermediary which has been retained by, or is authorized to act on behalf of, the Company or any of its Subsidiaries which might be entitled to any fee or commission from the Company, Holding, Acquiror or any of their respective Affiliates upon consummation of the Merger or the other transactions contemplated by this Agreement. The Company has heretofore furnished to the Acquiror complete and correct copies of all agreements between the Company or its Subsidiaries and Morgan Stanley & Co. Incorporated pursuant to which such firm would be entitled to any payment relating to the Merger and the other transactions contemplated by this Agreement. (b) The Special Committee has received the opinion of Morgan Stanley & Co. Incorporated, dated as of the date hereof, to the effect that, as of such date, and subject to the qualifications stated therein, the Merger Consideration is fair to the holders of Company Shares (other than Acquiror and the members of the Buying Group and each of their respective Affiliates) from a financial point of view. 4.17. Labor Matters. There are no strikes, slowdowns, work stoppages, ------------- lockouts or other material labor controversies pending or, to the Knowledge of the Company, threatened by or between the Company or any of its Material Subsidiaries and any of their respective employees that would be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a -21- labor union or labor organization. The Company and each of its Material Subsidiaries is in compliance with all applicable Laws, agreements, contracts, and policies relating to employment, employment practices, wages, hours, and terms and conditions of employment except for failures so to comply, if any, that would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. 4.18. Material Contract Defaults. To the Knowledge of the Company, neither -------------------------- the Company nor any of its Material Subsidiaries is, or has received any notice that any other party is, in default or unable to perform in any respect under any material contracts, agreements, commitments, arrangements, leases, licenses, policies or other instruments to which it or any of its Material Subsidiaries is a party or by which it or any of its Material Subsidiaries is bound ("Material Contracts"), except for those defaults which would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a default, except for those defaults which would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has not received written notice of the termination of, or intent to terminate any Material Contract, except for such notices or terminations which would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. 4.19. Required Vote; Board Approval. ----------------------------- (a) Under the DGCL (including, without limitation, Section 203 thereof), the Company's certificate of incorporation and by-laws and any other applicable Law or stock exchange rules, the only votes required of the holders of any class or series of the Company's Equity Interests necessary to adopt this Agreement and to approve the Merger and the other transactions contemplated hereby are the following: (i) the approval, assuming a quorum is present, of a majority of the Company Shares voting in person or by proxy at such meeting, and (ii) the approval, and not the written consent, of at least 66 2/3% of the outstanding Company Shares which are not owned by any "interested stockholder" (as defined in Section 203 of the DGCL) (collectively, "Company Stockholder Approval"). (b) The Special Committee and the Company's Board of Directors has (i) determined that this Agreement and the transactions contemplated hereby, including the Merger, are in the best interests of the Company and its Stockholders (other than Holding, Acquiror and the members of the Buying Group and each of their respective Affiliates), (ii) approved this Agreement and the transactions contemplated hereby, including the Merger and (iii) resolved to recommend to the Company Stockholders that they vote in favor of adopting and approving this Agreement and the Merger in accordance with the terms hereof. 4.20. Information to Be Supplied. -------------------------- (a) The information supplied or to be supplied by the Company for inclusion or incorporation by reference in (i) the Registration Statement will, at the time the Registration Statement is filed with the SEC and at the time it becomes effective under the Securities Act, not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading and (ii) the -22- Schedule 13E-3 will, at the time it is first filed with the SEC and at any time it is amended or supplemented, not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading. (b) The Proxy Statement will, at the time of the mailing thereof and at the time of the Company Stockholder Meeting, not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Company Stockholder Meeting which has become untrue or misleading. (c) The Registration Statement and the Schedule 13E-3 (in each case with respect to information provided by or incorporated by reference from, the Company) and the Proxy Statement will comply as to form in all material respects with the provisions of the Securities Act and the Exchange Act. (d) Notwithstanding the foregoing, the Company makes no representation or warranty with respect to any statements made or incorporated by reference in the Registration Statement, the Proxy Statement or the Schedule 13E-3 based on information supplied by Holding or Acquiror for inclusion or incorporation by reference therein. 4.21. Disclaimer of Other Representations and Warranties. The Company -------------------------------------------------- does not make, and has not made, any representations or warranties in connection with the Merger and the transactions contemplated hereby other than those expressly set forth herein. It is understood that any data, any financial information or any memoranda or other materials or presentations are not and shall not be deemed to be or to include representations and warranties of the Company. Except as expressly set forth herein, no Person has been authorized by the Company to make any representation or warranty relating to the Company or any Company Subsidiary or their respective businesses, or otherwise in connection with the Merger and the transactions contemplated hereby and, if made, such representation or warranty may not be relied upon as having been authorized by the Company. ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF HOLDING AND ACQUIROR Except as disclosed in the Holding and Acquiror Disclosure Schedule attached hereto, Holding and Acquiror, jointly and severally, represent and warrant to the Company that: 5.1. Corporate Existence and Power. Each of Holding and Acquiror is a ----------------------------- corporation duly incorporated, validly existing and in good standing under the Laws of its jurisdiction of incorporation and has all corporate powers and authority required to own, lease and operate its properties and carry on its business as now conducted. Each of Holding and Acquiror is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the property owned, leased or operated by it or the nature of its activities -23- makes qualification necessary, except where the failure to be qualified would not be reasonably likely to have, individually or in the aggregate, a Holding Material Adverse Effect. Each of Holding and Acquiror has heretofore made available to the Company true and complete copies of its certificate of incorporation and by-laws as currently in effect. Since the date of its incorporation, each of Holding and Acquiror has not engaged in any activities other than in connection with or as contemplated by this Agreement. 5.2. Corporate Authorization. ----------------------- (a) The execution, delivery and performance by each of Holding and Acquiror of this Agreement and the consummation by each of Holding and Acquiror of the Merger and the other transactions contemplated hereby are within the corporate powers of each of Holding and Acquiror and have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of Holding or Acquiror are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by each of Holding and Acquiror and assuming that this Agreement constitutes the valid and binding obligation of the Company, this Agreement constitutes a valid and binding agreement of each of Holding and Acquiror, enforceable in accordance with its terms. (b) The Board of Directors of each of Holding and Acquiror has (i) determined that this Agreement and the transactions contemplated hereby, including the Merger, are in the best interests of such company and its stockholders, (ii) approved this Agreement and the transactions contemplated hereby and (iii) resolved to recommend and recommended to its stockholders that they vote in favor of adopting and approving this Agreement and the Merger in accordance with the terms hereof. Holding, in its capacity as the sole stockholder of Acquiror, has approved and adopted this Agreement and the transactions contemplated hereby, including the Merger. The stockholders of Holding have unanimously approved and adopted this Agreement and the transactions contemplated hereby, including the Merger. 5.3. Governmental Authorization. The execution, delivery and performance -------------------------- by each of Holding and Acquiror of this Agreement and the consummation by Holding and Acquiror of the transactions contemplated hereby will not require any consent, approval, action, order, authorization, or permit of, or regulation or filing with, any Governmental Entity by Holding or Acquiror other than (a) those set forth in clauses (a) through (d) of Section 4.3 and (b) other consents, approvals, actions, orders, authorizations, registrations, declarations, filings and permits which, if not obtained or made, would not prevent or materially impair the ability of Holding or Acquiror to consummate the Merger or the other transactions contemplated by this Agreement. 5.4. Non-Contravention. The execution, delivery and performance by ----------------- Holding and Acquiror of this Agreement and the consummation by Holding and Acquiror of the Merger and the other transactions contemplated hereby do not and will not (a) contravene or conflict with the certificate of incorporation or by- laws of either of Holding or Acquiror, (b) assuming compliance with the matters referred to in Section 5.3, contravene or conflict with any provision of Law, binding upon or applicable to either of Holding and Acquiror or by which any of their respective -24- properties is bound or affected, (c) constitute a default under (or an event that with notice or lapse of time or both could reasonably become a default) or give rise (with or without notice or lapse of time or both) to a right of termination, amendment, cancellation or acceleration under any agreement, contract, note, bond, mortgage, indenture, lease, license, franchise, joint venture, limited liability or partnership agreement or other instrument binding upon, either of Holding or Acquiror, or (d) result in the creation or imposition of any Lien on any asset of either of Holding or Acquiror other than, in the case of clauses (b), (c) and (d), any such items that would not prevent or materially impair the ability of Holding or Acquiror to consummate the Merger or the other transactions contemplated by this Agreement. 5.5. Financing. --------- (a) Acquiror has received and executed commitment letters dated February 23, 2001 from Credit Suisse First Boston ("CSFB") and DLJ Investment Funding, Inc. ("DLJ") as amended on May 31, 2001 (collectively, the "Commitment Letters"), pursuant to which CSFB and DLJ have committed, subject to the terms and conditions set forth therein, to provide to the Company the amount of financing set forth in the Commitment Letters (the "Commitment Letter Financing"), to complete the transactions contemplated hereby and for working capital and general corporate purposes following the Effective Time. A true and complete copy of each of the Commitment Letters is attached hereto as Exhibit C. --------- The Commitment Letters have not been amended or modified since the amendments of May 31, 2001. Acquiror has fully paid any and all commitment fees or other fees required by such Commitment Letters to be paid as of the date hereof (and will duly pay any such fees after the date hereof). The Commitment Letters are valid and in full force and effect and no event has occurred which (with or without notice, lapse of time or both) would constitute a default thereunder on the part of Holding or Acquiror. (b) Acquiror has entered into a purchase agreement, dated as of May 31, 2001 (the "Note Purchase Agreement") with a group of initial purchasers, including CSFB, providing for Acquiror to issue and sell, and such initial purchasers to purchase, $229,000,000 aggregate principal amount of 11 1/4% Senior Subordinated Notes due 2011 of Acquiror (the "Acquiror Senior Subordinated Notes"), subject to the terms and conditions set forth in the Note Purchase Agreement (the "Purchase Agreement Financing" and, together with the Commitment Letter Financing, the "Financing"). The proceeds of the Acquiror Senior Subordinated Notes are referred to herein as the "Senior Subordinated Notes Proceeds." A true and complete copy of the Note Purchase Agreement is attached hereto as Exhibit D. Acquiror has fully paid all commitment fees or --------- other fees required by the Note Purchase Agreement to be paid as of the date hereof (and will duly pay any such fees after the date hereof). The Note Purchase Agreement is valid and in full force and effect and no event of default has occurred which (with or without notice, lapse of time or both) would constitute a default thereunder on the part of Acquiror (other than any matter relating to the Company or any of its Subsidiaries). (c) The Commitment Letters have been obtained and the Note Purchase Agreement has been entered into, subject to the terms and conditions thereof, to pay in part the aggregate Merger Consideration pursuant to the Merger, to refinance in part any indebtedness of the Company and its Subsidiaries that will become due as a result of the transactions contemplated by this Agreement, to pay all related fees and expenses, and to provide additional financing for future -25- working capital and general corporate needs of the Company and its Subsidiaries. The obligations to fund the commitments under the Commitment Letters and the Note Purchase Agreement are not subject to any conditions other than as set forth in the Commitment Letters and the Note Purchase Agreement, respectively. It is the good faith belief of Holding and Acquiror, as of the date hereof, that the Financing will be obtained. Each of Holding and Acquiror will use its reasonable best efforts to cause the Financing to be completed on the terms set forth in the Commitment Letters and the Note Purchase Agreement. (d) The Financing, together with the other funds available to Acquiror, will provide sufficient funds to consummate the Merger and the other transactions contemplated hereby on the terms set forth in this Agreement. (e) Immediately after the consummation of the Merger, the Surviving Corporation (i) will not be insolvent, (ii) will not be left with unreasonably small capital, and (iii) will not have debts beyond its ability to pay such debts as they mature. 5.6. Information to Be Supplied. -------------------------- (a) The Registration Statement will, at the time the Registration Statement is filed with the SEC and at the time it becomes effective under the Securities Act, not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading. (b) The information supplied or to be supplied by Holding and Acquiror for inclusion or incorporation by reference in (i) the Schedule 13E-3 will, at the time it is first filed with the SEC and at any time it is amended or supplemented, not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, and (ii) the Proxy Statement will, at the time of the mailing thereof and at the time of the Company Stockholder Meeting, not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Company Stockholder Meeting which has become untrue or misleading. (c) The Proxy Statement and the Schedule 13E-3 (in each case with respect to information relating to Holding and Acquiror) and the Registration Statement will comply as to form in all material respects with the provisions of the Securities Act and the Exchange Act. (d) Notwithstanding the foregoing, neither Holding nor Acquiror makes any representation or warranty with respect to any statements made or incorporated by reference in the Proxy Statement, the Registration Statement or the Schedule 13E-3 based on information supplied by the Company for inclusion or incorporation by reference therein. -26- 5.7. No Breach. Each Person affiliated with the Buying Group listed on --------- Section 5.7 of the Holding and Acquiror Disclosure Schedule has reviewed Article 4 of this Agreement and has no actual knowledge as of the date hereof of any breaches of the representations or warranties contained therein such that the condition in Section 9.3(a)(ii) would not be satisfied. 5.8. Disclaimer of Other Representations and Warranties. Holding and -------------------------------------------------- Acquiror do not make, and have not made, any representations or warranties in connection with the Merger and the transactions contemplated hereby other than those expressly set forth herein. It is understood that any data, any financial information or any memoranda or other materials or presentations are not and shall not be deemed to be or to include representations and warranties of Holding and Acquiror. Except as expressly set forth herein, no Person has been authorized by Holding or Acquiror to make any representation or warranty relating to Holding or Acquiror or their respective businesses, or otherwise in connection with the Merger and the transactions contemplated hereby and, if made, such representation or warranty may not be relied upon as having been authorized by Holding or Acquiror. ARTICLE 6 COVENANTS OF THE COMPANY The Company agrees as set forth below. 6.1. Company Interim Operations. Except as set forth in the Company -------------------------- Disclosure Schedule or as otherwise expressly contemplated hereby, without the prior consent of Acquiror (which consent shall not be unreasonably withheld or delayed), from the date hereof until the Effective Time, the Company shall, and shall cause each of its Material Subsidiaries to, conduct their business in all material respects in the ordinary course consistent with past practice (with such changes as the Company determines in good faith are necessary or advisable with respect to (w) changes in U.S. or global economic, industry or political conditions, (x) changes in U.S. or global financial markets or conditions, (y) any generally applicable change in Law or interpretation of any thereof and/or (z) the announcement of this Agreement or the transactions contemplated hereby or the Company's performance of its obligations under this Agreement and compliance with the covenants set forth herein), and shall use commercially reasonable efforts to (i) preserve intact its present business organization, (ii) maintain in effect all material Permits that are required for the Company or such Material Subsidiary to carry on its business, (iii) keep available the services of its present key officers and employees, and (iv) preserve existing relationships with its material customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, except as set forth in the Company Disclosure Schedule or as otherwise expressly contemplated by this Agreement, from the date hereof until the Effective Time, without the prior consent of Acquiror, the Company shall not, nor shall it permit any of its Subsidiaries, directly or indirectly, to: (a) amend the Company's or any Subsidiary's certificate of incorporation or by-laws (or equivalent organizational documents); (b) (i) split, combine or reclassify any shares of capital stock of the Company or amend the terms of any rights, warrants or options to acquire its securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination -27- thereof) in respect of its Equity Interests, or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any rights, warrants or options to acquire its securities, except for ordinary course dividends by Company Subsidiaries or, with respect to clause (iii) only, pursuant to the existing terms of any Company Employee Plan or Foreign Plan or any agreement executed pursuant thereto; (c) issue, deliver, sell, or authorize the issuance, delivery or sale of, its Equity Interests or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, its Equity Interests, other than, (i) in connection with directors' qualifying shares, (ii) the issuance of Company Shares upon the exercise of stock options granted prior to the date hereof or in accordance with their present terms, and (iii) the issuance of Company Shares in exchange for CBRE Stock Fund Units allocated under the Deferred Compensation Plan prior to the date hereof, in accordance with the terms of the Deferred Compensation Plan; (d) acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or series of related transactions any Person, any Equity Interests of any Person, any division or business of any Person or all or substantially all of the assets of any Person for consideration having a fair market value in excess of $5.0 million in any single or series of related transactions or $15.0 million in the aggregate; (e) sell, lease, encumber or otherwise dispose of any assets which are material to the Company and its Subsidiaries, taken as a whole, other than (i) sales in the ordinary course of business consistent with past practice, (ii) equipment and property no longer used in the operation of the Company's business, (iii) assets related to discontinued operations, and (iv) contributions or other transfers of assets to any Joint Venture permitted by Section 6.1(d) hereof; provided, however, that the consent of Acquiror to do any of the foregoing shall not be unreasonably withheld; (f) (i) (A) incur any indebtedness for borrowed money, except to fund working capital in the ordinary course consistent with past practice under the Company's existing credit facilities, (B) issue or sell any debt securities (except intercompany debt securities) or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, (C) make any loans, advances (other than to employees of and consultants to the Company in the ordinary course of business) or capital contributions to, or, except as permitted by 6.1(d), investments in, any other Person, other than to the Company or any Subsidiary of the Company or (D) assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person (other than obligations of Subsidiaries and the endorsements of negotiable instruments for collection in the ordinary course of business consistent with past practice), or (ii) enter into or materially amend any contract, agreement, commitment or arrangements to effect any of the transactions prohibited by this Section 6.1(f); (g) except in the ordinary course of business consistent with past practice, (i) materially amend, modify or terminate any material contract, agreement or arrangement of the Company or any of its Material Subsidiaries or (ii) otherwise waive, release or assign any material rights, claims or benefits of the Company or any of its Material Subsidiaries thereunder; provided, however, that the consent of Acquiror to do any of the forgoing shall not be unreasonably withheld; -28- (h) (i) except as required by Law or any existing agreement, increase the amount of compensation of any director or executive officer of the Company, (ii) except as required by Law, an agreement existing on the date hereof or pursuant to a Company severance policy existing on the date hereof, grant any severance or termination pay to any director or senior officer of the Company or any Material Subsidiary, (iii) adopt any additional material employee benefit plan or (iv) except as may be required by Law or as necessary to comply with the terms of this Agreement, amend in any material respect any Company Employee Plan or Foreign Plan; provided, however, that the consent of Acquiror to do any of the forgoing shall not be unreasonably withheld; (i) materially change the Company's methods of accounting in effect at September 30, 2000, except as required by changes in GAAP or by Regulation S-X of the Exchange Act, as concurred in by its independent public accountants; provided, however, that the consent of Acquiror to do any of the forgoing shall not be unreasonably withheld; (j) (i) settle, pay or discharge, any litigation, investigation, arbitration, proceeding or other claim that is material to the business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole or (ii) settle, pay or discharge any Claim against the Company with respect to or arising out of the transactions contemplated by this Agreement; (k) other than in the ordinary course of business consistent with past practice, (i) make any material Tax election or take any position on any Company Return filed on or after the date of this Agreement or adopt any method therein that is materially inconsistent with elections made, positions taken or methods used in preparing or filing similar returns in prior periods, (ii) enter into any settlement or compromise of any material Tax liability that in either case is material to the business of the Company and its Subsidiaries, taken as a whole, (iii) file any amended Company Return with respect to any material Tax, (iv) change any annual Tax accounting period, (v) enter into any closing agreement relating to any material Tax or (vi) surrender any right to claim a material Tax refund; (l) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger); and (m) agree or commit to do any of the foregoing; provided that the limitations set forth in Sections 6.1(b) through 6.1(g) and Section 6.1(l) shall not apply to any action, transaction or event occurring exclusively between the Company and any Company Subsidiary or exclusively between any Company Subsidiaries. 6.2. Stockholder Meeting. Subject to Section 6.3, the Company shall cause ------------------- a meeting of its Stockholders (the "Company Stockholder Meeting") to be duly called and held as promptly as reasonably practicable after the date hereof for the purpose of obtaining the Company Stockholder Approval. Subject to Section 6.3 hereto, (i) the Company's Board of Directors shall recommend approval and adoption by its Stockholders of this Agreement and the transactions contemplated hereby, including the Merger (the "Company Recommendation") and (ii) the Company shall take all other reasonable lawful action to solicit and secure the Company Stockholder Approval. The Company Recommendation, together with a copy of the -29- opinion referred to in Section 4.16(b), shall be included in the Proxy Statement. Holding and Acquiror or their agents shall have the right to solicit from the Company Stockholders proxies in favor of adoption of this Agreement and the transactions contemplated hereby. 6.3. Acquisition Proposals; Board Recommendation. ------------------------------------------- (a) The Company agrees that it shall not, nor shall it permit any Company Subsidiary to, nor shall it authorize or knowingly permit any officer, director, employee, investment banker, attorney, accountant, agent or other advisor or representative of the Company or any Company Subsidiary, directly or indirectly, to (i) solicit or initiate the submission of any Acquisition Proposal, (ii) participate in any discussions or negotiations regarding, or furnish to any Person any information with respect to, or take any other action knowingly to facilitate any inquiries or the making of any proposal that constitutes or that would reasonably be expected to lead to any Acquisition Proposal, (iii) grant any waiver or release under any standstill or similar agreement with respect to any class of the Company's equity securities or (iv) enter into any agreement with respect to any Acquisition Proposal; provided, however, that if the Company receives an unsolicited Acquisition Proposal from a Third Party that the Company's Board of Directors or the Special Committee determines in good faith is or could reasonably be expected to lead to the delivery of a Superior Proposal from that Third Party, the Company may, subject to compliance with the other provisions of this Section 6.3, furnish information to, and engage in discussions and negotiations with, such Third Party with respect to its Acquisition Proposal ("Permitted Actions"). Notwithstanding the foregoing, the Board of Directors shall not take any Permitted Actions unless the Company provides Acquiror with reasonable advance notice thereof. (b) Except as permitted by this Section 6.3(b), neither the Board of Directors of the Company, the Special Committee nor any committee thereof shall amend, withdraw, modify, change, condition or qualify in any manner adverse to Acquiror, the Company Recommendation (it being understood and agreed that a communication by the Board of Directors of the Company or the Special Committee to the Company Stockholders pursuant to Rule 14d-9(f) of the Exchange Act, or any similar communication to the Company Stockholders in connection with the making or amendment of a tender offer or exchange offer, shall not be deemed to constitute a withdrawal, modification, amendment, condition or qualification of the Company Recommendation for all purposes of this Agreement, including this Section 6.3 and Section 10.1(e)). Notwithstanding the foregoing, in the event that the Board of Directors of the Company or the Special Committee takes the actions set forth in Section 6.3(e), the Board of Directors of the Company or the Special Committee may (i) withdraw or modify in any manner adverse to Acquiror, the Company Recommendation and (ii) approve or recommend, or propose to approve or recommend, any Acquisition Proposal. (c) Unless the Company's Board of Directors or the Special Committee has previously withdrawn, or is concurrently therewith withdrawing, the Company Recommendation in accordance with this Section 6.3, neither the Company's Board of Directors nor any committee thereof shall recommend any Acquisition Proposal to the Company Stockholders. Notwithstanding the foregoing, nothing contained in this Section 6.3(c) or elsewhere in this Agreement shall prevent the Company's Board of Directors or the Special Committee from complying with Rule 14e-2 under the Exchange Act with respect to any Acquisition Proposal or making any disclosure required by or otherwise complying with applicable Law. -30- (d) The Company shall notify Acquiror promptly (but in no event later than the next Business Day) after receipt by the Company of any Acquisition Proposal or any request for information relating to the Company or any of its Subsidiaries in connection with an Acquisition Proposal or for access to the properties, books or records of the Company or any of its Subsidiaries or any request for a waiver or release under any standstill or similar agreement, by any Person that informs the Board of Directors of the Company or such Subsidiary that it is considering making, or has made an Acquisition Proposal; provided, however, that prior to participating in any discussions or negotiations or furnishing any such information, the Company shall receive from such Person an executed confidentiality agreement on terms that are not materially less favorable to the Company than the Confidentiality Agreement. The notice shall indicate the terms and conditions of the proposal or request and the identity of the Person making it, and the Company will promptly notify Acquiror of any material modification of or material amendment to any Acquisition Proposal (and the terms of such modification or amendment); provided, however, that, without limiting what changes may be material, any change in the consideration to be paid with respect to the Acquisition Proposal shall be deemed to be a material modification or a material amendment. The Company shall keep Acquiror informed, on a reasonably current basis, of the status of any negotiations, discussions and documents with respect to such Acquisition Proposal or request. (e) Holding, Acquiror or the Company may terminate this Agreement, if the Company's Board of Directors or the Special Committee, after consultation with its financial and legal advisors, shall have determined (i) to approve or recommend an Acquisition Proposal after concluding that the Acquisition Proposal constitutes a Superior Proposal and (ii) to enter into a binding agreement concerning the Acquisition Proposal; provided, however, that the Company may not exercise its right to terminate under this Section 6.3(e), unless (1) the Company shall have provided to Acquiror at least three (3) Business Days' prior written notice that its Board of Directors or the Special Committee has authorized the termination and intends to terminate this Agreement pursuant to this Section 6.3(e), specifying the material terms and conditions of the Acquisition Proposal, and (2) Acquiror does not make, within three (3) Business Days of delivery of the notice, an offer such that a majority of the disinterested members of the Company's Board of Directors or the Special Committee determines that the foregoing Acquisition Proposal no longer constitutes a Superior Proposal. In connection with the forgoing, the Company agrees that it will not enter into an agreement which binds the Company with respect to such an Acquisition Proposal unless (x) the Company simultaneously delivers to Acquiror the notice contemplated by the foregoing proviso, (y) such agreement is not binding on the Company until three (3) Business Days after delivery of the notice set forth in this Section 6.3(e) and (z) the Company has the right under such agreement to unilaterally terminate such agreement prior to the termination of this Agreement without any payment or other liability or obligation of any kind. (f) The Company shall immediately cease, and shall cause any party acting on its behalf to cease, and cause to be terminated any existing discussions or negotiations with any Third Party conducted heretofore with respect to any of the foregoing and shall request any such parties in possession of confidential information about the Company or its Subsidiaries that was furnished by or on behalf of the Company or its Subsidiaries to return or destroy all such information in the possession of any such party or the agent or advisor of any such party. -31- ARTICLE 7 COVENANTS OF HOLDING AND ACQUIROR Each of Holding and Acquiror agrees as set forth below. 7.1. Director and Officer Liability. ------------------------------ (a) Holding, Acquiror and the Surviving Corporation agree that the Surviving Corporation shall adopt on or prior to the Effective Time, in its certificate of incorporation and by-laws, the same indemnification, limitation of or exculpation from liability and expense advancement provisions as those set forth in the Company's certificate of incorporation and by-laws, in each case as of the date of this Agreement, and that such provisions shall not be amended, repealed, revoked or otherwise modified for a period of six (6) years after the Effective Time in any manner that would adversely affect the rights thereunder of the individuals who on or prior to the Effective Time were directors, officers, employees or agents of the Company or the Company Subsidiaries or are otherwise entitled to the benefit of such provisions, unless such modification is required after the Effective Time by applicable Law. (b) To the fullest extent permitted under applicable Law, commencing at the Effective Time and continuing for six (6) years thereafter, Holding shall, and Holding shall cause the Surviving Corporation to, indemnify, defend and hold harmless, each present and former director, officer or employee of the Company and each Company Subsidiary and their respective estates, heirs, personal representatives, successors and assigns (collectively, the "Indemnified Parties") against all costs and expenses (including reasonable attorneys' fees), judgments, fines, losses, claims, damages, liabilities and settlement amounts paid in connection with any claim, action, suit, proceeding or investigation (whether arising before or after the Effective Time) (each, a "Claim"), arising out of or pertaining to any action or omission in their capacity as director or officer of the Company or any Subsidiary of the Company or their serving at the request of the Company or any Subsidiary of the Company as director, officer, trustee, partner or fiduciary of another Person, pension or other employee benefit plan or enterprise in each case occurring on or before the Effective Time (including the transactions contemplated by this Agreement); provided, however, that in the event any Claim or Claims for indemnification are made within such six year period, all rights to indemnification in respect of any such Claim or Claims shall continue until the final disposition of any and all such Claims. Without limiting the foregoing, in the event of any Claim, (i) Holding and the Surviving Corporation shall (x) periodically advance reasonable fees and expenses (including attorneys fees) with respect to the foregoing, (y) pay the reasonable fees and expenses of counsel selected by each Indemnified Party, promptly after statements therefor are received and (z) vigorously assist each Indemnified Party in such defense, and (ii) Holding and the Surviving Corporation, as applicable, shall cooperate in the defense of any matter; provided, however, that Holding and the Surviving Corporation shall not be liable for any settlement effected without its prior written consent (which consent shall not be unreasonably withheld or delayed). (c) For six (6) years from the Effective Time, the Surviving Corporation shall, and Holding shall cause the Surviving Corporation to, provide to the Company's and each Company Subsidiary's directors and officers liability and fiduciary liability insurance protection with the -32- same coverage and in the same amount, and on terms no less favorable to the directors and officers than that provided by the Company's directors' and officers' liability insurance policies in effect on the date hereof; provided, however, that the Surviving Corporation shall not be obligated to make premium payments for such insurance to the extent such annual premiums exceed 250% of the annual premiums paid as of the date hereof by the Company for such insurance; and provided, further, that if the premiums with respect to such insurance exceed 250% of the annual premiums paid as of the date hereof by the Company for such insurance, the Surviving Corporation shall be obligated to obtain such insurance with the maximum coverage as can be obtained at an annual premium equal to the sum of (i) 250% of the annual premiums paid by the Company as of the date hereof plus (ii) the cumulative amount by which the premiums paid after the Effective Time are less than the product of 250% of the annual premiums paid by the Company as of the date hereof and the number of years that have expired since the Effective Time. (d) All rights to indemnification and/or advancement of expenses contained in any agreement with any Indemnified Parties as in effect on the date hereof with respect to matters occurring on or prior to the Effective Time (including the transactions contemplated hereby) shall survive the Merger and continue in full force and effect. (e) This Section 7.1 shall survive the consummation of the Merger and is intended to be for the benefit of, and shall be enforceable by, the Indemnified Parties referred to herein, their heirs and personal representatives and shall be binding on the Surviving Corporation and its successors and assigns and the covenants and agreements contained herein shall not be deemed exclusive of any other rights to which an Indemnified Party is entitled, whether pursuant to Law, contract or otherwise. (f) If the Surviving Corporation or any of it successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each case, to the extent necessary, proper provision shall be made so that the successors and assigns of the Surviving Corporation shall assume the obligations set forth in this Section 7.1. (g) Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors' and officers' insurance claims under any policy that is or has been in existence with respect to the Company or any of its officers, directors or employees, it being understood and agreed that the indemnification provided for in this Section 7.1 is not prior to or in substitution for any such claims under such policies. 7.2. Employee Benefits. ----------------- (a) For twelve (12) months from the Effective Time, Holding shall provide (or shall cause the Surviving Corporation to provide) employees of the Company and the Company Subsidiaries with benefits under employee benefit plans (other than equity based compensation) that are no less favorable in the aggregate than those currently provided by the Company and the -33- Company Subsidiaries to its employees. For purposes of any employee benefit plan or arrangement maintained by Holding or the Surviving Corporation, Holding and the Surviving Corporation shall recognize (or cause to be recognized) service with the Company and its Subsidiaries and any predecessor entities (and any other service credited by the Company under similar benefit plans) for all purposes (including for vesting, eligibility to participate, severance, and benefit accrual; provided, however, that solely to the extent necessary to avoid duplication of benefits, amounts payable under employee benefit plans provided by Holding or the Surviving Corporation may be reduced by amounts payable under similar employee benefit plans of the Company and its Subsidiaries with respect to the same periods of service). Any benefits accrued by employees of the Company or any Company Subsidiary prior to the Effective Time under any defined benefit pension plan of the Company or any Company Subsidiary that employs a final average pay formula shall be calculated based on the terms of such plan. From and after the Effective Time, Holding and the Surviving Corporation shall waive any pre-existing condition limitations and credit any flexible spending account balances, deductibles and out-of-pocket expenses that are applicable and/or covered under the Company's and its Subsidiaries' employee benefit plans, and are incurred by the employees and their beneficiaries during the portion of the plan year prior to participation in the benefit plans provided by Holding and the Surviving Corporation. The provisions of this Section 7.2 shall not create in any employee or former employee of the Company or any Company Subsidiary any rights to employment or continued employment with Holding, Acquiror, the Surviving Corporation or the Company or any of their respective Subsidiaries, successors or Affiliates. The provisions of this Section 7.2 shall apply to employees of the Company or any Company Subsidiary who are on disability or leave of absence. (b) Participants in the Company's 401(k) plan and non-qualified retirement plans will receive all Company contributions for the partial year ending on the Closing Date without regard to any last day of the plan year requirement or service requirement. 7.3. Severance Plan. For one (1) year from the Effective Time, Holding -------------- shall provide (or shall cause the Surviving Corporation to provide) employees of the Company and the Company's Subsidiaries with a severance plan that is no less favorable than the plan currently applicable to the Company's employees. Holding and the Surviving Corporation shall recognize (or cause to be recognized) service with the Company and its Subsidiaries or any predecessor entities (and any other services credited by the Company under similar severance plans) for all purposes; provided, however, that solely to the extent necessary to avoid duplication of benefits, amounts payable under other severance plans provided by Holding or the Surviving Corporation may be reduced by the amounts payable under the Company's severance plan. 7.4. Conduct of Holding and Acquiror. Holding will and will take all ------------------------------- action necessary to cause Acquiror to perform its obligations under this Agreement to consummate the Merger on the terms and subject to conditions set forth in this Agreement. 7.5. Transfer Taxes. All state, local or foreign sales, use, real -------------- property transfer, stock transfer or similar Taxes (including any interest or penalties with respect thereto) attributable to the Merger (collectively, the "Transfer Taxes") shall be timely paid by Holding, Acquiror or the Surviving Corporation. -34- 7.6. Investment Banking Fee. If the Closing shall occur, Holding, ---------------------- Acquiror and the Surviving Corporation shall pay or cause to be paid all fees and expenses due to Morgan Stanley & Co. Incorporated from the Company pursuant to the agreement referred to in Section 4.16(a). 7.7. Financing Arrangements. ---------------------- (a) Holding and Acquiror shall use their reasonable best efforts to obtain the Financing on the terms set forth in Commitment Letters and the Note Purchase Agreement and in an amount at least equal to the Financing on or prior to the date of the Company Stockholders Meeting. The Commitment Letters, the definitive agreements contemplated thereby and the Note Purchase Agreement (along with any other document pursuant to which Holding and Acquiror intends to obtain financing of all or a portion of the Financing) are referred to herein collectively as the "Financing Agreements". The Company will be afforded a reasonable opportunity to review and comment on the representations and warranties contained in the Financing Agreements. Holding and Acquiror shall use reasonable best efforts to ensure that the representations and warranties contained in the Financing Agreements shall be consistent with the Commitment Letters and the Note Purchase Agreement. (b) Holding or Acquiror shall provide prompt written notice to the Company of RCBA's, DLJ's or CSFB's refusal or unwillingness to provide the financing described in the Contribution and Voting Agreement, the Commitment Letters or the Note Purchase Agreement, as the case may be, and, in each case, the stated reasons therefor (to the extent known). (c) In the event that any portion of the Financing becomes unavailable in the manner or from the sources originally contemplated, Holding and Acquiror will use their reasonable best efforts to obtain any such portion from alternative sources on substantially comparable terms, if available. Holding and Acquiror acknowledge and agree that the condition set forth in Section 9.3(c) would be satisfied if they were able to obtain financing on terms substantially comparable to those set forth in the draft commitment letter of CSFB dated November 9, 2000 previously delivered to the Company. (d) The Company acknowledges and agrees that Holding and Acquiror shall have the right to seek to obtain alternative debt financing that they believe to be on more favorable terms than the terms of the Commitment Letters so long as they simultaneously continue to use their reasonable best efforts to obtain the Financing on the terms set forth in the Commitment Letters. 7.8. Contribution and Voting Agreement. Holding and Acquiror shall --------------------------------- enforce to the fullest extent permitted by applicable Laws Sections 3.1 and 4.4 of the Contribution and Voting Agreement. Sections 3.1 and 4.4 of the Contribution and Voting Agreement shall not be amended, modified, terminated or waived without the prior written approval of the Company and the Special Committee or a majority of the disinterested members of the Board of Directors. 7.9. Board Member. Holding and Acquiror agree to cause the initial Board ------------ of Directors of Holding after the Effective Time to include one person who is currently employed by the Company (other than Messrs. Wirta and White) as an active broker of the Company. -35- ARTICLE 8 COVENANTS OF HOLDING, ACQUIROR AND THE COMPANY The parties hereto agree as set forth below. 8.1. Efforts and Assistance. ---------------------- (a) Subject to the terms and conditions hereof, each party will use commercially reasonable best efforts to take, or cause to be taken, all actions, to file, or caused to be filed, all documents and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement as promptly as practicable, including, without limitation, obtaining all necessary consents, waivers, approvals, authorizations, Permits or orders from all Governmental Entities or other Third Parties. The Company, Holding and Acquiror shall furnish all information required to be included in the Proxy Statement, the Schedule 13E-3, the Registration Statement or for any application or other filing to be made pursuant to the rules and regulations of any Governmental Entity in connection with the transactions contemplated by this Agreement. Holding, Acquiror and the Company shall have the right to review in advance, and to the extent reasonably practicable each will consult the other on, all the information relating to the other and each of their respective Subsidiaries, that appear in any filing made with, or written materials submitted to, any third party or any Governmental Entity in connection with the Merger. Holding and Acquiror shall act reasonably and as promptly as reasonably practicable. (b) Each of the Company and Holding shall make an appropriate filing of a notification and report form pursuant to the HSR Act with respect to the transactions contemplated hereby promptly and shall promptly respond to any request for additional information pursuant to the HSR Act and supply such information. In addition, the Company and Holding shall each promptly make any other filing that is required under any Non-U.S. Competition Law. Holding, Acquiror and the Company shall each use their commercially reasonable efforts to resolve objections, if any, as may be asserted by any Governmental Entity with respect to the Merger under any antitrust or trade or regulatory Laws or regulations of any Governmental Entity, and neither the Company nor any of the Company Subsidiaries shall agree to do any of the actions set forth in the foregoing clause without the prior written consent of Acquiror. Holding and Acquiror shall reasonably consult with the Company and, subject to being permitted by the Governmental Entity to do so, the Company shall have the right to attend and participate in any telephone calls or meetings that Holding or Acquiror has with any Person with regard to this Agreement and the transactions contemplated hereby. (c) The Company agrees to provide, and will cause its Subsidiaries and its and their respective officers, employees and advisers to provide, such cooperation as is reasonably necessary in connection with the arrangement of any financing to be consummated contemporaneously with or at or after the Closing in respect of the transactions contemplated by this Agreement, including (i) participation in meetings, due diligence sessions and road shows, (ii) the preparation of offering memoranda, private placement memoranda, prospectuses and similar documents, (iii) the execution and delivery of any commitment or financing letters, underwriting , purchase or placement agreements, pledge and security documents, other definitive financing documents, or other requested certificates or documents and comfort letters -36- and consents of accountants as may be reasonably requested by Holding and Acquiror and taking such other actions as are reasonably required to be taken by the Company in the Commitment Letters or any other financing arrangements contemplated by Section 7.7 hereof; provided, however, that (A) the terms and conditions of any of the agreements and other documents referred to in clause (iii) shall be consistent with the terms and conditions of the financing required to satisfy the condition precedent set forth in Section 9.3(d), (B) the Company shall be given a reasonable amount of time to review and comment on the terms and conditions of any of the agreements and other documents set forth in clause (iii) prior to the execution of those documents, (C) the terms and conditions of such financing may not require the payment of any commitment or other fees by the Company or any of its Subsidiaries, or the incurrence of any liabilities by the Company or any of its Subsidiaries, prior to the Effective Time and the obligation to make any such payment shall be subject to the occurrence of the Closing and (D) the Company shall not be required to provide any such assistance which would interfere unreasonably with the business or operations of the Company or its Subsidiaries. In addition, in conjunction with the obtaining of any such financing, the Company agrees, at the reasonable request of Holding and Acquiror, to call for prepayment or redemption, or to prepay, redeem and/or renegotiate, as the case may be, any then existing indebtedness of the Company; provided that no such prepayment or redemption shall themselves actually be made until contemporaneously with or after the Effective Time of the Merger. 8.2. Proxy Statement and Schedule 13E-3. ---------------------------------- (a) Reasonably promptly after execution of this Agreement, the Company shall prepare the Proxy Statement, file the Proxy Statement with the SEC under the Exchange Act, and use commercially reasonable efforts to have the Proxy Statement cleared by the SEC. Holding, Acquiror and the Company shall cooperate with each other in the preparation of the Proxy Statement, and the Company shall notify Acquiror of the receipt of any comments of the SEC with respect to the Proxy Statement and of any requests by the SEC for any amendment or supplement thereto or for additional information and shall provide to Acquiror reasonably promptly copies of all correspondence between the Company or any representative of the Company and the SEC. The Company shall give Acquiror and its counsel the opportunity to review and comment on the Proxy Statement and any other documents filed with the SEC or mailed to the Company Stockholders prior to their being filed with, or sent to, the SEC or mailed to its Stockholders and shall give Acquiror and its counsel the opportunity to review and comment on all amendments and supplements to the Proxy Statement and any other documents filed with, or sent to, the SEC or mailed to the Company Stockholders and all responses to requests for additional information and replies to comments prior to their being filed with, or sent to, the SEC or mailed to its Stockholders. Each of the Company, Holding and Acquiror agrees to use its commercially reasonable efforts, after consultation with the other parties hereto, to respond promptly to all such comments of and requests by the SEC. As promptly as practicable after the Proxy Statement has been cleared by the SEC, the Company shall mail the Proxy Statement to the Stockholders. Prior to the date of approval of the Merger by the Stockholders, each of the Company, Holding and Acquiror shall correct promptly any information provided by it and used in the Proxy Statement that shall have become false or misleading in any material respect, and the Company shall take all steps necessary to file with the SEC and have cleared by the SEC any amendment or supplement to the Proxy Statement as to correct the same and to -37- cause the Proxy Statement as so corrected to be disseminated to the Stockholders, in each case to the extent required by applicable Law. (b) Promptly following the date of this Agreement, Holding, Acquiror and the Company shall file with the SEC, and shall use all commercially reasonable efforts to cause any of their respective Affiliates engaging in this transaction to file with the SEC, a Schedule 13E-3 with respect to the Merger. Each of the parties hereto agrees to use all commercially reasonable efforts to cooperate and to provide each other with such information as any of such parties may reasonably request in connection with the preparation of the Proxy Statement and the Schedule 13E-3. The Schedule 13E-3 shall be filed with the SEC concurrently with the filing of the Proxy Statement. Each of the Company, Holding and Acquiror agrees to use its commercially reasonable efforts, after consultation with the other parties hereto, to respond promptly to all such comments of and requests by the SEC. Each party hereto agrees promptly to supplement, update and correct any information provided by it for use in the Schedule 13E-3 if and to the extent that such information is or shall have become incomplete, false or misleading. 8.3. Public Announcements. The parties shall consult with each other -------------------- before issuing any press release or making any public statement with respect to this Agreement and the transactions contemplated hereby and shall not issue any such press release or make any such public statement without the prior consent of the other parties, which shall not be unreasonably withheld or delayed, except as may be required by applicable Law or any listing agreement with any national securities exchange. 8.4. Access to Information; Notification of Certain Matters. ------------------------------------------------------ (a) From the date hereof until the Effective Time and subject to applicable Law, the Company shall (i) give to Holding and Acquiror, their counsel, financial advisors, auditors and other authorized representatives reasonable access to its offices, properties, books and records; (ii) furnish or make available to Holding and Acquiror, their counsel, financial advisors, auditors and other authorized representatives any financial and operating data and other information as those Persons may reasonably request; and (iii) instruct its employees, counsel, financial advisors, auditors and other authorized representatives to cooperate with the reasonable requests of Holding and Acquiror in their investigation. Any investigation pursuant to this Section shall be conducted in a manner which will not interfere unreasonably with the conduct of the business of the Company and its Subsidiaries and shall be in accordance with any other existing agreements or obligations binding on the Company or any of its Subsidiaries. Unless otherwise required by Law, each of Holding and Acquiror will hold, and will cause its respective officers, employees, counsel, financial advisors, auditors and other authorized representatives to hold any nonpublic information obtained in any investigation in confidence in accordance with and agrees to be bound by, the terms of the confidentiality letter, dated December 15, 2000, as amended as of the date hereof (the "Confidentiality Agreement"), among the Company and the members of the Buying Group. No investigations pursuant to this Section 8.4(a) shall affect any representations or warranties of the parties herein or the conditions to the obligations of the parties hereto. -38- (b) The Company shall give prompt notice to Holding and Acquiror, and Holding and Acquiror shall give prompt notice to the Company, of (i) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would reasonably be expected to cause any representation or warranty of such party contained in this Agreement to be untrue or inaccurate in any material respect; (ii) any failure of the Company or Holding and Acquiror, as the case may be, to materially comply with or satisfy, or the occurrence or nonoccurrence of any event, the occurrence or nonoccurrence of which would reasonably be expected to cause the failure by such party to materially comply with or satisfy, any covenant, condition or agreement to be complied with or satisfied by it hereunder; (iii) any notice or other communication from any Third Party alleging that the consent of such Third Party is or may be required in connection with the transactions contemplated by this Agreement; and (iv) the occurrence of any event, development or circumstance which has had or would be reasonably likely to result in a Company or Holding Material Adverse Effect; provided, however, that the delivery of any notice pursuant to this Section 8.4(b) shall not limit or otherwise affect the remedies available hereunder to the party giving or receiving such notice. 8.5. Further Assurances. Upon the terms and subject to the conditions of ------------------ this Agreement, each of the parties hereto shall use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all other things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement, to obtain in a timely manner all necessary waivers, consents and approvals and to effect all necessary registrations and filings, and otherwise to satisfy or cause to be satisfied all conditions precedent to its obligations under this Agreement. At and after the Effective Time, the officers and directors of the Surviving Corporation will be authorized to execute and deliver, in the name and on behalf of the Company or Acquiror, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company or Acquiror, any other actions and things to vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets of the Company acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger. 8.6. Registration Statement. ---------------------- (a) Reasonably promptly after execution of this Agreement, Holding shall prepare and file with the SEC the Registration Statement; provided, however, that Holding and Acquiror shall use their commercially reasonable efforts to file the Registration Statement simultaneously with the filings of the Schedule 13E-3 and the Proxy Statement. Holding and the Company agree to cooperate in coordinating such simultaneous filings. Holding shall use commercially reasonable efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after the filing and to keep the Registration Statement effective as long as is necessary to offer and sell shares of common stock of Holding to employees of the Company. Holding and the Company shall also take any action required to be taken under any applicable state securities or blue sky Laws in connection with the issuance of shares of common stock of Holding. (b) Holding and the Company shall cooperate with each other in the preparation of the Registration Statement, and Holding shall notify the Company of the receipt of any comments of -39- the SEC with respect to the Registration Statement and of any requests by the SEC for any amendment thereto or for additional information and shall provide to the Company reasonably promptly copies of all correspondence between Holding or any representative of the Holding and the SEC. Holding shall give the Company and its counsel the opportunity to review the Registration Statement prior to its being filed with the SEC and shall give the Company and its counsel the opportunity to review all amendments to the Registration Statement and all responses to requests for additional information and replies to comments prior to their being filed with, or sent to, the SEC. Holding will advise the Company, promptly after it receives notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has been filed, the issuance of any stop order, or any request by the SEC for amendment of the Registration Statement or comments thereon and responses thereto or requests by the SEC for additional information. If at any time prior to the Effective Time, the Company or Holding discovers any information relating to either party, or any of their respective Affiliates, officers or directors, that should be set forth in an amendment to the Registration Statement, so that the document will not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party that discovers any misleading information shall promptly notify the other parties hereto and an appropriate amendment describing the information shall be promptly filed with the SEC and, to the extent required by Law, disseminated to the recipients of the Prospectus. (c) Subject to compliance with applicable securities Laws, Holding and Acquiror will use their commercially reasonable efforts to provide adequate information and communications to the employees of the Company concerning the proposed capitalization of Holding and any proposals of Holding or Acquiror to allow employees of the Company to purchase shares of common stock of Holding pursuant to the Registration Statement or to otherwise acquire equity securities of Holding. 8.7. Disposition of Litigation. The Company will consult with Holding ------------------------- with respect to any Action by any Third Party to restrain or prohibit or otherwise oppose the Merger or the other transactions contemplated by this Agreement and, subject to Section 6.3, will resist any such effort to restrain or prohibit or otherwise oppose the Merger or the other transactions contemplated by this Agreement. Holding may participate in (but not control) the defense of any stockholder litigation against the Company and its directors relating to the transactions contemplated by this Agreement at Holding's sole cost and expense. In addition, subject to Section 6.3, the Company will not voluntarily cooperate with any Third Party which has sought or may hereafter seek to restrain or prohibit or otherwise oppose the Debt Offer, the Merger or the other transactions contemplated by this Agreement and will cooperate with Holding to resist any such effort to restrain or prohibit or otherwise oppose the Debt Offer, the Merger or the other transactions contemplated by this Agreement. 8.8. Confidentiality Agreements. The parties acknowledge that the Company -------------------------- and the members of the Buying Group entered into the Confidentiality Agreement, which Confidentiality Agreement shall continue in full force and effect in accordance with its terms until the earlier of (a) the Effective Time or (b) the expiration of the Confidentiality Agreement according to its terms. Without the prior written consent of Acquiror, neither the Company nor any Subsidiary of the Company will waive or fail to enforce any provision of any confidentiality or similar -40- agreement which the Company has entered into since November 10, 2000 in connection with a business combination relating to the Company. 8.9. Resignation of Directors. Prior to the Effective Time, the Company ------------------------ shall use its commercially reasonable efforts to deliver to Acquiror evidence satisfactory to Acquiror of the resignation of all directors of the Company (other than Richard C. Blum, Bradford M. Freeman, Raymond E. Wirta and W. Brett White), effective at the Effective Time. 8.10. Senior Subordinated Notes. ------------------------- (a) At or prior to the Effective Time, the Company, Holding and Acquiror will take all actions as may be necessary to (i) repurchase the aggregate principal amount of the Company's 8-7/8% Senior Subordinated Notes due 2006 (hereinafter referred to as the "Notes") that are tendered to the Company on the terms set forth in Section 8.10 of the Company Disclosure Schedule and such other customary terms and conditions as are reasonably acceptable to Acquiror and (ii) obtain the consent of holders of such principal amount of the Notes outstanding required pursuant to terms of the First Supplemental Indenture dated as of May 26, 1998 between the Company and State Street Bank and Trust Company of California, National Association, as Trustee (the "Indenture"), to amend the terms of the Indenture in the manner set forth in Section 8.10 of the Company Disclosure Schedule (the foregoing clauses (i) and (ii), together the "Debt Offer"). Notwithstanding the foregoing, in no event shall the Company be required to take any action that could obligate the Company to repurchase any Notes or incur any additional obligations to the holders of Notes prior to the Effective Time. (b) The Company shall waive any of the conditions to the Debt Offer and make any other changes in the terms and conditions of the Debt Offer as reasonably requested by the Acquiror, and the Company shall not, without Acquiror's prior consent, waive any material condition to the Debt Offer, make any changes to the terms and conditions of the Debt Offer set forth in Section 8.10 of the Company Disclosure Schedule or make any other material changes in the terms and conditions of the Debt Offer. Notwithstanding the immediately preceding sentence, Acquiror shall not request that the Company make any change to the terms and conditions of the Debt Offer which decreases the price per Note payable in the Debt Offer, changes the form of consideration payable in the Debt Offer (other than by adding consideration) or imposes conditions to the Debt Offer in addition to those set forth in Section 8.10 of the Company Disclosure Schedule which are materially adverse to holders of the Notes (it being agreed that a request by Acquiror that the Company waive any condition in whole or in part at any time and from time to time in its sole discretion shall not be deemed to be materially adverse to any holder of Notes), unless such change was previously approved in writing by the Special Committee or a majority of the disinterested members of the Board of Directors of the Company. (c) Promptly following the date of this Agreement, Holding, Acquiror and the Company shall prepare an offer to purchase the Notes (or portions thereof) and forms of the related letter of transmittal (the "Letter of Transmittal") (collectively, the "Offer to Purchase") and summary advertisement, as well as other information and exhibits (collectively, the "Offer Documents"). Holding, Acquiror and the Company shall cooperate with each other in the preparation of the Offer Documents. All mailings to the holders of Notes in connection with the Debt Offer shall -41- be subject to the prior review, comment and reasonable approval of Acquiror. Provided that this Agreement shall not have been terminated in accordance with Section 10.1, the Company shall, promptly after request of Acquiror (but in no event earlier than twenty calendar days after the date hereof), commence the Debt Offer and cause the Offer Documents to be mailed to the holders of the Notes as promptly as practicable following execution of this Agreement. The Company, Holding and Acquiror agree promptly to correct any information in the Offer Documents that shall be or have become false or misleading in any material respect. (d) In connection with the Debt Offer, if requested by Acquiror, the Company shall promptly furnish Acquiror with security position listings, any non-objecting beneficial owner lists and any available listings or computer files containing the names and addresses of the beneficial owners and/or record holders of Notes, each as of a recent date, and shall promptly furnish Acquiror with such additional information (including but not limited to updated lists of Noteholders, mailing labels, security position listings and non-objecting beneficial owners lists) and such other assistance as Acquiror or its agents may reasonably require in communicating the Debt Offer to the record and beneficial holders of Notes. ARTICLE 9 CONDITIONS TO MERGER 9.1. Conditions to the Obligations of Each Party. The obligations of the ------------------------------------------- Company, Holding and Acquiror to consummate the Merger are subject to the satisfaction of the following conditions: (a) the Company Stockholder Approval shall have been obtained; (b) any applicable waiting period or required approval under the HSR Act, Non-U.S. Competition Law or any other similar applicable Law required prior to the completion of the Merger shall have expired or been earlier terminated or received; (c) no Governmental Entity of competent authority or jurisdiction shall have issued any Law or taken any other action then in effect, which restrains, enjoins or otherwise prohibits or makes illegal the consummation of the Merger; provided, however, that the parties hereto shall use their commercially reasonable efforts to have any such Law or other legal restraint vacated; and (d) the Registration Statement shall have been declared by the SEC and continue to be effective. 9.2. Conditions to the Obligations of the Company. The obligations of the -------------------------------------------- Company to consummate the Merger are subject to the satisfaction of the following further conditions: (a) (i) each of Holding and Acquiror shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Effective Time, (ii) (A) the representations and warranties of Holding and Acquiror contained in this Agreement that are qualified by reference to a Holding Material Adverse Effect shall be true and correct when made -42- and at and as of the Effective Time, as if made at and as of such time, and (B) all other representations and warranties of Holding and Acquiror shall have been true and correct in all material respects when made and at and as of the Effective Time as if made at and as of such time, and (iii) the Company shall have received a certificate signed by the Chief Executive Officer or President of each of Holding and Acquiror to the foregoing effect; (b) each of Holding and Acquiror shall have obtained or made all consents, approvals, actions, orders, authorizations, registrations, declarations, announcements and filings contemplated by Section 5.3, which if not obtained or made (i) would render consummation of the Merger illegal or (ii) (assuming the Effective Time had occurred) would be reasonably likely to have, individually or in the aggregate, a Holding Material Adverse Effect or a Company Material Adverse Effect; and (c) Holding and Acquiror shall have caused the valuation firm which has delivered a solvency letter to the financial institutions providing the Financing (or, if no such letter has been provided thereto, a valuation firm reasonably acceptable to the Company) to have delivered to the Company a letter addressed to the Special Committee and the Board of Directors in form and substance reasonably satisfactory to the Special Committee as to the solvency of the Company and its Subsidiaries after giving effect to the Merger, the financing arrangements contemplated by Acquiror with respect to the Merger and the other transactions contemplated hereby. 9.3. Conditions to the Obligations of Acquiror. The obligations of ----------------------------------------- Acquiror to consummate the Merger are subject to the satisfaction of the following further conditions: (a) (i) the Company shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Effective Time, (ii) (A) the representations and warranties of the Company contained in this Agreement that are qualified by reference to a Company Material Adverse Effect shall be true and correct when made and at and as of the Effective Time, as if made at and as of such time, and (B) all other representations and warranties of the Company shall have been true and correct in all material respects when made and at and as of the time of the Effective Time, as if made as of such time, and (iii) Acquiror shall have received a certificate signed by the Chief Executive Officer or Chief Financial Officer of the Company to the foregoing effect; (b) the Company shall have obtained or made all consents, approvals, actions, orders, authorizations, registrations, declarations, announcements and filings contemplated by Section 4.3 which if not obtained or made (i) would render consummation of the Merger illegal or (ii) would be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect; provided, however, that this condition shall be deemed satisfied if the failure of this condition is due to willful breach by Holding or Acquiror of any covenant or willful failure to perform any agreement or a willful breach by Holding or Acquiror of any representation or warranty contained in any of the agreements related to the Financing; (c) (i) the Senior Subordinated Notes Proceeds shall have been released to the Acquiror from the escrow account into which they were deposited in connection with the closing of the offering of the Acquiror Senior Subordinated Notes, and (ii) the funding contemplated by the Commitment Letters shall have been obtained on substantially the terms set forth in the -43- Commitment Letters or the funding of the alternative financing contemplated by Section 7.7 shall have been obtained; and (d) the consents of the holders of the Notes required by Section 8.10(a) shall have been obtained. ARTICLE 10 TERMINATION 10.1. Termination. This Agreement may be terminated and the Merger ----------- abandoned at any time prior to the Effective Time by written notice, whether before or after the Company Stockholder Approval shall have been obtained: (a) by mutual written agreement of Holding, Acquiror and the Company, in each case duly authorized by the Boards of Directors or a duly authorized committee thereof; (b) by either Acquiror or the Company, if (i) the Merger shall not have been consummated by July 20, 2001 (the "End Date"); provided, however, that the right to terminate this Agreement under this Section 10.1(b)(i) shall not be available to any party whose breach of any provision of this Agreement has resulted in the failure of the Merger to occur on or before the End Date; (ii) there shall be any Law that makes consummation of the Merger illegal or otherwise prohibited or any judgment, injunction, order or decree of any Governmental Entity having competent jurisdiction enjoining the Company or Acquiror from consummating the Merger is entered and the judgment, injunction, judgment, order or decree shall have become final and nonappealable and, prior to that termination, the parties shall have used reasonable best efforts to resist, resolve or lift, as applicable, the Law, judgment, injunction, order or decree; or (iii) at the Company Stockholder Meeting (including any adjournment or postponement thereof), the Company Stockholder Approval shall not have been obtained; (c) by the Company, (i) if a breach of any representation, warranty, covenant or agreement on the part of Holding or Acquiror set forth in this Agreement shall have occurred which would cause any of the conditions set forth in Section 9.2(a) not to be satisfied, and such condition shall be incapable of being satisfied by the End Date; or (ii) as contemplated by Section 6.3(e); provided, however, that termination of this Agreement pursuant to this clause (ii) shall not be effective until the Termination Fee has been paid to Acquiror in accordance with Section 10.2(b); (d) by Acquiror if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement shall have occurred which would cause any of the conditions set forth in Section 9.3(a) not to be satisfied, and such condition is incapable of being satisfied by the End Date; or -44- (e) by Acquiror if the Board of Directors of the Company or the Special Committee shall (i) (A) amend, withdraw, modify, change, condition or qualify the Company Recommendation in a manner adverse to Holding and Acquiror; (B) approve or recommend to the Company Stockholders an Acquisition Proposal (other than by Holding, Acquiror or their Affiliates); or (C) approve or recommend that the Company Stockholders tender their Company Shares in any tender or exchange offer that is an Acquisition Proposal (other than by Holding, Acquiror or their Affiliates); (ii) deliver any notice pursuant to Section 6.3(e) that it intends to terminate this Agreement and such notice is not unconditionally withdrawn prior to the third Business Day following such delivery; (iii) in the case of the Board of Directors, the Special Committee or any other duly authorized committee thereof, approve a resolution or agree to do any of the foregoing (it being understood and agreed that the delivery of notice pursuant to Section 6.3(e) and any subsequent public announcement of such notice shall not entitle Acquiror to terminate this Agreement pursuant to this Section 10.1(e), provided such notice is unconditionally withdrawn prior to the third Business Day following delivery and the Company has previously unconditionally terminated any agreement entered into in connection with the related Acquisition Proposal); or (iv) any Person or group (other than Holding, Acquiror or their Affiliates) acquires beneficial ownership of a majority of the outstanding Company Shares. 10.2. Effect of Termination. --------------------- (a) If this Agreement is terminated pursuant to Section 10.1 (including any termination by way of Section 6.3), there shall be no liability or obligation on the part of Holding, Acquiror, the Company or any of their respective officers, directors, Stockholders, agents or Affiliates, except no such termination shall relieve any party hereto of any liability or damages resulting from any willful breach of this Agreement; provided that the provisions of Sections 8.3, 8.8, 10.2 and 10.3 and Article 11 of this Agreement, shall remain in full force and effect and survive any termination of this Agreement. (b) In the event that this Agreement is terminated by Acquiror pursuant to Section 10.1(e) or by the Company pursuant to Section 10.1(c)(ii), the Company shall pay to RCBA by wire transfer of immediately available funds to an account designated by RCBA on the next Business Day following such termination a cash amount equal to the sum of $7,500,000 plus all reasonable and documented out-of- pocket expenses and fees incurred by Holding and its stockholders on or prior to the termination of this Agreement in connection with the transactions contemplated by this Agreement; provided, however, that the aggregate amount of expenses and fees to be paid by the Company shall not exceed $3,000,000 (collectively, the "Termination Fee"). This Section 10.2(b) is intended to be for the benefit of, and shall be enforceable by, RCBA. (c) In the event that (i) this Agreement is terminated pursuant to Sections 10.1(b)(iii) or 10.1(d), (ii) an Acquisition Proposal (with all percentages included in the definition of Acquisition Proposal increased to 51% for purposes of this definition) has been made prior to the Company Stockholder Meeting or such termination (and, in the case of Section 10.1(d), prior to the breach giving rise to termination) and (iii) a transaction contemplated by an Acquisition Proposal (with all percentages included in the definition of Acquisition Proposal increased to 51% for purposes of this definition) is completed or a definitive agreement is executed by the parties thereto with respect to an Acquisition Proposal (with all percentages included in the -45- definition of Acquisition Proposal increased to 51% for purposes of this definition) within twelve (12) months from the date this Agreement is terminated, the Company shall pay to RCBA by wire transfer of immediately available funds to an account designated by RCBA on the next Business Day following the closing of the transaction contemplated by such Acquisition Proposal, a cash amount equal to the Termination Fee. 10.3. Fees and Expenses. Except as otherwise specifically provided ----------------- herein, all fees and expenses incurred in connection herewith and the transactions contemplated hereby shall be paid by the party incurring expenses, whether or not the Merger is consummated. ARTICLE 11 MISCELLANEOUS 11.1. Notices. All notices, requests and other communications to any ------- party hereunder shall be in writing (including facsimile or similar writing) and shall be given, if to Holding or Acquiror, to: c/o BLUM Capital Partners, L.P. 909 Montgomery Street, Suite 400 San Francisco, California 94133 Attention: Murray A. Indick Facsimile No.: (415) 434-3130 with a copy to: Simpson Thacher & Bartlett 3330 Hillview Avenue Palo Alto, California 94304 Attention: Richard Capelouto Facsimile No.: (650) 251-5002 if to the Company, to: CB Richard Ellis Services, Inc. 200 North Sepulveda Boulevard Suite 300 El Segundo, California 90245 Attention: Walter V. Stafford Facsimile: (310) 563-8632 -46- with a copy to: McDermott, Will & Emery 227 West Monroe Street Chicago, Illinois 60606 Attention: Thomas J. Murphy, P.C. Facsimile: (312) 984-7700 or such other address or facsimile number as a party may hereafter specify for the purpose by notice to the other parties hereto. Each notice, request or other communication shall be effective only (a) if given by facsimile, when the facsimile is transmitted to the facsimile number specified in this Section and the appropriate facsimile confirmation is received or (b) if given by overnight courier or personal delivery when delivered at the address specified in this Section. 11.2. Effectiveness of Amendment and Restatement; Effectiveness of ------------------------------------------------------------ Representations and Warranties and Agreements. - --------------------------------------------- (a) This Agreement amends certain provisions of the First Amended and Restated Agreement and restates the terms of the First Amended and Restated Agreement in their entirety so as to reflect and give effect to such amendments. All amendments to the First Amended and Restated 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 Closing Date and (ii) not made on the date hereof (except that the representations and warranties of Acquiror in Section 5.5 shall be deemed to be made on the date hereof and as of the Closing Date). 11.3. Survival of Representations, Warranties and Covenants after the --------------------------------------------------------------- Effective Time. The representations and warranties contained herein and in any - -------------- certificate or other writing delivered pursuant hereto shall not survive the Effective Time or the termination of this Agreement. The covenants contained in Articles 2, 3, 7 and 11 shall survive the Effective Time. 11.4. Amendments; No Waivers. ---------------------- (a) Any provision of this Agreement may be amended or waived prior to the Effective Time, if, and only if, the amendment or waiver is in writing and signed, in the case of an amendment, by the Company, Holding and Acquiror or in the case of a waiver, by the party against whom the waiver is to be effective; provided, however, that after the Company Stockholder Approval, no such amendment or waiver shall, without the further approval of the Company Stockholders, be made that would require such approval under any applicable Law. Notwithstanding the foregoing, any amendment or waiver agreed to by the Company shall be effective only if authorized or approved in writing by the Special Committee or a majority of the members of the Board of Directors not affiliated with the Buying Group. -47- (b) At any time prior to the Effective Time, any party hereto may with respect to any other party hereto (a) extend the time for the performance of any of the obligations or other acts of such party and (b) waive any inaccuracies in the representations and warranties of such party contained herein or in any document delivered pursuant hereto; provided, however, that any extension or waiver agreed to by the Company shall be effective only if authorized or approved in writing by the Special Committee or a majority of the members of the Board of Directors not affiliated with the Buying Group. No such extension or waiver shall be deemed or construed as a continuing extension or waiver on any occasion other than the one on which such extension or waiver was granted or as an extension or waiver with respect to any provision of this Agreement not expressly identified in such extension or waiver on the same or any other occasion. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law. 11.5. Successors and Assigns. The provisions of this Agreement shall be ---------------------- binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that all or any of the rights or obligations of Holding or Acquiror may be assigned to any direct or indirect wholly-owned Subsidiary of such party (which assignment shall not relieve such assigning party of its obligations hereunder); provided, further, that other than with respect to the foregoing proviso, no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other parties hereto. Any purported assignment in violation hereof shall be null and void. 11.6. Counterparts; Effectiveness; Third Party Beneficiaries. This ------------------------------------------------------ Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. Except as set forth in Section 7.1 and Section 10.2(b), no provision of this Agreement is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. 11.7. Governing Law. This Agreement shall be construed in accordance with ------------- and governed by the internal Laws of the State of Delaware applicable to contracts executed and fully performed within the state of Delaware. 11.8. Jurisdiction. Except as otherwise expressly provided in this ------------ Agreement, the parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the District of Delaware or, if such court does not have jurisdiction over the subject matter of such proceeding or if such jurisdiction is not available, in the Court of Chancery of the State of Delaware, County of New Castle, and each of the parties hereby consents to the exclusive jurisdiction of those courts (and of the appropriate appellate courts therefrom) in any suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of the venue of any suit, action or proceeding in any of those courts -48- or that any suit, action or proceeding which is brought in any of those courts has been brought in an inconvenient forum. Process in any suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any of the named courts. Without limiting the foregoing, each party agrees that service of process on it by notice as provided in Section 11.1 shall be deemed effective service of process. 11.9. Enforcement. The parties agree that irreparable damage would occur ----------- in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to specific performance of the terms hereof, this being in addition to any other remedy to which they are entitled at Law or in equity. 11.10. Entire Agreement. This Agreement (together with the exhibits and ---------------- schedules hereto) and the Confidentiality Agreement constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof. 11.11. Authorship. The parties agree that the terms and language of this ---------- Agreement were the result of negotiations between the parties and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against any party. Any controversy over construction of this Agreement shall be decided without regard to events of authorship or negotiation. 11.12. Severability. If any term or other provision of this Agreement is ------------ invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon a determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible. 11.13. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY -------------------- IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. 11.14. Headings; Construction. The headings contained in this Agreement ---------------------- are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. In this Agreement (a) words denoting the singular include the plural and vice versa, (b) "it" or "its" or words denoting any gender include all genders, (c) the word "including" shall mean "including without limitation," whether or not expressed, (d) any reference herein to a Section, Article, Paragraph, Clause or Schedule refers to a Section, Article, Paragraph or Clause of or a Schedule to this Agreement, unless otherwise stated, and (e) when calculating the period of time within or following which any act is to be done or steps taken, the date which is the -49- reference day in calculating such period shall be excluded and if the last day of such period is not a Business Day, then the period shall end on the next day which is a Business Day. * * * -50- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. CBRE HOLDING, INC. CB RICHARD ELLIS SERVICES, INC. By: /s/ Claus J. Moller By: /s/ Walter Stafford ---------------------------- -------------------------------- Its: President Its: Senior Executive Vice President ---------------------------- -------------------------------- BLUM CB CORP. By: /s/ Claus J. Moller ---------------------------- Its: President ---------------------------- -51- Exhibit B --------- Amended and Restated Article FOURTH ----------------------------------- FOURTH: ------ A. The total number of shares of all classes of capital stock that the corporation is authorized to issue is 108,000,000, of which (1) 8,000,000 shall be Preferred Stock ("Preferred Stock"), 6,250,000 of which shall be designated Series A Convertible Participating Preferred Stock ("Series A Preferred Stock") and (2) 100,000,000 shall be Common Stock ("Common Stock"). Both the Preferred Stock and Common Stock shall have a par value of $.01 per share. B. The Common Stock shall consist of a single class of 100,000,000 shares, each of which shall be identical. There shall be no cumulative voting. C. The Preferred Stock shall consist of a single class of 8,000,000 shares and may be issued from time to time in one or more series. The Board of Directors of the corporation (the "Board of Directors") is expressly authorized to provide for the issue of all or any of the Preferred Stock in one or more series, to fix the designation and number of shares thereof and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such stock and as may be permitted by the General Corporation Law of the State of Delaware. The Board of Directors is also expressly authorized to increase or decrease (but not below the number of shares of such series then outstanding, plus the number of shares of such series issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by the corporation) the number of shares of any series. If the number of shares of any such series shall be so decreased, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series. The relative rights, preferences, privileges, limitations and restrictions granted to or imposed on the Series A Preferred Stock or the holders thereof are as follows: 1. Dividends. a. Preference. The holders of the Series A Preferred Stock shall be entitled to receive a dividend, prior and in preference to any declaration or payment of any dividend (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of the corporation), payable out of funds legally available therefore when, as and if declared by the board of directors of the corporation, at the rate of sixteen percent (16%) per annum (compounded quarterly calculated on the basis of a 360 day year of twelve 30-day months) of the Original Purchase Price. All such dividends shall be cumulative. To the extent the dividend provided by this Section 1.a. is not paid, such dividends shall cumulate and must be paid prior to any other dividend may be paid by the corporation. Dividends that are declared and paid in an amount less than the full amount of dividends accumulated on the Series A Preferred Stock shall be applied to the earliest dividend which has not theretofore been paid. The "Original Purchase Price" for each share of Series A Preferred Stock shall be deemed to be $16.00 per share of Series A Preferred Stock (as adjusted for stock splits, stock dividends, combinations or similar events with respect to such shares). b. Participation. In addition to the preference set forth in subsection a. above, the holders of Series A Preferred Stock shall be entitled to participate on an as-converted to Common Stock basis in any dividends paid to the holders of Common Stock. 2. Liquidation Preference. In the event of any liquidation, dissolution or winding up of the corporation, either voluntary or involuntary, distributions to the stockholders of the corporation shall be made in the following manner: a. Series A Preferred Stock Liquidation Preference. The holders of Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the corporation to the holders of Common Stock of the corporation, an amount per share of Series A Preferred Stock equal to the Original Purchase Price plus any accrued but unpaid dividends per share, whether or not declared and including compounding (as adjusted for stock splits, stock dividends, combinations or similar events with respect to such shares) (the "Series A Liquidation Preference"). If, upon such liquidation, dissolution or winding up of the corporation, the assets and funds distributed are insufficient to permit the payment of the Series A Liquidation Preference, the entire assets and funds legally available for distribution shall be distributed ratably among the holders of the Series A Preferred Stock. b. Remaining Assets. After payment or setting apart of payment of the Series A Liquidation Preference, the holders of the Series A Preferred Stock and the holders of the Common Stock shall be entitled to receive the remaining assets of the corporation pro rata based on the number of shares of Common Stock held by each such holder (assuming full conversion of all the Series A Preferred Stock). c. Reorganization or Merger. (1) For the purposes of this Section 2, a liquidation, dissolution or winding up of the corporation shall be deemed to include (i) the acquisition of the corporation by another entity by means of any transaction or series of related transactions (including, without limitation, 2 any sale of capital stock, reorganization, recapitalization, merger or consolidation but, excluding any merger effected exclusively for the purpose of changing the domicile of the corporation) unless the Corporation's stockholders of record as constituted immediately prior to such acquisition or sale will, immediately after such acquisition or sale (by virtue or securities issued as consideration for the corporation's acquisition or sale or otherwise) hold at least 50% of the voting power of the surviving or acquiring entity or (y) a sale of all or substantially all of the assets of the corporation. No stockholder of the corporation shall enter into any transaction or series of related transactions described above unless the terms of such transaction or transactions provide that the consideration to be paid to the stockholders of the corporation is to be allocated in accordance with the preferences and priorities set forth in this Section 2. (2) In any of such events, if the consideration received by the corporation is other than cash, its value will be deemed its fair market value. Any securities shall be valued as follows: (A) for securities not subject to investment letter or other similar restrictions on free marketability, (B) if traded on a securities exchange or the Nasdaq Stock Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange or market over the 30-day period ending three (3) days prior to the closing of such transaction; (C) if actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the 30-day period ending three (3) days prior to the closing of such transaction; and (D) if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the board of directors of the corporation. (3) The method of valuation of securities subject to investment letter or other restrictions on free marketability shall take into account an appropriate discount (as determined in good faith by the board of directors of the corporation) from the market value determined as pursuant to (2)(A), (B) or (C) above so as to reflect the approximate fair market value thereof. 3. Voting. Except as otherwise required by law or contract, the holder of each share of Common Stock issued and outstanding shall have one vote and the holder of each share 3 of Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such share of Preferred Stock could be converted at the record date for determination of the stockholders entitled to vote on such matters, or, if no such record date is established, at the date such vote is taken or any written consent of stockholders is solicited, such votes to be counted together with all other shares of the corporation having general voting power and not separately as a class. Fractional votes by the holders of Preferred Stock shall not, however, be permitted and any fractional voting rights shall (after aggregating all shares into which shares of Preferred Stock held by each holder could be converted) be rounded to the nearest whole number. 4. Conversion. The holders of the Series A Preferred Stock have conversion rights as follows: a. Right to Convert. Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the corporation or any transfer agent for the Series A Preferred Stock, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Original Purchase Price by the Conversion Price, determined as hereinafter provided, in effect at the time of the conversion (the "Conversion Rate"). The Conversion Price for the Series A Series A Preferred Stock shall initially be $16.00 per share. Such initial Conversion Price shall be subject to adjustment as hereinafter provided. b. Mechanics of Conversion. Before any holder of Series A Preferred Stock shall be entitled to convert the same into full shares of Common Stock and to receive certificates therefor, such holder shall surrender the certificate or certificates therefor, duly endorsed, at the office of the corporation or of any transfer agent for the Series A Preferred Stock, and shall give written notice to the corporation at such office that such holder elects to convert the same; provided, however, that the holder may notify the corporation or its transfer agent that such certificates have been lost, stolen or destroyed and, in lieu of the surrender of such certificate or certificates, execute an agreement satisfactory to the corporation to indemnify the corporation from any loss incurred by it in connection with such certificates. The corporation shall, as soon as practicable after such delivery, or such agreement and indemnification in the case of a lost certificate, issue and deliver at such office to such holder of Series A Preferred Stock, a certificate or certificates for the number of shares of Common Stock to which the holder shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of Common Stock. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series A Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. 4 c. Fractional Shares. In lieu of any fractional shares to which the holder of Series A Preferred Stock would otherwise be entitled, the corporation shall pay cash equal to such fraction multiplied by the then effective Conversion Price. Whether or not fractional shares are issuable upon such conversion shall be determined on the basis of the total number of shares of Series A Preferred Stock of each holder at the time converting into Common Stock and the number of shares of Common Stock issuable upon such aggregate conversion. d. Adjustment of Conversion Price. The Conversion Price of Series A Preferred Stock shall be subject to adjustment from time to time as follows: (1) If the number of shares of Common Stock outstanding at any time after the date hereof is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of Common Stock, then, on the date such payment is made or such change is effective, the Conversion Price of Series A Preferred Stock shall be appropriately decreased so that the number of shares of Common Stock issuable on conversion of any shares of Series A Preferred Stock shall be increased in proportion to such increase of outstanding shares. (2) If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, then, on the effective date of such combination, the Conversion Price of Series A Preferred Stock shall be appropriately increased so that the number of shares of Common Stock issuable on conversion of any shares of Series A Preferred Stock shall be decreased in proportion to such decrease in outstanding shares. (3) In case, at any time after the date hereof, of any capital reorganization, or any reclassification of the stock of the corporation (other than as a result of a stock dividend or subdivision, split-up or combination of shares), or the consolidation or merger of the corporation with or into another person (other than a consolidation or merger in which the corporation is the continuing entity and which does not result in any change in the Common Stock), the shares of Series A Preferred Stock shall, after such reorganization, reclassification, consolidation, merger, sale or other disposition, be convertible into the kind and number of shares of stock or other securities or property of the corporation or otherwise to which such holder would have been entitled if immediately prior to such reorganization, reclassification, consolidation, merger, sale or other disposition such holder had converted its shares of Series A Preferred Stock into Common Stock. The provisions of this clause (3) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or other dispositions. e. Minimal Adjustments. All calculations under this Section 4 shall be made to the nearest cent or to the nearest one hundredth (1/100) of a share, as 5 the case may be. No adjustment in the Conversion Price for Series A Preferred Stock need be made if such adjustment would result in a change in the Conversion Price of less than $0.01. f. No Impairment. The corporation will not through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the corporation, but will at all times in good faith assist in the carrying out of all the provisions hereunder and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of Series A Preferred Stock set forth hereunder against impairment. This provision shall not restrict the corporation's right to amend its Certificate of Incorporation with the requisite stockholder consent. h. Reservation of Stock Issuable Upon Conversion. The corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of Series A Preferred Stock such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series A Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series A Preferred Stock, the corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. i. Reissuance of Converted Shares. No shares of Series A Preferred Stock which have been converted into Common Stock after the original issuance thereof shall ever again be reissued and all such shares so converted shall upon such conversion cease to be a part of the authorized shares of the corporation. 5. Redemption. The Series A Preferred Stock is not redeemable. 6 EX-2 3 dex2.txt AMND. & RESTATED CONTRIBUTION AGMT. 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 2 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. 3 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. 4 (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 5 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 6 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. 7 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. 8 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. 9 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. 10 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. 11 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. 12 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. CBRE HOLDING, INC. By: /s/ Claus J. Moller ------------------- Name: Claus J. Moller Title: President BLUM CB CORP. By: /s/ Claus J. Moller ------------------- Name: Claus J. Moller Title: President RCBA STRATEGIC PARTNERS, L.P. By: RCBA GP, L.L.C., its general partner By: /s/ Claus J. Moller ------------------- 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: /s/ William M. Wardlaw ---------------------- Name: William M. Wardlaw Title: Vice President 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/ William M. Wardlaw --------------------- Name: William M. Wardlaw Title: Vice President THE KOLL HOLDING COMPANY /s/ Donald M. Koll ------------------- By: Donald M. Koll /s/ Frederic V. Malek ---------------------- Frederic V. Malek /s/ Raymond Wirta ----------------- Raymond E. Wirta /s/ Brett White --------------- W. Brett White /s/ Donald M. Koll ------------------ 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, Kathi Koll, 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 May 31, 2001 /s/ Kathi Koll -------------- Kathi 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, M. Malek, 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 May 31, 2001 /s/ M. Malek ------------ M. Malek 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, /s/ Sandra Wirta, 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 May 31, 2001 /s/ Sandra Wirta ---------------- Sandra Wirta 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, Danielle White, 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 May 31, 2001 /s/ Danielle White ------------------ Danielle White Schedule I ---------- Total Shares of Outstanding Common Stock Beneficially Owned ------------------------ BLUM 3,423,886 Freeman Spogli 3,402,463 Raymond E. Wirta 35,000/1/ W. Brett White 58,575 Frederic V. Malek 397,873 The Koll Holding Company 734,2901/1/ - --------------- /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. Exhibit A Securityholders' Agreement Exhibit B Warrant Agreement EX-3 4 dex3.txt FORM OF SECURITYHOLDERS AGMT. Exhibit 3. SECURITYHOLDERS' AGREEMENT, dated as of _________ ___, 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) 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"), (iv) DLJ Investment Partners II, L.P. ("DLJ") [OTHER DLJ ENTITIES TO - -------- --- COME], (v) The Koll Holding Company, a California corporation (together with its successors, "Koll"), Frederic V. Malek ("Malek", and together with Koll, the ---- ----- "Other Non-Management Investors"), and (vi) the individuals identified on the - ------------------------------- signature pages hereto as "Management Investors" (together, the "Management ---------- Investors"; collectively with the FS Entities, DLJ 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: I 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. "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 Holder" means (i) BLUM and (ii) any Person to whom BLUM ----------- Transfers Registrable Securities (but only to the extent of the Registrable Securities acquired from BLUM) 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. "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 pursuant to the terms of the Certificate of Incorporation. "Closing" means the Closing of the Merger. ------- 2 "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]. [Note: To the extent that the senior debt financing contains a different definition of Consolidated EBITDA, this definition will be conformed to that used in the senior debt financing.] "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 Holder" means (i) DLJ and (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 as a DLJ Party in the manner set forth in Section 6.5 hereto. "DLJ Parties" means (i) DLJ and (ii) any Person to whom DLJ 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. "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 3 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) 4 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 DLJ 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 DLJ 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. 5 "Material Securityholder" means BLUM, each of the FS Entities, each of ----------------------- the DLJ Parties that holds at least 1% of the total outstanding Common Stock as of such date, DLJ Investment Partners II, L.P. 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 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 DLJ Parties, the Other ---------------- Non-Management Parties and the Management Parties, collectively. "Notes" means the Company's 16.0% Senior Notes due ______ ___, 2011. ----- "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 DLJ 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 6 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 DLJ, pursuant to which, among other things, the Company issued and sold to DLJ, and DLJ 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, 7 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. 8 "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 9 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 DLJ 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., FS EQUITY PARTNERS III, L.P., FS EQUITY PARTNERS INTERNATIONAL, L.P., THE KOLL HOLDING COMPANY, FREDERIC V. MALEK, DLJ INVESTMENT FUNDING, INC., CERTAIN MANAGEMENT INVESTORS 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 10 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 DLJ 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 11 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 DLJ Parties, its employees, (iii) in the case of each of the DLJ 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, 12 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 several obligations) 13 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. 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). 14 (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 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 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 15 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 or (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, 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) DLJ Holders holding not less than 25% of the Registrable Securities then outstanding held by the DLJ 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 16 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 as nearly as possible on a pro rata basis based on the total number of Registrable Securities held by all such Initiating Holders 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), 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)(ii), 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) registration requested by FS Holders pursuant to such Section, and (z) a registration requested by DLJ Holders pursuant to Section 3.1(a)(ii), after the Company has effected one (1) registration requested by DLJ Holders pursuant to such Section; 17 (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 181st 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 the 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 18 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 19 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) DLJ Holders holding not less than 50% of the Registrable Securities then outstanding held by all DLJ 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 DLJ 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 20 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. 21 (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 22 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 23 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 24 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 25 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. 26 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 DLJ 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 DLJ 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 DLJ 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 DLJ Holders. No such amendment shall adversely affect the rights of the Other Holders relative to the rights of the FS Holders or the DLJ 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. 27 (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 nine (9) directors. 28 (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 BLUM, subject to Section 4.1(e) below (including any director designee of BLUM pursuant to Section 4.1(f) below, the "BLUM Directors"); ---- --------- (ii) one designee of the FS Entities, collectively (the "FS Director"); ----------- (iii) Wirta 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 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 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 designee 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 BLUM 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) 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) 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. 29 (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 BLUM is then entitled to designate three BLUM Directors pursuant to this Section 4.1), the number of BLUM Directors will be increased such that BLUM thereafter has the right to designate a majority of the entire Board (e.g., four out of seven directors), 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). 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 BLUM 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 BLUM 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 the 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 30 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 the 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 the IPO hereby agrees that, at all times after the 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 the 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 the 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 Parties, by vote of a majority of the outstanding Restricted Securities held by the DLJ Parties, shall be entitled to have one observer (the "DLJ Observer", and ------------ together with the FS Observers, the "Observers") at all regular and special --------- meetings of the Board for so long as the DLJ Parties, 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) The Company shall reimburse each Observer for out-of-pocket expenses, if any, relating to attendance at such meetings but only to the same extent that the Company reimburses the non-employee members of the Board for such attendance expenses. 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 31 them at any meeting of the Board strictly confidential. The DLJ Parties 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. (d) 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 32 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 33 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 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); 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; 34 (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 35 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 36 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 37 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 38 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 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. 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 DLJ 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): 39 (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): [counsel to the Company] with an additional 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 (c) 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 40 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 (d) 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, 17th Floor Newport Beach, CA 92660-6429 Attn: Gary J. Singer Fax: (949) 823-6994 (e) 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 (f) If to any of the DLJ Parties: DLJ Investment Partners II, L.P. 277 Park Avenue New York, New York 10172 Attn: Joseph Ehrlich Fax: (212) 892-0064 41 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 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, (A) if such Person acquires a majority of the Common Stock beneficially owned by BLUM, BLUM shall have the right to assign to such Person all of the rights and obligations of BLUM hereunder, (B) if such Person acquires less than a majority of the Common Stock beneficially owned by BLUM, 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 DLJ Party, such Person shall assume and be entitled to all of the rights and obligations of a DLJ 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 BLUM 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 DLJ Parties relative to BLUM without the prior written consent of the holders of a majority of the shares of the Restricted Securities held by the DLJ Parties at such time, (iii) the Other Non-Management Parties relative to BLUM 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 BLUM 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 DLJ 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 DLJ 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. 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: 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: DLJ INVESTMENT PARTNERS II, L.P. By: DLJ Investment Partners, II, Inc., its managing general partner By: ----------------------------------- Name: Title: THE KOLL HOLDING COMPANY ______________________________ By: Donald M. Koll ______________________________ Frederic V. Malek MANAGEMENT INVESTORS: ______________________________ Raymond E. Wirta ______________________________ W. Brett White 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., FS Equity Partners III, L.P., FS Equity Partners International, L.P., DLJ Investment Partners II, L.P., The Koll Holding Company, Frederic V. Malek and the Management Investors named therein, I, _______________________, 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 ______________ ____, 2001 ------------------------------------- [Spouse] 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., FS Equity Partners III, L.P., FS Equity Partners International, L.P., DLJ Investment Partners II, L.P., The Koll Holding Company, Frederic V. Malek and the Management Investors named therein, I, _______________________, 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 ______________ ____, 2001 --------------------------------------- [Spouse] 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., FS Equity Partners III, L.P., FS Equity Partners International, L.P., DLJ Investment Partners II, L.P., The Koll Holding Company, Frederic V. Malek and the Management Investors named therein, I, _______________________, 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 ______________ ____, 2001 --------------------------------------- [Spouse] 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., FS Equity Partners III, L.P., FS Equity Partners International, L.P., DLJ Investment Partners II, L.P., The Koll Holding Company, Frederic V. Malek and the Management Investors named therein, I, _______________________, 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 ______________ ____, 2001 --------------------------------------- [Spouse] Exhibit A FORM OF ASSUMPTION AGREEMENT [DATE] To the Parties to the Securityholders' Agreement dated as of _______ ___, 2001 Dear Sirs or Madams: Reference is made to the Securityholders' Agreement, dated as of _________ ___, 2001 (the "Securityholders' Agreement"), among CBRE Holding, Inc., CB Richard Ellis Services, Inc., RCBA Strategic Partners, L.P., FS Equity Partners III, L.P., FS Equity Partners International, DLJ Investment Partners II, L.P., The Koll Holding Company, Frederic V. Malek, and the individuals identified on the signature pages thereto as "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., FS Equity Partners III, L.P., FS Equity Partners International, L.P., DLJ Investment Partners II, L.P., The Koll Holding Company, 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-10 5 dex10.txt JOINT FILING AGREEMENT Exhibit 10. JOINT FILING AGREEMENT The undersigned, being duly authorized thereunto, hereby execute this agreement as an exhibit to this Schedule 13D to evidence the agreement of the below-named parties, in accordance with the rules promulgated pursuant to the Securities Exchange Act of 1934, to file this Schedule, and any amendments or supplements thereto, jointly on behalf of each such party. Dated: June 5, 2001 RCBA GP, L.L.C. RCBA STRATEGIC PARTNERS, L.P. By: RCBA GP, L.L.C. its general partner By: /s/ Murray A. Indick By: /s/ Murray A. Indick --------------------------------- ------------------------------ Murray A. Indick, Member Murray A. Indick, Member RICHARD C. BLUM & ASSOCIATES, INC. BLUM CAPITAL PARTNERS, L.P. By: Richard C. Blum & Associates, Inc. its general partner By: /s/ Murray A. Indick By: /s/ Murray A. Indick --------------------------------- ------------------------------ Murray A. Indick Murray A. Indick Partner, General Counsel Partner, General Counsel and Secretary and Secretary BLUM CB CORP. /s/ Murray A. Indick By: /s/ Murray A. Indick --------------------------------- ------------------------------ RICHARD C. BLUM Murray A. Indick Vice President, Secretary and By: Murray A. Indick, Attorney-in-Fact Assistant Treasurer CBRE HOLDING, INC. By: /s/ Murray A. Indick --------------------------------- Murray A. Indick Vice President, Secretary and Assistant Treasurer EX-12 6 dex12.txt PURCHASE AGMT. DATED AS OF MAY 31, 2001 Exhibit 12. $229,000,000 BLUM CB Corp. 11 1/4% Senior Subordinated Notes Due 2011 PURCHASE AGREEMENT ------------------ May 31, 2001 Credit Suisse First Boston Corporation Credit Lyonnais Securities (USA) Inc. HSBC Securities (USA) Inc. Scotia Capital (USA) Inc. c/o Credit Suisse First Boston Corporation Eleven Madison Avenue, New York, N.Y. 10010-3629 Dear Sirs: 1. Introductory. BLUM CB Corp., a Delaware corporation (the "Issuer"), which is a wholly owned subsidiary of CBRE Holding, Inc. ("Holdings"), a Delaware corporation, proposes, subject to the terms and conditions stated herein, to issue and sell to Credit Suisse First Boston Corporation ("CSFBC"), Credit Lyonnais Securities (USA) Inc., HSBC Securities (USA) Inc. and Scotia Capital (USA) Inc. (the "Initial Purchasers") $229,000,000 aggregate principal amount of its 11 1/4% Senior Subordinated Notes Due 2011 (the "Notes"). The Notes will be unconditionally guaranteed on a senior subordinated basis by Holdings (the "Parent Guaranty"; the Parent Guaranty, together with the Notes, the "Offered Securities"). The Offered Securities are to be issued pursuant to an indenture (the "Indenture") to be dated as of June 7, 2001 (the "Closing Date"), between the Issuer, Holdings and State Street Bank and Trust Company of California, N.A., as trustee (the "Trustee"). As part of the transactions (the "Transactions") as defined in the "Description of the Notes" and as described under the heading "The Transactions" in the Offering Document (as defined herein), the Issuer will merge with and into CB Richard Ellis Services, Inc., a Delaware corporation (the "Company"), with the Company as the surviving corporation in such merger (the "Merger"). As a result of the Merger, all of the Issuer's obligations under the Notes, the Indenture, the Registration Rights Agreement and the Escrow Agreement (as each term is defined herein) will, by operation of law, become obligations of the Company. Concurrently with the consummation of the Merger, (1) the Company and the Subsidiary Guarantors (as defined herein) will execute counterparts to this Agreement and the Registration Rights Agreement, which will cause the obligations of the Issuer under this Agreement and the Registration Rights Agreement which survive past the closing date of the Merger to be contractually assumed by the Company and the Subsidiary Guarantors, (2) the Company will enter into a supplemental indenture relating to the Indenture (the "Supplemental Indenture"), which Supplemental Indenture will cause the obligations of the Issuer under the Indenture to be assumed by the Company, (3) the Company will enter into a credit agreement (together with the related guaranties and security documents, the "Credit Agreement") among itself, the guarantors named therein, Credit Suisse First Boston, New York branch, as administrative agent, and the lenders named therein and (4) each subsidiary of the Company that is a guarantor under the Credit Agreement (the "Subsidiary Guarantors") will guarantee the Notes on an unconditional senior subordinated basis pursuant to the terms of the Supplemental Indenture (the "Subsidiary Guaranties"; after the consummation of the Merger, the Subsidiary Guaranties, the Notes and the Parent Guaranty are collectively referred to as the "Offered Securities"). If the Closing Date occurs prior to the consummation of the Merger, the Issuer will, on the Closing Date, deposit with State Street Bank and Trust Company of California, N.A. (the "Escrow Agent") the gross proceeds of the offering of the Offered Securities, together with an amount of cash or treasury securities (the "Escrowed Funds") so that the amount in escrow will be sufficient to pay the special mandatory redemption price for the Offered Securities, when and if due. In the event that the Merger and the other Transactions are not consummated on or prior to the 75th day after the closing of this offering or the Merger Agreement is terminated at any time prior thereto, the Issuer will redeem the Offered Securities at a redemption price equal to 100% of the aggregate principal amount of the Offered Securities, plus accrued and unpaid interest to the date of redemption. If the Merger and the other Transactions are consummated on or prior to the 75th day after the closing of this offering, the Escrowed Funds will be released to the Issuer in connection with the closing of the Merger. This Agreement (including the counterparts to be executed concurrently with the consummation of the Merger), the Indenture, the Supplemental Indenture, the Offered Securities, the Exchange Securities (as defined in the Registration Rights Agreement), the Registration Rights Agreement (including the counterparts to be executed concurrently with the consummation of the Merger) and the Escrow Agreement are sometimes referred to in this Agreement collectively as the "Operative Documents". All material agreements and instruments relating to the Transactions (including, but not limited to, the Merger Agreement and the Credit Agreement), are sometimes referred to in this Agreement collectively as the "Transaction Agreements". The Operative Documents and the Transactions Agreements are sometimes referred to in this Agreement collectively as the "Transaction Documents". References in this Agreement to the subsidiaries of the Company shall include all direct and indirect subsidiaries of the Company after the consummation of the Merger. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Offering Document (as defined below). The Issuer and Holdings hereby agree with the Initial Purchasers as follows: 2. Representations and Warranties of the Issuer. The Issuer and Holdings represent and warrant to, and agree with, the Initial Purchasers that: (a) A preliminary offering circular dated May 23, 2001 and an offering circular dated the date of this Agreement relating to the Offered Securities to be purchased by the Initial Purchasers have been prepared by the Issuer. Such preliminary offering circular (the "Preliminary Offering Circular") and offering circular (the "Offering Circular") are hereinafter collectively referred to as the "Offering Document". On the date of this Agreement, the Offering Document does not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements or omissions from the Offering Document based upon written information furnished to the Company by any Initial Purchaser through CSFBC specifically for use therein, it being understood and agreed that the only such information is that described in Section 7(b) hereof. (b) Each of the Issuer, Holdings and the Company has been duly incorporated and is an existing corporation in good standing under the laws of the jurisdiction of its incorporation, with corporate power and authority to own its properties and conduct its business as described in the Offering Document, and each of the Issuer, Holdings and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified or to be in good standing would not have a material adverse effect on the business, financial condition or results of operation of the Company and its subsidiaries, taken as a whole (a "Material Adverse Effect"). (c) Each subsidiary of the Company has been duly incorporated and is an existing corporation, limited liability company or limited partnership, as the case may be, in good standing (if applicable) under the laws of the jurisdiction of its incorporation or organization, with corporate power and authority to own its properties and conduct its business as described in the Offering Document, and each subsidiary of the Company is duly qualified to do business as a foreign corporation, limited liability company or limited partnership, as the case may be, in good standing (if applicable) in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified or to be in good standing would not have a Material Adverse Effect; all of the issued and outstanding capital stock, ownership interests, or partnership interests, as the case may be, of each subsidiary of the Company has been, and immediately following the Merger will be, duly authorized and validly issued and, in the case of capital stock, is fully paid and nonassessable; and except as disclosed in the Offering Document and for pledges in favor of Credit Suisse First Boston, New York branch, as collateral agent under the Credit Agreement, the capital stock, ownership interests, or partnership interests, as the case may be, of the Company and each subsidiary owned by the Company, directly or through subsidiaries, will be owned free from liens, encumbrances and defects immediately following the Merger and the other Transactions. (d) On the Closing Date, the Indenture will be duly authorized by the Issuer and Holdings, and the Supplemental Indenture will be duly authorized by the Company and the Subsidiary Guarantors upon consummation of the Merger; on the Closing Date, the Offered Securities will be duly authorized by the Issuer and Holdings, and the Subsidiary Guaranties will be duly authorized by the Subsidiary Guarantors upon consummation of the Merger; and when the Offered Securities are delivered and paid for pursuant to this Agreement and the Indenture on the Closing Date (as defined below), assuming due authorization, execution and delivery of the Indenture by the Trustee, the Indenture will have been duly executed and delivered by the Issuer and Holdings, such Offered Securities will have been duly executed, authenticated, issued and delivered by the Issuer and Holdings (assuming authentication by the Trustee in accordance with the provisions of the Indenture) and will conform in all material respects to the description thereof contained in the Offering Document and the Indenture and such Offered Securities will constitute valid and legally binding obligations of the Issuer and Holdings and, upon execution of the Supplemental Indenture, the Company and the Subsidiary Guarantors, enforceable in accordance with their terms and entitled to the benefits of the Indenture or the Supplemental Indenture, as the case may be (assuming that the Indenture and the Supplemental Indenture are valid and legally binding obligations of the Trustee), subject to (i) the effects of bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar laws of general applicability relating to or affecting creditors' rights, (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and (iii) an implied covenant of good faith and fair dealing. (e) On the Closing Date, the Exchange Securities will have been duly authorized by the Issuer and Holdings, and upon consummation of the Merger, the Exchange Securities will be duly authorized by the Company and the Subsidiary Guarantors. When the Exchange Securities are issued, executed and authenticated in accordance with the terms of the Exchange Offer and the Indenture, the Exchange Securities (assuming authentication by the Trustee in accordance with the provisions of the Indenture) will be entitled to the benefits of the Indenture and will be the valid and binding obligations of the Company, Holdings and the Subsidiary Guarantors, enforceable against the Company, Holdings and the Subsidiary Guarantors in accordance with their terms (assuming that the Indenture and the Supplemental Indenture are valid and legally binding obligations of the Trustee), subject to (i) the effects of bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar laws of general applicability affecting creditors' rights and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). (f) On the Closing Date, the Indenture will conform in all material respects to the requirements of the Trust Indenture Act of 1939, as amended (the "TIA" or the "Trust Indenture Act"), and the rules and regulations of the Securities and Exchange Commission (the "Commission") applicable to an indenture which is qualified thereunder. (g) Except as disclosed in the Offering Document, there are no contracts, agreements or understandings between the Issuer, Holdings or the Company and any person that would give rise to a valid claim against the Issuer, Holdings, the Company or any Initial Purchaser for a brokerage commission, finder's fee or other like payment in connection with the Offered Securities. (h) No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by this Agreement, the Registration Rights Agreement dated the date hereof, between the Issuer, Holdings and the Initial Purchasers (the "Registration Rights Agreement"), or any other Transaction Document, in each case, in connection with the consummation of the transactions contemplated therein, except as may be required under the Securities Act, the TIA and the rules and regulations of the Commission thereunder with respect to the Exchange Offer Registration Statement or the Shelf Registration Statement (each as defined in the Registration Rights Agreement) or the transactions contemplated by the Registration Rights Agreement, or any state or foreign securities laws or by the regulations of the National Association of Securities Dealers, Inc. (i) Assuming the accuracy of the representations of the other parties thereto and the performance by those parties of their agreements therein, the execution, delivery and performance by each of the Issuer, Holdings, the Company and the subsidiaries of the Company (to the extent a party thereto) of each of the Transaction Documents and their compliance with the terms and provisions thereof and the consummation of the Transactions will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, (i) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, that has jurisdiction over the Issuer, Holdings, the Company, or any of the Company's subsidiaries or any of their properties, (ii) the Transaction Documents or any agreement or instrument to which the Issuer, Holdings, the Company or any of the Company's subsidiaries is a party or by which the Issuer, Holdings, the Company or any of the Company's subsidiaries is bound or to which any of the properties of the Issuer, Holdings, the Company or the Company's subsidiaries is subject or (iii) the charter, by-laws or similar governing documents of the Issuer, Holdings, the Company or any of the Company's subsidiaries, except, with respect to clauses (i) and (ii), where such breach, violation or default would not have a Material Adverse Effect or would not have a material adverse effect on the business, financial condition or results of operation of the Issuer or Holdings or the Company or its subsidiaries, taken as a whole; the Issuer has full corporate power and authority to authorize, issue and sell the Notes as contemplated by this Agreement. (j) None of the Issuer, Holdings, the Company or any of the subsidiaries of the Company is in breach or violation of any of the terms and provisions of, or in default under, (i) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, that has jurisdiction over the Issuer, Holdings, the Company, or any of the Company's subsidiaries or any of their properties, (ii) any agreement or instrument to which the Issuer, Holdings, the Company or any of the Company's subsidiaries is a party or by which the Issuer, Holdings, the Company or any of the Company's subsidiaries is bound or to which any of the properties of the Issuer, Holdings, the Company or the Company's subsidiaries is subject or (iii) the charter, by-laws or similar governing document of the Issuer, Holdings, the Company or any of the Company's subsidiaries, except with respect to clauses (i) and (ii) for any breaches, violations or defaults that would not have a Material Adverse Effect or would not have a material adverse effect on the business, financial condition or results of operation of the Issuer or Holdings or the Company or its subsidiaries, taken as a whole. (k) This Agreement has been duly authorized, executed and delivered by the Issuer and Holdings. Each of the other Operative Documents has been, or as of the Closing Date will have been, duly authorized, executed and delivered by the Issuer and Holdings (to the extent a party thereto), and immediately upon consummation of the Merger will be duly authorized, executed and delivered by each of Holdings, the Company and the Subsidiary Guarantors (to the extent a party thereto). All of the Transaction Agreements have been or will be as of or on the Merger closing date, duly authorized, executed and delivered by each of Holdings, the Company and the Company's subsidiaries (to the extent a party thereto). Each Transaction Document conforms or will conform in all material respects to the descriptions thereof contained in the Offering Document and each Operative Document (other than this Agreement) is or will constitute valid and legally binding obligations of the Issuer and Holdings (to the extent a party thereto) and each Transaction Agreement constitutes or will constitute valid and legally binding obligations of Holdings, the Company and each Subsidiary Guarantor (to the extent a party thereto), enforceable in accordance with its respective terms, except that any rights to indemnity and contribution may be limited by federal and state securities laws and public policy considerations and subject to (i) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights, (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and (iii) an implied covenant of good faith and fair dealing. (l) Except as disclosed in the Offering Document, the Company and its subsidiaries have, or following consummation of the Merger will have, good and marketable title to all real properties and all other properties and assets owned by them that are material to the Company and its subsidiaries taken as a whole, in each case free from liens, encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or proposed to be made thereof by them; and except as disclosed in the Offering Document, the Company and its subsidiaries hold any leased real or personal property that is material to the Company and its subsidiaries taken as a whole under valid and enforceable leases with no exceptions that would materially interfere with the use made or proposed to be made thereof by them. (m) The Company and its subsidiaries possess adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by them and have not received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect. (n) No labor dispute with the employees of the Company or any subsidiary exists or, to the knowledge of the Issuer or Holdings, is imminent that would reasonably be expected to have a Material Adverse Effect. (o) The Company and its subsidiaries own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, "intellectual property rights") necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect. (p) Except as disclosed in the Offering Document, neither the Company nor any of its subsidiaries is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, "environmental laws"), owns or operates any real property contaminated with any substance that is subject to any environmental laws, is liable for any off-site disposal or contamination pursuant to any environmental laws, or is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would individually or in the aggregate have a Material Adverse Effect; and neither the Issuer nor Holdings is aware of any pending investigation which might lead to such a claim. (q) Except as disclosed in the Offering Document, there are no pending actions, suits or proceedings against or affecting the Issuer, Holdings or the Company, any of the Company's subsidiaries or any of their respective properties that (i) if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect, (ii) would materially and adversely affect the ability of the Issuer, Holdings or the Company to perform its obligations under the Transaction Documents or (iii) are otherwise material in the context of the sale of the Offered Securities; and no such actions, suits or proceedings are, to the knowledge of the Issuer or Holdings, threatened or contemplated. (r) The historical financial statements included in the Offering Document present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis and the assumptions used in preparing the pro forma financial statements included in the Offering Document provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma columns therein reflect the proper application of those adjustments to the corresponding historical financial statement amounts. (s) To our knowledge, no "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436(g)(2) under the Securities Act (i) has imposed (or has informed the Issuer, Holdings, the Company or any of the Subsidiary Guarantors that it is considering imposing) any condition (financial or otherwise) on the Issuer's, Holding's, the Company's or any Subsidiary Guarantor's retaining any rating assigned to the Issuer, Holdings, the Company or any Subsidiary Guarantor, any securities of the Issuer, Holdings, the Company or any Subsidiary Guarantor or (ii) has indicated to the Issuer, Holdings, the Company or any Subsidiary Guarantor that it is considering (a) the downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate the direction of the possible change in, any rating so assigned or (b) any change in the outlook for any rating of the Issuer, Holdings, the Company, any Subsidiary Guarantor or any securities of the Issuer, Holdings, the Company or any Subsidiary Guarantor. (t) Except as disclosed in the Offering Document, since the date of the latest audited financial statements of the Company included in the Offering Document, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the financial condition, business, properties or results of operations of the Company and its subsidiaries taken as a whole, and, except as disclosed in or contemplated by the Offering Document, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (u) None of the Issuer, Holdings, the Company or any Subsidiary Guarantor is, and following the consummation of the Merger none of them will be, an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act of 1940 (the "Investment Company Act"); and none of the Issuer, Holdings, the Company or any Subsidiary Guarantor is and, after giving effect to the offering and sale of the Offered Securities, the Merger, the other Transactions and the application of the proceeds thereof as described in the Offering Document, none of them will be an "investment company" as defined in the Investment Company Act. (v) No securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the Offered Securities are listed on any national securities exchange registered under Section 6 of the Securities Exchange Act of 1934 ("Exchange Act") or quoted in a U.S. automated inter-dealer quotation system. (w) Assuming the accuracy of the representations and the performance of the Initial Purchasers of their agreements contained herein, the offer and sale of the Offered Securities in the manner contemplated by this Agreement will be exempt from the registration requirements of the Securities Act by reason of Section 4(2) thereof and Regulation S thereunder. (x) None of the Issuer, Holdings, the Company, nor any of their respective affiliates, nor any person acting on its or their behalf (i) has, within the six-month period prior to the date hereof, offered or sold in the United States or to any U.S. person (as such terms are defined in Regulation S under the Securities Act) the Offered Securities or any security of the same class or series as the Offered Securities or (ii) has offered or will offer or sell the Offered Securities (A) in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) with respect to any such securities sold in reliance on Rule 903 of Regulation S ("Regulation S") under the Securities Act, by means of any directed selling efforts within the meaning of Rule 902(c) of Regulation S. The Issuer, Holdings, the Company, their affiliates and any person acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S. None of the Issuer, Holdings, the Company or any of the Company's subsidiaries has entered or will enter into any contractual arrangement with respect to the distribution of the Offered Securities except for this Agreement. (y) Each of the Preliminary Offering Circular and the Offering Circular, as of its date, contains all the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Securities Act. 3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Issuer agrees to sell to the Initial Purchasers, and the Initial Purchasers agree to purchase from the Issuer, at a purchase price of 95.57% of the principal amount thereof plus accrued interest, if any, from June 7, 2001 to the Closing Date (as hereinafter defined) $229,000,000 in aggregate principal amount of Notes. The Issuer will deliver against payment of the purchase price the Offered Securities in the form of one or more permanent global securities in definitive form (the "Global Securities") deposited with the Trustee as custodian for The Depository Trust Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC. Interests in any permanent Global Securities will be held only in book-entry form through DTC, except in the limited circumstances described in the Offering Document. Payment for the Offered Securities shall be made by the Initial Purchasers in Federal (same day) funds by official check or checks or wire transfer to an account at a bank acceptable to CSFBC drawn to the order of BLUM CB Corp. at the office of Cravath, Swaine & Moore at 9:00 A.M. (New York time), on June 7, 2001, or at such other time not later than seven full business days thereafter as CSFBC and the Issuer determine, such time being herein referred to as the "Closing Date", against delivery to the Trustee as custodian for DTC of the Global Securities representing all of the Offered Securities. The Global Securities will be made available for checking at the office of Cravath, Swaine & Moore at least 24 hours prior to the Closing Date. 4. Representations by Initial Purchasers; Resale by Initial Purchasers. (a) Each of the Initial Purchasers and its selling affiliates represents and warrants to the Issuer, Holdings, the Company and each Subsidiary Guarantor that it is an "accredited investor" within the meaning of Regulation D under the Securities Act. (b) Each Initial Purchaser severally acknowledges that the Offered Securities have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the Securities Act. Each Initial Purchaser represents and agrees that it has offered and sold the Offered Securities, and will offer and sell the Offered Securities, only in accordance with Rule 903 or Rule 144A under the Securities Act ("Rule 144A"). Accordingly, none of the Initial Purchasers or their affiliates, or any persons acting on their behalf, has engaged or will engage in any directed selling efforts with respect to the Offered Securities, and the Initial Purchasers, their affiliates and all persons acting on their behalf have complied and will comply with the offering restrictions requirement of Regulation S and Rule 144A. (c) Each Initial Purchaser agrees that it and each of its affiliates has not entered and will not enter into any contractual arrangement with respect to the distribution of the Offered Securities except with the prior written consent of the Issuer. (d) Each Initial Purchaser agrees that it and each of its affiliates will not offer or sell the Offered Securities in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, including, but not limited to (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. Each Initial Purchaser agrees, with respect to resales made in reliance on Rule 144A of any of the Offered Securities, to deliver either with the confirmation of such resale or otherwise prior to settlement of such resale a notice to the effect that the resale of such Offered Securities has been made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A. (e) Each Initial Purchaser represents and agrees that (i) it has not offered or sold and prior to the date six months after the date of issue of the Offered Securities will not offer or sell any Offered Securities to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has complied and will comply with all applicable provisions of the Financial Services Act 1986 with respect to anything done by it in relation to the Offered Securities in, from or otherwise involving the United Kingdom; and (iii) it has only issued or passed on and will only issue or pass on in the United Kingdom any document received by it in connection with the issue of the Offered Securities to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a person to whom such document may otherwise lawfully be issued or passed on. (f) Each Initial Purchaser agrees that it will not offer, sell or deliver any of the Offered Securities in any jurisdiction outside of the United States except under circumstances that will result in compliance with the applicable laws thereof. 5. Certain Agreements of the Issuer and Holdings. The Issuer and Holdings agree with the Initial Purchasers that: (a) The Issuer will advise CSFBC promptly of any proposal to amend or supplement the Offering Document and will not effect such amendment or supplementation without CSFBC's consent, which consent shall not be unreasonably withheld or delayed. If, at any time prior to the completion of the resale of the Offered Securities by any Initial Purchaser, any event occurs as a result of which the Offering Document as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Issuer promptly will notify CSFBC of such event and promptly will prepare, at its own expense, an amendment or supplement which will correct such statement or omission. Neither the CSFBC'S consent to, nor its delivery to offerees or investors of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6. (b) The Issuer will furnish to the CSFBC copies of any Offering Document and all amendments and supplements to any such document, in each case as soon as available and in such quantities as CSFBC reasonably requests, and the Issuer will furnish to CSFBC on the date hereof three copies of the Offering Circular signed by a duly authorized officer of the Company, one of which will include the independent accountants' reports therein manually signed by such independent accountants. At any time when the Issuer is not subject to Section 13 or 15(d) of the Exchange Act, the Issuer will promptly furnish or cause to be furnished to CSFBC and, upon request of holders and prospective purchasers of the Offered Securities, to such holders and purchasers, copies of the additional information required to be delivered to holders and prospective purchasers of the Offered Securities pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto) in order to permit compliance with Rule 144A in connection with resales by such holders of the Offered Securities (the "Additional Issuer Information"). The Issuer will pay the expenses of printing and distributing to the Initial Purchasers all such documents. (c) The Issuer will arrange for the qualification of the Offered Securities for sale and the determination of their eligibility for investment under the laws of such jurisdictions in the United States and Canada as CSFBC designates and will continue such qualifications in effect so long as required for the resale of the Offered Securities by the Initial Purchasers; provided, however, that the Issuer will not be required to -------- ------- qualify as a foreign corporation or to file a general consent to service of process or to subject itself to taxation in respect of doing business in any such state or province where it is not then required to be so qualified or subject to taxation. (d) During the period of three years hereafter, the Issuer or the Company will furnish to CSFBC, and upon request, to each of the other Initial Purchasers, as soon as practicable after the end of each fiscal year, a copy of its annual report to shareholders for such year; and the Issuer or the Company will furnish to the CSFBC, and upon request, to each of the other Initial Purchasers as soon as available, a copy of each report and any definitive proxy statement of it filed with the Commission under the Exchange Act or mailed to holders of Offered Securities or of any securities of the Issuer or the Company which have been registered under Section 12 of the Exchange Act. (e) During the period of two years after the Closing Date, the Issuer will, upon request, furnish to CSFBC, and upon request, furnish to any holder of Offered Securities, a copy of the restrictions on transfer applicable to the Offered Securities. (f) During the period of two years after the Closing Date, none of the Issuer, Holdings, the Company or any of the Subsidiary Guarantors will, and none of them will permit any of their affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Offered Securities that have been reacquired by any of them. (g) During the period of two years after the Closing Date, none of the Issuer, Holdings, the Company or any of the Subsidiary Guarantors will become, an open-end investment company, unit investment trust or face- amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act. (h) The Issuer or Holdings will pay all expenses incidental to the performance of the obligations of the Issuer, Holdings, the Company and the Company's subsidiaries under this Agreement (including the counterparts to be executed concurrently with the consummation of the Merger), the Indenture, the Supplemental Indenture, the Registration Rights Agreement (including the counterparts to be executed concurrently with the consummation of the Merger) and the other Transaction Documents, including (i) the fees and expenses of counsel and accountant for the Issuer, Holdings, the Company and the Subsidiary Guarantors and of the Trustee and its professional advisers; (ii) all expenses in connection with the execution, issue, authentication, packaging and initial delivery of the Offered Securities and, as applicable, the Exchange Securities, and the printing of the Offering Document and amendments and supplements thereto, and any other document relating to the issuance, offer, sale and delivery of the Offered Securities and as applicable, the Exchange Securities; (iii) the cost of listing the Offered Securities and qualifying the Offered Securities for trading in The PortalSM Market ("PORTAL") and any expenses incidental thereto; (iv) the cost of any advertising approved by the Issuer in connection with the issue of the Offered Securities; (v) for any expenses (including reasonable fees and disbursements of counsel to the Initial Purchasers) incurred in connection with qualification of the Offered Securities or the Exchange Securities for sale under the laws of such jurisdictions as CSFBC designates and the printing of memoranda relating thereto (such expenses not to exceed $15,000); (vi) for any fees charged by investment rating agencies for the rating of the Offered Securities or the Exchange Securities; and (vii) for expenses incurred in printing and distributing any Offering Document (including any amendments and supplements thereto) to or at the direction of the Initial Purchasers. Each party will pay its own expenses in connection with attending or hosting meetings with prospective purchasers of the Offered Securities from the Initial Purchasers, including the costs attributable to the use of a private airplane to attend such meetings to the extent one is so used. (i) In connection with the offering, until CSFBC shall have notified the Issuer of the completion of the resale of the Offered Securities, none of the Issuer, Holdings, the Company, any of the Subsidiary Guarantors or any of their respective affiliates has or will, either alone or with one or more other persons, bid for or purchase for any account in which it or any of its affiliates has a beneficial interest any Offered Securities or attempt to induce any person to purchase any Offered Securities; and none of them nor any of their affiliates will make bids or purchases for the purpose of creating actual, or apparent, active trading in, or of raising the price of, the Offered Securities. (j) For a period of 120 days after the date of the initial offering of the Offered Securities by the Initial Purchasers, except as described in the section entitled "The Transactions" in the Offering Document, none of the Issuer, Holdings, the Company or any of the Company's subsidiaries will offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any United States dollar-denominated debt securities issued or guaranteed by any of the Issuer, Holdings, the Company or any of the Company's subsidiaries and having a maturity of more than one year from the date of issue. The Issuer, Holdings, the Company or any of the Company's subsidiaries will not at any time offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any securities under circumstances where such offer, sale, pledge, contract or disposition would cause the exemption afforded by Section 4(2) of the Securities Act or the safe harbor of Regulation S thereunder to cease to be applicable to the offer and sale of the Offered Securities. (k) On the Closing Date, the Issuer will deposit the Escrowed Funds with the Escrow Agent. (l) The Issuer, Holdings and the Company will use the net proceeds from the sale of the Offered Securities in substantially the manner described in the Offering Document under the caption "Use of Proceeds". (m) None of the Issuer, Holdings, the Company, or any of the Company's subsidiaries will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) that would be integrated with the sale of the Offered Securities in a manner that would require the registration under the Securities Act of the sale to the Initial Purchasers of the Offered Securities or to take any other action that would result in the resale of the Offered Securities not being exempt from registration under the Securities Act. (n) None of the Issuer, Holdings, the Company or any of its subsidiaries, will take, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of any security of the Issuer to facilitate the resale of the Offered Securities. Except as permitted by the Securities Act, the Issuer will not distribute any (i) preliminary offering memorandum or offering memorandum, including without limitation, the Offering Document or (ii) other offering material in connection with the offering and sale of the Offered Securities. (o) On the closing date of the Merger, the Issuer and Holdings shall cause the Initial Purchasers to receive one or more counterparts of this Agreement and the Registration Rights Agreement in the form attached as Exhibit A, which shall have been executed and delivered by duly authorized officers of each of the Company and the Subsidiary Guarantors. (p) On the closing date of the Merger, the Company shall deliver to the Initial Purchasers Secretary's Certificates reasonably satisfactory to the Initial Purchasers which shall include the following documents with respect to the Company and each of the Subsidiary Guarantors: (1) certificates of incorporation, (2) by-laws, (3) resolutions and (4) certificates of good standing and/or qualification to do business as a foreign corporation in such jurisdictions as the Initial Purchasers may reasonably request. (q) On the closing date of the Merger, the Issuer and Holdings shall cause the Initial Purchasers to receive an opinion, dated the date of such closing, from Simpson, Thacher & Bartlett, counsel for the Company and Holdings after the Merger, substantially in the form of Exhibit D. (r) On the closing date of the Merger, the Issuer and Holdings shall cause the Initial Purchasers to receive a copy of the opinions delivered in connection with the consummation of the Credit Agreement, which opinions shall expressly state that the Initial Purchasers are justified in relying upon the opinions therein. 6. Conditions of the Obligations of the Initial Purchasers. The obligations of the Initial Purchasers to purchase and pay for the Offered Securities will be subject to the accuracy of the representations and warranties on the part of the Issuer and Holdings herein, to the accuracy of the statements of officers of the Issuer and the Company made pursuant to the provisions hereof, to the performance by the Issuer and Holdings of their obligations hereunder and to the following additional conditions precedent: (a) The Initial Purchasers shall have received a letter, dated the date of this Agreement, of Arthur Andersen LLP in a form satisfactory to the Initial Purchasers in all respects. (b) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) a change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls that would, in the reasonable judgment of CSFBC, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Offered Securities, whether in the primary market or in respect of dealings in the secondary market, or (ii) (A) any change, or any development or event involving a prospective change, in the financial condition, business, properties or results of operations of the Company or its subsidiaries which, in the reasonable judgment of CSFBC, is material and adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Offered Securities; (B) any downgrading in the rating of any debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Securities Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (C) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (D) any banking moratorium declared by U.S. Federal or New York authorities; or (E) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any other substantial national or international calamity or emergency if, in the judgment of CSFBC, the effect of any such outbreak, escalation, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the offering or sale of and payment for the Offered Securities. (c) There shall exist at and as of the Closing Date no condition that would constitute a default (or an event that with notice or lapse of time, or both, would constitute a default) under any Transaction Agreement as in effect or as in draft form at the Closing Date. (d) The Initial Purchasers shall have received an opinion, dated the Closing Date, of Simpson, Thacher & Bartlett, counsel to the Issuer, Holdings and the Company, substantially in the form of Exhibit B. (e) The Initial Purchasers shall have received an opinion, dated the Closing Date, of Walter Stafford, Esq., Senior Vice President, Secretary and General Counsel of the Company substantially in the form of Exhibit C. (f) The Initial Purchasers shall have received from Cravath, Swaine & Moore, counsel for the Initial Purchasers, such opinion or opinions, dated the Closing Date, with respect to the incorporation of the Issuer or the Company, the validity of the Offered Securities, the Offering Circular, the exemption from registration for the offer and sale of the Offered Securities by the Issuer to the Initial Purchasers and the resales by the Initial Purchasers as contemplated hereby and other related matters as CSFBC may require, and the Issuer and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (g) The Initial Purchasers shall have received a certificate, dated the Closing Date, of the Chief Executive Officer, Chairman of the Americas or any Vice President and a principal financial or accounting officer of the Company in which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties made by the Issuer and Holdings with respect to the Company in this Agreement are true and correct and that, subsequent to the respective date of the most recent financial statements in the Offering Document, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the financial condition, business, properties or results of operations of the Company and its subsidiaries taken as a whole except as set forth in or contemplated by the Offering Document or as described in such certificate. (h) The Initial Purchasers shall have received a letter, dated the Closing Date, of Arthur Anderson LLP which meets the requirements of subsection (a) of this Section, except that the specified date referred to in such subsection will be a date not more than three days prior to the Closing Date for the purposes of this subsection. (i) The Issuer , Holdings and the Trustee shall have entered into the Indenture and you shall have received counterparts, conformed as executed, thereof. (j) The Issuer and Holdings shall have entered into the Registration Rights Agreement and you shall have received counterparts, conformed as executed, thereof. (k) The Issuer and Holdings shall have entered into an escrow agreement with the Escrow Agent and, on the Closing Date, will deposit the Escrowed Funds with the Escrow Agent. (l) The Offered Securities shall have been designated PORTAL securities in accordance with the rules and regulations adopted by the NASD relating to trading in the PORTAL market. (m) On or prior to the Closing Date, the Issuer shall have provided to each of the Initial Purchasers and counsel to the Initial Purchasers copies of all Transaction Documents executed and delivered on or prior to such date (and, to the extent available, drafts of Transaction Agreements to be executed on the closing date of the Merger, if later), including but not limited to legal opinions relating to the Transactions. CSFBC may waive compliance with any conditions to the obligations of the Initial Purchasers hereunder. 7. Indemnification and Contribution. (a) Each of the Issuer and Holdings will indemnify and hold harmless the Initial Purchasers, their partners, directors and officers and each person, if any, who controls such Initial Purchaser within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Initial Purchasers may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any breach of any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or any related Preliminary Offering Circular, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, including any losses, claims, damages or liabilities arising out of or based upon the Issuers's failure to perform its obligations under Section 5(a) of this Agreement, and will reimburse the Initial Purchasers for any legal or other expenses reasonably incurred by such Initial Purchasers in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Issuer and Holdings will -------- ------- not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Issuer by any Initial Purchaser through CSFBC specifically for use therein, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below; and provided further, however, that with respect to any untrue -------- ------- ------- statement or alleged untrue statement in or omission or alleged omission from any Preliminary Offering Circular, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of the Initial Purchaser that sold the securities concerned (or any Person controlling such Purchaser) to the person asserting any such losses, claims, damages or liabilities, to the extent that such sale was an initial resale by such Initial Purchaser and any such loss, claim, damage or liability of such Initial Purchaser or such Person controlling such Initial Purchaser results from the fact that there was not sent or given to the person, at or prior to the written confirmation of the sale of such securities to such person, a copy of the Offering Circular, if the Issuer or the Company had previously furnished copies thereof to such Initial Purchaser on a timely basis and in a sufficient quantity to enable such Initial Purchaser to furnish copies of the Offering Circular to all the persons to whom such Initial Purchaser sold the securities concerned. (b) The Initial Purchasers will indemnify and hold harmless the Issuer, its directors and officers and each person, if any, who controls the Issuer within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities to which the Issuer may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document or any amendment or supplement thereto or arise out of or are based upon the omission or the alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Issuer or the Company by such Initial Purchasers through CSFBC specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Issuer in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by the Initial Purchasers consists of (i) the following information in the Offering Document: under the caption "Plan of Distribution", the fifth, eighth and ninth paragraphs, and the third sentence of the seventh paragraph; provided, however, that -------- ------- the Initial Purchasers shall not be liable for any losses, claims, damages or liabilities arising out of or based upon the Issuer's failure to perform its obligations under Section 5(a) of this Agreement. (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying 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 under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of any indemnified party. (d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuer and Holdings on the one hand and the Initial Purchasers on the other from the offering of the Offered Securities 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 Issuer and Holdings on the one hand and the Initial Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Issuer and Holdings on the one hand and the Initial Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Issuer bear to the total discounts and commissions received by the Initial Purchasers from the Issuer under this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer and Holdings or the Initial Purchasers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), the Initial Purchasers shall not be required to contribute any amount in excess of the amount by which the total discounts and commissions received by the Initial Purchasers exceeds the amount of any damages which the Initial Purchasers have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. (e) The obligations of the Issuer and Holdings under this Section shall be in addition to any liability which the Issuer and Holdings may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls such Initial Purchaser within the meaning of the Securities Act or the Exchange Act; and the obligations of the Initial Purchasers under this Section shall be in addition to any liability which the Initial Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Issuer within the meaning of the Securities Act or the Exchange Act. 8. Default of Initial Purchasers. If any Initial Purchaser or Initial Purchasers default in their obligations to purchase Offered Securities hereunder and the aggregate principal amount of Offered Securities that such defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase does not exceed 10% of the total principal amount of Offered Securities, CSFBC may make arrangements satisfactory to the Issuer for the purchase of such Offered Securities by other persons, including any of the Initial Purchasers, but if no such arrangements are made by the Closing Date, the non-defaulting Initial Purchasers shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting Initial Purchasers agreed but failed to purchase. If any Initial Purchaser or Initial Purchasers so default and the aggregate principal amount of Offered Securities with respect to which such default or defaults occur exceeds 10% of the total principal amount of Offered Securities and arrangements satisfactory to CSFBC and the Issuer for the purchase of such Offered Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Initial Purchaser or the Issuer, except as provided in Section 9. As used in this Agreement, the term "Initial Purchaser" includes any person substituted for an Initial Purchaser under this Section. Nothing herein will relieve a defaulting Initial Purchaser from liability for its default. 9. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Issuer and Holdings or any of their officers and of the Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of the Initial Purchasers, the Issuer, Holdings or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If for any reason the purchase of the Offered Securities by the Initial Purchasers is not consummated, the Issuer shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5(h) and the respective obligations of the Issuer and Holdings and the Initial Purchasers pursuant to Section 7 shall remain in effect. If the purchase of the Offered Securities by the Initial Purchasers is not consummated for any reason other than solely because of the occurrence of any event specified in clause (C), (D) or (E) of Section 6(b)(ii), the Issuer and Holdings will reimburse the Initial Purchasers for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by it in connection with the offering of the Offered Securities; provided, however, that the Issuer and Holdings will not reimburse the - -------- ------- defaulting Initial Purchaser or Purchasers if the purchase is not consummated as a result of the termination of this Agreement pursuant to Section 8. 10. Notices. All communications hereunder will be in writing and, if sent to the Initial Purchasers will be mailed, delivered or telegraphed and confirmed to the Initial Purchasers at Eleven Madison Avenue, New York, New York 10010- 3629, Attention: Investment Banking Department - Transactions Advisory Group, or, if sent to the Issuer, will be mailed, delivered or telegraphed and confirmed to it at BLUM CB Corp., 909 Montgomery Street, Suite 400, San Francisco, California 94133, Attention: Claus Moller. 11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder, except that holders of Offered Securities shall be entitled to enforce the agreements for their benefit contained in the second and third sentences of Section 5(b) hereof against the Issuer as if such holders were parties thereto. 12. Representation of Initial Purchasers. CSFBC will act for the several Initial Purchasers in connection with this purchase, and any action under this Agreement taken by CSFBC will be binding upon all the Initial Purchasers. 13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. 14. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The Issuer and Holdings hereby submit to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If the foregoing is in accordance with the Initial Purchasers' understanding of our agreement, kindly sign and return to us one of the counterparts hereof, whereupon it will become a binding agreement between the Issuer, Holdings and the Initial Purchasers in accordance with its terms. Very truly yours, BLUM CB Corp. By: /s/ Claus J. Moller --------------------- Name: Claus J. Moller Title: President CBRE Holding, Inc. By: /s/ Claus J. Moller --------------------- Name: Claus J. Moller Title: President The foregoing Purchase Agreement is hereby confirmed and accepted as of the date first above written. Credit Suisse First Boston Corporation Acting on behalf of itself and as the Representative of the several Initial Purchasers By Credit Suisse First Boston Corporation By: /s/ Malcolm Price ------------------- Name: Malcolm Price Title: SCHEDULE A
Principal Amount of Manager Offered Securities ------- ------------------- Credit Suisse First Boston Corporation $179,522,000 Credit Lyonnais Securities (USA) Inc. $ 20,299,000 HSBC Securities (USA) Inc. $ 20,299,000 Scotia Capital (USA) Inc. $ 8,880,000 ------------ Total $229,000,000 ============
EXHIBIT A [TO BE SIGNED BY CB RICHARD ELLIS SERVICES] Counterpart to the Purchase Agreement ------------------------------------- The undersigned hereby agrees to assume and be bound by all of the obligations of BLUM CB Corp., a Delaware corporation (the "Issuer"), under the Purchase Agreement dated May 31, 2001, among the Issuer, CBRE Holding, Inc. and the Initial Purchasers (as defined therein). Dated: ________________________________________ CB RICHARD ELLIS SERVICES, INC. By: ___________________________________________ Name: Title: [TO BE SIGNED BY EACH SUBSIDIARY GUARANTOR] Counterpart to the Purchase Agreement ------------------------------------- The undersigned hereby agrees to be bound by all of the obligations of CBRE Holding, Inc., a Delaware Corporation ("Holdings"), under the Purchase Agreement dated May 31, 2001, among BLUM CB Corp., a Delaware Corporation, Holdings and the Initial Purchasers (as defined therein). For the avoidance of doubt, such obligators shall include, but not be limited to, the obligations enumerated in Section 7(a) of the Purchase Agreement. Dated: _________________________________________ Name of Company By: ____________________________________________ Name: Title: [TO BE SIGNED BY CB RICHARD ELLIS SERVICES AND EACH SUBSIDIARY GUARANTOR] Counterpart to Registration Rights Agreement -------------------------------------------- The undersigned hereby agrees to be bound by all of obligations of the "Company" under the Registration Rights Agreement, dated May 31, 2001, among BLUM CB Corp., a Delaware corporation, CBRE Holding, Inc., a Delaware corporation, and the Initial Purchasers (as defined therein). For the avoidance of doubt, such obligations shall include, but not be limited to, the obligations enumerated in Section 5(a) and in Section 6 of the Registration Rights Agreement. Dated: __________________________________________ Name of Company By: _____________________________________________ Name: Title: Credit Suisse First Boston Corporation EXHIBIT B June____, 2001 Credit Suisse First Boston Corporation Credit Lyonnais Securities (USA) Inc. HSBC Securities (USA) Inc. Scotia Capital (USA) Inc. c/o Credit Suisse First Boston Corporation Eleven Madison Avenue New York, New York 10010 Ladies and Gentlemen: We have acted as special counsel to BLUM CB Corp. (the "Issuer"), a Delaware corporation, and CBRE Holding, Inc. ("Holdings"), a Delaware corporation and the parent corporation of the Issuer, in connection with the purchase by you of $229,000,000 aggregate principal amount of 11 1/4% Senior Subordinated Notes due 2011 (the "Notes") of the Issuer, unconditionally guaranteed on an unsecured, senior subordinated basis by Holdings (such guaranty is referred to herein as the "Parent Guaranty"), pursuant to the Purchase Agreement, dated as of May 31, 2001 (the "Purchase Agreement"), by and among the Issuer, Holdings and you, as the initial purchasers (the "Initial Purchasers"). Pursuant to the terms and subject to the conditions of the amended and restated agreement and plan of merger, dated as of May 31, 2001, among CB Richards Ellis Services, Inc. (the "Company"), a Delaware corporation, Holdings and the Issuer, the Issuer is to be merged into the Company as described therein. We have examined the Offering Circular, dated as of May 31, 2001 (the "Offering Circular"), relating to the sale of the Notes; the Indenture, dated as of June 7, 2001 (the "Indenture"), by and among the Issuer, Holdings and State Street Bank and Trust Company of California, N.A., as trustee (the "Trustee"), relating to the Notes and the Parent Guaranty; the global notes representing the Notes; the Purchase Agreement; the Escrow Agreement, dated as of June 7, 2001 (the "Escrow Agreement"), by and among the Issuer, Holdings and State Street Bank and Trust Company N.A., as escrow agent (the "Escrow Agent"); and the Registration Rights Agreement, dated as of May 31, 2001 (the "Registration Rights Credit Suisse First Boston Corporation Agreement"), by and among the Issuer, Holdings and you. In addition, we have examined, and have relied as to matters of fact upon, the documents delivered to you at the closing, and upon originals, or duplicates or certified or conformed copies, of such corporate records, agreements, documents and other instruments and such certificates or comparable documents of public officials and of officers and representatives of the Issuer, Holdings and the Company, and have made such other investigations, as we have deemed relevant and necessary in connection with the opinions hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. Based upon the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion that: 1. The Issuer and Holdings have been duly incorporated and are validly existing and in good standing as corporations under the laws of the State of Delaware. 2. The Indenture has been duly authorized, executed and delivered by the Issuer and Holdings and, assuming that the Indenture is the valid and legally binding obligation of the Trustee, constitutes valid and legally binding obligations of the Issuer and Holdings, respectively, enforceable against the Issuer and Holdings in accordance with its terms. 3. The Notes have been duly authorized, executed and issued by the Issuer and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the Purchase Agreement, will constitute valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms and entitled to the benefits of the Indenture . 4. The Exchange Securities (as defined in the Registration Rights Agreement) have been duly authorized by the Issuer and Holdings. 5. The Parent Guaranty has been duly authorized, executed and issued by Holdings and, assuming due authentication of the Notes by the Trustee and upon payment for and delivery of the Notes in accordance with the Purchase Agreement, will constitute valid and legally binding obligation of Holdings enforceable against Holdings in accordance with its terms and entitled to the benefits of the Indenture. 6. The Registration Rights Agreement has been duly authorized, executed and delivered by the Issuer and Holdings and, assuming that the Registration Rights Agreement is the valid and legally binding obligations of the Initial Purchasers, constitutes valid and legally binding obligations of the Issuer and Holdings, respectively, enforceable against the Issuer and Holdings in accordance with its terms. 7. The Escrow Agreement has been duly authorized executed and delivered by the Issuer and Holdings and, assuming that the Escrow Agreement is the valid and legally binding obligation of the Escrow Agent, constitutes valid and legally binding obligations of the Issuer and Holdings, respectively, enforceable against the Issuer and Holdings in accordance with its terms. Credit Suisse First Boston Corporation 8. The Purchase Agreement has been duly authorized and executed by the Issuer and Holdings. 9. The statements made in the Offering Circular under the caption "Description of the Notes" insofar as they purport to constitute summaries of certain terms of documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. 10. The statements made in the Offering Circular under the caption "U.S. Federal Income Tax Consequences to Non-U.S. Holders" insofar as they purport to constitute summaries of matters of United States federal tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects. 11. The issue and sale of the Notes by the Issuer, the issue of the Parent Guaranty by Holdings, the compliance by the Issuer and Holdings with all of the provisions of the Purchase Agreement and the consummation of the Merger (as defined in the Indenture) will not breach or result in a default under any of the agreements or instruments identified on Schedule I annexed hereto and furnished to us by the Issuer and Holdings, nor will such action violate the Certificate of Incorporation or By-laws of the Issuer or Holdings or any federal or New York statute or the Delaware General Corporation Law or any order known to us issued pursuant to any federal or New York statute or the Delaware General Corporation Law by any court or governmental agency or body or court having jurisdiction over the Issuer, Holdings or any of their respective property. 12. No consent, approval, authorization, order, registration or qualification of or with any federal or New York governmental agency or body or any Delaware governmental agency or body acting pursuant to the Delaware General Corporation Law or, to our knowledge, any federal or New York court or any Delaware court acting pursuant to the Delaware General Corporation Law is required for the issue and sale of the Notes by the Issuer and the issue of the Parent Guaranty by Holdings and the compliance by the Issuer and Holdings with all of the provisions of the Purchase Agreement, except for such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Notes by the Initial Purchasers. 13. To our knowledge, there are no pending or threatened legal proceedings to which the Issuer or Holdings is a party or otherwise subject that are required to be described in the Offering Circular which are not described as required. 14. No registration under the Securities Act of 1933, as amended (the "Securities Act"), of the Notes or the Parent Guaranty and no qualification of the Indenture under the Trust Indenture Act is required for the offer and sale of the Notes by the Issuer to the Initial Purchasers or the reoffer and resale of the Notes by the Initial Purchasers to the initial purchasers therefrom solely in the manner contemplated in the Offering Circular, the Purchase Agreement and the Indenture. 15. Following the issuance of the Notes and the application of the proceeds therefrom, none of the Issuer, Holdings or the Company will be an "investment company" within the meaning of and subject to regulation under the Investment Company Act of 1940, as amended. 16. When the Notes are issued and delivered pursuant to the Purchase Agreement, such Notes will not be of the same class (within the meaning of Rule 144A under the Securities Act) as securities of the Company that are listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended, or that are quoted in a United States automated inter-dealer quotation system. Our opinions in paragraphs 2, 3, 5, 6 and 7 above are subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, (ii) general equitable principles (whether considered in a Credit Suisse First Boston Corporation proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing. Our opinion in paragraph 6 is further limited by considerations of public policy. We express no opinion as to the validity, legally binding effect or enforceability of any provision of the Registration Rights Agreement or any related provisions of the Indenture, that requires or relates to payment of any interest at a rate or in an amount which a court would determine in the circumstances under applicable law to be commercially unreasonable or a penalty or a forfeiture. We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Offering Circular and take no responsibility therefore, except as and to the extent set forth in paragraphs 9 and 10 above. In the course of the preparation by the Issuer, Holdings and the Company of the Offering Circular, we participated in conferences with certain officers and employees of the Issuer, Holdings and the Company and with representatives of Arthur Andersen LLP, independent accountants to the Issuer, Holdings and the Company. Based upon our examination of the Offering Circular, our investigations made in connection with the preparation of the Offering Circular and our participation in the conferences referred to above, we have no reason to believe that the Offering Circular contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that we express no belief with respect to the financial statements or other financial or statistical data contained in the Offering Circular. We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the law of the State of New York, the federal law of the United States and the Delaware General Corporation. This opinion letter is rendered to you in connection with the above- described transaction. This opinion letter may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation without our prior written consent. Very truly yours, SIMPSON THACHER & BARTLETT Credit Suisse First Boston Corporation EXHIBIT C June ___, 2001 CREDIT SUISSE FIRST BOSTON CORPORATION Credit Lyonnais Securities (USA) Inc. HSBC Securities (USA) Inc. Scotia Capital (USA) Inc. c/o Credit Suisse First Boston Corporation Eleven Madison Avenue New York, New York 10010 Ladies and Gentlemen: Reference is hereby made to the purchase by you of $229,000,000 aggregate principal amount of 11 1/4% Senior Subordinated Notes due 2011 (the "Notes") of BLUM CB Corp. (the "Issuer"), a Delaware corporation, unconditionally guaranteed on an unsecured, senior subordinated basis by CBRE Holding, Inc. ("Holdings"), a Delaware corporation and the parent corporation of the Issuer (such guaranty is referred to herein as the "Parent Guaranty"), and to be unconditionally guaranteed on an unsecured, senior subordinated basis by the subsidiaries listed on Schedule I hereto (such listed subsidiaries are referred to herein as the "Subsidiary Guarantors") of CB Richard Ellis Services, Inc. (the "Company"), a Delaware corporation and the entity into which the Issuer will merge (pursuant to the terms and subject to the conditions of the amended and restated agreement and plan of merger, dated as of May 31, 2001, among the Company, Holdings and the Issuer), pursuant to the Purchase Agreement, dated as of May 31, 2001 (the "Purchase Agreement"), by and among the Issuer, Holdings and you, as the initial purchasers (the "Initial Purchasers"). As the General Counsel of the Company, I have examined the Offering Circular, dated as of May 31, 2001 (the "Offering Circular"), relating to the sale of the Notes; the Indenture, dated as of June 7, 2001 (the "Indenture"), by and among the Issuer, Holdings and State Street Bank and Trust Company of California, N.A., as trustee (the "Trustee"), relating to the Notes and the Parent Guaranty; the global notes representing the Notes; the Purchase Agreement; the Escrow Agreement, dated as of June 7, 2001 (the "Escrow Agreement"), by and among the Issuer, Holdings and State Street Bank and Trust Company N.A., Credit Suisse First Boston Corporation as escrow agent; and the Registration Rights Agreement, dated as of May 31, 2001 (the "Registration Rights Agreement"), by and among the Issuer, Holdings and the Initial Purchasers. In addition I have examined, and have relied as to matters of fact upon, the documents delivered to you at the closing, and upon originals, or duplicates or certified or conformed copies, of such corporate records, agreements, documents and other instruments and such certificates or comparable documents of public officials and of officers and representatives of the Company and the Subsidiary Guarantors, and have made such other investigations, as I have deemed relevant and necessary in connection with the opinions hereinafter set forth. In such examination, I have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. Based upon the foregoing, and subject to the qualifications and limitations stated herein, I am of the opinion that: 1. Each of the Company and the Subsidiary Guarantors is duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, with corporate power and authority to own its properties and conduct its business as described in the Offering Circular; and each of the Company and the Subsidiary Guarantors is duly qualified to do business as a foreign corporation in good standing in all jurisdictions in which its ownership or leasing of properties or the conduct of its business requires such qualification; except to the extent that the failure to be so qualified or to be in good standing would not have a material adverse effect on the business, financial condition or results of operation of the Company and its subsidiaries, taken as a whole ("Material Adverse Effect"). 2. Neither the Company nor, to my knowledge, any of the Subsidiary Guarantors is in breach or violation of any of the terms and provisions of, or in default under, (i) any statute, rule or regulation, or any order known to me of any governmental agency or body or any court, domestic or foreign, that has jurisdiction over the Company or any of its subsidiaries or any of their properties, (ii) any agreement or instrument to which the Company or any of the Subsidiary Guarantors is a party or by which the Company or any of the Subsidiary Guarantors is bound or to which any of the properties of the Company or its subsidiaries is subject or (iii) the charter, by-laws or similar governing document of the Company or any of the Subsidiary Guarantors, except for such breaches, violations or defaults which would not result in a Material Adverse Effect. 3. Except as disclosed in the Offering Circular, there are no pending or threatened actions, suits or proceedings against the Company or, to my knowledge, any Subsidiary Guarantor or any of their respective properties or assets that, if determined adversely to the Company or any such Subsidiary Guarantor, would individually or in the aggregate have a Material Adverse Effect, or would materially and adversely affect the power or ability of the Company or any Subsidiary Guarantor to consummate the Transactions (as defined in the Purchase Agreement) or would materially and adversely affect the ability of the Company to assume the Issuer's obligations under the Purchase Agreement, the Registration Rights Agreement, the Notes or the Indenture or the Subsidiary Guarantors' ability to guarantee the Notes or to execute the Supplemental Indenture or the counterparts to the Purchase Agreement or the Registration Rights Agreement. Credit Suisse First Boston Corporation 4. Except as otherwise disclosed in the Offering Circular, the consummation of the Transactions will not result in a breach or violation of any of the terms and provisions, of, or constitute a default under, any statute, rule or regulation, or any order known to me of any governmental agency or body or any court having jurisdiction over the Company or, to my knowledge, any Subsidiary Guarantor or any of the properties of the Company or any of the properties of the Subsidiary Guarantors known to me, or any agreement or instrument which the Company or, to my knowledge, a Subsidiary Guarantor is a party or by which the Company or, to my knowledge, a Subsidiary Guarantor is bound or to which any of the properties of the Company or, to my knowledge, a Subsidiary Guarantor is subject, or the charter or by-laws of the Company or any Subsidiary Guarantor. I have not independently verified the accuracy, completeness or fairness of the statements made or included in the Offering Circular and take no responsibility therefor. Based upon my examination of the Offering Circular, I have no reason to believe that the Offering Circular contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that I shall express no belief with respect to the financial statements or other financial or statistical data contained in the Offering Circular. I am a member of the Bar of the State of California, and I do not express any opinion herein concerning any law other than the law of the State of California, the federal law of the United States, the Delaware General Corporation law and the Delaware Limited Liability Company Act. This opinion letter is rendered to you in connection with the above- described transaction. This opinion letter may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation without my prior written consent. Very truly yours, WALTER V. STAFFORD Credit Suisse First Boston Corporation EXHIBIT D July ___, 2001 Credit Suisse First Boston Corporation Credit Lyonnais Securities (USA) Inc. HSBC Securities (USA) Inc. Scotia Capital (USA) Inc. c/o Credit Suisse First Boston Corporation Eleven Madison Avenue New York, New York 10010 Ladies and Gentlemen: We have acted as special counsel to BLUM CB Corp. (the "Issuer"), a Delaware Corporation, CBRE Holding, Inc. ("Holdings"), a Delaware corporation and the parent corporation of the Issuer, CB Richard Ellis Services, Inc. (the "Company"), a Delaware corporation, and the Subsidiary Guarantors (as defined below) in connection with the purchase by you of $229,000,000 aggregate principal amount of 11 1/4% Senior Subordinated Notes due 2011 (the "Notes") of the Issuer, unconditionally guaranteed on an unsecured, senior subordinated basis by (i) Holdings and (ii) the subsidiaries of the Company listed on Schedule I hereto (such listed subsidiaries are referred to herein as the "Subsidiary Guarantors"). Such guarantees of the Subsidiary Guarantors are referred to herein as the "Subsidiary Guarantees." Pursuant to the terms of the amended and restated plan of merger, dated as of May 31, 2001, among the Company, Holdings and the Issuer, the Issuer has been merged into the Company. We have examined the Indenture, dated as of June 7, 2001 (the "Indenture"), by and among the Issuer, Holdings and State Street Bank and Trust Company of California, N.A., as trustee (the "Trustee"); the Supplemental Indenture, dated as of July ___, 2001 (the "Supplemental Indenture"), by and among Holdings, the Company, the Subsidiary Guarantors and the Trustee; the global notes representing the Notes; the counterpart (the "Purchase Agreement Counterpart") to the Purchase Agreement, dated May 31, 2001, by and among the Issuer, Holdings and you, as initial purchasers (the "Initial Purchasers"); and the counterpart (the "Registration Rights Agreement Counterpart") to the Registration Rights Agreement, dated May 31, 2001, by and among the Issuer, Holdings and the Initial Purchasers. In addition, we have examined, and have relied as to matters of fact upon, the documents delivered to you at the closing, and upon originals, or duplicates or certified or conformed copies, of such Credit Suisse First Boston Corporation corporate records, agreements, documents and other instruments and such certificates or comparable documents of public officials and of officers and representatives of the Issuer, the Company, Holdings and the Subsidiary Guarantors, and have made such other investigations, as we have deemed relevant and necessary in connection with the opinions hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. In rendering the opinions set forth in the enumerated paragraphs below, we have assumed that (1) the Subsidiary Guarantors that are not incorporated in, or organized or formed under the laws of, the State of Delaware (such guarantors, the "Non-Delaware Guarantors") are validly existing and in good standing under the laws of the jurisdictions in which each of them is organized and have duly authorized, executed and delivered the Subsidiary Guarantees of the Non-Delaware Guarantors in accordance with their respective charter documents and by-laws (or, as the case may be, equivalent constitutive documents) and the laws of the jurisdictions in which each of them is organized, (2) execution, delivery and performance by the Non-Delaware Guarantors of the Guarantees of the Non-Delaware Guarantors do not violate the laws of the jurisdictions in which each of them is incorporated, organized or formed and (3) execution, delivery and performance by the Non-Delaware Guarantors of the Guarantees of the Non-Delaware Guarantors do not constitute a breach or violation of any agreement or instrument that is binding upon the Non-Delaware Guarantors. Based upon the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion that: 1. The Supplemental Indenture has been duly authorized, executed and delivered by Holdings, the Company and the Subsidiary Guarantors and, assuming that the Supplemental Indenture is the valid and legally binding obligation of the Trustee, the Supplemental Indenture constitutes valid and legally binding obligations of Holdings, the Company and the Subsidiary Guarantors, respectively, enforceable against Holdings, the Company and the Subsidiary Guarantors in accordance with its terms. 2. The Purchase Agreement Counterpart and the Registration Rights Agreement Counterpart have been duly authorized, executed and delivered by the Company. 3. The Purchase Agreement Counterpart and the Registration Rights Agreement Counterpart have been duly authorized, executed and delivered by the Subsidiary Guarantors. 4. The Subsidiary Guarantees have been duly authorized, executed and issued by the Subsidiary Guarantors and, assuming due authentication of the Notes by the Trustee and upon payment for and delivery of the Notes in accordance with the Purchase Agreement, will constitute valid and legally binding obligations of the Subsidiary Guarantors enforceable against the Subsidiary Guarantors in accordance with their terms and entitled to the benefit of the Indenture. Credit Suisse First Boston Corporation 5. The issue of the Subsidiary Guarantees by the Subsidiary Guarantors and the compliance by the Company and the Subsidiary Guarantors with all of the provisions of the Supplemental Indenture will not breach or result in a default under any of the agreements or instruments identified on Schedule II annexed hereto furnished to us by the Company, nor will such action violate the Certificate of Incorporation or By-laws of the Company or any Subsidiary Guarantor or any federal or New York statute or the Delaware General Corporation Law or any order known to us issued pursuant to any federal or New York statute or the Delaware General Corporation Law by any court or governmental agency or body or court having jurisdiction over the Company or any Subsidiary Guarantor or any of their properties. 6. No consent, approval, authorization, order, registration or qualification of or with any federal or New York governmental agency or body or any Delaware governmental agency or body acting pursuant to the Delaware General Corporation Law or, to our knowledge, any federal or New York court or any Delaware court acting pursuant to the Delaware General Corporation Law is required for the issue of the Subsidiary Guarantees by the Subsidiary Guarantors and the compliance by the Subsidiary Guarantors with all of the provisions of the Supplemental Indenture. Our opinion in paragraphs 1 and 4 above is subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing. We express no opinion as to the validity, legally binding effect or enforceability of any provision of the Supplemental Indenture, or the Guarantees that requires or relates to payment of any interest at a rate or in an amount which a court would determine in the circumstances under applicable law to be commercially unreasonable or a penalty or a forfeiture. We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the law of the State of New York, the federal law of the United States, the Delaware General Corporation law and the Delaware Limited Liability Company Act. This opinion letter is rendered to you in connection with the above-described transaction. This opinion letter may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation without our prior written consent. Very truly yours, SIMPSON THACHER & BARTLETT EX-13 7 dex13.txt AMND. TO THE CSFB COMMITMENT LTR. Exhibit 13. CREDIT SUISSE FIRST BOSTON Eleven Madison Avenue New York, NY 10010 May 31, 2001 BLUM CB Corp. In care of RCBA Strategic Partners, L.P. 909 Montgomery Street San Francisco, CA 94133 Attention of Claus Moller Project Radio Senior Secured Credit Facilities Ladies and Gentlemen: Reference is made to (a) the commitment letter dated February 23, 2001 (the "Commitment Letter"), between Credit Suisse First Boston ("CSFB") and you, and (b) the Confidential Offering Circular dated May 31, 2001 (the "Offering Circular"), relating to your proposed issuance of $225,000,000 aggregate principal amount of Senior Subordinated Notes Due 2011 (the "Senior Subordinated Notes"). Terms used but not defined in this letter agreement shall have the meanings assigned thereto in the Commitment Letter (including the attachments thereto). As described in the Offering Circular, it is proposed that the debt financing for the Transaction be modified from that set forth in the Commitment Letter. In particular, the amount of CSFB's commitment under the Commitment Letter will be reduced to $325,000,000 and the Borrower intends to issue the Senior Subordinated Notes. Accordingly, you and we hereby agree that the Commitment Letter shall be deemed modified to reflect the following: 1. The aggregate principal amount of the Tranche A Facility shall be $50,000,000. 2. The aggregate principal amount of the Tranche B Facility shall be $175,000,000. 3. The aggregate principal amount of the Revolving Facility shall remain at $100,000,000. 4. The Borrower shall issue the Senior Subordinated Notes on the terms described in the Offering Circular. 5. The aggregate principal amount of the Notes to be issued by Holdings shall be $65,000,000, with the entire net cash proceeds thereof being contributed to the Borrower as part of the Cash Equity Contribution. 2 6. It shall be an additional condition precedent to CSFB's commitment that the Facilities continue to be rated BB- or higher by Standard & Poor's and Ba3 or higher by Moody's Investors Service, Inc. Except as expressly set forth herein, this letter agreement shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the parties to the Commitment Letter, and shall not alter, modify or amend in any way or affect any of the terms, conditions, obligations, covenants or agreements contained in the Commitment Letter. Without limiting the generality of the foregoing, this letter agreement shall not be construed as a waiver of any of the conditions precedent to CSFB's obligations set forth or referred to in the Commitment Letter, nor shall it be construed as implying that any of such conditions precedent have been satisfied at the date hereof. This letter agreement may not be amended or any provision hereof waived or modified except by an instrument in writing signed by each of the parties hereto. This letter agreement is intended to be solely for the benefit of the parties hereto, is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto and is not intended to create a fiduciary relationship between the parties hereto. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York. This letter agreement may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this letter agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart of this letter agreement. 3 If the foregoing correctly sets forth our understanding, please indicate your acceptance of the terms hereof by returning to us an executed counterpart hereof not later than 5:00 p.m., New York time, on May 31, 2001, whereupon this letter agreement shall become a binding agreement between us. Very truly yours, CREDIT SUISSE FIRST BOSTON, by /s/ Richard Carey --------------------------- Name: Richard Carey Title: Managing Director by /s/ Mark E. Gleason --------------------------- Name: Mark E. Gleason Title: Director Accepted and agreed to as of the date first above written: BLUM CB CORP., by /s/ Claus J. Moller ---------------------------- Name: Claus J. Moller Title: President EX-14 8 dex14.txt AMND. TO THE DLJ COMMITMENT LTR. Exhibit 14. May 31, 2001 CBRE Holding, Inc. c/o RCBA Strategic Partners, L.P. 909 Montgomery Street San Francisco, CA 94133 Attention: Mr. Claus Moller RE: AMENDMENT TO COMMITMENT LETTER DATED FEBRUARY 23, 2001 Dear Sir: Reference is made to the commitment letter dated February 23, 2001 (the "Commitment Letter") pursuant to which DLJ Investment Partners II, L.P. agreed, subject to the conditions set forth therein, to purchase up to $75.0 million of senior notes of Holdings (as defined in the Commitment Letter in connection with the Sponsor's acquisition of CB Richard Ellis Services, Inc. Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Commitment Letter. The Commitment Letter is hereby amended and modified as follows: 1. The amount of the commitment in the Commitment Letter is hereby reduced from $75.0 million to $65.0 million and the Takedown Equity associated with the commitment is reduced from 2.0% to 1.867%. 2. The amount of the Credit Facilities referenced in the Commitment Letter shall be to $325.0 million and as a partial replacement proceeds of up to $225.6 million will be raised in the high yield debt market. In addition to the foregoing, the undersigned hereby agrees that the terms of the Notes will be substantially the same as the terms of the senior subordinated notes due 2011 of BLUM CB Corp. ("Holdings") as set forth in the confidential offering circular dated May 31, 2001, except for coupon and the following: 1. The Notes will be senior obligations of CBRE Holdings, with such changes as are customary for a holding company issuance, the language of which will be agreed; 2. The Notes will contain a lien covenant pertaining to Holdings and an appropriate conduct of business covenant, the language of which will be agreed; 3. Certain of the negative covenants contained in the Notes will terminate when the company obtains an investment grade rating from both S&P and Moody's for the Notes of Holdings; 4. There will be no requirement to give notice to the banks prior to acceleration; 5. Grace periods for covenants will conform to the high yield indenture. In addition to the foregoing, as a condition to closing, we will receive a list of the entities that will initially be "unrestricted subsidiaries" prior to closing, such list to be reasonably satisfactory to us. Except as expressly amended or modified by this amendment, the terms of the Commitment Letter shall remain in full force and effect. Please indicate your acceptance of the terms hereof by signing in the appropriate space below and returning a copy of this amendment to the undersigned. Very truly yours, DLJ INVESTMENT FUNDING, INC. By: /s/ Paul Thompson III --------------------- Paul Thompson III Managing Director Accepted and Agreed to as of the date first above written: CBRE HOLDING, INC. By: /s/ Claus J. Moller ------------------- Name: Claus J. Moller Title: President -----END PRIVACY-ENHANCED MESSAGE-----