<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 26, 2000
REGISTRATION NO. 333-48074
REGISTRATION NO. 333-48074-01
REGISTRATION NO. 333-48074-02
REGISTRATION NO. 333-48074-03
REGISTRATION NO. 333-48074-04
REGISTRATION NO. 333-48074-05
REGISTRATION NO. 333-48074-06
REGISTRATION NO. 333-48074-07
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM F-4(*) AND FORM S-4(*)
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
JONES LANG LASALLE FINANCE B.V.
(Exact Name of Registrant as Specified in its Charter)
NOT APPLICABLE
(Translation of Registrant's Name into English)
<TABLE>
<S> <C> <C>
THE NETHERLANDS 6531 NOT APPLICABLE
(State or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification Number)
Incorporation or Organization) Classification Code Number)
</TABLE>
200 EAST RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601
(312) 782-5800
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Co-Registrants' Principal Executive Offices)
------------------------
SEE TABLE OF ADDITIONAL REGISTRANTS
------------------------
WILLIAM E. SULLIVAN
EXECUTIVE VICE PRESIDENT
JONES LANG LASALLE INCORPORATED
200 EAST RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601
(312) 782-5800
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
------------------------
WITH COPIES TO:
<TABLE>
<S> <C>
ROBERT K. HAGAN RODD M. SCHREIBER, ESQ.
FRITZ E. FREIDINGER SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
HAGAN & ASSOCIATES 333 WEST WACKER DRIVE, SUITE 2100
200 EAST RANDOLPH DRIVE, SUITE 4322 CHICAGO, ILLINOIS 60606
CHICAGO, ILLINOIS 60601 (312) 407-0700
(312) 228-2050
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /
------------------------
* THIS REGISTRATION STATEMENT COMPRISES A FILING ON FORM F-4 WITH RESPECT TO
THE SECURITIES OF JONES LANG LASALLE FINANCE B.V. AND JONES LANG LASALLE
LIMITED AND A FILING ON FORM S-4 WITH RESPECT TO THE SECURITIES OF JONES
LANG LASALLE INCORPORATED, JONES LANG LASALLE AMERICAS, INC., LASALLE
INVESTMENT MANAGEMENT, INC., JONES LANG LASALLE INTERNATIONAL, INC., JONES
LANG LASALLE CO-INVESTMENT, INC. AND LASALLE HOTEL ADVISORS, INC.
------------------------
The co-registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the co-registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until this registration statement shall become effective
on such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
PRIMARY STANDARD
EXACT NAME OF STATE OR OTHER JURISDICTION OF INDUSTRIAL CLASSIFICATION I.R.S. EMPLOYER
REGISTRANT AS SPECIFIED IN ITS CHARTER INCORPORATION OR FORMATION CODE NUMBER IDENTIFICATION NO.
-------------------------------------- ------------------------------ ------------------------- ------------------
<S> <C> <C> <C>
Jones Lang LaSalle Incorporated Maryland 6531 36-4150422
Jones Lang LaSalle Americas, Inc. Maryland 6531 36-4160760
LaSalle Investment Management, Inc. Maryland 6531 36-4160747
Jones Lang LaSalle International, Inc. Delaware 6531 36-3722108
Jones Lang LaSalle Co-Investment, Inc. Maryland 6531 36-4160750
LaSalle Hotel Advisors, Inc. Maryland 6531 36-4208322
Jones Lang LaSalle Limited England and Wales 6531 Not Applicable
</TABLE>
In the case of each of the registrants listed in the table above, the
address and telephone number of the principal executive offices and the name,
address and telephone number of the agent for service are the same as those of
Jones Lang LaSalle Finance B.V.
<PAGE>
PROSPECTUS
[LOGO]
JONES LANG LASALLE FINANCE B.V.
EXCHANGE OFFER FOR
[EURO]165,000,000
9% SENIOR NOTES DUE 2007
GUARANTEED ON AN UNSECURED BASIS BY
JONES LANG LASALLE INCORPORATED
AND CERTAIN SUBSIDIARIES OF JONES LANG LASALLE INCORPORATED
-------------------
WE ARE OFFERING TO EXCHANGE AN AGGREGATE PRINCIPAL AMOUNT OF UP TO
[EURO]165,000,000 OF JONES LANG LASALLE FINANCE B.V.'S NEW 9% SENIOR NOTES DUE
2007 FOR A LIKE AMOUNT OF JONES LANG LASALLE FINANCE B.V.'S OLD 9% SENIOR NOTES
DUE 2007. THE TERMS OF THE NEW NOTES WILL BE IDENTICAL IN ALL MATERIAL RESPECTS
TO THE TERMS OF THE OLD NOTES, EXCEPT THAT THE NEW NOTES:
- WILL HAVE BEEN REGISTERED UNDER THE SECURITIES ACT;
- WILL NOT BEAR RESTRICTIVE LEGENDS RESTRICTING THEIR TRANSFER UNDER THE
SECURITIES ACT;
- WILL NOT BE ENTITLED TO THE REGISTRATION RIGHTS THAT APPLY TO THE OLD NOTES;
AND
- WILL NOT CONTAIN PROVISIONS RELATING TO AN INCREASE IN THE INTEREST RATE
BORNE BY THE OLD NOTES UNDER CIRCUMSTANCES RELATED TO THE TIMING OF THE
EXCHANGE OFFER.
THE EXCHANGE OFFER EXPIRES AT 5:00 P.M., LONDON TIME, ON JANUARY 26, 2001,
UNLESS WE EXTEND IT.
THE NEW NOTES ARE NOT LISTED ON THE NASDAQ STOCK MARKET OR ANY NATIONAL
SECURITIES EXCHANGE. APPLICATION WILL BE MADE TO LIST THE NEW NOTES ON THE
LUXEMBOURG STOCK EXCHANGE.
EACH BROKER-DEALER THAT RECEIVES NEW NOTES IN THE EXCHANGE OFFER MUST
ACKNOWLEDGE THAT IT WILL DELIVER A PROSPECTUS IN CONNECTION WITH ANY RESALE OF
THOSE NEW NOTES. IF A PARTICIPATING BROKER-DEALER ACQUIRED ITS OLD NOTES AS A
RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES, IT MAY USE THIS PROSPECTUS,
AS AMENDED OR SUPPLEMENTED, IN CONNECTION WITH THE RESALE OF THE NEW NOTES
ACQUIRED IN EXCHANGE FOR ITS OLD NOTES IN THE EXCHANGE OFFER.
-------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR A DISCUSSION OF RISK FACTORS THAT
YOU SHOULD CONSIDER BEFORE EXCHANGING YOUR OLD NOTES.
-----------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------
DECEMBER 26, 2000
<PAGE>
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT US THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS. THIS
INFORMATION IS AVAILABLE WITHOUT CHARGE TO HOLDERS OF THE NOTES UPON WRITTEN OR
ORAL REQUEST TO JONES LANG LASALLE INCORPORATED, 200 EAST RANDOLPH DRIVE,
CHICAGO, ILLINOIS 60601, ATTENTION: INVESTOR RELATIONS, TELEPHONE NUMBER
(312) 782-5800. TO OBTAIN TIMELY DELIVERY, NOTE HOLDERS MUST REQUEST THE
INFORMATION NO LATER THAN JANUARY 19, 2001.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Summary................................ 1
Risk Factors........................... 12
Information Regarding Forward-Looking
Statements........................... 23
The Issuer............................. 24
Use of Proceeds........................ 26
Capitalization......................... 26
Pro Forma Financial Information
Relating to Interest Expense......... 27
The Exchange Offer..................... 28
Selected Financial and Other Data...... 39
Business............................... 42
Description of Other Indebtedness...... 57
</TABLE>
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Corporate Structure -- Issuer and
Guarantors........................... 63
Description of the Notes............... 64
Material United States Federal Income
Tax Consequences..................... 113
Dutch Taxation......................... 117
Plan of Distribution and Selling
Restrictions......................... 119
Legal Matters.......................... 120
Experts................................ 120
Where You Can Find More Information.... 121
Information Incorporated by
Reference............................ 121
</TABLE>
In this prospectus, unless the context requires otherwise:
- "issuer" refers to Jones Lang LaSalle Finance B.V., the issuer of the old
notes and the new notes;
- "Jones Lang LaSalle Incorporated" refers only to Jones Lang LaSalle
Incorporated;
- "subsidiary guarantors" refers to Jones Lang LaSalle Americas, Inc., a
Maryland corporation, LaSalle Investment Management, Inc., a Maryland
corporation, Jones Lang LaSalle International, Inc., a Delaware
corporation, Jones Lang LaSalle Co-Investment, Inc., a Maryland
corporation, LaSalle Hotel Advisors, Inc., a Maryland corporation, and
Jones Lang LaSalle Limited, a company organized under the laws of England
and Wales;
- "guarantors" refers to Jones Lang LaSalle Incorporated and the subsidiary
guarantors; and
- "Jones Lang LaSalle," "we," "us," "our" and similar terms refer to Jones
Lang LaSalle Incorporated, its consolidated subsidiaries, including the
issuer and the subsidiary guarantors, and the businesses conducted by its
predecessor companies.
-------------------
Our logo and certain titles and logos of our services are our trademarks.
Each trademark, trade name or service mark of any other company appearing in
this prospectus belongs to its holder. The terms Jones Lang LaSalle, LaSalle
Investment Management and Jones Lang LaSalle Hotels are our service marks or
trademarks that are registered or otherwise protected under the laws of various
jurisdictions.
We report our financial statements in U.S. dollars and prepare our financial
statements in accordance with generally accepted accounting principles in the
United States. In this prospectus,
i
<PAGE>
except where otherwise indicated, references to "$," "dollars" or "U.S. dollars"
are to the lawful currency of the United States, and all references to "euro" or
"[EURO]" are to the common currency of certain participating member countries of
the European Union. We have a fiscal year end of December 31.
Except as indicated otherwise, in this prospectus, euro amounts have been
converted into dollars at an exchange rate of $0.8830 per euro, the spot-market
rate at approximately 3:00 p.m., Chicago time, on September 29, 2000, as
reported on the "Curncy HP" screen of the Bloomberg Professional service. The
comparable exchange rate as of December 15, 2000 was $0.8966 per euro.
-------------------
SELLING RESTRICTIONS
There are restrictions on the offer and sale of securities in the United
Kingdom. No action has been taken to permit the new notes to be offered to the
public in the United Kingdom. This document may only be issued or passed on in
or into the United Kingdom to any person to whom the document may lawfully be
issued or passed on by reason of, or of any regulation made under, section 58 of
the Financial Services Act 1986. It is the responsibility of all persons under
whose control or into whose possession this document comes to inform themselves
about and to ensure observance of all applicable provisions of the Public Offers
of Securities Regulations 1995 and the Financial Services Act 1986 in respect of
anything done in relation to the new notes in, from or otherwise involving the
United Kingdom. See "Plan of Distribution and Selling Restrictions" at page 119.
The offer of the old notes was made in reliance upon Section 6 of the Dutch
Exemption Regulation under the Supervision of Securities Trade Act of 1995,
known as the Euro Securities Exemption. Accordingly, neither the issuer nor any
holder of new notes may engage in a general advertising or sales campaign, or
ALGEMENE RECLAMECAMPAGNE OF COLPORTAGECAMPAGNE, within the meaning of the Dutch
Exemption Regulation under the Supervision of Securities Trade Act of 1995,
worldwide with respect to the new notes. See "Plan of Distribution and Selling
Restrictions" at page 119.
THE DISTRIBUTION OF THIS PROSPECTUS AND THE OFFER AND SALE OF THE NEW NOTES
MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS. PERSONS WHO COME INTO
POSSESSION OF THIS PROSPECTUS OR ANY OF THE NEW NOTES MUST INFORM THEMSELVES
ABOUT AND OBSERVE ANY SUCH RESTRICTIONS. YOU MUST COMPLY WITH ALL APPLICABLE
LAWS AND REGULATIONS IN FORCE IN ANY JURISDICTION IN WHICH YOU PURCHASE, OFFER
OR SELL THE NEW NOTES OR POSSESS OR DISTRIBUTE THIS PROSPECTUS AND, IN
CONNECTION WITH ANY PURCHASE, OFFER OR SALE BY YOU OF THE NEW NOTES, MUST OBTAIN
ANY CONSENT, APPROVAL OR PERMISSION REQUIRED UNDER THE LAWS AND REGULATIONS IN
FORCE IN ANY JURISDICTION TO WHICH YOU ARE SUBJECT OR IN WHICH YOU MAKE SUCH
PURCHASE, OFFER OR SALE.
ii
<PAGE>
SUMMARY
YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS.
JONES LANG LASALLE
We are a leading global real estate services and investment management firm.
We provide a wide variety of commercial real estate transactional, advisory and
investment management services on a local, national and international basis
across approximately 100 markets on five continents.
We manage approximately 700 million square feet of property, provide
investment management services for approximately $22.7 billion of assets and
have approximately 9,800 employees. We serve a wide variety of clients,
including owners and tenants of office, industrial, retail and hotel properties,
as well as real estate investors. We have grown by expanding both our client
base and our range of services and products in anticipation of client needs, as
well as through a series of strategic acquisitions, including the acquisition of
Compass Management and Leasing, Inc. and related companies in October 1998, and
a merger with the Jones Lang Wootton companies, or JLW, in March 1999. By
offering a broad range of real estate products and services, and through our
extensive knowledge of domestic and international real estate markets, we are
able to serve as a single source provider of solutions for our clients' real
estate needs.
RELATIONSHIP BETWEEN JONES LANG LASALLE INCORPORATED AND THE ISSUER
Jones Lang LaSalle Incorporated formed the issuer as an indirect wholly
owned subsidiary under Netherlands law as a private company with limited
liability on July 7, 2000. The issuer has its corporate seat in Amsterdam and is
registered with the Trade Register at the Amsterdam Chamber of Commerce and
Industry under No. 34137364. The primary purpose of the issuer is to finance the
business operations of Jones Lang LaSalle.
The issuer's principal obligations are the old notes and a multicurrency
credit facility with a group of commercial banks under a Second Amended and
Restated Multicurrency Credit Agreement dated as of July 26, 2000. Prior to the
July 26, 2000 amendment and restatement of the multicurrency credit agreement,
Jones Lang LaSalle Incorporated was the borrower under the multicurrency credit
facility. On July 26, 2000, concurrently with its issuance of the old notes, the
issuer became the borrower, and assumed the remaining outstanding indebtedness,
under the multicurrency credit facility. The principal components of the
multicurrency credit facility were a $250.0 million revolving portion, which
remains in effect, and a $175.0 million term portion, which the issuer
permanently repaid in full in August 2000, having previously repaid a
substantial amount using the net proceeds from its sale of the old notes. See
"Description of Other Indebtedness -- Multicurrency Credit Facility" at
page 57.
THE EXCHANGE OFFER
On July 26, 2000, the issuer issued [EURO]165,000,000 principal amount of 9%
senior notes due 2007, the old notes to which the exchange offer applies, to a
group of placement agents in reliance on exemptions from, or in transactions not
subject to, the registration requirements of the U.S. Securities Act of 1933 and
applicable state securities laws. As a condition to the placement agents'
purchase of the old notes, the issuer, Jones Lang LaSalle Incorporated and the
subsidiary guarantors agreed to commence the exchange offer following the
initial offering of the old notes. The new notes being offered in the exchange
offer and the old notes are sometimes referred to collectively in this
prospectus as the "notes."
1
<PAGE>
<TABLE>
<S> <C>
The Exchange Offer........................... We are offering new 9% senior notes due 2007, issued
by the issuer and guaranteed by Jones Lang LaSalle
Incorporated and the subsidiary guarantors, all of
which new notes and guarantees have been registered
under the Securities Act, in exchange for your old
notes.
To exchange your old notes, you must properly tender
them, and we must accept them. We will exchange all
old notes that you validly tender and do not validly
withdraw.
Resale of New Notes.......................... We believe that, if you are not a broker-dealer, you
may offer for resale, resell or otherwise transfer
the new notes without complying with the registration
and prospectus delivery requirements of the
Securities Act if you:
- acquire the new notes in the ordinary course of
your business;
- are not engaged in, do not intend to engage in and
have no arrangement or understanding with any person
to participate in a distribution of the new notes;
and
- are not an "affiliate" of the issuer, Jones Lang
LaSalle Incorporated or any subsidiary guarantor
within the meaning of Rule 405 of the Securities
Act.
If any of these conditions is not satisfied and you
transfer any new notes issued to you in the exchange
offer without delivering a proper prospectus or
without qualifying for a registration exemption, you
may incur liability under the Securities Act.
Moreover, our belief that transfers of new notes
would be permitted without registration or prospectus
delivery under the conditions described above is
based on SEC interpretations given to other,
unrelated issuers in similar exchange offers. We
cannot assure you that the SEC would make a similar
interpretation with respect to our exchange offer. We
will not be responsible for or indemnify you against
any liability you may incur under the Securities Act.
Any broker-dealer that acquires new notes for its own
account in exchange for old notes which it acquired
through market-making or other trading activities
must acknowledge that it will deliver a proper
prospectus when it transfers any new notes. During
the period ending 180 days after the expiration date
of the exchange offer, subject to extension in
limited circumstances, a broker-dealer may use this
prospectus for an offer to sell or a sale or other
transfer of the new notes.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
Expiration Date.............................. The exchange offer will expire at 5:00 p.m., London
time, on January 26, 2001, unless we extend it. The
maximum period for which the exchange offer will
remain open, including any extensions, is 60 days
from the date the registration statement of which
this prospectus forms a part is declared effective by
the SEC.
Withdrawal................................... You may withdraw your tender of old notes under the
exchange offer at any time before the exchange offer
expires.
Procedures for Tendering Old Notes........... Each holder of old notes that wishes to accept the
exchange offer must either
- complete, sign and date the accompanying letter of
transmittal or a facsimile copy of the letter of
transmittal, have the signatures on the letter of
transmittal guaranteed if required and deliver the
letter of transmittal, together with the old notes
and any other required documents, to the exchange
agent; or
- arrange for DTC, Euroclear or Clearstream, as
applicable, to transmit the required information to
the exchange agent in connection with a book-entry
transfer.
Do not send letters of transmittal or certificates
representing old notes to the issuer, Jones Lang
LaSalle Incorporated, any of the subsidiary
guarantors, DTC, Euroclear or Clearstream. Send these
documents only to the exchange agent at the
appropriate address given in this prospectus and in
the letter of transmittal.
Special Procedures for Tenders by Beneficial
Owners of Old Notes........................ If
- you beneficially own old notes;
- those notes are registered in the name of a broker,
dealer, commercial bank, trust company or other
nominee; and
- you wish to tender your old notes in the exchange
offer,
please contact the registered holder as soon as
possible and instruct it to tender on your behalf and
comply with the instructions set forth in this
prospectus and the letter of transmittal.
Guaranteed Delivery Procedures............... If you hold old notes in certificated form or if you
own old notes in the form of a book-entry interest in
a global note deposited with the trustee, as
custodian for DTC, and you wish to tender those old
notes but
- your old notes are not immediately available;
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
- time will not permit you to deliver the required
documents to the exchange agent by the expiration
date; or
- you cannot complete the procedure for book-entry
transfer on time,
you may tender your old notes pursuant to the
procedures described in "The Exchange Offer --
Procedures for Tendering Old Notes -- Guaranteed
Delivery Procedures" at page 32.
Consequences of Not Exchanging Old Notes..... If you were not to tender your old notes or we were
to reject your tender, your old notes would remain
outstanding and would be entitled to the benefits of
the indenture. You would not be entitled to any
further registration rights under the registration
rights agreement, except under limited circumstances.
Existing transfer restrictions would continue to
apply to the old notes. We could reject your tender
of old notes if you tender them in a manner that does
not comply with the instructions provided in this
prospectus and the accompanying letter of
transmittal.
You do not have any appraisal or dissenters' rights
in connection with the exchange offer.
United States Federal Income Tax
Consequences............................... Your exchange of old notes for new notes is not a
taxable exchange for U.S. federal income tax
purposes. You will not recognize any taxable gain or
loss or any interest income, under U.S. federal
income tax law, as a result of the exchange.
Dutch Income Tax Consequences................ A holder of old notes will not be subject to any
Dutch taxes on income or capital gains in respect of
any payment under the old notes or in respect of any
gain realized on the disposal of the old notes,
including any gain realized on the disposal of old
notes for new notes pursuant to the exchange offer,
provided that:
- the holder is neither resident nor deemed to be
resident in the Netherlands;
- the holder does not have an enterprise or an
interest in an enterprise that is, in whole or in
part, carried on through a permanent establishment
or a permanent representative in the Netherlands
and to which enterprise or part of an enterprise,
as the case may be, the notes are attributable; and
- the holder does not have a substantial interest or
a deemed substantial interest in the issuer or, if
such holder does have such an interest, it forms
part of the assets of an enterprise.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
Conditions................................... The exchange offer is not subject to any conditions
other than that it not violate applicable law or any
applicable interpretation of the staff of the SEC.
Use of Proceeds.............................. We will not receive any proceeds from the exchange
offer. The proceeds from the issuance of the old
notes were applied to repay indebtedness under the
term portion of the multicurrency credit facility.
Acceptance of Old Notes and Delivery of New
Notes...................................... We will accept for exchange any and all old notes
properly tendered prior to the expiration of the
exchange offer. We will complete the exchange offer
and issue the new notes as soon as practicable after
the expiration date.
Exchange Agent............................... The Bank of New York is serving as exchange agent for
the exchange offer. The addresses and telephone
numbers of the exchange agent are provided in this
prospectus under "The Exchange Offer-Exchange Agent"
at page 35 and in the letter of transmittal.
</TABLE>
THE NEW NOTES
The form and terms of the new notes will be identical in all material
respects to the form and terms of the old notes, except that the new notes:
- will have been registered under the Securities Act;
- will not bear restrictive legends restricting their transfer under the
Securities Act;
- will not be entitled to the registration rights that apply to the old
notes; and
- will not contain provisions relating to an increase in the interest rate
borne by the old notes under circumstances related to the timing of the
exchange offer.
The new notes represent the same debt as the old notes and are governed by the
same indenture, which is governed by New York law.
<TABLE>
<S> <C>
Securities Offered........................... [EURO]165.0 million aggregate principal amount of 9%
senior notes due 2007.
Issuer....................................... Jones Lang LaSalle Finance B.V., an indirect wholly
owned subsidiary of Jones Lang LaSalle Incorporated.
Maturity..................................... June 15, 2007.
Interest Payment Dates....................... Interest will be payable in cash on June 15 and
December 15 of each year.
Parent Guarantee............................. The new notes will be unconditionally guaranteed by
Jones Lang LaSalle Incorporated.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
Subsidiary Guarantees........................ The new notes also will be unconditionally guaranteed
by the following subsidiaries of Jones Lang LaSalle
Incorporated: Jones Lang LaSalle Americas, Inc., a
Maryland corporation, LaSalle Investment
Management, Inc., a Maryland corporation, Jones Lang
LaSalle International, Inc., a Delaware corporation,
Jones Lang LaSalle Co-Investment, Inc., a Maryland
corporation, LaSalle Hotel Advisors, Inc., a Maryland
corporation, and Jones Lang LaSalle Limited, a
company organized under the laws of England and
Wales.
Optional Redemption.......................... The issuer may redeem any or all of the new notes
beginning June 15, 2004 at the redemption prices
disclosed elsewhere in this prospectus.
In addition, at any time before June 15, 2003, the
issuer may redeem up to 35% of the aggregate
principal amount of the new notes with the proceeds
of specified types of sales of capital stock of Jones
Lang LaSalle Incorporated. The redemption price of
the new notes will equal 109% of their principal
amount on the redemption date plus accrued interest.
The issuer may redeem notes under the optional
redemption provision described in the previous
sentence only if after the redemption at least 65% of
the aggregate principal amount of the notes
originally issued remains outstanding.
The new notes are also redeemable at any time by the
issuer at their principal amount plus the applicable
premium and accrued interest.
See "Description of the Notes -- Optional Redemption"
at page 65.
Change of Control............................ A change of control occurs under the indenture if:
- Jones Lang LaSalle Incorporated ceases to
beneficially own 99% of the voting power of the
issuer;
- after July 26, 2000, a person or group becomes the
beneficial owner of more than 35% of the voting
power of Jones Lang LaSalle Incorporated on a fully
diluted basis; or
- individuals who on July 26, 2000 constitute the
board of directors of Jones Lang LaSalle
Incorporated, together with new directors approved
by two-thirds of the members of the board of
directors who either were members on July 26, 2000
or whose membership was previously so approved,
cease to constitute a majority of the board of
directors of Jones Lang LaSalle Incorporated.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
Upon a change of control, the issuer will be required
to make an offer to purchase the new notes. The
purchase price will equal 101% of the principal
amount of the new notes on their date of purchase
plus accrued interest.
The issuer and the guarantors may not have sufficient
funds available at the time of any change of control
to make any required debt payment, including
repurchases of the new notes.
Ranking...................................... The new notes will rank equally with all other senior
indebtedness of the issuer, including the
multicurrency credit facility and any old notes that
remain outstanding. See "Description of Other
Indebtedness -- Multicurrency Credit Facility" at
page 57.
The indebtedness evidenced by each guarantee of the
new notes will rank equally with all other senior
indebtedness of the applicable guarantor. Each
guarantor has also guaranteed the outstanding
indebtedness of the issuer under the multicurrency
credit facility.
The new notes and each guarantee of the new notes
will be effectively junior to any indebtedness or
other liabilities of subsidiaries of the issuer and
the applicable guarantor, respectively, that do not
guarantee the new notes.
In addition, the new notes will be effectively junior
to the secured indebtedness of Jones Lang LaSalle
Incorporated and its subsidiaries.
At September 30, 2000:
- the issuer had $146.5 million of outstanding senior
indebtedness, excluding the old notes, but
including indebtedness under the multicurrency
credit facility;
- Jones Lang LaSalle Incorporated and the subsidiary
guarantors had $9.9 million of outstanding senior
indebtedness, excluding the guarantees of
indebtedness under the multicurrency credit
facility and the old notes; and
- the subsidiaries of the issuer and the guarantors
that do not guarantee the old notes, and will not
guarantee the new notes, had $4.1 million of
outstanding indebtedness and $127.5 million of
other liabilities.
Other than capitalized lease obligations of
$3.1 million, we had no secured indebtedness at
September 30, 2000.
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
Although the indenture and the multicurrency credit
agreement limit the amount of additional indebtedness
which Jones Lang LaSalle Incorporated and its
subsidiaries can incur, Jones Lang LaSalle
Incorporated and its subsidiaries may nonetheless
incur additional indebtedness, in amounts which could
be substantial, pursuant to exceptions from such
limitations. For example, under the indenture, Jones
Lang LaSalle Incorporated and its restricted
subsidiaries may incur additional indebtedness:
- if, after giving effect to such incurrence, the
interest coverage ratio would exceed 3-to-1;
- under the multicurrency credit agreement, so long
as the principal amount of all indebtedness under the
multicurrency credit agreement does not exceed
$275 million;
- in the form of capitalized lease obligations or
purchase money indebtedness in an aggregate principal
amount not to exceed $20 million at any time; and
- in an aggregate principal amount not to exceed
$40 million at any time.
The indenture and the multicurrency credit agreement
allow additional indebtedness to be incurred by
non-guarantor subsidiaries.
See "Description of the Notes -- Covenants --
Limitation on Indebtedness" at page 86 and
"Description of Other Indebtedness -- Multicurrency
Credit Facility -- Covenants" at page 58.
Certain Covenants............................ The terms of the new notes restrict the ability of
Jones Lang LaSalle Incorporated and its restricted
subsidiaries, including the issuer, to:
- incur additional indebtedness;
- engage in sale-leaseback transactions;
- grant liens on their assets;
- pay dividends or make distributions in respect of
capital stock;
- redeem capital stock;
- make investments or certain other restricted
payments;
- sell assets;
- issue or sell stock of restricted subsidiaries;
- enter into transactions with affiliates; and
- effect a consolidation or merger.
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
See "Description of the Notes -- Covenants" beginning
at page 86.
Payment of Additional Amounts and Tax
Redemption................................. All payments on the new notes will be made without
withholding or deduction for taxes of the Netherlands
and certain other jurisdictions, unless required by
law. If required by law, we will pay, subject to
specified exceptions, the additional amounts
necessary so that the net amount received by holders
will not be less than the amount that they would have
received in the absence of any withholding or
deduction. See "Description of the Notes -- Payment
of Additional Amounts" at page 103.
In the event that we would be required to pay any
additional amounts as a result of specified changes
affecting withholding tax laws, then the issuer may
redeem all the notes at 100% of their principal
amount plus accrued interest, unless the issuer
could, without other material adverse consequences to
Jones Lang LaSalle Incorporated or the issuer,
reasonably arrange for another obligor to make
payment in lieu of the issuer's having to pay those
additional amounts. See "Description of the Notes --
Optional Redemption" at page 65.
Listing...................................... Application will be made to list the new notes on the
Luxembourg Stock Exchange.
Trustee, Paying and Transfer Agent and
Registrar.................................. The Bank of New York.
Luxembourg Paying and Transfer Agent......... Kredietbank S.A. Luxembourgeoise, for so long as the
new notes are listed on the Luxembourg Stock
Exchange.
</TABLE>
RISK FACTORS
You should read the section entitled "Risk Factors," beginning on page 12,
which discusses risks that you should consider before deciding whether to
participate in the exchange offer.
-------------------
Our principal executive offices are located at 200 East Randolph Drive,
Chicago, Illinois 60601, and our telephone number is (312) 782-5800. The
registered office of the issuer is located at Strawinskylaan 3103, 1077 ZX
Amsterdam, the Netherlands.
9
<PAGE>
SUMMARY FINANCIAL AND OTHER DATA
The financial data set forth below should be read in conjunction with, and
are qualified by reference to, "Selected Financial and Other Data," included
elsewhere in this prospectus, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial statements and
related notes contained in Jones Lang LaSalle Incorporated's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999, as amended; the financial
statements and related notes contained in Jones Lang LaSalle Incorporated's
Current Report on Form 8-K, dated August 11, 2000; and the financial statements
and related notes contained in Jones Lang LaSalle Incorporated's Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2000, as
amended, each of which is incorporated herein by reference. See "Information
Incorporated by Reference" and "Where You Can Find More Information" at page
121.
Pro forma results for 1999 give effect to the operations of JLW for the two
months ended February 28, 1999, the period of 1999 prior to the JLW merger,
amortization of the goodwill resulting from the JLW merger as if it occurred on
January 1, 1999 and a benefit for income taxes as if the JLW merger had taken
effect on January 1, 1999, using an estimated effective tax rate of 40%.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------- -------------------------
1999 1999 1998 2000 1999
ACTUAL PRO FORMA ACTUAL ACTUAL ACTUAL
----------- ----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenue..................... $ 755,439 $ 813,899 $ 304,464 $ 637,270 $ 474,737
Operating income (loss)........... (71,303) (88,087) 37,842 (13,380) (117,787)
Interest expense, net of interest
income.......................... 18,211 18,118 4,153 21,565 12,312
Net earnings (loss)............... (94,842) (108,253) 20,465 (41,800) (110,056)
Basic earnings (loss) per common
share........................... (4.20) (4.50) 1.26 (1.69) (4.98)
Diluted earnings (loss) per common
share........................... (4.20) (4.50) 1.25 (1.69) (4.98)
OTHER DATA:
Adjusted net earnings (loss)(1)... 32,271 12,611
Adjusted EBITDA(2)................ $ 116,774 $ 112,164 $ 61,318 $ 73,731 $ 24,311
Adjusted EBITDA/interest
expense......................... 6.41x 6.19x 14.76x
Adjusted EBITDA/adjusted interest
expense(3)...................... 4.88x
Ratio of earnings to fixed
charges(4)...................... -- 2.47x 5.54x --
Cash flows provided by (used in):
Operating activities............ $ (32,766) $ 29,114 $ 19,238 $ 35,479 $ (64,928)
Investing activities............ (67,143) (108,463) (235,365) (31,711) (47,927)
Financing activities............ 106,717 110,051 202,377 (9,609) 117,507
Investments under management(5)... $21,500,000 $21,500,000 $14,200,000 $22,700,000 $21,200,000
Square feet under management --
corporate property
services(6)..................... 250,000 250,000 188,000 200,000 230,000
Total square feet under
management(7)................... 700,000 700,000 400,500 700,000 700,000
</TABLE>
----------
(FOOTNOTES ON FOLLOWING PAGE)
10
<PAGE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000
-------------------
(IN THOUSANDS)
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $17, 467
Total assets................................................ 863,212
Total debt.................................................. 306,164
Total liabilities........................................... 537,239
Stockholders' equity........................................ 325,333
</TABLE>
----------
(1) Adjusted net earnings (loss) represents operating income (loss) excluding
- after-tax non-recurring transition and integration costs associated with
the JLW merger and the acquisition of Compass and
- after-tax compensation expense associated with the issuance of shares of
Jones Lang LaSalle Incorporated's common stock to former employees of JLW
in connection with the JLW merger.
Adjusted net earnings (loss) is not determined in accordance with GAAP and
may not be comparable to other companies' reported net earnings (loss).
(2) Adjusted EBITDA represents earnings (loss) before interest expense, income
taxes, depreciation and amortization, non-recurring transition and
integration costs associated with the JLW merger and the acquisition of
Compass and compensation expense associated with the issuance of shares of
Jones Lang LaSalle Incorporated's common stock to former employees of JLW in
connection with the JLW merger. We believe that Adjusted EBITDA is useful to
investors as a measure of operating performance, cash generation and ability
to service debt. However, Adjusted EBITDA should not be considered as an
alternative either to
- net earnings determined in accordance with GAAP,
- operating cash flow determined in accordance with GAAP or
- liquidity and may not be comparable to EBITDA of other companies.
(3) Adjusted interest expense represents interest expense excluding the interest
on that part of the term portion of the multicurrency credit facility repaid
with the net proceeds of the old notes and including interest on the notes
at a rate of 9% per annum and gives effect to the repayment of the remaining
indebtedness under the term portion of the multicurrency credit facility
with the proceeds from borrowings under the revolving portion of the
multicurrency credit facility using an assumed rate of 8.2% per annum, the
effective rate for the nine months ended September 30, 2000. See
"Description of Other Indebtedness -- Multicurrency Credit Facility" at page
57. Adjusted interest expense does not give effect to amortization of the
costs of the exchange offer and the offering of the old notes.
(4) For purposes of computing the ratio of earnings to fixed charges, earnings
represents
- for 1999 (actual) and the nine months ended September 30, 2000 (actual),
net earnings (loss) before income taxes plus fixed charges, less
capitalized interest and
- for 1999 (pro forma), adjusted net earnings (loss) before income taxes
plus fixed charges, less capitalized interest.
Fixed charges consist of interest expense, including amortization of debt
discount and financing costs, capitalized interest and one-third of rental
expense which we believe is representative of the interest component of
rental expense. Earnings were insufficient to cover fixed charges by
$89.5 million for the year ended December 31, 1999 (actual) and
$35.0 million for the nine months ended September 30, 2000 (actual).
(5) Investments under management represent the aggregate fair market value or
cost basis of assets managed by our Investment Management segment as of the
end of the periods reflected.
(6) Represents the square footage of properties for which we provided corporate
property services as of the end of the periods reflected.
(7) Represents the total square footage of properties for which we provided
property management and leasing or corporate property services as of the end
of the periods reflected.
11
<PAGE>
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW, AS WELL AS THE
OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS,
BEFORE DECIDING WHETHER TO PARTICIPATE IN THE EXCHANGE OFFER.
RISKS RELATED TO OUR BUSINESS
OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS ARE SUBJECT TO
RISKS ARISING FROM THE INTERNATIONAL SCOPE OF OUR OPERATIONS
We conduct a substantial portion of our business, and a substantial number
of our employees are located, outside of the United States. In 1999, giving pro
forma effect to the JLW merger, we generated approximately 57.8% of our revenue
from operations outside the United States. The international scope of our
operations may lead to volatile financial results and difficulties in managing
our businesses. Circumstances and developments related to international
operations that could negatively affect our business, financial condition or
results of operations include the following material factors:
- difficulties and costs of staffing and managing international operations;
- currency restrictions and exchange rate fluctuations, such as the recent
behavior of the exchange rate of the U.S. dollar relative to the euro, the
pound sterling and the Australian dollar;
- unexpected changes in regulatory requirements;
- potentially adverse tax and tariff consequences;
- the burden of complying with multiple and potentially conflicting laws;
- the impact of regional or country-specific business cycles and economic
instability;
- the geographic, time zone, language and cultural differences between
personnel in different areas of the world;
- greater difficulty in collecting accounts receivable in certain geographic
regions such as Asia, where many countries have underdeveloped insolvency
laws and clients often are slow to pay, and Europe, where clients in some
countries, particularly Spain, Italy and France, also tend to delay
payments;
- political instability in the nature of what has occurred in recent years
in Indonesia, the Philippines and Russia, but which may arise in any
particular region; and
- foreign ownership restrictions with respect to operations in certain
countries such as Indonesia, India and China.
We have committed additional resources to expand our worldwide sales and
marketing activities, to globalize our service offerings and products in
selected markets and to develop local sales and support channels. If we are
unable to successfully implement these plans, to maintain adequate long-term
strategies which successfully manage the risks associated with our global
business or to adequately manage operational fluctuations, our business,
financial condition or results of operations could be materially and adversely
affected.
DETERIORATION IN ECONOMIC CONDITIONS AND THE REAL ESTATE MARKETS COULD HARM
OUR BUSINESS
Our business is negatively impacted by periods of economic slowdown or
recession in a given region, rising interest rates and declining demand for real
estate. These economic conditions could have
12
<PAGE>
a number of effects which could have a material adverse impact on certain
segments of our business, including the following:
- a decline in acquisition, disposition and leasing activity;
- a decline in the supply of capital invested in commercial real estate;
- a decline in the value of real estate and in rental rates which would
cause us to realize lower revenue from
-- investment management fees, which are typically based upon the value
of the managed investments;
-- property management fees, which in certain cases are calculated as a
percentage of the revenue of the property under management; and
-- commissions or fees derived from property valuation, sales and
leasing, which are typically based on the value, sale price or lease
revenue commitment, respectively.
The real estate market tends to be cyclical and related to the condition of
the economy as a whole or, at least, to the perceptions of investors and users
as to the economic outlook. We operate in markets throughout the world. An
economic downturn in one or more of those markets could have a material adverse
effect on our business, financial condition or results of operations.
CURRENCY EXCHANGE RATE FLUCTUATIONS COULD ADVERSELY AFFECT OUR FINANCIAL
PERFORMANCE
Fluctuations in the U.S. dollar relative to currencies in which earnings are
generated could materially adversely affect our business, financial condition or
results of operations as reported in U.S. dollars. Our exposure to currency
exchange rate fluctuations results primarily from the translation exposure
associated with the preparation of our consolidated financial statements. Our
consolidated financial statements are reported in the U.S. dollar. The financial
statements of our subsidiaries outside the United States, except those located
in highly inflationary economies, are generally measured using the local
currency as the functional currency. As a result, fluctuations in the exchange
rate of the U.S. dollar relative to the local currencies in which our
subsidiaries outside the United States report could cause significant
fluctuations in our consolidated results because of corresponding fluctuations
in foreign currency exchange rates. A strengthening of the U.S. dollar relative
to the local currencies in which our subsidiaries outside the United States
report could reduce, and has at times reduced, the amount of revenue and net
income attributable to the operations of our subsidiaries generating revenues in
currencies other than the U.S. dollar. For example, the weakening of the pound
sterling, the euro and the Australian dollar during the first nine months of
2000 meant that our reported net loss for that period was $1.8 million higher
than it would have been if those exchange rates had remained constant during
that period. During this nine month period, the pound sterling declined by 8.8%,
the euro declined by 12.2% and the Australian dollar declined by 17.3% against
the U.S. dollar.
Because a substantial amount of our consolidated revenue is attributable to
operations having functional currencies other than the U.S. dollar, any adverse
impact of fluctuations in the value of the U.S. dollar relative to the other
currencies on our business, financial condition or results of operations could
also be material. In addition, fluctuations in currencies relative to the U.S.
dollar may make it more difficult to perform meaningful period-to-period
comparisons of our financial results. Due to the constantly changing currency
exposures to which we will be subject and the volatile behavior of currency
exchange rates, there can be no assurance that we will not experience currency
exchange losses in the future, nor can we predict the effect of exchange rate
fluctuations upon future operating results.
While we have been materially affected by translation exposure in the past,
our exposure to currency exchange rate fluctuations resulting from transaction
exposure, such as through the incurrence
13
<PAGE>
of revenues in one currency and the incurrence of related expenses in another
currency, is rather limited and has not materially affected our operations. Our
revenues and expenses are primarily earned and incurred in the currency of the
location where the operations generating the revenues and expenses have
occurred. A future change in our product mix could, however, make us more
vulnerable to transaction exposure.
WE COULD INCUR LOSSES IF OUR CURRENCY HEDGING TRANSACTIONS ARE INEFFECTIVE
On a limited basis, we enter into forward foreign currency exchange
contracts to manage currency risks and reduce exposure resulting from
fluctuations in the designated foreign currency associated with existing
commitments, assets or liabilities. There can be no assurance, however, that our
hedging transactions will be effective. Economic risks associated with these
hedging instruments include unexpected fluctuations in interest rates impacting
our future buying power for purchasing foreign currencies and unexpected changes
in the timing and collection of funds related to the hedging instruments, both
of which can cause hedging instruments to be ineffective. An ineffective hedging
instrument may expose us to currency losses, which could have an adverse effect
on our business, financial condition or results of operations. As a means of
hedging intercompany financing, at September 30, 2000, we had forward exchange
contracts in effect with a notional value of approximately $63.0 million and a
market value and carrying value of $0.2 million. We do not enter into forward
foreign currency exchange contracts for trading or speculative purposes.
A DECLINE IN THE PERFORMANCE OF PROPERTY WE MANAGE WOULD DEPRESS OUR REVENUE
GROWTH AND COULD CAUSE OUR REVENUE TO DECLINE
Our revenue from property management services is generally based upon
percentages of the revenue generated by the properties that we manage, and our
leasing commissions typically are based on the value of the lease revenue
commitments. Our revenue would be adversely affected by decreases in the
performance of the properties we manage. Property performance typically depends
upon:
- our ability to attract and retain creditworthy tenants;
- our ability to manage operating expenses, which in some cases we cannot
control;
- financial and economic conditions generally and in the specific areas
where properties are located; and
- the real estate market generally.
THE CONCENTRATION OF OUR INCOME IN THE FOURTH QUARTER MAY CAUSE A LOSS IN
OTHER QUARTERS
Our operating income and earnings have historically been substantially lower
during the first three calendar quarters than in the fourth quarter. The reasons
for the concentration of income and earnings in the fourth quarter include a
general, industry-wide focus on completing transactions by calendar year end, as
well as the constant nature of our non-variable expenses throughout the year
versus the seasonality of our revenues. This has historically resulted in a
small loss in the first quarter, a small profit or loss in the second and third
quarters and a larger profit in the fourth quarter, excluding the recognition of
investment generated performance fees. As a result, quarter-to-quarter
comparisons may be difficult to interpret.
COMPETITION IN REAL ESTATE SERVICES MARKETS COULD UNDERMINE OUR ABILITY TO
OPERATE PROFITABLY
We compete across a variety of business disciplines within the commercial
real estate industry, including investment management, tenant representation,
corporate property services, construction and development management, property
management, agency leasing, valuation and capital markets. In general, with
respect to each of our business disciplines, we cannot assure that we will be
able to
14
<PAGE>
continue to compete effectively, will be able to maintain current fee
arrangements or margin levels or will not encounter increased competition. Each
of the business disciplines in which we compete is highly competitive on an
international, national, regional or local level. Although we are one of the
largest real estate services firms in the world, our relative competitive
position varies significantly across product and service categories and
geographic areas. Depending on the product or service, we face competition from
other real estate service providers, institutional lenders, insurance companies,
investment banking firms, investment managers and accounting firms. Many of our
competitors are local or regional firms, which are substantially smaller than
us. However, they may be substantially larger on a local or regional basis. We
are also subject to competition from other large national and multinational
firms.
The advent of the Internet has introduced new ways of providing real estate
services, as well as new competitors to the industry. We cannot currently
predict who these competitors will be nor can we predict what our response to
them will be. This response could require significant capital resources, changes
in our organization or technological changes. If we are not successful in
developing a strategy to address the risks and to capture the related
opportunities presented by technological changes and the emergence of
e-business, our business, financial condition or results of operations could be
materially adversely affected.
WE MAY LOSE SERVICE AGREEMENTS OR CLIENT RELATIONSHIPS, WHICH COULD
NEGATIVELY AFFECT OUR OPERATING RESULTS
As a result of our strong, long-term client relationships, many of our
clients use our services consistently for new assignments and many also use a
variety of different services. If we fail to maintain existing relationships or
fail to develop and maintain new, similar client relationships, we could
experience a material adverse effect on our business, financial condition or
results of operations. We are substantially dependent on long-term client
relationships and on revenue received for services under various service
agreements. Many of these agreements are cancellable by the client for any
reason on as little as 30 to 60 days' notice. These contracts may be cancelled
prior to their expiration or not renewed when their respective terms expire.
Although no single client of ours accounted for more than 2% of our 1999
revenues after giving effect to the JLW merger, the loss of several major
clients could have a material adverse effect on our business, financial
condition or results of operations.
We provide related services such as property management and leasing services
to our investment management clients and earn substantial fees for providing
these services. If our investment management clients terminate or do not renew
our services or if a property which is part of an investment management
portfolio is sold, other related services provided to the investment management
clients may also be terminated or not renewed. As a consequence, we would lose
not only investment management fee revenue but also fee revenue from related
services. The loss of a substantial number of service agreements or client
relationships could have a material adverse effect on our business, financial
condition or results of operations.
OUR CO-INVESTMENT ACTIVITIES AND RELIANCE ON INCENTIVE PARTICIPATION FEES
SUBJECT US TO REAL ESTATE INVESTMENT RISKS WHICH COULD CAUSE FLUCTUATIONS IN
OUR EARNINGS AND CASH FLOW
An important part of the strategy for our investment management business
involves investing our own capital in real estate investments with our clients.
As of September 30, 2000, we had a total net investment of $71.4 million in
co-investments, had committed an additional $21.0 million to fund future
co-investments and held $4.5 million in notes receivable related to
co-investments. Our participation in real estate transactions through
co-investment activity could increase fluctuations in our earnings and cash
flow. Other risks associated with these activities include:
- loss of our investments;
15
<PAGE>
- difficulties associated with international co-investment described in " --
Our business, financial condition and results of operations are subject to
risks arising from the international scope of our operations" at page 12
and " -- Currency exchange rate fluctuations could adversely affect our
financial performance" at page 13; and
- our potential lack of control over the disposition of any co-investments
and the timing of the recognition of gains, losses or potential incentive
participation fees.
WE MAY INCUR LIABILITIES RELATED TO OUR SUBSIDIARIES BEING GENERAL PARTNERS
OF NUMEROUS GENERAL AND LIMITED PARTNERSHIPS
We have subsidiaries which are general partners in numerous general and
limited partnerships which invest in or manage real estate assets in connection
with our co-investments. Any subsidiary which is a general partner is
potentially liable to its partners and for obligations of its partnership. If
our exposure as a general partner is not limited, or if our exposure as a
general partner is expanded in the future, any resulting losses may have a
material adverse effect on our business, financial condition or results of
operations. We own our general partnership interests through special purpose
subsidiaries. We believe this structure will limit our exposure to the total
amount we have invested in and the amount of notes from, or advances and
commitments to, such special purpose subsidiaries. However, this limited
exposure may be expanded in the future based upon, among other things, changes
in our operating practices, changes in applicable laws or the application of
additional laws to our business.
WE MAY INCUR ENVIRONMENTAL LIABILITY IN OUR ROLE AS ON-SITE PROPERTY MANAGER
Various national, state and local laws and regulations impose liability on
current or previous real property owners or operators for the cost of
investigating, cleaning up or removing contamination caused by hazardous or
toxic substances at the property. We may be held liable as an operator for these
costs in our role as an on-site property manager. In addition, we could be held
liable for liability incurred at the properties managed by JLW prior to the
merger. The liability may be imposed even if the original actions were legal and
we did not know of, or were not responsible for, the presence of hazardous or
toxic substances. We may also be solely responsible for the entire payment of
the liability if we are subject to joint and several liability with other
responsible parties who are unable to pay. We may be subject to additional
liability if we fail to disclose environmental issues to a buyer or lessee of
property or if a third party is damaged or injured as a result of environmental
contamination emanating from the site, including the presence of asbestos
containing materials. Additionally, some environmental laws create a lien on the
site in favor of the government for damages and costs it incurs in connection
with the contamination. We can not be sure that any of these kinds of
liabilities to which we or any of our affiliates may become subject will not
have a material adverse effect upon our business, financial condition or results
of operations.
IF WE ARE UNABLE TO RECRUIT AND RETAIN QUALIFIED PERSONNEL, OUR BUSINESS MAY
SUFFER
The growth of our business depends to a significant degree on our ability to
attract and retain qualified personnel in all areas of our business,
particularly management. We believe that there is currently a shortage of
qualified property management personnel. If these labor market conditions
continue, our compensation costs may increase substantially and, if we are
unable to attract and retain qualified personnel, we could be forced to limit
our growth, to the detriment of our business, financial condition or results of
operations.
16
<PAGE>
RISKS RELATED TO THE NOTES AND THE MULTICURRENCY CREDIT FACILITY
WE HAVE A SUBSTANTIAL AMOUNT OF DEBT, WHICH WE MAY NOT BE ABLE TO SATISFY
AND WHICH COULD IMPEDE OUR OPERATIONS AND FLEXIBILITY
We have a substantial amount of debt and debt service obligations. At
September 30, 2000, we had $306.2 million of indebtedness on a consolidated
basis. We need [EURO]15.1 million, or $13.3 million, annually to make required
interest payments on the notes. Approximately $12.3 million is needed on an
annual basis to make required interest payments under the revolving portion of
the multicurrency credit facility, based on outstanding borrowings under the
multicurrency credit facility of $146.5 million as of September 30, 2000 and
assuming an interest rate of 8.4%, the weighted average interest rate for the
loans under the revolving portion of the multicurrency credit facility for the
three months ended September 30, 2000. If we are unable to generate sufficient
cash flow or otherwise obtain funds necessary to make required payments on the
notes or under the multicurrency credit facility, including from cash and cash
equivalents on hand, we will be in default under the terms of the indenture or
the multicurrency credit agreement, as the case may be, which could, in turn,
cause defaults under our other existing and future debt obligations.
Even if we are able to meet our debt service obligations, the amount of debt
we have could adversely affect us in a number of other ways, including the
following:
- we may be unable to obtain additional financing for working capital,
capital expenditures, acquisitions and general corporate purposes;
- a significant portion of our cash flow from operations must be dedicated
to debt service, which reduces the amount of cash we have available for
other purposes;
- we may be disadvantaged as compared to our competitors as a result of the
significant amount of debt we owe; and
- our ability to adjust to changing market conditions may be hampered by the
amount of debt we owe.
BECAUSE BORROWINGS UNDER OUR MULTICURRENCY CREDIT FACILITY ARE SUBJECT TO
VARIABLE RATES OF INTEREST, A RISE IN MARKET INTEREST RATES OR OUR DEBT
RATIO COULD INCREASE OUR BORROWING COSTS SIGNIFICANTLY
The loans under our multicurrency credit facility bear interest at a base
rate plus a margin that varies according to the ratio of our debt to our
consolidated net income before interest, taxes, depreciation, amortization and
specified other costs. The base rate is either the then-applicable prime
commercial rate, the Federal Funds rate plus 50 basis points or, in the case of
eurocurrency loans, the British Bankers' Association Interest Settlement Rate.
We are vulnerable to increases in interest rates as a result of either increases
in the base rate or the variable margin. For the three months ended
September 30, 2000, the weighted average interest rate for the loans under the
revolving portion of the multicurrency credit facility was 8.4%, and our
interest expense associated with the revolving portion of the multicurrency
credit facility was $3.4 million. An increase of 50 basis points in the
effective interest rate under the revolving portion of the multicurrency credit
facility for the same period would have resulted in $3.6 million of interest
expense, a $0.2 million increase.
THE TERMS OF OUR DEBT CONTAIN A NUMBER OF RESTRICTIVE COVENANTS, WHICH
RESTRICT OUR FLEXIBILITY AND WHICH, IF BREACHED, COULD RESULT IN
ACCELERATION OF THE NOTES AND THE DEBT UNDER THE MULTICURRENCY CREDIT
FACILITY
The indenture governing the notes and the multicurrency credit agreement
contain covenants that limit our actions. These covenants could materially and
adversely affect our ability to finance our future
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<PAGE>
operations or capital needs or to engage in other business activities that may
be in our best interests. The covenants limit our ability to, among other
things:
- engage in new lines of business;
- encumber our assets;
- enter into sale and leaseback transactions;
- merge, consolidate or dispose of a substantial part of our assets;
- dispose of stock in our subsidiaries or have our subsidiaries issue stock;
- engage in acquisitions, make loans, extend guarantees or enter into other
investments;
- incur indebtedness;
- pay dividends and make other distributions to our shareholders; and
- enter into transactions with our affiliates.
The multicurrency credit agreement also contains covenants concerning the
maintenance of maximum debt to EBITDA ratios and a minimum liquidity ratio.
See "Description of Other Indebtedness -- Multicurrency Credit Facility" at
page 57 and "Description of the Notes" at page 64 for a more detailed discussion
of the covenants discussed above as well as the exceptions to and exclusions
from the limitations imposed by the covenants.
Our ability to comply with these covenants may be affected by events beyond
our control, and we cannot be sure that we will be able to comply. A breach of
any of these covenants could result in a default under the indenture and/or the
multicurrency credit agreement and, potentially, an acceleration of the
obligation to repay the notes and/or the indebtedness under the multicurrency
credit agreement. An event of default under the indenture and/or the
multicurrency credit agreement could also cause other debt of ours to become
immediately due and payable under cross-default and cross-acceleration
provisions.
WE MAY BE UNABLE TO REPURCHASE THE NOTES UPON THE OCCURRENCE OF A CHANGE OF
CONTROL
Upon the occurrence of a change of control of Jones Lang LaSalle
Incorporated or the issuer, the issuer will be required to offer to repurchase
all outstanding notes. If a change of control were to occur, our ability to
repurchase the notes with cash would depend on the availability of sufficient
funds and compliance with the terms of any debt ranking senior or equal to
outstanding indebtedness under the notes, including the multicurrency credit
facility. Our failure to repurchase tendered notes upon a change of control
would constitute an event of default under the indenture, which could result in
the acceleration of the maturity of the notes and our other outstanding
indebtedness.
BECAUSE OF OUR ORGANIZATIONAL STRUCTURE, THE AVAILABILITY OF CASH TO SATISFY
THE NOTES OR THE GUARANTEES OF THE NOTES MAY BE LIMITED
Because our revenue-generating activities are conducted through various
operating subsidiaries that, in some cases, are not obligors under the
indenture, circumstances could arise in which the issuer and/or one or more
guarantors of the notes would not have access to the cash generated by those
operating subsidiaries and would, as a consequence, be unable to satisfy their
obligations under the notes or the guarantees of the notes, as the case may be.
The notes are obligations solely of the issuer, a finance vehicle with limited
assets. The guarantees of the notes are obligations solely of the issuer's
ultimate parent, Jones Lang LaSalle Incorporated, and some of Jones Lang LaSalle
Incorporated's operating subsidiaries. Jones Lang LaSalle Incorporated is a
holding company that conducts all of its operations through subsidiaries. As a
result, the issuer, Jones Lang LaSalle Incorporated and, at least
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<PAGE>
in part, the subsidiary guarantors are dependent upon dividends or other
intercompany transfers of funds from their respective subsidiaries or their
ability to otherwise realize economic benefits from their equity interests in
their respective subsidiaries to meet debt service and other obligations,
including obligations under the notes or the guarantees of the notes, as
applicable. Generally, creditors of a subsidiary will have a claim to the assets
and earnings of that subsidiary that is superior to the claims of creditors of
its parent or sister companies, except to the extent the claims of the parent
and sister companies' creditors are guaranteed by the subsidiary. The risk that
cash generated by our subsidiaries may not be available for payments on the
notes or the guarantees of the notes arises for two principal reasons: the
possibility that the subsidiary guarantees could not be enforced and the fact
that some of Jones Lang LaSalle Incorporated's subsidiaries are not guarantors
under the indenture.
Although the subsidiary guarantees of the notes provide holders of the notes
with a direct claim against the assets of the subsidiary guarantors, enforcement
of the subsidiary guarantees may be subject to legal challenge in a bankruptcy
or reorganization case or a lawsuit by or on behalf of creditors of the
subsidiary guarantors, and would be subject to certain defenses available to
guarantors generally. If the subsidiary guarantees are not enforceable, the
holders of the notes will not have a direct claim against the subsidiary
guarantors and their assets. As a result, holders of the notes would only have a
direct claim against the issuer and Jones Lang LaSalle Incorporated, as parent
guarantor. The issuer and Jones Lang LaSalle Incorporated are dependent upon
dividends and other intercompany transfers from the subsidiaries of Jones Lang
LaSalle Incorporated to satisfy obligations under the notes because they do not
have sufficient assets and earnings of their own. Since creditors of the
subsidiaries will have a claim superior to that of the issuer and Jones Lang
LaSalle Incorporated with respect to the assets and earnings of the
subsidiaries, the notes would be effectively junior in ranking to all the
liabilities of the subsidiaries of Jones Lang LaSalle Incorporated, including
trade payables. Our existing debt instruments, including the indenture and the
multicurrency credit agreement, permit subsidiaries of Jones Lang LaSalle
Incorporated and the subsidiary guarantors to incur additional indebtedness that
may limit the ability of these subsidiaries to make funds available for
repayment of the notes or other obligations.
Some of the subsidiaries of the guarantors of the notes will not guarantee
the issuer's payment obligations under the notes and the guarantors' obligations
under the guarantees of the notes. The holders of the notes will not have a
direct claim against the subsidiaries of the guarantors that do not guarantee
the notes. They will only have a direct claim against the issuer, Jones Lang
LaSalle Incorporated and the subsidiary guarantors. The issuer, Jones Lang
LaSalle Incorporated and the subsidiary guarantors may look to the assets and
earnings of the non-guarantor subsidiaries to satisfy their obligations under
the notes. The creditors of the non-guarantor subsidiaries will have a claim
superior to that of the issuer, Jones Lang LaSalle Incorporated and the
subsidiary guarantors with respect to the assets and earnings of the
non-guarantor subsidiaries. As a result, the notes and the guarantees of the
notes will be effectively junior in ranking to all liabilities of the
non-guarantor subsidiaries. As of September 30, 2000, non-guarantor subsidiaries
had $4.1 million of outstanding indebtedness and $127.5 million of other
liabilities. Although the indenture and the multicurrency credit facility limit
the ability of non-guarantor subsidiaries to incur additional indebtedness,
there are exceptions and qualifications to these limitations.
YOU MAY FACE FOREIGN EXCHANGE RISKS BY INVESTING IN THE NOTES
The notes, including principal and interest, are denominated and, except as
described in the next paragraph, payable in euros. If you are a U.S. investor,
an investment in the notes entails foreign exchange-related risks due to, among
other factors, possible significant changes in the value of the euro relative to
the U.S. dollar because of economic, political and other factors over which we
have no control. Depreciation of the euro against the U.S. dollar could cause a
decrease in the effective yield of the notes below their stated coupon rate and
could result in a loss to you on a U.S. dollar basis.
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<PAGE>
Interest accrued on notes held through DTC and other payments due to DTC as
registered holder of the notes will be exchanged at then-applicable currency
exchange rates for U.S. dollars prior to payment to DTC. Holders of notes
through DTC will be paid in U.S. dollars unless they request a conversion to
euros and bear the cost of any conversion. See " -- Book-Entry; Delivery and
Form for New Notes -- Currency of Payment for the New Global Notes" at page 108.
Holders of notes through DTC are subject to the risk of a strengthening U.S.
dollar relative to the euro resulting in a decreased return on the notes on a
relative basis, whether or not they request a conversion back into euros.
U.S. BANKRUPTCY OR FRAUDULENT CONVEYANCE LAWS MAY INTERFERE WITH THE PAYMENT
OF THE NOTES AND THE GUARANTEES OF THE NOTES
Application of U.S. bankruptcy or state fraudulent conveyance laws to the
issuer and the guarantors of the notes could result in your not receiving
payment on the notes or the guarantees of the notes. Under U.S. federal
bankruptcy law and comparable provisions of state fraudulent transfer laws, the
notes or the guarantee of the notes issued by the issuer or any guarantor of the
notes, as the case may be, could be voided or subordinated to all of the other
debt of the issuer or such guarantor, as the case may be, if, among other
things, the issuer or such guarantor, as the case may be:
- incurred indebtedness represented by the notes or its guarantee of the
notes with the intent of hindering, delaying or defrauding current or
future creditors; or
- received less than reasonably equivalent value or fair consideration for
incurring indebtedness represented by the notes or guarantee of the notes;
and
-- was insolvent or was rendered insolvent by reason of the incurrence;
-- was engaged, or about to engage, in a business or transaction for
which the assets remaining with it constituted unreasonably small
capital to carry on its business;
-- intended to incur, or believed that it would incur, debts beyond its
ability to pay as these debts matured; or
-- was a defendant in an action for money damages, or had a judgment for
money damages docketed against it if, in either case, after final
judgment the judgment was unsatisfied.
The measure of insolvency for these purposes will vary depending upon the
law of the jurisdiction that is being applied in any proceeding. Generally,
however, the issuer or a guarantor of the notes, as the case may be, would be
considered insolvent if, at the time the issuer or such guarantor, as the case
may be, incurred indebtedness, either:
- the sum of the debts of the issuer or such guarantor, as the case may be,
including contingent liabilities, is greater than its assets, at fair
valuation; or
- the present fair saleable value of the assets of the issuer or such
guarantor, as the case may be, is less than the amount required to pay the
probable liability on its total existing debts and liabilities, including
contingent liabilities, as they become absolute and matured.
On the basis of our analysis, internal cash flow projections, estimated
values of our assets and liabilities and other factors, we believe that at the
time the issuer and each guarantor of the notes initially incurred the
indebtedness represented by the notes or its guarantee of the notes, as
applicable, each:
- was not insolvent nor rendered insolvent as a result of the issuance
thereof;
- possessed sufficient capital to run its business effectively;
- was incurring debts within its ability to pay as they matured or became
due; and
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<PAGE>
- had sufficient assets to satisfy any probable money judgment against it in
any pending action.
We cannot assure you, however, as to what standard a court would apply in
making these determinations or that a court passing on these questions would
reach the same conclusions.
INSOLVENCY AND ADMINISTRATIVE LAWS OF THE NETHERLANDS COULD NEGATIVELY
AFFECT YOUR RIGHT TO ENFORCE THE NOTES
The issuer is incorporated under the laws of the Netherlands. Accordingly,
insolvency proceedings with respect to the issuer would likely proceed under,
and be governed by, insolvency laws of the Netherlands.
Fraudulent conveyance legislation is in force in the Netherlands. Fraudulent
conveyance legislation in the Netherlands provides generally that certain
transactions with a creditor entered into voluntarily by the debtor are subject
to avoidance if both the creditor and the debtor in the transaction knew or
should have known that the transaction would prejudice other creditors of the
debtor or that the debtor has previously made an application for bankruptcy.
Although we do not have any knowledge that the issuance of the notes would
prejudice other creditors of the issuer or that the issuer has previously made
an application for bankruptcy, knowledge is presumed by law for all transactions
performed within one year of the adjudication before bankruptcy or within one
year before the date the claim of fraudulent conveyance is made, if it is also
established that one of the conditions mentioned in Article 43 of the Dutch
Bankruptcy Act or, respectively, Article 46 of Book 3 of the Dutch Civil Code is
fulfilled. These conditions would include, but would not be limited to,
situations in which:
- the value of the obligation of the issuer materially exceeds the value of
the obligation of the purchasers of the notes;
- the issuer pays or grants security for notes which are not yet due;
- an agreement is made between the issuer and a purchaser of the notes or an
obligation arises from the issuer towards a purchaser of the notes if a
director of one of those entities is also a director of the other; or
- an agreement is made or an obligation arises with a group company.
We are not aware that any of these conditions is fulfilled with respect to
the issuance of notes by the issuer to any purchaser or holder of the notes.
INSOLVENCY LAWS OF ENGLAND COULD NEGATIVELY AFFECT YOUR RIGHT TO ENFORCE
CERTAIN SUBSIDIARY GUARANTEES
Jones Lang LaSalle Limited, a subsidiary guarantor, is organized under the
laws of England and Wales. Under English law, if Jones Lang LaSalle Limited or
any future guarantor of the notes organized under the laws of England and Wales
is placed into liquidation under the U.K. Insolvency Act 1986, its liabilities
in respect of its guarantee of the notes are unsecured debts that, on a
liquidation, will be payable after certain categories of debts, such as debts
representing the costs of liquidation, which are entitled to priority under
English law. If a guarantor of the notes goes into liquidation after the
issuance of its guarantee of the notes, the maximum amount that you may recover
under the guarantee of the notes would be the principal amount of the notes and
any interest on the notes accruing up to the date of liquidation. It is possible
that you may recover less than this, or nothing at all. You will not be able to
recover any interest payable on the notes from such a guarantor of the notes in
the period after the guarantor goes into liquidation, unless there is a surplus
remaining after payment of all its other debts.
Under English insolvency law, the liquidator or administrator of a guarantor
of the notes has certain powers to challenge a guarantee of notes by a guarantor
of the notes organized under the laws
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<PAGE>
of England and Wales if entered into by a guarantor of the notes that was
insolvent at the time of, or as a result of, the guarantee of the notes where
the guarantee of the notes takes place up to two years prior to the
administration or liquidation. A guarantee of the notes might be challenged in
this way if it involved a gift by the guarantor of the notes or the guarantor of
the notes received payment of significantly less value than it gave in return. A
court generally will not intervene, however, if the guarantor of the notes
entered into the guarantee of the notes in good faith for the purposes of
carrying on its business and if, at the time it did so, there were reasonable
grounds for believing the guarantee of the notes would benefit the guarantor of
the notes. Although Jones Lang LaSalle Limited guaranteed the notes in good
faith with reasonable grounds for believing the guarantee of the notes would
benefit Jones Lang LaSalle Limited, we cannot be sure that the giving of the
guarantee by Jones Lang LaSalle Limited would not be challenged by a liquidator
or administrator or that a court would uphold the guarantee of the notes as
valid.
RISKS ASSOCIATED WITH THE EXCHANGE OFFER
TRANSFERABILITY OF OLD NOTES WILL BE LIMITED FOLLOWING THE EXCHANGE OFFER
We did not register the old notes under the Securities Act or any state
securities law and do not intend to do so after the exchange offer. As a result,
old notes may be transferred only in limited circumstances under U.S. securities
laws. If you do not exchange your old notes in the exchange offer by following
the procedures described in this prospectus and the letter of transmittal, you
will lose your right to have the old notes registered under the Securities Act,
with some exceptions. If you continue to hold old notes after the exchange
offer, you may be unable to sell them. Old notes that are not tendered or are
tendered but not accepted will, following the exchange offer, continue to be
subject to existing transfer restrictions.
WE CANNOT ASSURE YOU THAT AN ACTIVE MARKET WILL DEVELOP FOR THE NEW NOTES OR
THAT OTHER DEVELOPMENTS WILL NOT ADVERSELY AFFECT THE LIQUIDITY AND MARKET
PRICE OF THE NEW NOTES
While the old notes are presently eligible for trading in the PORTAL market
of the National Association of Securities Dealers, Inc. by qualified
institutional buyers and are listed on the Luxembourg Stock Exchange, there is
no existing market for the new notes. If an active trading market for the new
notes is not developed or maintained, the market price and liquidity of the new
notes may be adversely affected. In addition, the liquidity and the market price
of the new notes may be adversely affected by changes in the overall market for
securities similar to the new notes, by changes in our financial performance or
prospects and by changes in conditions in our industry.
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<PAGE>
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Statements in this prospectus other than statements of historical fact,
including statements regarding future financial results and performance,
achievements, plans and objectives, are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause our actual results, performance, achievements, plans and
objectives to be materially different from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to differ
materially include those discussed under "Risk Factors" in this prospectus at
page 12; under "Business." "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Quantitative and Qualitative
Disclosures about Market Risk" and elsewhere in Jones Lang LaSalle
Incorporated's Annual Report on Form 10-K for the year ended December 31, 1999,
as amended; under "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Quantitative and Qualitative Disclosures about
Market Risk" and elsewhere in Jones Lang LaSalle Incorporated's Quarterly
Reports on Forms 10-Q and 10-Q/A for the quarter ended September 30, 2000 and on
Form 10-Q for the quarters ended June 30 and March 31, 2000; in Jones Lang
LaSalle Incorporated's Proxy Statement dated April 7, 2000; and in other reports
filed with the SEC. Statements in this prospectus speak only as of the date of
this prospectus. The issuer and the guarantors expressly disclaim any
undertaking or obligation, except as required under federal securities laws, to
update or revise any forward-looking statements contained herein to reflect any
change in Jones Lang LaSalle's expectations or results or any events or
circumstances occurring after the date of this prospectus.
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<PAGE>
THE ISSUER
BACKGROUND
The old notes are, and the new notes will be, obligations of our financing
subsidiary, Jones Lang LaSalle Finance B.V., which was incorporated on July 7,
2000 as a private company with limited liability under the laws of the
Netherlands. The issuer is an indirect wholly owned subsidiary of Jones Lang
LaSalle Incorporated and has no subsidiaries of its own. See "Corporate
Structure -- Issuer and Guarantors" at page 63 for a more detailed illustration
of our structure. The issuer has an authorized share capital composed of 500,000
ordinary shares each with a par value of [EURO]1.00, of which 100,000 have been
issued.
In connection with the listing of the new notes on the Luxembourg Stock
Exchange, the constituting documents of the issuer and a legal notice (NOTICE
LEGALE) relating to the issue of the new notes will be deposited prior to
listing with the Chief Registrar of the District Court of Luxembourg (GREFFIER
EN CHEF DU TRIBUNAL D'ARRONDISSEMENT DE ET A LUXEMBOURG) where such documents
may be examined and copies obtained free of charge. Copies may also be obtained
from Kredietbank S.A. Luxembourgeoise, our paying and transfer agent in
Luxembourg.
BUSINESS
The issuer was formed solely for the purpose of issuing the notes, becoming
the borrower under the multicurrency credit facility and further financing our
business operations. The multicurrency credit facility ranks equally with the
notes and is guaranteed by Jones Lang LaSalle Incorporated and the subsidiary
guarantors. The issuer may, from time to time, obtain additional financing by,
among other things, entering into loan agreements and issuing additional
securities. Debt owed by the issuer as a result of any such additional financing
may rank equally with the notes. The registered office of the issuer is
Strawinskylaan 3103, 1077 ZX Amsterdam, the Netherlands.
CAPITALIZATION
The following table sets forth the capitalization of the issuer as of the
date of its formation, based on the amount of indebtedness outstanding under the
multicurrency credit facility on September 30, 2000 (dollars in thousands):
<TABLE>
<S> <C>
Debt:
Senior notes.............................................. $145,695
Multicurrency credit facility............................. 146,493
Share capital, issued and paid in full: 100,000 shares,
[EURO]1 par value......................................... 95(1)
--------
Total capitalization.................................... $292,283
========
</TABLE>
---------
(1) Based on the exchange rate on July 7, 2000, the date of the issuer's
incorporation.
BOARD OF DIRECTORS
The members of the issuer's board of directors are Henricus Theodorus Maria
Teeuwisse, Finance Director of Jones Lang LaSalle B.V., our principal operating
subsidiary in the Netherlands, and Brian Patrick Hake, Senior Vice President and
Treasurer of Jones Lang LaSalle Incorporated. The issuer is managed by its board
of directors, whose members we elect and may suspend or remove from office at
any time.
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<PAGE>
FINANCIAL STATEMENTS
The issuer has not prepared financial statements since the date of its
formation, and this prospectus does not include any financial statements of the
issuer. The issuer will not publish financial statements, except for such
statements which the issuer is required by Netherlands law to publish, because
the issuer will not have any operations independent from its parent company, and
the issuer's obligations under the notes will be fully and unconditionally
guaranteed by Jones Lang LaSalle Incorporated. So long as the notes are listed
on the Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange
so require, copies of all annual financial statements of the issuer will be
available during normal business hours on any weekday at the offices of our
paying and transfer agent for the notes in Luxembourg.
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<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. The exchange offer
is intended to satisfy our obligations under the registration rights agreement.
Of the proceeds from the issuance of the old notes, $149.5 million was applied
to repay indebtedness under the term portion of the multicurrency credit
facility.
CAPITALIZATION
The following is a summary of the consolidated short-term borrowings and
total capitalization of Jones Lang LaSalle Incorporated and its subsidiaries as
of September 30, 2000. This summary should be read in conjunction with "Selected
Financial and Other Data" at page 39, "Description of Other Indebtedness" at
page 57 and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the financial statements and related notes contained
in Jones Lang LaSalle Incorporated's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999, as amended; the financial statements and related
notes contained in Jones Lang LaSalle Incorporated's Current Report on
Form 8-K, dated August 11, 2000; and the financial statements and related notes
contained in Jones Lang LaSalle Incorporated's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2000, as amended, each of which is
incorporated herein by reference.
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 2000
------------------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C>
Short-term borrowings(1).................................... $ 13,293
Long-term debt (excluding current portion):
Credit facilities(2)...................................... 146,493
Senior notes.............................................. 145,695
Other long-term notes(3).................................. 683
--------
Total debt.............................................. 306,164
Minority interest in consolidated subsidiaries.............. 640
Stockholders' equity:
Common stock, $.01 par value per share; 100,000,000 shares
authorized; 30,861,683 shares issued and outstanding.... 309
Additional paid-in capital................................ 452,648
Unallocated ESOT shares(4)................................ (7)
Deferred stock compensation............................... (21,574)
Retained deficit.......................................... (91,850)
Accumulated other comprehensive income (loss)............. (14,193)
--------
Total stockholders' equity.............................. 325,333
--------
Total capitalization.................................... $632,137
========
</TABLE>
---------
(1) Includes $3.9 million of outstanding indebtedness of non-guarantor
subsidiaries.
(2) Represents the outstanding indebtedness under the multicurrency credit
facility. See "Description of Other Indebtedness -- Multicurrency Credit
Facility" at page 57.
(3) Includes $0.2 million of outstanding indebtedness of non-guarantor
subsidiaries.
(4) See "Acquisitions and Merger -- Jones Lang Wootton Merger" under Note 3 in
the Notes to Consolidated Financial Statements included in Jones Lang
LaSalle Incorporated's Current Report on Form 8-K, dated August 11, 2000,
and incorporated herein by reference.
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<PAGE>
PRO FORMA FINANCIAL INFORMATION
RELATING TO INTEREST EXPENSE
After giving effect to the issuance of the old notes and the use of proceeds
from the old notes to repay indebtedness under the term portion of the
multicurrency credit facility as if the issuance of the old notes and the
repayment of indebtedness under the multicurrency credit facility had taken
place on January 1, 1999 (dollars in thousands):
- For the nine months ended September 30, 2000, interest expense, net of
interest income, of $21,565 would have increased by $639, resulting in pro
forma interest expense, net of interest income, of $22,204. The pro forma
tax benefit associated with the additional pro forma interest expense for
the nine months ended September 30, 2000 at an effective tax rate of 38%
would have been $243.
- For the year ended December 31, 1999, interest expense, net of interest
income, of $18,211 would have increased by $4,866, resulting in pro forma
interest expense, net of interest income, of $23,077. The pro forma tax
benefit associated with the additional pro forma interest expense for the
year ended December 31, 1999 at an effective tax rate of 38% would have
been $1,849.
The pro forma adjustments described above are based upon available
information and assumptions that management believes are reasonable under the
circumstances. The pro forma information is not necessarily indicative of what
our actual interest expense and associated tax benefit would have been for the
nine months ended September 30, 2000 and the year ended December 31, 1999 had we
completed the issuance of old notes and repyament of indebtedness under the
multicurrency credit facility as of January 1, 1999, nor does it purport to
represent our future interest expense or associated tax benefit.
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<PAGE>
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the issuance of the old notes, the issuer, Jones Lang
LaSalle Incorporated and the subsidiary guarantors entered into a registration
rights agreement with the placement agents for the old notes. Under the
registration rights agreement, the issuer, Jones Lang LaSalle Incorporated and
the subsidiary guarantors agreed to use their best efforts to cause to become
effective the registration statement of which this prospectus forms a part
regarding the exchange of the old notes for new notes that are registered under
the Securities Act and to have such registration statement remain effective
until the closing of the exchange offer. The registration rights agreement
provides that in the event the issuer, Jones Lang LaSalle Incorporated and the
subsidiary guarantors have not, by the date that is six months after the
issuance of the old notes, consummated a registered exchange offer for the old
notes or caused a shelf registration statement with respect to resales of the
old notes to be declared effective, the interest rate on the old notes will
increase by 0.5% per annum until the exchange offer has been completed or a
shelf registration statement with respect to resales of the old notes has become
effective, whereupon the interest rate will decrease permanently to the original
interest rate on the old notes. Copies of the registration rights agreement may
be obtained by following the instructions under "Where You Can Find More
Information" and "Information Incorporated by Reference" at page 121.
None of the issuer, Jones Lang LaSalle Incorporated, the subsidiary
guarantors or their respective boards of directors or managers, as the case may
be, recommends that you tender or not tender old notes in the exchange offer or
has authorized anyone to make any recommendation. You must decide whether to
tender in the exchange offer and, if you decide to tender, the aggregate amount
of notes to tender.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, the issuer will accept for exchange old notes
which are properly tendered on or before the expiration date and are not
withdrawn as permitted below. The exchange offer expires at 5:00 p.m., London
time, on January 26, 2001, or such later date and time to which we extend the
exchange offer. The maximum period for which the exchange offer will remain
open, including any extensions, is 60 days from the date the registration
statement of which this prospectus forms a part is declared effective by the
SEC.
The form and terms of the new notes will be identical in all material
respects to the form and terms of the old notes, except that the new notes:
- will have been registered under the Securities Act;
- will not bear restrictive legends restricting their transfer under the
Securities Act;
- will not be entitled to the registration rights that apply to the old
notes; and
- will not contain provisions relating to an increase in the interest rate
borne by the old notes under circumstances related to the timing of the
exchange offer.
Old notes tendered in the exchange offer must be in denominations of the
principal amount of [EURO]1,000 and any integral multiple of [EURO]1,000 in
excess thereof.
The issuer, Jones Lang LaSalle Incorporated and the subsidiary guarantors
expressly reserve the right, in their reasonable discretion and in accordance
with applicable law:
- to extend the expiration date;
- to delay accepting any old notes;
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<PAGE>
- if any of the conditions set forth below under " -- Conditions to the
Exchange Offer" have not been satisfied, to terminate the exchange offer
and not accept any old notes for exchange; and
- to amend the exchange offer in any manner.
In the event of any extension, delay, non-acceptance, termination or
amendment, the issuer, Jones Lang LaSalle Incorporated and the subsidiary
guarantors will as promptly as practicable give oral or written notice to the
exchange agent and make a public announcement of the extension, delay,
non-acceptance, termination or amendment. In the case of an extension of the
exchange offer, an announcement, including disclosure of the approximate number
of old notes tendered to date, will be made no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date.
If the issuer, Jones Lang LaSalle Incorporated and the subsidiary guarantors
amend the exchange offer in a manner that they consider material, they will:
- disclose the amendment by means of a prospectus supplement; and
- extend the exchange offer for a period of five to ten business days,
depending upon the significance of the amendment and the manner of
disclosure to the registered holders, if the exchange offer would
otherwise expire during the five to ten business day period.
During an extension, all old notes previously tendered will remain subject
to the exchange offer and may be accepted for exchange by the issuer. Any old
notes not accepted for exchange for any reason will be returned without cost to
the holder that tendered them as promptly as practicable after the expiration or
termination of the exchange offer.
PROCEDURES FOR TENDERING OLD NOTES
VALID TENDER; SIGNATURE GUARANTEES
When the holder of old notes tenders, and the issuer accepts, old notes for
exchange, a binding agreement between the issuer, Jones Lang LaSalle
Incorporated and the subsidiary guarantors, on the one hand, and the tendering
holder, on the other hand, is created, subject to the terms and conditions set
forth in this prospectus and the accompanying letter of transmittal. Except as
set forth below, a holder of old notes who wishes to tender old notes for
exchange must, on or prior to the expiration date:
- transmit a properly completed and duly executed letter of transmittal,
including all other documents required by such letter of transmittal, to
The Bank of New York (the "exchange agent") at the applicable address set
forth below under the heading " -- Exchange Agent" at page 35; or
- if old notes are tendered pursuant to the book-entry procedures set forth
below, the tendering holder must cause an agent's message to be
transmitted to the exchange agent at the address set forth below under the
heading " -- Exchange Agent" at page 35.
In addition, on or prior to the expiration date, either:
- the exchange agent must receive the certificates for the old notes and the
letter of transmittal;
- the exchange agent must receive a timely confirmation of the book-entry
transfer of the old notes being tendered into the exchange agent's account
at The Depository Trust Company ("DTC") or a timely confirmation of the
tender of such old notes in accordance with the procedures of Morgan
Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System ("Euroclear") or Clearstream Banking, SOCIETE ANONYME
("Clearstream"), along with the letter of transmittal or an agent's
message; or
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<PAGE>
- only in the case of certificated old notes or old notes represented by the
global note held by the trustee as custodian for DTC, the holder must
comply with the guaranteed delivery procedures described below.
The term "agent's message" means a message, transmitted to the appropriate
exchange agent by DTC, Euroclear or Clearstream and forming a part of a
book-entry transfer (a "book-entry confirmation"), which states that DTC,
Euroclear or Clearstream, as the case may be, has received an express
acknowledgment that the tendering holder agrees to be bound by the letter of
transmittal and that the issuer, Jones Lang LaSalle Incorporated and the
subsidiary guarantors may enforce the letter of transmittal against such holder.
If you beneficially own old notes, those notes are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee and you wish
to tender your old notes in the exchange offer, you should contact the
registered holder as soon as possible and instruct it to tender on your behalf
and comply with the instructions set forth in this prospectus and the letter of
transmittal.
The method of delivery of the old notes, the letter of transmittal and all
other required documents is at the election and risk of the holders. If such
delivery is by mail, we recommend registered mail with return receipt requested,
properly insured, or overnight delivery service. In all cases, you should allow
sufficient time to assure timely delivery. No letters of transmittal or old
notes should be sent directly to the issuer, Jones Lang LaSalle Incorporated or
any subsidiary guarantor.
Signatures on a letter of transmittal or a notice of withdrawal, as the case
may be, must be guaranteed unless the old notes surrendered for exchange are
tendered:
- by a registered holder of old notes who has not completed the box entitled
"Special Issuance Instructions" or "Special Delivery Instructions" on the
letter of transmittal; or
- for the account of an eligible institution.
An "eligible institution" is a firm which is a member of a registered
national securities exchange under the Securities Exchange Act of 1934, as
amended, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States. If signatures on a letter of transmittal or notice of withdrawal are
required to be guaranteed, the guarantor must be an eligible institution.
If old notes are registered in the name of a person other than the signer of
the letter of transmittal, the old notes surrendered for exchange must be
endorsed or accompanied by a written instrument or instruments of transfer or
exchange, in satisfactory form as determined by the issuer, Jones Lang LaSalle
Incorporated and the subsidiary guarantors in their sole discretion, duly
executed by the registered holder with the holder's signature guaranteed by an
eligible institution.
The issuer, Jones Lang LaSalle Incorporated and the subsidiary guarantors
will determine all questions as to the validity, form, eligibility (including
time of receipt) and acceptance of old notes tendered for exchange in their sole
discretion. Their determination will be final and binding. The issuer, Jones
Lang LaSalle Incorporated and the subsidiary guarantors reserve the absolute
right to:
- reject any and all tenders of any old note improperly tendered;
- refuse to accept any old note if, in their judgment or the judgment of
their counsel, acceptance of the old note may be deemed unlawful; and
- waive any defects or irregularities or conditions of the exchange offer as
to any particular old note either before or after the expiration date,
including the right to waive the ineligibility of any holder who seeks to
tender old notes in the exchange offer, whether or not similar defects,
irregularities or conditions are waived in the case of other holders.
30
<PAGE>
The issuer's, Jones Lang LaSalle Incorporated's and the subsidiary
guarantors' interpretation of the terms and conditions of the exchange offer as
to any particular old notes either before or after the expiration date,
including the letter of transmittal and the instructions to it, will be final
and binding on all parties. Holders must cure any defects and irregularities in
connection with tenders of old notes for exchange within such reasonable period
of time as the issuer, Jones Lang LaSalle Incorporated and the subsidiary
guarantors will determine, unless the issuer, Jones Lang LaSalle Incorporated
and the subsidiary guarantors waive such defects or irregularities. Neither the
issuer, Jones Lang LaSalle Incorporated, the subsidiary guarantors, the exchange
agent nor any other person will be under any duty to give notification of any
defect or irregularity with respect to any tender of old notes for exchange, nor
will the issuer, Jones Lang LaSalle Incorporated or any of the subsidiary
guarantors incur any liability for failure to give such notification.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity sign any letter of transmittal, any old notes or any written
instruments of transfer or exchange, such persons should so indicate when
signing and must submit proper evidence satisfactory to the issuer, Jones Lang
LaSalle Incorporated and the subsidiary guarantors of such person's authority to
so act unless the issuer, Jones Lang LaSalle Incorporated and the subsidiary
guarantors waive this requirement.
By tendering, each holder will represent to the issuer, Jones Lang LaSalle
Incorporated and the subsidiary guarantors that, among other things, the person
acquiring new notes in the exchange offer is obtaining them in the ordinary
course of its business, whether or not such person is the holder, and that
neither the holder nor such other person has any arrangement or understanding
with any person to participate in the distribution of the new notes. If any
holder or any such other person is an "affiliate" of the issuer, Jones Lang
LaSalle Incorporated or any subsidiary guarantor (as defined under Rule 405 of
the Securities Act) or is engaged in, intends to engage in or has an arrangement
or understanding with any person to participate in a distribution of such new
notes, such holder or any such other person:
- may not rely on the applicable interpretations of the staff of the SEC;
and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction.
Each broker-dealer who acquired its old notes as a result of market-making
activities or other trading activities and thereafter receives new notes issued
for its own account in the exchange offer must acknowledge that it will deliver
a prospectus in connection with any resale of such new notes. The letter of
transmittal states that by so acknowledging and delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. See "Plan of Distribution and Selling
Restrictions" at page 119 for a discussion of the exchange and resale
obligations of broker-dealers in connection with the exchange offer.
BOOK-ENTRY TRANSFERS
Tenders by book-entry transfer of old notes cleared through Euroclear or
Clearstream must be initiated by sending an electronic instruction to the
applicable book-entry transfer facility in accordance with the procedures of
that book-entry transfer facility. Any financial institution that is a
participant in Euroclear and/or Clearstream's systems may make book-entry
delivery of old notes by causing Euroclear and/or Clearstream to tender the old
notes to the exchange agent in accordance with the procedures for transfer
established by Euroclear and/or Clearstream, as applicable. Upon receipt of
electronic instructions, Euroclear and/or Clearstream will block the position of
old notes that the holder of the old notes has requested to exchange and, upon
completion of the exchange offer and confirmation of receipt of the new notes
from the common depositary, Euroclear and/or Clearstream
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<PAGE>
will simultaneously transfer the old notes out of the participants' accounts and
replace them with an equivalent amount of new notes.
For tenders by book-entry transfer of old notes cleared through DTC, the
exchange agent will make a request to establish an account at DTC for purposes
of the exchange offer. Any financial institution that is a DTC participant may
make book-entry delivery of old notes by causing DTC to transfer such old notes
into the exchange agent's account at DTC in accordance with DTC's procedures for
transfer. The exchange agent and DTC have confirmed that any financial
institution that is a participant in DTC may use the Automated Tender Offer
Program ("ATOP") procedures to tender old notes. Accordingly, any participant in
DTC may make book-entry delivery of old notes represented by the global note
held by the trustee as custodian for DTC by causing DTC to transfer such old
notes into the exchange agent's account in accordance with its ATOP procedures
for transfer.
Notwithstanding the ability of holders of old notes to effect delivery of
old notes through book-entry transfer at the applicable book-entry transfer
facility, the letter of transmittal or facsimile thereof (or an agent's message
in lieu of the letter of transmittal) with any required signature guarantees and
any other required documents must, in any case, be transmitted to and received
by the exchange agent at one of the addresses given below under " -- Exchange
Agent" at page 35 prior to the expiration date or, in the case of a delivery of
old notes through DTC, the guaranteed delivery procedures described below must
be complied with.
GUARANTEED DELIVERY PROCEDURES
If a holder of old notes desires to tender such old notes and the holder's
old notes are not immediately available, or time will not permit such holder's
old notes or other required documents to reach the exchange agent before the
expiration date, or the procedure for book-entry transfer cannot be completed on
a timely basis, a tender may be effected if:
- the old notes are in certificated form or are represented by the global
note held by the trustee as custodian for DTC;
- the holder tenders the old notes through an eligible institution;
- prior to the expiration date, the exchange agent receives from such
eligible institution a properly completed and duly executed notice of
guaranteed delivery, substantially in the form provided with the form of
letter of transmittal, by telegram, telex, facsimile transmission, mail or
hand delivery, setting forth the name and address of the holder of the old
notes being tendered and the amount of the old notes being tendered. The
notice of guaranteed delivery will state that the tender is being made and
guarantee that within three (3) New York Stock Exchange trading days after
the date of execution of the notice of guaranteed delivery, the
certificates for all physically tendered old notes, in proper form for
transfer, or a book-entry confirmation, as the case may be, together with
a properly completed and duly executed letter of transmittal or agent's
message with any required signature guarantees and any other documents
required by the letter of transmittal, will be deposited by the eligible
institution with the exchange agent; and
- the exchange agent receives the certificates for all physically tendered
old notes in proper form for transfer, or a book-entry confirmation, as
the case may be, together with a properly completed and duly executed
letter of transmittal or agent's message with any required signature
guarantees and any other documents required by the letter of transmittal,
within three (3) New York Stock Exchange trading days after the date of
execution of the notice of guaranteed delivery.
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<PAGE>
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all of the conditions to the exchange offer,
the issuer will accept, promptly after the expiration date, all old notes
properly tendered and will issue new notes registered under the Securities Act.
For purposes of the exchange offer, the issuer will be deemed to have accepted
properly tendered old notes for exchange when, as and if it has given oral or
written notice to the exchange agent, with written confirmation of any oral
notice to be given promptly thereafter. See " -- Conditions to the Exchange
Offer" at page 34 for a discussion of the conditions that must be satisfied
before old notes are accepted for exchange.
For each old note accepted for exchange, the holder will receive a new note
registered under the Securities Act having a principal amount equal to, and in
the denomination of, that of the surrendered old note. Accordingly, registered
holders of new notes issued in the exchange offer on the relevant record date
for the first interest payment date following the consummation of the exchange
offer will receive interest accruing from the most recent date to which interest
has been paid on the old notes or, if no interest has been paid on the old
notes, from July 26, 2000. Old notes accepted for exchange will cease to accrue
interest from and after the date of consummation of the exchange offer.
In all cases, the issuer will issue new notes in the exchange offer for old
notes that are accepted for exchange only after the exchange agent timely
receives:
- certificates for such old notes, a timely book-entry confirmation of the
transfer of such old notes into the exchange agent's account at DTC or a
timely book-entry confirmation of the tender of such old notes in
accordance with the procedures of Euroclear or Clearstream;
- a properly completed and duly executed letter of transmittal or an agent's
message; and
- all other required documents.
If for any reason set forth in the terms and conditions of the exchange
offer the issuer, Jones Lang LaSalle Incorporated and the subsidiary guarantors
do not accept any tendered old notes, or if a holder submits old notes for a
greater principal amount than the holder desires to exchange, the issuer will
return such unaccepted or non-exchanged old notes without cost to the tendering
holder as promptly as practicable after the expiration or termination of the
exchange offer. In the case of old notes tendered by book-entry transfer through
the applicable book-entry transfer facility, the old notes withdrawn will be
credited to an account maintained with that facility for the old notes.
WITHDRAWAL RIGHTS
You may withdraw tenders of your old notes at any time prior to 5:00 p.m.,
London time, on the expiration date.
For a withdrawal to be effective, you must send a written notice of
withdrawal to the exchange agent at one of the addresses set forth below under "
-- Exchange Agent" at page 35. Any such notice of withdrawal must:
- specify the name of the person having tendered the old notes to be
withdrawn;
- identify the old notes to be withdrawn, including the principal amount of
such old notes; and
- where certificates for old notes are transmitted, specify the name in
which old notes are registered, if different from that of the withdrawing
holder.
If certificates for old notes have been delivered or otherwise identified to
the exchange agent, then, prior to the release of such certificates the
withdrawing holder must also submit the serial numbers of the particular
certificates to be withdrawn and signed notice of withdrawal with signatures
guaranteed by an eligible institution unless such holder is an eligible
institution. If old notes have been
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<PAGE>
tendered pursuant to the procedure for book-entry transfer described above, any
notice of withdrawal must specify the name and number of the account at DTC,
Euroclear or Clearstream to be credited with the withdrawn old notes and
otherwise comply with the procedures of such book-entry transfer facility.
The issuer, Jones Lang LaSalle Incorporated and the subsidiary guarantors
will determine all questions as to the validity, form and eligibility (including
time of receipt) of such notices and their determination will be final and
binding on all parties. Any tendered old notes so withdrawn will be deemed not
to have been validly tendered for exchange for purposes of the exchange offer.
In the case of old notes tendered by book-entry transfer through the
applicable book-entry transfer facility, the old notes withdrawn will be
credited to an account maintained with that facility. The old notes will be
returned or credited to the book-entry transfer facility account as soon as
practicable after withdrawal, rejection of tender or termination of the exchange
offer. Any old notes which have been tendered for exchange but which are not
exchanged for any reason will be returned to the holder thereof without cost to
such holder.
Properly withdrawn old notes may be re-tendered by following one of the
procedures described under " -- Procedures for Tendering Old Notes" above at any
time on or prior to 5:00 p.m., London time, on the expiration date.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the exchange offer, the issuer is not
required to accept for exchange, or to issue new notes in exchange for, any old
notes and may terminate or amend the exchange offer if at any time prior to
5:00 p.m., London time, on the expiration date, the issuer, Jones Lang LaSalle
Incorporated and the subsidiary guarantors determine that the exchange offer
violates applicable law or any applicable interpretation of the staff of the
SEC.
The foregoing conditions are for the sole benefit of the issuer, Jones Lang
LaSalle Incorporated and the subsidiary guarantors, and they may assert them
regardless of the circumstances giving rise to any such condition, or they may
waive the conditions, completely or partially, whenever or as many times as they
choose, in their reasonable discretion. The foregoing rights are not deemed
waived because the issuer, Jones Lang LaSalle Incorporated and the subsidiary
guarantors fail to exercise them, but continue in effect, and they may still
assert them whenever or as many times as they choose. If the issuer, Jones Lang
LaSalle Incorporated and the subsidiary guarantors determine that a waiver of
conditions materially changes the exchange offer, the prospectus will be amended
or supplemented, and the exchange offer extended, if appropriate, as described
under " -- Terms of the Exchange Offer" at page 28.
In addition, the issuer will not accept for exchange any old notes tendered,
and no new notes will be issued in exchange for any such old notes, if at such
time any stop order shall be threatened or in effect with respect to the
registration statement of which this prospectus constitutes a part or with
respect to the qualification of the indenture under the Trust Indenture Act of
1939, as amended.
If the issuer, Jones Lang LaSalle Incorporated and the subsidiary guarantors
terminate or suspend the exchange offer based on a determination that the
exchange offer violates applicable law or SEC staff interpretations, the
registration rights agreement requires that the issuer, Jones Lang LaSalle
Incorporated and the subsidiary guarantors, as soon as practicable after such
determination, use their best efforts to cause a shelf registration statement
covering the resale of the old notes to be filed and declared effective by the
SEC. The issuer, Jones Lang LaSalle Incorporated and the subsidiary guarantors
would be required, at their cost, to use their best efforts to keep the shelf
registration statement continuously effective, and to amend and supplement the
shelf registration prospectus if required by applicable rules or reasonably
requested by a holder of old notes, until either the
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<PAGE>
expiration of the period referred to in Rule 144(k) under the Securities Act
with respect to the old notes or, if sooner, until all of the old notes have
been resold under the shelf registration statement or otherwise under
then-current rules and regulations.
EXCHANGE AGENT
We have appointed The Bank of New York as the exchange agent for the
exchange offer. Questions, requests for assistance and requests for additional
copies of this prospectus, letters of transmittal and notices of guaranteed
delivery should be directed to the exchange agent addressed as follows:
- in relation to old notes represented by the global note deposited with the
trustee as custodian for DTC:
<TABLE>
<S> <C> <C>
BY REGISTERED MAIL OR BY HAND DELIVERY: FOR INFORMATION CALL:
OVERNIGHT CARRIER: The Bank of New York (212) 815-3738
The Bank of New York 101 Barclay Street
Reorganization Section Corporate Trust Services FACSIMILE TRANSMISSION
101 Barclay Street, Floor 7 Window NUMBER:
East Ground Level (212) 815-6339
New York, New York 10286 New York, New York 10286
Attention: Tolutope Adeyoju Attention: Tolutope Adeyoju CONFIRM BY TELEPHONE:
Reorganization Section, 7E (212) 815-3738
</TABLE>
- in relation to old notes represented by the global notes deposited with
the common depositary for Euroclear and Clearstream:
<TABLE>
<S> <C>
BY REGISTERED MAIL, HAND DELIVERY FOR INFORMATION CALL:
OR OVERNIGHT CARRIER: 011 44 207 964-7284 or
The Bank of New York 011 44 207 964-7235
Lower Ground Floor
30 Cannon Street FACSIMILE TRANSMISSION NUMBER:
London 011 44 207 964-6369 or
EC4M 6XH 011 44 207 964-7294
Attention: Linda Read or Emma Wilkes
CONFIRM BY TELEPHONE:
011 44 207 964-7284
011 44 207 964-7235
</TABLE>
- in relation to certificated notes, to the exchange agent at either one of
the two locations for which information is provided above.
If you deliver letters of transmittal or any other required documents to an
address or facsimile number other than those listed above, your tender will be
invalid.
In addition, we have appointed Kredietbank S.A. Luxembourgeoise as
Luxembourg exchange agent. The Luxembourg exchange agent may be contacted as
follows:
Kredietbank S.A. Luxembourgeoise
Corporate Trust and Agencies
43, Boulevard Royal
L-2955 Luxembourg
Attention: Sandra Cortese
Tel No: +352 4797 3931
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<PAGE>
FEES AND EXPENSES
We will pay the exchange agent reasonable and customary fees for its
services and reasonable out-of-pocket expenses. We will also reimburse brokerage
houses and other custodians, nominees and fiduciaries for customary mailing and
handling expenses incurred by them in forwarding this prospectus and related
documents to their clients and for handling or tendering for their clients.
We have not retained any dealer-manager in connection with the exchange
offer and will not pay any fee or commission to any broker, dealer, nominee or
other person (other than the exchange agent) for soliciting tenders of old notes
pursuant to the exchange offer.
TRANSFER TAXES
Holders who tender their old notes for exchange will not be obligated to pay
any transfer taxes in connection with the exchange. If, however, new notes
issued in the exchange offer are to be delivered to, or are to be issued in the
name of, any person other than the holder of the old notes tendered, or if a
transfer tax is imposed for any reason other than the exchange of old notes in
connection with the exchange offer, then the holder must pay any such transfer
taxes, whether imposed on the registered holder or on any other person. If
satisfactory evidence of payment of, or exemption from, such taxes is not
submitted with the letter of transmittal, the amount of such transfer taxes will
be billed directly to the tendering holder.
ACCOUNTING TREATMENT
The new notes will be recorded at the same carrying value as the old notes.
Accordingly, we will not recognize any gain or loss on the exchange for
accounting purposes. We intend to amortize the expenses of the exchange offer
and issuance of the old notes, which we estimate will total approximately
$4.5 million, over the term of the notes.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES
Holders who desire to tender their old notes in exchange for new notes
registered under the Securities Act should allow sufficient time to ensure
timely delivery. Neither the exchange agent, the issuer, Jones Lang LaSalle
Incorporated nor any subsidiary guarantor is under any duty to give notification
of defects or irregularities with respect to the tenders of old notes for
exchange.
You do not have any appraisal or dissenters' rights in the exchange offer.
Old notes that are not tendered or are tendered but not accepted will, following
the consummation of the exchange offer, continue to be subject to the provisions
in the indenture regarding the transfer and exchange of the old notes and the
existing restrictions on transfer set forth in the legend on the old notes.
Except in limited circumstances with respect to specific types of holders of old
notes, the issuer, Jones Lang LaSalle Incorporated and the subsidiary guarantors
will have no further obligation to provide for the registration under the
Securities Act of the old notes. In general, old notes, unless registered under
the Securities Act, may not be offered or sold except pursuant to an exemption
from, or in a transaction not subject to, the Securities Act and applicable
state securities laws. We do not currently anticipate that the issuer, Jones
Lang LaSalle Incorporated or the subsidiary guarantors will take any action to
register the old notes under the Securities Act or under any state securities
laws.
Upon completion of the exchange offer, holders of the old notes will not be
entitled to any further registration rights under the registration rights
agreement, except under limited circumstances.
Holders of the new notes and any old notes which remain outstanding after
consummation of the exchange offer will vote together as a single class under
the indenture.
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<PAGE>
RESALE OF NEW NOTES
We are exchanging the old notes for new notes in reliance upon the staff of
the SEC's position, set forth in the following interpretive letters to third
parties in other similar transactions: EXXON CAPITAL HOLDINGS CORPORATION
(available May 13, 1989); MORGAN STANLEY & CO. INCORPORATED (available June 5,
1991); MARY KAY COSMETICS, INC. (available June 5, 1991); EPIC PROPERTIES, INC.
(available October 21, 1991); VITRO, SOCIEDAD ANONIMA (available November 19,
1991); K-III COMMUNICATIONS CORPORATION (available May 14, 1993); SHEARMAN &
STERLING (available July 2, 1993); GRUPO FINANCIERO INVERMEXICO, S.A. (available
April 4, 1995); and BROWN & WOOD LLP (available February 7, 1997). We will not
seek our own interpretive letter. As a result, we cannot assure you that the
staff will take the same position on this exchange offer as it did in
interpretive letters to other parties. Based on the staff's letters to other
parties, we believe that holders of new notes, other than broker-dealers, can
offer the new notes for resale, resell and otherwise transfer the new notes
without delivering a prospectus to prospective purchasers. However, you must
acquire the new notes in the ordinary course of business and have no intention
of engaging in a distribution of the new notes, as a "distribution" is defined
by the Securities Act. This SEC position does not apply to any holder that is
- an "affiliate" of the issuer, Jones Lang LaSalle Incorporated or any
subsidiary guarantor;
- a broker-dealer who acquired notes directly from the issuer; or
- a broker-dealer who acquired notes as a result of market-making or other
trading activities.
If you are an "affiliate" of the issuer, Jones Lang LaSalle Incorporated or
any subsidiary guarantor or you intend to distribute new notes, you:
- cannot rely on the staff's interpretations in the above mentioned
interpretive letters;
- cannot tender old notes in the exchange offer; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act to transfer the old notes, unless the sale is exempt.
In addition, if you are a broker-dealer who acquired old notes for your own
account as a result of market-making or other trading activities and you
exchange the old notes for new notes, you must deliver a prospectus with any
resale of the new notes.
If you want to exchange your old notes for new notes, you will be required
to affirm that you:
- are not an "affiliate" of the issuer, Jones Lang LaSalle Incorporated or
any subsidiary guarantor within the meaning of Rule 405 under the
Securities Act;
- are acquiring the new notes in the ordinary course of your business;
- have no arrangement or understanding with any person to participate in a
distribution of the new notes, within the meaning of the Securities Act;
- are not a broker-dealer; and
- are not engaged in, and do not intend to engage in, a distribution of the
new notes, within the meaning of the Securities Act.
In addition, we may require you to provide information regarding the number
of "beneficial owners" of the old notes within the meaning of Rule 13d-3 under
the Exchange Act. Each broker-dealer that receives new notes for its own account
must acknowledge that it acquired the old notes for its own account as the
result of market-making activities or other trading activities. Each
broker-dealer must further agree that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of new notes.
By making this acknowledgment and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" under
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<PAGE>
the Securities Act. Based on the staff's position in interpretive letters issued
to third parties, we believe that broker-dealers who acquired old notes for
their own accounts as a result of market-making activities or other trading
activities may fulfill their prospectus delivery requirements with respect to
the new notes with a prospectus meeting the requirements of the Securities Act.
Accordingly, a broker-dealer may use this prospectus to satisfy such
requirements. We have agreed that a broker-dealer may use this prospectus for a
period ending 180 days, subject to extension under limited circumstances, after
the expiration date of the exchange offer. You should read the section entitled
"Plan of Distribution and Selling Restrictions" at page 119 for further
information about the use of this prospectus by broker-dealers. A broker-dealer
intending to use this prospectus in the resale of new notes must notify us, on
or prior to the expiration date, that it is a participating broker-dealer. This
notice may be given in the letter of transmittal or may be delivered to the
exchange agent. Any participating broker-dealer who is an "affiliate" of the
issuer, Jones Lang LaSalle Incorporated or any subsidiary guarantor may not rely
on the staff's interpretive letters and must comply with the registration and
prospectus delivery requirements of the Securities Act when reselling new notes.
Each participating broker-dealer exchanging old notes for new notes agrees
that, upon receipt of notice from the issuer, Jones Lang LaSalle Incorporated or
a subsidiary guarantor of the happening of any event which makes the
registration statement of which this prospectus forms a part contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements, in light of the circumstances under which they were
made, not misleading, the participating broker-dealer will suspend use of this
prospectus. Each participating broker-dealer agrees not to use this prospectus
until the issuer, Jones Lang LaSalle Incorporated and the subsidiary guarantors
have amended or supplemented this prospectus to correct the misstatement or
omission and the amendment has been declared effective by the SEC, if required.
If the issuer, Jones Lang LaSalle Incorporated or a subsidiary guarantor
gives notice suspending the sale of new notes, it shall extend the 180-day
period during which this prospectus may be used by a participating broker-dealer
by the number of days between the date the issuer, Jones Lang LaSalle
Incorporated or a subsidiary guarantor gives notice of suspension and the date
participating broker-dealers receive copies of the amended or supplemented
prospectus or the date the issuer, Jones Lang LaSalle Incorporated or a
subsidiary guarantor gives notice resuming the sale of new notes.
38
<PAGE>
SELECTED FINANCIAL AND OTHER DATA
The financial data set forth below should be read in conjunction with, and
are qualified by reference to, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial statements and
related notes contained in Jones Lang LaSalle Incorporated's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999, as amended; the financial
statements and related notes contained in Jones Lang LaSalle Incorporated's
Current Report on Form 8-K, dated August 11, 2000; and the financial statements
and related notes contained in Jones Lang LaSalle Incorporated's Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2000, as
amended, each of which is incorporated herein by reference. See "Information
Incorporated by Reference" and "Where You Can Find More Information" at
page 121.
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------
------------------------- 1999
2000 1999(1) PRO FORMA(2) 1999(1)
----------- ----------- ------------ -----------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenue(3)................... $ 637,270 $ 474,737 $ 813,899 $ 755,439
----------- ----------- ----------- -----------
Operating income (loss)............ (13,380) (117,787) (88,087) (71,303)
Interest expense, net of interest
income........................... 21,565 12,312 18,118 18,211
----------- ----------- ----------- -----------
Earnings (loss) before provision
(benefit) for income taxes and
minority interest................ (34,945) (130,099) (106,205) (89,514)
Net provision (benefit) for income
taxes............................ 6,795 (20,043) 2,048 5,328
Minority interests in earnings of
subsidiaries..................... 60 -- -- --
Net earnings (loss)................ $ (41,800) $ (110,056) $ (108,253) $ (94,842)
=========== =========== =========== ===========
Basic earnings (loss) per common
share............................ $ (1.69) $ (4.98) $ (4.50) $ (4.20)
=========== =========== =========== ===========
Basic weighted average shares
outstanding...................... 24,701,106 22,109,143 24,067,363 22,607,350
=========== =========== =========== ===========
Diluted earnings (loss) per common
share............................ $ (1.69) $ (4.98) $ (4.50) $ (4.20)
=========== =========== =========== ===========
Diluted weighted average shares
outstanding...................... 24,701,106 22,109,143 24,067,363 22,607,350
=========== =========== =========== ===========
ADJUSTMENTS FOR MERGER-RELATED
CHARGES(5):
Merger related nonrecurring
charges.......................... $ 55,382 $ 160,528
Tax benefit associated with merger
related non-recurring charges.... (971) (20,004)
----------- -----------
Adjusted net earnings (loss)(6).... $ 12,611 $ 32,271
=========== ===========
Adjusted net earnings per common
share............................ $ 0.41 $ 1.07
=========== ===========
Adjusted weighted average shares
outstanding...................... 30,679,303 30,298,332
=========== ===========
OTHER DATA:
Adjusted EBITDA(7)................. $ 73,731 $ 24,311 $ 112,164 $ 116,774
Ratio of earnings to fixed
charges(8)(9).................... -- --
Ratio of adjusted earnings to fixed
charges(6)(9)(10)................ 1.60x 2.47x
Cash flows provided by (used in):
Operating activities............. 35,479 (64,928) 29,114 (32,766)
Investing activities............. (31,711) (47,927) (108,463) (67,143)
Financing activities............. (9,609) 117,507 110,051 106,717
Investments under management(11)... $22,700,000 $21,200,000 $21,500,000 $21,500,000
Square feet under management --
corporate property
services(12)..................... 200,000 230,000 250,000 250,000
Total square feet under
management(13)................... 700,000 700,000 700,000 700,000
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1998 1997 1996 1995
----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenue(3)................... $ 304,464 $ 224,773 $ 159,453 $ 138,618
----------- ----------- ----------- -----------
Operating income (loss)............ 37,842 35,114 26,901 20,116
Interest expense, net of interest
income........................... 4,153 3,995 5,730 3,806
----------- ----------- ----------- -----------
Earnings (loss) before provision
(benefit) for income taxes and
minority interest................ 33,689 31,119 21,171 16,310
Net provision (benefit) for income
taxes............................ 13,224 5,279 1,207 505
Minority interests in earnings of
subsidiaries..................... -- -- -- --
Net earnings (loss)................ $ 20,465 $ 25,840 $ 19,964 $ 15,805
=========== =========== =========== ===========
Basic earnings (loss) per common
share............................ $ 1.26 $ 1.50(4)
=========== ===========
Basic weighted average shares
outstanding...................... 16,215,478 16,200,000
=========== ===========
Diluted earnings (loss) per common
share............................ $ 1.25 $ 1.49(4)
=========== ===========
Diluted weighted average shares
outstanding...................... 16,387,721 16,329,613
=========== ===========
ADJUSTMENTS FOR MERGER-RELATED
CHARGES(5):
Merger related nonrecurring
charges..........................
Tax benefit associated with merger
related non-recurring charges....
Adjusted net earnings (loss)(6)....
Adjusted net earnings per common
share............................
Adjusted weighted average shares
outstanding......................
OTHER DATA:
Adjusted EBITDA(7)................. $ 61,318 $ 44,207 $ 32,317 $ 24,356
Ratio of earnings to fixed
charges(8)(9).................... 5.54x 5.88x 3.73x 3.88x
Ratio of adjusted earnings to fixed
charges(6)(9)(10)................
Cash flows provided by (used in):
Operating activities............. 19,238 40,577 13,964 13,553
Investing activities............. (235,365) (14,126) (32,478) (5,706)
Financing activities............. 202,377 (3,128) 17,189 (12,365)
Investments under management(11)... $14,200,000 $14,700,000 $15,200,000 $11,500,000
Square feet under management --
corporate property
services(12)..................... 188,000 98,900 66,700 66,700
Total square feet under
management(13)................... 400,500 202,700 131,600 125,700
</TABLE>
------------
(FOOTNOTES ON FOLLOWING PAGE)
39
<PAGE>
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
-------------- ----------------------------------------------------
2000 1999 1998 1997 1996 1995
-------------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................. $ 17,467 $ 23,308 $ 16,941 $ 30,660 $ 7,207 $ 8,322
Total assets.............................................. 863,212 924,800 490,921 219,887 156,614 115,001
Long-term debt............................................ 292,871 159,743 202,923 -- 55,551 40,805
Total liabilities......................................... 537,239 600,275 321,349 72,990 132,367 100,004
Minority interest in consolidated subsidiaries............ 640 589 -- -- -- --
Total partners' capital/stockholders' equity.............. 325,333 323,936 169,572 146,897 24,247 14,997
</TABLE>
---------
(1) The 1999 actual results include the consolidated results of operations of
JLW as of March 1, 1999, the effective date of merger.
The following represents summarized consolidated financial results of JLW
for the two months ended February 28, 1999, the period during 1999 prior to
the effective date of the JLW merger:
<TABLE>
<S> <C>
Total revenues.............................................. $ 58,460
--------
Operating loss.............................................. (19,132)
Interest expense, net of interest income.................... (93)
--------
Loss before provision (benefit) for income taxes............ (19,039)
Net provision (benefit) for income taxes.................... (2,703)
Net loss.................................................... $(16,336)
========
</TABLE>
For additional financial information on JLW, please refer to Jones Lang
LaSalle Incorporated's Current Report on Form 8-K dated March 11, 1999 and
filed with the SEC on March 24, 1999. See "Where You Can Find More
Information" at page 121.
(2) Pro Forma results for 1999 give effect to the operations of JLW for the two
months ended February 28, 1999, the period prior to the JLW merger,
amortization of the goodwill resulting from the JLW merger as if it
occurred on January 1, 1999 and a benefit for taxes as if the JLW merger
occurred on January 1, 1999 at an estimated effective tax rate of 40%.
(3) Historical revenue and operating expenses have been reclassified to reflect
personnel cost reimbursements received on property management or specific
client assignments on a net rather than gross basis. These personnel cost
reimbursements totaled $16.5 million in 1996 and $13.2 million in 1995.
There was no effect on operating income or net earnings as historically
reported.
(4) Basic and diluted earnings per common share for 1997 are calculated based
on net earnings for the period from conversion to corporate form, July 22,
1997, through December 31, 1997.
(5) Excludes compensation expense associated with the issuance of shares of
Jones Lang LaSalle Incorporated's common stock to former employees of JLW
in connection with the JLW merger and non-recurring transition and
integration costs associated with the JLW merger and the acquisition of
Compass.
(6) Adjusted net earnings (loss) is not determined in accordance with GAAP and
may not be comparable to other companies' reported net earnings (loss).
(7) Adjusted EBITDA represents earnings (loss) before interest expense, income
taxes, depreciation and amortization, non-recurring transition and
integration costs associated with the JLW merger and the acquisition of
Compass and compensation expense associated with the issuance of shares of
Jones Lang LaSalle Incorporated's common stock to former employees of JLW
in connection with the JLW merger. We believe that Adjusted EBITDA is
useful to investors as a measure of operating performance, cash generation
and ability to service debt. However, Adjusted EBITDA should not be
considered as an alternative either to: (i) net earnings determined in
accordance with GAAP, (ii) operating cash flow determined in accordance
with GAAP, or (iii) liquidity and may not be comparable to EBITDA of other
companies.
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<PAGE>
(8) For purposes of computing the ratio of earnings to fixed charges, earnings
represents net earnings (loss) before income taxes plus fixed charges, less
capitalized interest. Earnings were insufficient to cover fixed charges by
$35.0 million for the nine months ended September 30, 2000 and
$89.5 million for the year ended December 31, 1999.
(9) Fixed charges consist of interest expense, including amortization of debt
discount and financing costs, capitalized interest and one-third of rental
expense which we believe is representative of the interest component of
rental expense.
(10) For purposes of computing the ratio of adjusted earnings to fixed charges,
adjusted earnings represents net earnings (loss) before income taxes plus
fixed charges, less capitalized interest.
(11) Investments under management represent the aggregate fair market value or
cost basis of assets managed by our Investment Management segment as of
the end of the periods reflected.
(12) Represents the square footage of properties for which we provided
corporate property services as of the end of the periods reflected.
(13) Represents the total square footage of properties for which we provided
property management and leasing or corporate property services as of the
end of the periods reflected.
41
<PAGE>
BUSINESS
OVERVIEW
We are a leading global real estate services and investment management firm.
We provide a wide variety of commercial real estate transactional, advisory and
investment management services on a local, national and international basis
across approximately 100 markets on five continents.
We manage approximately 700 million square feet of property, provide
investment management services for approximately $22.7 billion of assets and
have approximately 9,800 employees. We serve a wide variety of clients,
including owners and tenants of office, industrial, retail and hotel properties,
as well as real estate investors. We have grown by expanding both our client
base and our range of services and products in anticipation of client needs, as
well as through a series of strategic acquisitions and a merger. By offering a
broad range of real estate products and services, and through our extensive
knowledge of domestic and international real estate markets, we are able to
serve as a single source provider of solutions for our clients' real estate
needs.
We manage our businesses along a combination of functional and geographic
lines. Accordingly, our operations are now classified into five business
segments consisting of two global businesses, Investment Management and Hotel
Services, and Owner and Occupier Services managed in three geographic regions,
the Americas, Europe and Asia Pacific, as follows (with percentages indicating
the proportion of our 1999 revenues accounted for by each segment):
[CHART REPRESENTING BUSINESS SEGMENTS AND INDICATING
PERCENTAGE OF 1999 REVENUES ACCOUNTED FOR BY EACH SEGMENT]
Our Owner and Occupier Services business is operated on a geographical basis
and consists of Implementation Services, composed primarily of tenant
representation, agency leasing, capital markets services and valuation services,
and Management Services, composed primarily of property management services,
corporate property services, development services and project management
services. Our Investment Management segment provides real estate investment
management services to institutional investors, corporations and high net worth
individuals. Our Hotel Services segment provides strategic advisory, sales,
acquisition, valuation and asset management services related solely to hotel,
conference and resort properties.
The following provides a brief overview of our business units:
OWNER AND OCCUPIER SERVICES -- IMPLEMENTATION SERVICES
TENANT REPRESENTATION. Our Tenant Representation Services units assist
clients by defining space requirements, identifying suitable alternatives,
recommending appropriate occupancy solutions and negotiating lease and ownership
terms with third parties.
AGENCY LEASING. Our Agency Leasing Services units create and execute
marketing and leasing programs to identify tenants for our clients' properties
and negotiate leases with terms in the best interests of our clients.
CAPITAL MARKETS SERVICES. Our Capital Markets Services units provide
clients with investment banking services, including real estate finance, private
equity placements, portfolio advisory activities, corporate finance and
institutional property sales and acquisitions.
42
<PAGE>
VALUATION SERVICES. Our Valuation Services units provide clients with
professional valuation services that help them to determine accurate values for
office, retail, industrial and mixed-use properties.
OWNER AND OCCUPIER SERVICES -- MANAGEMENT SERVICES
PROPERTY MANAGEMENT SERVICES. Our Property Management Services units
provide on-site management services to real estate investors for office,
industrial, retail and specialty properties, leveraging our market share and
buying power to deliver superior service for clients.
CORPORATE PROPERTY SERVICES. Our Corporate Property Services units provide
comprehensive portfolio and property management services to corporate and
institutional owner-occupiers of real estate that outsource their real estate
management functions.
DEVELOPMENT SERVICES. Our Development Services units manage all aspects of
the development, redevelopment and renovation of commercial projects,
principally on a fee basis.
PROJECT MANAGEMENT SERVICES. Our Project Management Services units provide
a variety of services, including interior build-out, move management and
occupancy planning services, to tenants of leased space, owners in self-occupied
buildings and owners of real estate investments.
INVESTMENT MANAGEMENT
Our Investment Management business invests the funds of institutional
investors, corporations and high net worth individuals in a broad range of real
estate investment products and services in the public and private capital
markets to meet various strategic, risk/return and liquidity requirements.
HOTEL SERVICES
Our Hotel Services business specializes in providing global real estate
services, such as sales, acquisitions, strategic consulting, valuation and
appraisal, operator selection, debt and equity sourcing, asset management and
research, to investors, financiers and operators of hotel, conference and resort
properties.
THE JLW MERGER
On March 11, 1999, LaSalle Partners Incorporated merged its businesses with
those of Jones Lang Wootton and changed its name to Jones Lang LaSalle
Incorporated. The JLW merger combined two leading real estate services companies
with complementary geographic focus to create a global real estate services
firm. JLW's culture, long-term strategy and service capability were compatible
with those of LaSalle Partners. Prior to the merger, we believe that JLW, with
approximately 4,000 employees in 32 countries, was one of the largest
international real estate organizations. JLW's name recognition in and focus on
Europe (60% of 1998 revenues) and Asia and Australasia (27% of 1998 revenues)
complemented LaSalle Partners' concentration and reputation in the Americas. In
addition to improving the geographic diversity of our revenues, the JLW merger
further enhanced the diversity of our customer base. Pro forma for the JLW
merger, no client represented more than 2% of our 1999 revenues and our top 25
clients represented less than 20% of our 1999 revenues. While these business
synergies were the principal purpose for the JLW merger, we have also focused on
identifying cost savings, including through reducing infrastructure functions
common to LaSalle Partners and JLW. As part of the integration, offices in some
cities, particularly in the United States, were combined.
The heritage of both LaSalle Partners and JLW as employee-owned companies
and partnerships has resulted in strong participation of employees in the
ownership of Jones Lang LaSalle Incorporated,
43
<PAGE>
which we continue to encourage and promote. At December 31, 1999, our employees
owned more than 60% of Jones Lang LaSalle Incorporated's common stock.
For additional information on JLW and the JLW merger, please refer to Jones
Lang LaSalle Incorporated's Current Report on Form 8-K dated March 11, 1999 and
filed with the SEC on March 24, 1999. See "Where You Can Find More Information"
at page 121.
As a direct result of the JLW merger, we have recognized non-cash,
nonrecurring stock compensation expense of approximately $160.0 million through
September 30, 2000. We have also recognized non-recurring integration and
transition expenses, principally composed of severance costs, marketing and
branding initiatives, professional fees, travel and meeting costs and office
closures, directly associated with the integration of the Compass and JLW
businesses aggregating to approximately $59.8 million through September 30,
2000. These substantial non-recurring costs have been the principal factors
giving rise to our accumulated deficit of approximately $91.9 million as of
September 30, 2000.
COMPETITIVE ADVANTAGES
We believe that we have several competitive advantages which have
established us as a leader in the real estate services and investment management
industries. We believe that we are one of the few companies in these industries
that possess all of these competitive advantages, which include the following:
RELATIONSHIP ORIENTATION
Our client-driven focus enables us to develop long-term relationships with
owners and users of real estate. By developing these relationships, we generate
repeat business and create recurring revenue sources. In many cases, we develop
a strategic alliance with clients who have ongoing service needs, to deliver
fully integrated real estate services across multiple business units and office
locations. Our relationship orientation is supported by an employee compensation
system which we believe is unique in the real estate industry. We compensate our
professionals with a salary and bonus plan designed to reward client
relationship building, teamwork and quality performance, rather than on a
commission basis which is typical in the industry.
FULL RANGE OF SERVICES
By offering a wide range of high quality, complementary services, we can
combine our services to develop and implement real estate strategies that meet
the increasingly complex needs of our clients. In addition, business units are
able to develop revenue sources for our other business units.
WORLD-CLASS RESEARCH
We invest in and rely upon comprehensive research to support and guide the
development of real estate and investment strategy. Our Global Research
Committee oversees and coordinates the activities of more than 150 research
professionals who cover market and economic conditions in 36 countries on five
continents. We produce more than 100 research publications annually. Research
will also play a key role in our new, company-wide intranet, keeping all of our
professionals attuned to important events and changing conditions in world
markets.
GEOGRAPHIC REACH
We believe that we have established a business presence in the principal
real estate markets and that we can build our revenues without a substantial
increase in costs. With approximately 100 corporate offices on five continents,
we possess in-depth knowledge of local and regional markets and
44
<PAGE>
can provide our full range of real estate services around the globe. This
geographic coverage positions the firm to serve our multinational clients and
manage investment capital on a global basis.
REPUTATION
Based on our industry knowledge, commissioned marketing surveys, industry
publications and our number of long-standing client relationships, we believe
that we are widely recognized by large corporations and institutional owners and
users of real estate as a provider of high quality, professional real estate
services and investment management products. We believe our name recognition and
reputation for quality services are significant advantages when pursuing new
business opportunities.
INDUSTRY TRENDS
INCREASING DEMAND FOR GLOBAL SERVICES; GLOBALIZATION OF CAPITAL FLOWS
Many corporations, both those based in the United States and those based in
other countries, have pursued growth opportunities in international markets.
This has increased the demand for global real estate services, like corporate
property services, tenant representation and leasing and property management. We
believe that this trend will favor those real estate service providers with the
capability to provide services in many markets around the world. Additionally,
real estate capital flows have become more global as more investors seek real
estate investment opportunities beyond their existing borders. This trend has
created new markets for investment managers that can facilitate international
real estate capital flows and execute cross-border real estate transactions.
GROWTH OF OUTSOURCING
In recent years, outsourcing of professional real estate services on a
global level has increased substantially as corporations have focused corporate
resources, including capital, on their core competencies. In addition, public
and other non-corporate users of real estate, such as government agencies and
health and educational institutions, have begun outsourcing real estate
activities as a means of reducing costs. As a result, there are significant
growth opportunities for firms that can provide integrated real estate services
across many geographic markets.
CONSOLIDATION
The real estate services industry has gone through a high degree of
consolidation in recent years, although the pace of consolidation has slowed in
the last year. Many large real estate service firms engaged in the property
management business, including us, believe that, as a result of substantial
existing infrastructure investments and the ability to spread fixed costs over a
broader base of business, it is possible to recognize incrementally higher
margins on property management and corporate property services assignments as
the amount of square footage under management increases.
Large users of commercial real estate services continue to demonstrate a
desire for a single source service provider across local, regional and global
markets. The ability to offer a full range of services on this scale requires
significant corporate infrastructure investment, including information
technology and personnel training. Smaller regional and local real estate
service firms, with limited resources, are less able to make such investments.
ALIGNMENT OF INTERESTS OF INVESTORS AND INVESTMENT MANAGERS
Institutional investors continue to allocate significant portions of their
investment capital to real estate. Many investors have shown a desire to commit
their capital to investment managers willing to co-invest their own funds with
them in specific real estate investments or in real estate funds. In addition,
investors are increasingly requiring that the fees paid to investment managers
be more closely
45
<PAGE>
aligned with investment performance. As a result, we believe that investment
managers with capital available to co-invest with their clients will have an
advantage in attracting real estate investment capital. Real estate investments
made through co-investment typically bring with them the opportunity to provide
additional services related to the acquisition, financing, property management,
leasing and disposition of such investments.
BUSINESS STRATEGY
We intend to capitalize on our competitive advantages and the opportunities
created by our new global platform to pursue the following growth strategy:
- EXPAND CLIENT RELATIONSHIPS. Based on our ability to deliver high quality
real estate services, we have been able to successfully turn discrete
client assignments into more comprehensive relationships utilizing some or
all of our business groups. Current industry trends, particularly the
globalization of corporate clients and the increased outsourcing of real
estate services on a global basis, provide a favorable environment for us
to increase the scope of our current client relationships and to develop
new relationships through our broad array of services. We intend to expand
the strategic alliance approach we have applied in our Tenant
Representation Services unit to the rest of our business units worldwide.
Our business groups identify new clients and markets and pursue
opportunities to sell the products and services of many of our business
units. Our Global Services Management Group, created in 1999, acts as a
catalyst in assisting our professionals in all groups in marketing the
multiple services we offer to existing and prospective clients.
- STRENGTHEN INTERNATIONAL PRESENCE. We intend to focus our near term
efforts on further developing and strengthening the global platform which
was created by the JLW merger to take advantage of the increasing
globalization of real estate capital sources and investment opportunities
and the international business expansion of many of our corporate clients.
In December, we combined our former Australasia and Asia regions into the
Asia Pacific region. This combination is intended, among other things, to
position us to use our talent and expertise in the relatively mature
Australian market to pursue growth opportunities in Asia. Similarly, we
plan to leverage our talent and expertise in the United States to pursue
growth opportunities in Latin America and our talent and expertise in
Western Europe to pursue growth opportunities in Central and Eastern
Europe. In our Investment Management business, we intend to take advantage
of our global platform to increase our activities outside the United
States and capitalize on the growing trend of cross-border capital
movement. We will pursue selective acquisitions in product categories and
geographic niches in order to serve our clients' increasingly global real
estate needs, and to pursue new business opportunities.
- PROVIDE CONSISTENT, HIGH QUALITY SERVICE. We have created a Global
Services Management group designed to ensure that worldwide operations
work and interact at the consistently high levels expected by clients.
Through the delivery of consistent, high quality service, we aim to expand
our current client relationships, grow our business and further strengthen
our name recognition and reputation.
- PURSUE CO-INVESTMENT OPPORTUNITIES. We intend to continue our strategy of
investing our funds alongside our investment management clients' funds. As
of September 30, 2000, we had a total net investment of $71.4 million in
29 separate property or fund co-investments and had committed an
additional $21.0 million of our capital to fund future co-investments. The
total acquisition cost of the properties acquired through co-investments
we have made with our clients exceeds $2.0 billion. Our existing
co-investments consist primarily of direct investments in office
properties, land and development properties purchased within the last five
years; investments in commingled investment funds; and the investment in
LaSalle Hotel Properties, the public real
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<PAGE>
estate investment trust advised by us.
Our co-investment strategy is supported by our broad fundamental real
estate research capabilities, which include identifying trends in
geographic regions and property types. Our extensive knowledge of local
markets drawn from our presence and work in these markets facilitates the
identification and evaluation of specific investment opportunities.
Co-investments provide us with the opportunity to participate in returns
generated by such investments and provide services related to the
acquisition, financing, property management, leasing and disposition of
such investments. As a result of the JLW merger, we have an increased
access to international market knowledge, positioning us to take advantage
of recovering markets in various regions throughout the world.
- DEVELOP A TECHNOLOGY AND E-BUSINESS STRATEGY. Our technology strategy is
to create an open, advanced technology platform that enables our clients
to achieve their real estate and broader business objectives. This
strategy includes investing in software applications for the Project
Management and Development Management businesses and utilizing the
Internet to enhance existing services provided to clients and to develop
entirely new services via e-commerce. We are in the final stages of
implementing a global data network, which we intend to be a reliable,
high-speed system that will enable our clients and employees around the
world to efficiently communicate with each other. In addition, we plan to
utilize the Internet to:
-- aggregate purchases in our managed property portfolio;
-- invest in software applications for the Project Management and
Development Management businesses;
-- expand the use of electronic auction sites; and
-- offer clients online access to portfolio performance data.
E-COMMERCE INITIATIVES
Through the first nine months of 2000, we have evaluated a number of
e-business opportunities. On April 26, 2000, we announced the formation of
Octane, an e-commerce alliance with two other leading U.S. real estate services
firms. This alliance will develop e-business solutions for the real estate
services industry and will focus on procurement, transactions, support services
and other business-to-business activities. On May 5, 2000, we announced our
intent to join 11 other leading North American real estate firms to form
Constellation, a real estate e-business company. This company will form,
incubate and sponsor real estate-related Internet, e-commerce and broadband
enterprises; acquire interests in existing leading companies on a synergistic
basis; and act as an opportunistic consolidator across property sectors in the
emerging real estate technology area. On June 29, 2000, we announced that
together with two other leading international property services firms and an
international business to business publisher, we would be developing a
pan-European commercial property listings, information and data research portal.
The venture will be an unaffiliated, independently managed company with its own
brand and may ultimately include other content and technology partners. On
April 26, 2000, we announced our involvement in a consortium to develop a
property "vortal" (a vertically integrated portal) called propbuzz.com.
Propbuzz.com will be a one-stop complete property resource portal with a wide
range of residential and commercial property listings, current property
transacted prices, premier research information and a whole host of supporting
services in the property transaction chain. The final terms and conditions of
the agreements related to these ventures are currently being negotiated.
On July 12, 2000, it was announced that we, together with two other leading
U.S. real estate services firms, had participated in a $30 million preferred
stock financing for SiteStuff.com, Inc., an e-marketplace for owners and
operators of commercial and multi-family real estate properties. On
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July 19, 2000, we funded our $10.0 million participation. Through SiteStuff, we
have the ability to aggregate the purchase of property management maintenance,
repair and operations products and services for the benefit of clients in the
U.S. We will continue to seek additional e-commerce opportunities which enhance
our product and service offerings.
BUSINESS SEGMENTS
We serve our clients through three principal business segments: owner and
occupier services which we divide along geographic lines, investment management
and hotel services. A description of each of these segments is set forth below.
OWNER AND OCCUPIER SERVICES
To effectively address the local, regional and global needs of real estate
owners and occupiers, we provide a full range of integrated transaction,
property management and corporate property services. Operations are managed
geographically in three regions: the Americas, Europe and Asia Pacific. In
addition, our Global Services Management group supports the regional Owner and
Occupier Services groups on a global basis for marketing, consulting and
delivery of best practices to multi-national clients.
Owner and occupier services can be grouped into two types: implementation
services and management services.
<TABLE>
<CAPTION>
IMPLEMENTATION SERVICES MANAGEMENT SERVICES
<S> <C>
- Tenant Representation - Property Management Services
- Agency Leasing - Corporate Property Services
- Capital Markets Services - Development Services
- Valuation Services - Project Management Services
</TABLE>
IMPLEMENTATION SERVICES
Implementation services consist primarily of tenant representation, agency
leasing, capital markets and valuation services. Implementation services
produced 54.7% of our total revenue for the nine months ended September 30,
2000, 52.1% for 1999, 40.1% for 1998 and 40.8% for 1997.
TENANT REPRESENTATION SERVICES. Our Tenant Representation Services units
assist clients by defining space requirements, identifying suitable
alternatives, recommending appropriate occupancy solutions and negotiating lease
and ownership terms with third parties. We seek to assist our clients to lower
real estate costs, minimize real estate occupancy risks, improve occupancy
flexibility and control and create more productive office environments. We use a
multi-disciplined approach to develop occupancy strategies that are linked to
our clients' core business objectives. In 1999, we completed approximately 1,700
tenant representation transactions involving approximately 26 million square
feet. During the nine months ended September 30, 2000, we completed
approximately 2,000 tenant representation transactions involving approximately
20.1 million square feet.
The tenant representation industry includes a large number of service
providers offering a wide range of service quality and capabilities. Our Tenant
Representation Services units, particularly in the United States, direct their
marketing efforts toward developing "strategic alliances" with clients whose
real estate requirements include on-going assistance in meeting their real
estate needs and also toward clients who have the need to consider multiple real
estate options and to execute complex strategies. The term "strategic alliance"
is used in the real estate services industry to refer to longer-term
relationships with large owners or occupiers of real estate that, in many cases,
require a number of different property services.
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In many cases, we develop a strategic alliance with clients to deliver fully
integrated real estate services, including comprehensive on-going strategic
planning and transaction execution services across multiple office locations via
the assignment of dedicated client teams. We view our strategic alliances as a
competitive advantage since these long-term relationships lower business
development costs for us and create recurring revenue sources. Through these
relationships, we gain a better understanding of our clients' portfolio and
occupancy requirements since the same professionals service the client's needs
nationwide. We believe that these relationships enable us to deliver more
consistent services and better results than single-transaction, commissioned
brokerage service providers. In 1998 and 1999, strategic alliances accounted for
71.9% and 77.8%, respectively, of our tenant representation revenue derived in
the Americas.
In addition to our strategic alliances, we also represent clients in large,
complex transaction assignments that typically involve relocations of
headquarters facilities or major office consolidations. For these assignments,
we draw on our broad depth of other capabilities to assist our clients with
development, buy or lease decisions and the evaluation of long-term financing
options.
We intend to grow this business by increasing our strategic alliance
relationships and by expanding existing relationships to cover multinational
clients that have occupancy needs around the world and are looking for a single
source provider.
We are generally compensated for Tenant Representation Services on a
negotiated fee basis. Although fees are generated by lease commissions, they are
often also determined by performance related to targets set by us and the client
prior to our engagement and, in the case of strategic alliances, at annual
intervals thereafter. Quantitative and qualitative measurements assess progress
relative to these goals, and we are compensated accordingly. Incentive fees are
often awarded for superior performance. Our Tenant Representation Services
professionals do not earn commissions. They are compensated by means of a base
salary and performance bonus that is determined primarily by their contribution
to achieving predetermined client performance objectives.
AGENCY LEASING SERVICES. Our Agency Leasing Services units create and
execute marketing and leasing programs to identify tenants for our clients'
properties and negotiate leases with terms in the best interests of our clients.
Clients are typically investors, property companies, developers or public
bodies. In 1999, we completed approximately 11,000 agency leasing transactions
representing approximately 90.0 million square feet of space. During the nine
months ended September 30, 2000, we completed approximately 9,400 agency leasing
transactions representing approximately 80.0 million square feet of space.
Agency leasing fees are typically based on a percentage of the value of the
lease revenue commitment for leases consummated.
CAPITAL MARKETS SERVICES. Our Capital Markets Services include real estate
finance, private equity placements, portfolio advisory activities, corporate
finance and institutional property sales and acquisitions. We completed
institutional property sales and acquisitions, debt financings, equity
placements and portfolio advisory activities on assets and portfolios valued at
approximately $23.0 billion during 1999 and approximately $16.0 billion during
the nine months ended September 30, 2000.
We believe that our Capital Markets Services units have a number of
competitive strengths, including their broad accumulated base of real estate
investment banking knowledge and an ability to draw on our access to global
capital sources. Our Agency Leasing, Property Management and Investment
Management units are valuable resources for the Capital Markets Services units
in providing local market and property information and local capital markets
expertise. As a result of the JLW merger, the Capital Markets Services units
have expanded access to international market and
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property information. This access creates the platform necessary to offer our
expertise to multinational clients.
The Capital Markets Services units are integral to the business development
efforts of our other businesses by researching, developing and introducing
innovative new financial products and strategies. This includes the development
of our hotel investment capability, which is currently performed within our
Investment Management group through the management of LaSalle Hotel Properties,
a Real Estate Investment Trust, or REIT.
We are typically compensated for Capital Markets Services on the basis of
the value of transactions completed or securities placed, but in certain
circumstances we receive retainer fees for portfolio advisory services.
VALUATION SERVICES. Our Valuation Services units provide clients with
professional valuation services that help them to determine accurate values for
office, retail, industrial and mixed-use properties. Such services may involve
valuing a single property or a worldwide portfolio of multiple property types.
Valuations typically involve commercial property, investment grade residential
property and land for a variety of purposes, including acquisition, disposition,
debt and equity financing, mergers and acquisitions, securities offerings and
privatization. Our clients include occupiers, investors and financing sources
from the public and private sectors. We have valuation specialists capable of
providing valuation advice to clients in nearly every developed country. During
1999, we performed approximately 32,000 valuations of properties valued in the
aggregate at approximately $194.0 billion. During the nine months ended
September 30, 2000, we performed approximately 21,500 valuations of properties
valued in the aggregate at approximately $115.0 billion.
Compensation for valuation services is generally negotiated for each
assignment based on its scale and complexity and will typically relate in part
to the value of the underlying assets.
MANAGEMENT SERVICES
Management services include property management, corporate property
services, development and project management services. We have a portfolio of
approximately 700 million square feet of property under management worldwide.
Management services produced 30.0% of our total revenue for the nine months
ended September 30, 2000, 30.9% for 1999, 27.3% for 1998 and 21.5% for 1997.
PROPERTY MANAGEMENT SERVICES. Our Property Management Services units
provide on-site management services to real estate investors for office,
industrial, retail and specialty properties, leveraging our market share and
buying power to deliver superior service for clients. Our goal, as a pioneer in
the development of value-creating property management services, is to enhance
our clients' property values through aggressive day-to-day management focused on
maintaining high levels of occupancy and tenant satisfaction, while lowering the
operating costs of such properties. As of September 30, 2000, we provided
on-site Property Management Services for office, retail, mixed-use and
industrial properties totaling approximately 500 million square feet.
Our property management services are typically provided by an on-site
general manager and staff supported through regional supervisory teams as well
as central resources in areas such as training, technical and environmental
services, accounting, marketing and human resources. Property general managers
assume full responsibility for property management activities, client
satisfaction and financial results and are compensated, not by fees or
commissions, but through a combination of base salary and performance bonus that
is directly linked to results produced for clients.
Increasingly, management agreements provide for incentive compensation
relating to operating expense reductions, gross revenue or occupancy objectives
or tenant satisfaction levels. As is customary in the industry, management
contract terms typically range from one to three years, but are cancellable at
any time upon a short notice period, usually 30 to 60 days.
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Our acquisitions of Compass and Galbreath and our recent investment in a new
property information system in the Americas provides us with opportunities to
use our size to offer high quality, low cost services over a wider geographic
area. The marketing efforts of the Property Management Services business are
directed toward pursuing new third-party management assignments, expanding our
relationships with existing clients and capitalizing on new business
opportunities which may arise from our Investment Management initiatives, like
our co-investment strategy. In addition, the JLW merger has provided an
opportunity for us to combine our best practices around the globe to enhance
current client satisfaction and margin objectives as well as to serve new
multinational clients.
CORPORATE PROPERTY SERVICES. We were a pioneer in the corporate property
services business. Our Corporate Property Services units provide comprehensive
portfolio and property management services to corporate and institutional
owner-occupiers of real estate that outsource their real estate management
functions. The properties under management range from corporate headquarters to
industrial complexes. Our target clients typically have large, over one million
square foot, portfolios with significant opportunities to reduce costs and
improve service delivery. Performance measures are generally developed to
quantify progress made toward the goals and objectives that are set mutually
with clients. At September 30, 2000, we had approximately 200 million square
feet under management relating to Corporate Property Services clients.
Our Corporate Property Services units also serve as an important "port of
entry" for our other business units. Depending on client needs, the Corporate
Property Services units, either alone or through our other business units,
provide services such as portfolio planning, property management, leasing,
tenant representation, acquisition, finance, disposition, project management,
development management and land advisory services.
The Corporate Property Services units are compensated on the basis of
negotiated fees, which are typically structured to include a base fee and a
performance bonus. The performance bonus compensation is based on a quantitative
evaluation of progress toward performance measures and regularly scheduled
client satisfaction surveys. Corporate Property Services agreements are
typically three to five years in duration, but are cancellable at any time upon
a short notice period, usually 30 to 60 days.
We believe that the global corporate trend of outsourcing non-core business
functions represents an important long-term business opportunity. We also
believe that our broad-based service capabilities will become an increasingly
valuable competitive advantage in pursuing Corporate Property Services
assignments. We believe that our demonstrated experience in improving our
clients' operating expense levels and client satisfaction also provide us with
an important competitive advantage. In order to efficiently provide all services
required to manage and operate large corporate property portfolios, we partner
with major building services and architecture firms. The Corporate Property
Services units have been actively pursuing, and have had success with obtaining
new business opportunities with universities, health care institutions and
government agencies.
DEVELOPMENT SERVICES. Our Development Services units manage all aspects of
the development, redevelopment and renovation of commercial projects,
principally on a fee basis. We prepare feasibility studies, negotiate contracts,
develop and monitor budgets and coordinate and manage the architects, engineers
and attorneys related to the project. We also undertake entitlement, zoning and
a variety of other development-related responsibilities. Our clients are
generally corporations with significant office space needs. We have extensive
experience in ground-up development in the office, retail, industrial and
special-purpose sectors. Our Development Services units frequently manage
development initiatives for clients of our Corporate Property Services and
Tenant Representation Services units, as well as for clients of our Investment
Management segment which are pursuing development-related investment strategies.
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Our Development Services units generate development and advisory fees, which
are negotiated based upon the cost of the developments or improvements. In
addition, the units generate performance fees based on investment returns
generated for clients. Assignments are typically multi-year in nature.
PROJECT MANAGEMENT SERVICES. Our Project Management Services units provide
a variety of services, including interior build-out, move management and
occupancy planning services, to tenants of leased space, owners in self-occupied
buildings and owners of real estate investments. Our Project Management Services
units frequently manage the relocation and build-out initiatives for clients of
our Property Management Services, Corporate Property Services and Tenant
Representation Services units.
We are one of the largest providers of project management services in the
United States. We intend to grow our Project Management Services business by
expanding into additional markets and by increasing the number of our current
clients to which the business provides services.
The Project Management Services units are typically compensated on the basis
of negotiated fees. Client contracts are typically multi-year in duration and
may govern a number of discrete projects, with individual projects being
completed in less than one year.
GLOBAL SERVICES MANAGEMENT
We created the Global Services Management unit to support our geographical
Owner and Occupier Services segments. The Global Services Management unit is
composed of three management functions: Global Client Services, Global Services
Development and Global Consulting.
Global Client Services is a dedicated firm-wide marketing organization,
which acts as a catalyst in assisting our professionals in all groups in
marketing multiple services of the firm to existing and prospective clients.
Global Services Development identifies and institutes our best practices
throughout our company, making skilled resources available to clients wherever
such expertise may be needed, and supporting the expansion of our business
specialties globally. The Global Consulting team of senior real estate
consultants provides clients with specialized, value-added real estate
consulting services and strategies in seven areas: mergers and acquisitions,
ports and transit, development, public institutions, e-commerce, occupier
portfolio and organizational strategy and work process design.
The Global Services Management unit performs a global support function for
the regional Owner and Occupier Services businesses, and, therefore, we allocate
the revenue and expenses of this unit back to the regions for purposes of
segment reporting.
INVESTMENT MANAGEMENT
Our Investment Management business, which operates under the name "LaSalle
Investment Management," provides real estate investment management services to
institutional investors, corporations and high net-worth individuals. As of
September 30, 2000, we managed approximately $22.7 billion of real estate
assets, making us one of the largest managers of institutional capital invested
in real estate assets and securities. Of this total of $22.7 billion of real
estate assets, $18.2 billion consisted of direct investment in real estate
properties, and $4.5 billion consisted of investment in real estate related
securities. Investment Management revenue as a proportion of our total revenue
was 13.3% for the nine months ended September 30, 2000, 11.2% in 1999, 29.0% in
1998 and 34.5% in 1997. The reduction in Investment Management revenue as a
share of total revenue was principally due to the addition of Owner and Occupier
Services to our business as a result of the Compass acquisition and the JLW
merger, which was composed primarily of Owner and Occupier Services businesses.
LaSalle Investment Management serves its clients through a broad range of
real estate investment products and services in the public and private capital
markets to meet various strategic, risk/return and liquidity requirements. We
have organized our Investment Management business along two functional lines,
private equity and debt investments and public equity and debt investments.
LaSalle Investment
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Management offers clients a range of investment alternatives, including private
direct investments in multiple real estate property types (e.g., office, retail,
industrial, residential, land and parking) and indirect investments, primarily
in publicly traded real estate investment trusts and other real estate equities.
The success of LaSalle Investment Management is built on the foundation of fully
integrated research, innovative investment strategies and a strong client focus.
LaSalle Investment Management's strategy is focused on three fundamentals:
- developing and executing tailored investment strategies to meet a variety
of client objectives;
- providing superior performance for its clients; and
- delivering a high level of service.
The investment and capital origination activities of the Investment
Management business are becoming increasingly non-U.S. based. As of
September 30, 2000, 51.3% of LaSalle Investment Management's assets under
management were invested outside of the United States. We expect our Investment
Management activities outside of the United States, both fund raising and
investing, to continue to increase as a proportion of total capital raised and
invested. We also see a growing trend of cross-border capital movement. In 1999,
LaSalle Investment Management's application for Approved Fund Manager status was
approved by the Monetary Authority of Singapore. This approval marked the first
major step in our plan to build an investment management operation to service
clients in the Asia Pacific region.
Investment Management activities generate significant additional business
for other parts of our operations, particularly in the areas of Agency Leasing,
Property Management, Development Services and Capital Markets Services.
We maintain an extensive real estate research department, which monitors
real estate and capital market conditions around the world to enhance investment
decisions and identify future opportunities. In addition to drawing on public
sources for information, our research department utilizes the extensive local
presence of our professionals throughout the world to gain proprietary insight
into local market conditions.
DIRECT INVESTMENTS IN REAL ESTATE PROPERTIES
LaSalle Investment Management oversees the acquisition, management, leasing,
financing and divestiture of real estate investments across a broad range of
real estate property types on behalf of its investment management clients.
LaSalle Investment Management introduced its first institutional investment fund
in 1979 and currently has a series of commingled investment funds, including
three funds which invest in properties in the United States and two commingled
funds that are fully invested in assets located in continental Europe. LaSalle
Investment Management also has single client "separate account" relationships
with investors for whom LaSalle Investment Management manages private real
estate investments. As of September 30, 2000, we had approximately
$18.2 billion in assets under management in these funds and separate account
clients.
To take advantage of the trend toward globalization of real estate capital
sources, LaSalle Investment Management strengthened and extended its
international investment activities with the acquisition, in October 1996, of
CIN Property Management. This acquisition made LaSalle Investment Management one
of the largest managers of pension fund real estate investments in the United
Kingdom, and provided the basis for it to expand its investment activities and
capital raising in the United Kingdom and continental Europe. LaSalle Investment
Management currently has approximately $11.7 billion in assets under management
in Europe. LaSalle Investment Management is leveraging its organizational
strength and access to global capital, to take advantage of the accelerating
interest in international investment, to expand investment activity to new
countries within Europe and Asia Pacific
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and to strengthen its position as a leading investment manager for real estate
capital in the United States.
We increased our investment management involvement in the hotel industry
with the completion of the initial public offering of LaSalle Hotel Properties,
a real estate investment trust. LaSalle Hotel Properties was formed to own
properties and to continue and expand our hotel investment management activities
by investing principally in upscale luxury and full-service hotels located
primarily in major business and urban, resort and convention markets. We provide
advisory, acquisition and administrative services to LaSalle Hotel Properties
for which we receive a base advisory fee calculated as a percentage of net
operating income, as well as performance fees based on growth in funds from
operations on a per share basis.
In 1999, LaSalle Investment Management launched and funded two new
investment products: the Income & Growth II Fund and the Euro5 Fund. The
Income & Growth II Fund is a private equity commingled fund, which invests in
properties within the United States. This fund had its first and second closings
during 1999 and received commitments which represent more than $220.0 million in
buying power.
The Euro5 Fund also had its first closing in 1999. This diversified
value-added investment vehicle focuses on office, business park, retail and
industrial properties in areas with above-average growth in France, Italy,
Portugal, Spain and Germany.
Some investors continue to favor investment managers that co-invest their
own funds in investment vehicles they are forming for outside investors in order
to more closely align the interests of the investment manager with those of
prospective investors. We believe that our ability to co-invest our funds
alongside the investments of our clients' funds will continue to be important in
retaining and expanding our competitive position. We also believe that our
strategy of co-investing our funds with our clients will greatly strengthen our
ability to raise capital for new investment funds. By creating new investment
funds and thereby increasing the assets we manage, we also gain the opportunity
to provide additional services related to the acquisition, financing, property
management, leasing and disposition of these assets.
Our Investment Management operations are conducted with teams of
professionals dedicated to achieving client objectives. All investment decisions
for private market investments must be approved by LaSalle Investment
Management's five-member investment committee. The investment committee approval
process is utilized for both LaSalle Investment Management's investment funds
and for all of its separate account clients.
LaSalle Investment Management is generally compensated for investment
management services for private equity and debt investments based on initial
capital invested, with additional fees tied to investment performance above
benchmark levels. The terms of LaSalle Investment Management's contracts vary by
the form of investment vehicle involved and the type of service provided.
LaSalle Investment Management's investment funds have various lifespans,
typically ranging between three and seven years. Separate account advisory
agreements generally have three year terms with "at will" termination
provisions.
INVESTMENTS IN PUBLIC EQUITY AND DEBT SECURITIES
LaSalle Investment Management offers its clients the ability to invest in
separate and commingled accounts focused on public real estate equity and debt
securities. LaSalle Investment Management principally invests its clients'
capital in publicly traded securities of real estate investment trusts and
property company equities but is also active in private placement investments in
publicly traded real estate companies and selected investments in private real
estate companies seeking capital to ultimately gain access to the public
markets. As of September 30, 2000, LaSalle Investment Management had
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approximately $4.5 billion of assets under management in these types of
investments, of which approximately $0.5 billion was invested in equities
outside of the United States. LaSalle Investment Management is typically
compensated by its securities investment clients on the basis of the market
value of assets under management with increasing use of incentive fees tied to
performance of investments above benchmark levels.
HOTEL SERVICES
Hotel Services is a new business for us as a result of the JLW merger. The
segment specializes in providing global real estate services to investors,
financiers and operators of hotel, conference and resort properties. These
services include sales, acquisitions, strategic consulting, valuation and
appraisal, operator selection, debt and equity sourcing, asset management and
research. Principal clients of the segment include government agencies,
institutional investors, corporations, hotel groups and private investment
companies and individuals. The segment has approximately 100 hotel
professionals, based primarily in London, Frankfurt, New York, Los Angeles,
Sydney, Brisbane, Auckland, Jakarta and Singapore.
The Asian hotel market has been negatively impacted by poor economic
conditions over the last two years, but was showing strong signs of recovery in
the latter half of 1999, due to a renewed interest in tourism growth and a
return to hotel profitability. The Australian hotel market continues to show
strong activity, due to the recent exodus of Japanese investors from this
market. The United States and European hotel markets continue to benefit from
strong global economic growth. In 1999, the Hotel Services segment completed
over 600 corporate advisory transactions on properties with a total value of
approximately $17.0 billion and approximately 100 investment sales transactions
involving properties with a total value of approximately $900.0 million. One of
these investment sales transactions was the sale of the Seoul Hilton for
$230 million.
COMPETITION
We compete across a variety of business disciplines within the commercial
real estate industry, including investment management, tenant representation,
corporate property services, construction and development management, property
management, agency leasing, valuation and capital markets. Each of the business
disciplines in which we compete is highly competitive on an international,
national, regional or local level. Although we are one of the largest real
estate services firms in the world, our relative competitive position varies
significantly across product and service categories and geographic areas.
Depending on the product or service, we face competition from other real estate
service providers, institutional lenders, insurance companies, investment
banking firms, investment managers and accounting firms. Many of our competitors
are local or regional firms, which are substantially smaller than us. However,
they may be substantially larger on a local or regional basis. We are also
subject to competition from other large national and multinational firms.
The advent of the Internet has introduced new ways of providing real estate
services, as well as new competitors to the industry. We cannot currently
predict who these competitors will be nor can we predict what our response to
them will be. This response could require significant capital resources, changes
in our organization or technological changes.
In all of our businesses, we compete on the basis of
- the skills of our professionals;
- the quality and cost of the services we provide;
- the ability to meet the needs of our clients;
- the breadth and depth of our product and service offerings;
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- the geographic scope of our service delivery capabilities; and
- the quality of our infrastructure, including our technology.
Although competition in our industry is intense, we believe we compete
favorably by these standards.
Because our business involves client representation, conflicts of interest
may arise from time to time when we simultaneously represent clients with
competing interests. For example, we occasionally serve clients in a tenant
representation capacity who wish to lease property from other clients of ours
for whom we provide agency leasing services. In situations such as these where a
potential conflict of interest exists, we typically seek our clients' consent to
our continued representation. Although conflicts of interests have on occasion
resulted in our having to decline an engagement, these conflicts have not
resulted in a significant loss of clients to our competitors and have not had a
material effect on our business or results of operations.
EMPLOYEES
We employ approximately 5,000 professional staff members, 2,000 support
personnel and 2,800 janitorial, engineering and property maintenance workers who
provide services through our LPI Service Corporation subsidiary for some of the
properties we manage in the United States. Approximately 4,700 of our employees
are based in countries other than the United States. With the exception of
approximately 550 of our LPI Service Corporation employees, none of our
employees are members of any labor union. Satisfactory relations have generally
prevailed between us and our employees.
PROPERTIES
Our principal holding company headquarters is located at 200 East Randolph
Drive, Chicago, Illinois. We currently occupy over 100,000 square feet of office
space at our principal holding company's Chicago headquarters pursuant to a
lease that expires in February 2006. Our principal operational headquarters is
located at 22 Hanover Square, London, England. We lease approximately 83,000
square feet at our London operational headquarters under a lease expiring in
June 2004. Our regional headquarters are located in Chicago, London and Hong
Kong. We have approximately 100 local offices worldwide located in 94 major
cities and metropolitan areas as follows: 31 in the United States, 37 in 18
countries in Europe and 26 in 9 countries in Asia Pacific. Our offices are each
leased pursuant to agreements with terms ranging from month-to-month to ten
years. In addition, we have property and other offices located throughout the
world. On-site property management offices are generally located within
properties under management and are provided without cost.
LEGAL PROCEEDINGS
We are a defendant in various litigation matters arising in the ordinary
course of business, some of which involve claims for damages that are
substantial in amount. Many of these matters are covered by insurance. In our
opinion, the ultimate resolution of such litigation is not expected to have a
material adverse effect on our financial position, results of operations or
liquidity.
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DESCRIPTION OF OTHER INDEBTEDNESS
MULTICURRENCY CREDIT FACILITY
The issuer has a multicurrency credit facility with a group of commercial
banks under a Second Amended and Restated Multicurrency Credit Agreement dated
as of July 26, 2000. Prior to the July 26, 2000 amendment and restatement of the
multicurrency credit agreement, Jones Lang LaSalle Incorporated was the borrower
under the multicurrency credit facility. On July 26, 2000, in connection with
our establishment of the issuer as a vehicle for financing our business
operations, the issuer became the borrower, and assumed the remaining
outstanding indebtedness, under the multicurrency credit facility. The
multicurrency credit facility consists of the following:
- a $175.0 million term facility, consisting of loans denominated in U.S.
dollars, all of which we permanently repaid in August 2000 and therefore
none of which was outstanding or available for re-borrowing as of
September 30, 2000; and
- a $250.0 million revolving facility, a maximum of $75.0 million of which
may consist of loans denominated in currencies other than the U.S. dollar,
of which $146.5 million was outstanding as of September 30, 2000 at a
weighted average interest rate of 8.2% per annum during the nine months
ended September 30, 2000. The overall revolving facility commitment
includes provisions for
-- loans that may be requested on an expedited basis, called swingline
loans, in a maximum aggregate amount of $5.0 million, of which none
was outstanding as of September 30, 2000; and
-- letters of credit in an aggregate undrawn face amount of up to
$30.0 million, of which $2.1 million had been issued and were
outstanding as of September 30, 2000.
We used the net proceeds from the sale of the old notes to repay a portion
of the indebtedness under the term portion of the multicurrency credit facility
in July 2000. We completed the permanent repayment of all amounts outstanding
under the term portion of the multicurrency credit facility on August 29, 2000,
using additional borrowings under the revolving portion of the multicurrency
credit facility. No further borrowings can be made under the term portion of the
multicurrency credit facility.
The following is a description of the material terms of the multicurrency
credit agreement. It does not restate the multicurrency credit agreement in its
entirety. Copies of the multicurrency credit agreement may be obtained by
following the instructions under "Where You Can Find More Information" and
"Information Incorporated by Reference" at page 121.
USE OF PROCEEDS. The multicurrency credit agreement provides that the
revolving facility will be available for working capital, repayment of other
indebtedness and other general corporate purposes.
INTEREST. For purposes of calculating interest, loans under the
multicurrency credit agreement are designated as either Domestic Rate Loans or
Eurocurrency Loans as follows:
- loans denominated in U.S. dollars are designated, at our election, as
either Domestic Rate Loans or Eurocurrency Loans; and
- loans denominated in currencies other than the U.S. dollar are designated
Eurocurrency Loans.
Loans under the multicurrency credit facility bear interest at a rate equal
to
- a base rate, PLUS
- a margin that varies according to the ratio of (i) our debt to (ii) our
consolidated net income before interest, taxes, depreciation and
amortization, reasonable non-recurring transition costs incurred in
connection with the JLW merger and the acquisition of Compass and non-cash
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<PAGE>
contributions or accruals with respect to deferred profit sharing or
compensation (as used in this section, "Adjusted EBITDA").
The base rate for Domestic Rate Loans is the greater of
- the applicable prime commercial rate; and
- the applicable Federal Funds rate plus 50 basis points.
The base rate for Eurocurrency Loans is the British Bankers' Association
Interest Settlement Rate in the relevant currency, as displayed by the Telerate
Service, adjusted for regulatory reserve requirements.
The following table shows the applicable margins that apply to revolving
loans under the multicurrency credit agreement, depending on our
debt-to-Adjusted EBITDA ratio:
<TABLE>
<CAPTION>
MARGIN
----------------------------
RATIO OF DEBT TO EUROCURRENCY DOMESTIC RATE
ADJUSTED EBITDA LOANS LOANS
---------------- ------------ -------------
(BASIS POINTS)
<S> <C> <C>
less than 2.0 to 1.0............................... 100 0
less than 2.5 to 1.0............................... 125 0
less than 3.0 to 1.0............................... 150 0
less than 3.5 to 1.0............................... 175 0
3.5 to 1.0 or greater 225 50
</TABLE>
We used interest rate swaps to convert a portion of the floating rate
indebtedness under the term portion of the multicurrency credit facility to a
fixed rate. For the year ended December 31, 1999, the effective interest rate
under the multicurrency credit facility was approximately 6.48%, taking into
account the effect of interest rate swap agreements related to the term portion.
For the nine months ended September 30, 2000, the effective interest rate under
the multicurrency credit facility, including the term portion through
August 2000, was 8.3%, taking into account the effect of interest rate swap
agreements related to the term portion.
FEES. We are required to pay a quarterly commitment fee to the lenders
under the multicurrency credit facility. The commitment fee is computed as a
percentage of the average daily unused commitments. The applicable percentage
ranges from .20% per annum to .45% per annum, depending on the ratio of our debt
to Adjusted EBITDA. We are also required to pay an issuance fee of .10% of the
face amount of any letter of credit issued under the multicurrency credit
facility.
REPAYMENT. The revolving portion of the multicurrency credit facility
matures on October 15, 2002. We are required to make a mandatory prepayment of
revolving loans in the amount of the proceeds of the sale of any investment we
are permitted to make in accordance with the covenants under the multicurrency
credit facility. We must also prepay revolving loans on the last day of each
calendar quarter if and to the extent the aggregate amount of the revolving
loans, swingline loans and letter of credit commitments exceeds the revolving
credit commitments then in effect.
SECURITY AND GUARANTEES. The obligations of the issuer under the
multicurrency credit facility have been guaranteed by Jones Lang LaSalle
Incorporated and the subsidiary guarantors.
COVENANTS. The multicurrency credit agreement contains customary financial
and negative covenants. For purposes of the covenants, the multicurrency credit
agreement regards all of Jones Lang LaSalle Incorporated's subsidiaries as
restricted subsidiaries, except for specified subsidiaries that are designated
as unrestricted subsidiaries. The significance of restricted status under the
multicurrency credit agreement is that the financial covenants are calculated
only with reference to, and the negative covenants generally apply only to,
Jones Lang LaSalle Incorporated and its restricted subsidiaries, and
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<PAGE>
not to unrestricted subsidiaries. We may designate as an unrestricted subsidiary
any subsidiary of Jones Lang LaSalle Incorporated, other than the issuer or a
subsidiary guarantor, established for the sole purpose of investing in real
estate and real estate-related assets, including securities. No subsidiary may
be an unrestricted subsidiary for more than 180 days.
The financial covenants under the multicurrency credit agreement include
requirements relating to our consolidated net worth, ratio of debt to Adjusted
EBITDA, ratio of senior debt to Adjusted EBITDA, interest coverage ratio and
liquidity ratio, as follows:
- We must maintain a minimum consolidated net worth for the period
December 31, 1999 through December 30, 2000 of $270.0 million. In
subsequent annual periods, the minimum is increased by an amount equal to
50% of our positive net income earned in the most recently completed
fiscal year. The required minimum is also increased by an amount equal to
the proceeds of any issuance by us of capital securities.
- The covenant relating to our debt-to-Adjusted EBITDA ratio provides as
follows with respect to the last day of each rolling four calendar quarter
period within the indicated period:
<TABLE>
<CAPTION>
DEBT TO ADJUSTED
EBITDA
FROM AND TO AND RATIO SHALL NOT BE
INCLUDING INCLUDING GREATER THAN
--------------------- -------------- ------------------
<S> <C> <C>
July 1, 2000 March 31, 2001 3.50 to 1.00
April 1, 2001 March 31, 2002 3.25 to 1.00
April 1, 2002 Thereafter 3.00 to 1.00
</TABLE>
- The covenant relating to our senior debt-to-Adjusted EBITDA ratio provides
as follows with respect to the last day of each rolling four calendar
quarter period within the indicated period:
<TABLE>
<CAPTION>
DEBT TO ADJUSTED
EBITDA
FROM AND TO AND RATIO SHALL NOT BE
INCLUDING INCLUDING GREATER THAN
--------------------- -------------- ------------------
<S> <C> <C>
July 1, 2000 March 31, 2001 3.50 to 1.00
April 1, 2001 March 31, 2002 3.00 to 1.00
April 1, 2002 Thereafter 2.75 to 1.00
</TABLE>
- Our interest coverage ratio as of the last day of each rolling four
quarter period may not be less than 3.00 to 1.00. Our interest coverage
ratio is the ratio, computed for the most recent four calendar quarters,
of
-- our consolidated net income before interest, taxes, reasonable
non-recurring transition costs incurred in connection with the JLW
merger and the acquisition of Compass and non-cash contributions or
accruals with respect to deferred profit sharing or compensation
to
-- our interest charges, excluding interest charges of unrestricted
subsidiaries.
- The covenant relating to our liquidity ratio provides as follows with
respect to the last day of each rolling four calendar quarter period
within the indicated period:
<TABLE>
<CAPTION>
LIQUIDITY RATIO
FROM AND TO AND SHALL NOT BE LESS
INCLUDING INCLUDING THAN
--------------------- ----------------- -----------------
<S> <C> <C>
April 1, 2000 December 31, 2000 1.00 to 1.00
January 1, 2001 December 31, 2001 1.10 to 1.00
January 1, 2002 Thereafter 1.15 to 1.00
</TABLE>
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<PAGE>
Our liquidity ratio is the ratio, computed for the most recent four
calendar quarters, of
-- our Adjusted EBITDA
to
-- the sum of our interest expense, capital expenditures, cash taxes,
cash component of the purchase price of any acquisition, portion of
indebtedness due and payable, aggregate amount of cash dividends and
other cash distributions and the aggregate principal amount of all
investments not constituting acquisitions, reduced by the amount of
proceeds of the disposition of all or any part of any investment not
constituting an acquisition.
The negative covenants in the multicurrency credit agreement include the
following:
- We may not engage in any line of business that would substantially change
the general nature of our business as conducted on July 26, 2000.
- Jones Lang LaSalle Incorporated and its restricted subsidiaries may not,
subject to limited exceptions, incur liens on their property, other than
-- liens on property securing the purchase price or the refinancing of
the purchase price of such property in an aggregate principal amount
not to exceed $50 million; and
-- other liens (referred to in this section as "Other Permitted Liens")
securing obligations in an aggregate principal amount that, combined
with permitted capitalized lease obligations, does not exceed
$20 million.
- Jones Lang LaSalle Incorporated and its restricted subsidiaries may not
enter into sale-leaseback transactions except to the extent that the
aggregate principal amount of capitalized lease obligations does not
exceed $5 million and the combined amount of capitalized lease obligations
and Other Permitted Liens does not exceed $20 million.
- Jones Lang LaSalle Incorporated and its restricted subsidiaries may not
enter into a consolidation or merger with another party or lease or
dispose of all or a substantial part of their consolidated assets, subject
to limited exceptions relating to intercompany transactions in which Jones
Lang LaSalle Incorporated is the surviving corporation, sales of worn out
or obsolete assets and sales of real estate investments.
- Jones Lang LaSalle Incorporated and its restricted subsidiaries may not
dispose of shares of stock of any subsidiary, except subsidiaries through
which direct or indirect investments in real estate or real estate related
assets, including securities, are made, except to Jones Lang LaSalle
Incorporated or any restricted subsidiary of which Jones Lang LaSalle
Incorporated directly or indirectly holds at least the same percentage
ownership interest.
- We may not make new investments in or loans to, or assume liability for or
support any obligation of, any other party, except that
-- we may invest in U.S. government obligations and, subject to
limitations related to the credit quality of the obligor, in
commercial paper, demand deposit accounts, certificates of deposit,
time deposits, and money market funds that invest solely in the
foregoing;
-- we may extend up to $8 million in credit relating to employee
relocation expenses in the ordinary course of business and endorse
negotiable instruments for collection in the ordinary course of
business;
-- we may make acquisitions and investments in related lines of business
and investments in real estate and real estate related assets,
including notes and other securities, provided that
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<PAGE>
- no default or event of default exists under the multicurrency
credit agreement;
- in the case of an acquisition, the terms of the acquisition have
been approved by the governing body or the equity holders of the
entity to be acquired;
- the portion of the purchase price for acquisitions paid in cash,
including assumed liabilities, may not exceed $20 million in any
calendar year;
- until our liquidity ratio has exceeded 1.15 to 1.00 for two
consecutive calendar quarters, the portion of the purchase price
for all acquisitions paid for with equity securities of Jones Lang
LaSalle Incorporated or any of its subsidiaries in any calendar
year may not exceed $20 million;
- in the case of an investment not constituting an acquisition, the
amount of that investment, plus the sum of all permitted
investments other than acquisitions since October 27, 1999 less the
proceeds from disposition of any part of those investments, may not
exceed $150 million in aggregate purchase price; and
- we must obtain the prior written consent of banks holding more than
51% of the credit exposure under the multicurrency credit facility
for any investment in a single party that exceeds $20 million.
- Jones Lang LaSalle Incorporated may declare or pay dividends or
make a distribution, including by redemption or purchase, only if
no default or event of default under the multicurrency credit
agreement exists or would result. This limitation does not apply
to:
-- dividends and distributions payable solely in Jones Lang LaSalle
Incorporated's capital stock;
-- stock repurchases in connection with out employee benefits plans; and
-- stock repurchases in connection with the satisfaction of taxes
relating to shares allocated and distributed under the employee stock
ownership trust established in connection with the JLW merger.
- Jones Lang LaSalle Incorporated and its restricted subsidiaries may not
have outstanding indebtedness other than:
-- under the multicurrency credit agreement;
-- indebtedness to Jones Lang LaSalle Incorporated or any of its
subsidiaries;
-- capitalized lease obligations in an aggregate principal amount not
more than $20 million;
-- indebtedness that is subordinated in right of payment to obligations
under the multicurrency credit agreement;
-- types of indebtedness, such as guarantees, that are limited by the
covenant restricting investments;
-- guarantees by Jones Lang LaSalle Incorporated and its subsidiaries of
obligations of Jones Lang LaSalle Incorporated and its subsidiaries,
which obligations are not prohibited under the multicurrency credit
agreement;
-- obligations of the issuer and the guarantors under the indenture in
an aggregate principal amount not more than [EURO]165 million; and
-- other indebtedness of not more than $50 million in aggregate
principal amount outstanding.
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<PAGE>
The multicurrency credit agreement requires that we deliver annual and
quarterly certificates to the lending banks certifying that no default or event
of default existed during or at the end of the accounting period covered and
documenting our compliance with the financial covenants and with the negative
covenant limiting our investments. These compliance certificates are due within
120 days after the end of each fiscal year and within 60 days after the end of
each of our first three quarterly fiscal periods.
EVENTS OF DEFAULT. The multicurrency credit facility provides for
acceleration upon the occurrence of customary events of default, including a
default under the indenture.
OTHER CREDIT FACILITIES
We also have various overdraft facilities and short term credit facilities
in Europe and Asia Pacific. The aggregate amount available under these
facilities is approximately $34.9 million, of which $7.2 million was outstanding
as of September 30, 2000. Borrowings under these facilities are currently
limited to $50.0 million by the terms of the multicurrency credit facility.
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<PAGE>
CORPORATE STRUCTURE -- ISSUER AND GUARANTORS
The following chart shows the relationship among the issuer, Jones Lang
LaSalle Incorporated, the subsidiary guarantors and the other principal
operating subsidiaries of Jones Lang LaSalle Incorporated as of September 30,
2000:
[CHART DEPICTING DIRECT AND INDIRECT OWNERSHIP BY JONES LANG LASALLE
INCORPORATED OF THE ISSUER, THE SUBSIDIARY GUARANTORS AND THE OTHER
PRINCIPAL OPERATING SUBSIDIARIES OF JONES LANG LASALLE INCORPORATED]
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<PAGE>
DESCRIPTION OF THE NOTES
The old notes were, and the new notes will be, issued under an indenture,
dated as of July 26, 2000, among the issuer, Jones Lang LaSalle Incorporated
("JLL"), the parent of the issuer and a guarantor of the notes, the other
guarantors of the notes named under " -- Guarantors and Guarantees of the Notes"
at page 67 and The Bank of New York, as trustee. The terms of the old notes and
the new notes to be issued in the exchange offer include those stated in the
indenture and those made a part of the indenture by reference to the Trust
Indenture Act.
The form and terms of the new notes will be identical in all material
respects to the form and terms of the old notes, except that the new notes:
- will have been registered under the Securities Act;
- will not bear restrictive legends restricting their transfer under the
Securities Act;
- will not be entitled to the registration rights that apply to the old
notes; and
- will not contain provisions relating to an increase in the interest rate
borne by the old notes under circumstances related to the timing of the
exchange offer.
Except as otherwise indicated, the following summary relates to both the old
notes and the new notes. When we refer to the term "note" or "notes," we are
referring to both the old notes and the new notes to be issued in the exchange
offer. When we refer to "holders" of the notes, we are referring to those
persons who are the registered holders of the notes on the books of the
registrar appointed under the indenture.
The following description is a summary of the material provisions of the
indenture. It does not restate the indenture in its entirety. We urge you to
read the indenture, because it, and not this description, defines your rights as
a holder of the notes. Copies of the indenture may be obtained by following the
instructions under "Where You Can Find More Information" at page 121 and
"Information Incorporated by Reference" at page 121.
For definitions of certain capitalized terms used in the following summary,
see " -- Certain Definitions" at page 70.
GENERAL
The notes are unsecured unsubordinated obligations of the issuer, initially
limited to [EURO]165.0 million aggregate principal amount. The notes mature on
June 15, 2007. Each note bears interest at 9% per annum from July 26, 2000, or
from the most recent date to which interest has been paid or provided for.
Interest on the notes is payable semiannually to holders of record at the close
of business on the June 1 or December 1 immediately preceding the interest
payment date on June 15 and December 15 of each year. The first interest payment
date for the notes will be December 15, 2000. Principal and interest on the
notes will be paid in euros, except that in the case of notes held through DTC,
payments will be in U.S. dollars. See " -- Book-Entry; Delivery and Form for New
Notes -- Currency of Payment for the New Global Notes" at page 108.
The paying agents for the notes will initially be:
- in The City of New York, The Bank of New York located at 101 Barclay
Street, New York, New York 10286;
- in London, The Bank of New York, London Branch, located at One Canada
Square, 48th Floor, London E14 5AL, United Kingdom; and
- in Luxembourg, as long as the notes are listed on the Luxembourg Stock
Exchange, Kredietbank S.A. Luxembourgeoise, located at 43, Boulevard
Royal, L-2955 Luxembourg.
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<PAGE>
Principal of, premium, if any, and interest on the notes is payable at the
offices of the paying agents for the notes, except that payment of interest may
be made by check mailed to the holders of notes at their addresses as they
appear in the security register.
The notes may be presented for registration of transfer or for exchange:
- at the office or agency in The City of New York maintained for such
purposes by the issuer, which will initially be the office of The Bank of
New York set forth above; and
- as long as the notes are listed on the Luxembourg Stock Exchange, the
office or agency of the Luxembourg paying and transfer agent, which will
initially be the office of Kredietbank S.A. Luxembourgeoise located at the
address set forth above.
The notes will be issued only in fully registered form, without coupons, in
denominations of [EURO]1,000 of principal amount and any integral multiple
thereof. See " -- Book-Entry; Delivery and Form for New Notes" at page 107. No
service charge will be made for any registration of transfer or exchange of
notes. However, the issuer may require payment of a sum sufficient to cover any
transfer tax or other similar governmental charge payable in connection with any
registration of transfer or exchange of the notes.
Subject to the covenants described below under " -- Covenants" at page 86
and applicable law, the issuer may issue additional notes under the indenture.
The new notes offered hereby and any additional notes subsequently issued,
together with any old notes that remain outstanding after the exchange offer,
would be treated as a single class for all purposes under the indenture.
Application has been made to list the new notes on the Luxembourg Stock
Exchange. The old notes were accepted for listing in accordance with the rules
of the Luxembourg Stock Exchange effective July 26, 2000.
OPTIONAL REDEMPTION
The notes will be redeemable, at the issuer's option, in whole or in part,
at any time or from time to time, on or after June 15, 2004 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each holder's last address as it appears in the security
register. The notes will be redeemable at the following redemption prices, which
are expressed in percentages of principal amount, plus accrued and unpaid
interest, if any, to the redemption date, if redeemed during the 12-month period
commencing June 15 of the years set forth below:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
2004........................................................ 104.500%
2005........................................................ 102.250%
2006 and thereafter......................................... 100.000%
</TABLE>
In addition, at any time or from time to time, prior to June 15, 2003, the
issuer may redeem up to 35% of the principal amount of the notes, including
additional notes, if any, with the Net Cash Proceeds of one or more sales of
Capital Stock, other than Disqualified Stock, of JLL to a person other than JLL
or any of its Subsidiaries. Notes redeemed with Net Cash Proceeds may be
redeemed at a redemption price, which is expressed as a percentage of principal
amount, of 109.000%, plus accrued and unpaid interest, if any, to the redemption
date; PROVIDED that:
- at least 65% of the aggregate principal amount of notes, including
additional notes, if any, originally issued remains outstanding after each
such redemption; and
- notice of any such redemption is mailed within 90 days of each such sale
of Capital Stock.
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<PAGE>
In the event that:
- as a result of any change in, or amendments to, any laws or treaties, or
any regulations or rulings promulgated under any laws or treaties, or any
change in official position regarding the application of such laws,
treaties, regulations or rulings, including a holding, judgment or order
by a court of competent jurisdiction, which change, amendment, application
or interpretation becomes effective after July 26, 2000, the issuer has
become or would become obligated to pay any Additional Amounts as defined
under " -- Payment of Additional Amounts" at page 103; and
- the issuer cannot reasonably arrange, without other material adverse
consequences to the issuer or JLL, for another obligor to make such
payment so as to avoid the requirement to pay such Additional Amounts,
then the issuer may redeem all, but not less than all, the notes at any time at
100% of the principal amount thereof, plus accrued and unpaid interest, if any,
to the redemption date, subject to the rights of holders of record on the
relevant record date that is on or prior to the redemption date to receive
interest due on the relevant interest payment date.
Finally, the issuer may redeem the notes, in whole or from time to time in
part, upon not less than 30 nor more than 60 days' prior notice, on any date
prior to their maturity at a redemption price equal to the sum of:
(1) 100% of the principal amount thereof; PLUS
(2) a premium equal to the greater of:
(A) 1.0% of the principal amount of the notes; and
(B) the excess of:
(I) the present value at such redemption date of the redemption
price of such note at June 15, 2004, plus all required interest
payments that would otherwise be due to be paid on the note during
the period between the redemption date and June 15, 2004, excluding
accrued but unpaid interest, computed using a discount rate equal to
the Bund Rate at such redemption date plus 75 basis points, over
(II) the principal amount of the note, or portion thereof, being
redeemed; PLUS
(3) any accrued and unpaid interest, to the date of redemption, subject to
the rights of holders of record on the relevant record date that is on or
prior to the redemption date to receive interest due on the relevant
interest payment date.
The premium referred to in clause (2) above will be calculated by an
independent investment banking institution of national standing appointed by the
issuer; PROVIDED that if the issuer fails to make the appointment at least 45
business days prior to the date of redemption, or if the institution so
appointed is unwilling or unable to make the calculation, the calculation will
be made by Morgan Stanley & Co. Incorporated or, if Morgan Stanley & Co.
Incorporated is unwilling or unable to make the calculation, by an independent
investment banking institution of national standing appointed by the trustee.
Whenever notes are subject to redemption at the option of the issuer under
any of the circumstances described above, holders of record on a regular record
date that is on or prior to the redemption date have the right to receive
interest otherwise due on the relevant interest payment date.
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<PAGE>
In the case of any partial redemption, selection of the notes for redemption
will be made by the trustee:
- in compliance with the requirements of the principal national securities
exchange, if any, on which the notes are listed; or
- if the notes are not listed on a national securities exchange, by lot or
by such other method as the trustee in its sole discretion shall deem to
be fair and appropriate;
PROVIDED that no note of [EURO]1,000 in principal amount or less shall be
redeemed in part.
If any note is to be redeemed in part only, the notice of redemption
relating to such note shall state the portion of the principal amount thereof to
be redeemed. A new note in principal amount equal to the unredeemed portion
thereof will be issued in the name of the holder thereof upon cancellation of
the original note.
Any notice provided in connection with any of the optional redemption
provisions described above will be made in accordance with the terms of the
indenture and the procedures described under " -- Notices" on page 98. In
addition, for so long as the notes are listed on the Luxembourg Stock Exchange,
the issuer will notify the Luxembourg Stock Exchange of any changes in the
outstanding principal amount of the notes as a result of any optional
redemption.
GUARANTORS AND GUARANTEES OF THE NOTES
The payment and performance in full when due of the issuer's obligations
under the indenture and the notes will be fully and unconditionally Guaranteed
by:
- JLL;
- Jones Lang LaSalle Americas, Inc., a Maryland corporation;
- LaSalle Investment Management, Inc., a Maryland corporation;
- Jones Lang LaSalle International, Inc., a Delaware corporation;
- Jones Lang LaSalle Co-Investment, Inc., a Maryland corporation;
- LaSalle Hotel Advisors, Inc., a Maryland corporation; and
- Jones Lang LaSalle Limited, a company organized under the laws of England
and Wales.
The guarantees of the notes are joint and several, unsecured and unsubordinated
obligations of the guarantors.
The notes will also be guaranteed by any Restricted Subsidiary required to
Guarantee the notes pursuant to the covenant described under " -- Limitation on
Issuances of Guarantees by Restricted Subsidiaries" at page 94. If any
Subsidiary of Jones Lang LaSalle Incorporated becomes a guarantor of the notes,
notice will be published as described under " -- Notices" at page 98.
The obligations of each guarantor of the notes will be limited to the
maximum amount which, after giving effect to all of its other contingent and
fixed liabilities and after giving effect to any collections from or payments
made by or on behalf of the issuer in respect of the obligations of the issuer
under the indenture, will result in the obligations of such guarantor under its
guarantee of the notes not constituting a fraudulent conveyance or fraudulent
transfer under applicable law.
SINKING FUND
There will be no sinking fund payments for the notes.
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<PAGE>
REGISTRATION RIGHTS
For the benefit of the holders of the old notes, the issuer and the
guarantors of the notes entered into a registration rights agreement, dated
July 19, 2000, with Morgan Stanley & Co. International Limited, Bank of America
International Limited, BMO Nesbitt Burns Corp. and Chase Manhattan International
Limited, the placement agents for the offering of the old notes. The
registration rights agreement provides that the issuer and the guarantors of the
notes will use their best efforts, at their cost, to file and cause to become
effective a registration statement with respect to a registered offer to
exchange the old notes for an issue of unsubordinated notes of the issuer on
terms specified in the registration rights agreement. The exchange offer to
which this prospectus relates is intended to satisfy the requirements for the
registered exchange offer under the registration rights agreement.
In the event that applicable interpretations of the staff of the SEC do not
permit the issuer and the guarantors of the notes to effect the registered
exchange offer, or under certain other circumstances, the issuer and the
guarantors of the notes shall, at their cost, use their best efforts to cause to
become effective a shelf registration statement with respect to resales of the
old notes and to keep the shelf registration statement effective until the
expiration of the time period referred to in Rule 144(k) under the Securities
Act after July 26, 2000, or such shorter period that will terminate when all of
the old notes covered by the shelf registration statement have been sold
pursuant to the shelf registration statement. The issuer shall, in the event of
a shelf registration, provide to each holder of old notes copies of the related
prospectus, notify each holder when the shelf registration statement for the old
notes has become effective and take certain other actions required to permit
resales of the old notes. A holder that sells its old notes pursuant to the
shelf registration statement generally will be required to be named as a selling
security holder in the related prospectus and to deliver a prospectus to
purchasers, will be subject to civil liability provisions under the Securities
Act in connection with those sales and will be bound by the applicable
provisions of the registration rights agreement, including indemnification
obligations.
In the event that the registered exchange offer is not consummated and a
shelf registration statement is not declared effective on or prior to the date
that is six months after July 26, 2000, the annual interest rate borne by the
old notes will be increased by 0.5% per annum until the registered exchange
offer is consummated or the shelf registration statement is declared effective.
Notice of any increase in the interest rate on the old notes will be published
as described under " -- Notices" at page 98.
The foregoing description is a summary of selected provisions of the
registration rights agreement. It does not restate the registration rights
agreement in its entirety. We urge you to read the registration rights
agreement, because it, and not this description, defines your rights as a holder
of old notes under the registration rights agreement.
RANKING
The notes rank equally with all other senior Indebtedness of the issuer.
The Indebtedness evidenced by each guarantee of the notes ranks equally with
all other senior Indebtedness of the applicable guarantor of the notes. Each
guarantor of the notes also Guarantees the outstanding Indebtedness of the
issuer under the Second Amended and Restated Multicurrency Credit Agreement
dated as of the date of the indenture among the issuer, the guarantors party
thereto, the banks party thereto, Harris Trust and Savings Bank, as
Administrative Agent, Co-Lead Arranger and Joint Bookrunner, The Chase Manhattan
Bank, as Documentation Agent, Bank One, N.A., as Syndication Agent, Banc One
Capital Markets, Inc., as Co-Lead Arranger and Joint Bookrunner and Chase
Securities Inc., as Co-Arranger, as amended and supplemented (the "Credit
Agreement"). See "Description of Other Indebtedness -- Multicurrency Credit
Facility" at page 57 for a summary of the material terms of the Credit
Agreement.
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The notes and each guarantee of the notes will be effectively junior to any
Indebtedness or other liabilities of subsidiaries of the issuer and each
guarantor of the notes, respectively, that do not guarantee the notes. The
issuer does not have any subsidiaries and will not have any subsidiaries
immediately following the exchange offer.
The notes and each guarantee of the notes will also be effectively junior to
the secured Indebtedness of JLL and its subsidiaries.
At September 30, 2000:
- the issuer had $146.5 million of outstanding senior Indebtedness,
excluding the notes but including the Indebtedness under the Credit
Agreement, all of which ranked equally with the notes;
- the guarantors of the notes had $9.9 million of outstanding senior
indebtedness, excluding the guarantees of the notes and the guarantees of
the Indebtedness under the Credit Agreement, all of which ranked equally
with the guarantees of the notes;
- the issuer and the guarantors of the notes had no outstanding Indebtedness
that by its terms was subordinated to the notes, the Indebtedness under
the Credit Agreement, the guarantees of the notes or the guarantees of the
Indebtedness under the Credit Agreement;
- the notes, the Indebtedness under the Credit Agreement, the guarantees of
the notes and the guarantees of the Indebtedness under the Credit
Agreement were not by their terms subordinated to any outstanding
Indebtedness of the issuer or any guarantor of the notes;
- the Subsidiaries of JLL and the other guarantors of the notes that were
not themselves guarantors had $4.1 million of outstanding Indebtedness and
$127.5 million of other liabilities, all of which effectively ranked
senior to the notes, the Indebtedness under the Credit Agreement, the
guarantees of the notes and the guarantees of the Indebtedness under the
Credit Agreement; and
- JLL and its consolidated Subsidiaries had $3.1 million of secured
Indebtedness in the form of Capitalized Lease Obligations, all of which
effectively ranked senior to the notes, the Indebtedness under the Credit
Agreement, the guarantees of the notes and the guarantees of the
Indebtedness under the Credit Agreement.
Although the indenture and the Credit Agreement limit the amount of
additional Indebtedness which JLL and the Restricted Subsidiaries can Incur, JLL
and the Restricted Subsidiaries may nonetheless incur additional Indebtedness
pursuant to exceptions from such limitations. For instance, under the indenture,
JLL and its Restricted Subsidiaries may Incur additional Indebtedness:
- if, after giving effect to such incurrence, the Interest Coverage Ratio
would exceed 3.00:1.0;
- under the Credit Agreement so long as the principal amount of indebtedness
under the Credit Agreement does not exceed $275 million;
- in the form of Capitalized Lease Obligations or Purchase Money
Indebtedness in an aggregate principal amount not to exceed $20 million at
any time; and
- in an aggregate principal amount not to exceed $40 million at any time.
See " -- Covenants -- Limitation on Indebtedness" at page 86 for a
description of the limitation and the permitted exceptions and qualifications to
the limitation.
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CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
covenants and other provisions of the indenture. Reference is made to the
indenture for the full definition of all terms.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a person existing at the time
such person becomes a Restricted Subsidiary or assumed in connection with an
Asset Acquisition by a Restricted Subsidiary; PROVIDED that Indebtedness of such
person which is redeemed, defeased, retired or otherwise repaid at the time of
or immediately upon consummation of the transactions by which such person
becomes a Restricted Subsidiary or such Asset Acquisition shall not be Acquired
Indebtedness.
"ADJUSTED CONSOLIDATED NET INCOME" means, for any period, the aggregate net
income or loss of JLL and its Restricted Subsidiaries for such period determined
in conformity with GAAP; PROVIDED that the following items shall be excluded,
without duplication, in computing Adjusted Consolidated Net Income:
(1) the net income or loss of any person, other than JLL, that is not a
Restricted Subsidiary, except to the extent of the amount of dividends or
other distributions actually paid to JLL or any of its Restricted
Subsidiaries by such person during such period;
(2) the net income or loss of any person accrued prior to the date it
becomes a Restricted Subsidiary or is merged into or consolidated with JLL
or any of its Restricted Subsidiaries or all or substantially all of the
property and assets of such person are acquired by JLL or any of its
Restricted Subsidiaries;
(3) the net income of any Restricted Subsidiary, other than a Guarantor,
to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of such net income is not at the
time permitted by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary;
(4) any gains or losses, on an after-tax basis, attributable to Asset
Sales;
(5) solely for purposes of calculating the amount of Restricted Payments
that may be made pursuant to clause (C) of the first paragraph of the
"Limitation on Restricted Payments" covenant described at page 89:
(A) any amount paid or accrued as dividends on preferred stock of JLL
owned by persons other than JLL and any of its Restricted Subsidiaries;
and
(B) all non-cash contributions and accruals to or with respect to
deferred profit sharing or compensation in connection with the JLW
Acquisition;
(6) all extraordinary gains and extraordinary losses, on an after-tax
basis;
(7) except for purposes of calculating the Interest Coverage Ratio:
(A) any gains or losses, on an after-tax basis, attributable to sales
of Investments to the extent of any net cash proceeds included in the
calculation under clause (C)(III) of the "Limitation on Restricted
Payments" covenant described at page 89; or
(B) any gains or losses, on an after-tax basis, attributable to sales
of Permitted Investments to the extent of any net cash proceeds included
in the calculation under clause (7)(C) of the definition of "Permitted
Investment" described at page 80; and
(8) the cumulative effect of a change in accounting principles.
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"AFFILIATE" means, as applied to any person, any other person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such person. For purposes of this definition, "control,"
including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with," as applied to any person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities, by contract or otherwise.
"ASSET ACQUISITION" means:
(1) an Investment by JLL or any of its Restricted Subsidiaries in any
other person pursuant to which such person shall become a Restricted
Subsidiary or shall be merged into or consolidated with JLL or any of its
Restricted Subsidiaries; or
(2) an acquisition by JLL or any of its Restricted Subsidiaries of the
property and assets of any person, other than JLL or any of its Restricted
Subsidiaries, that constitute substantially all of a division or line of
business of such person.
"ASSET DISPOSITION" means the sale or other disposition by JLL or any of
its Restricted Subsidiaries, other than to JLL or a Restricted Subsidiary, of:
(1) all or substantially all of the Capital Stock of any Restricted
Subsidiary; or
(2) all or substantially all of the property and assets that constitute
a division or line of business of JLL or any of its Restricted Subsidiaries.
"ASSET SALE" means any sale, transfer or other disposition, including by
way of merger, consolidation or sale-leaseback transaction, in one transaction
or a series of related transactions by JLL or any of its Restricted Subsidiaries
to any person, other than JLL or any of its Restricted Subsidiaries, of:
(1) all or any of the Capital Stock of any Restricted Subsidiary, other
than any director's qualifying shares or Capital Stock held by foreign
nationals or employees to the extent required by applicable law in order to
conduct business as conducted at the time of issuance of such shares;
(2) all or substantially all of the property and assets of an operating
unit or business of JLL or any of its Restricted Subsidiaries; or
(3) any other property and assets, other than the Capital Stock or other
Investment in an Unrestricted Subsidiary, of JLL or any of its Restricted
Subsidiaries outside the ordinary course of business of JLL or such
Restricted Subsidiary,
and, in each case, that is not governed by the provisions of the indenture
applicable to mergers, consolidations and sales of assets; PROVIDED that "Asset
Sale" shall not include:
(A) sales or other dispositions of inventory, receivables and other
current assets;
(B) sales, transfers or other dispositions of assets permitted to be
made under the "Limitation on Restricted Payments" covenant described at
page 89;
(C) sales or other dispositions of assets for consideration at least
equal to the fair market value of the assets sold or disposed of, to the
extent that the consideration received would satisfy clause (1)(B) of the
third paragraph of the "Limitation on Asset Sales" covenant described at
page 96;
(D) a transaction constituting a Change of Control, provided that the
issuer or its successor complies with the provisions of the "Repurchase
of Notes upon a Change of Control" described at page 98; or
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(E) disposition of obsolete, uneconomical, worn out or surplus
property or equipment.
"AVERAGE LIFE" means, at any date of determination with respect to any debt
security, the quotient obtained by dividing:
(1) the sum of the products of the number of years from such date of
determination to the dates of each successive scheduled principal payment of
such debt security and the amount of such principal payment, by
(2) the sum of all such principal payments.
"BOARD OF DIRECTORS" means the board of directors of JLL or any authorized
committee thereof.
"BUND RATE" means the yield to maturity as of the redemption date of direct
obligations of the Republic of Germany (Bunds or Bundesanleihen) with a fixed
maturity most nearly equal to the period from such redemption date to June 15,
2004; PROVIDED that if there are no such obligations the rate determined by
linear interpolation between the rates borne by the two direct obligations of
the Republic of Germany maturing closest to, but straddling such date; and
PROVIDED FURTHER that if the period from the redemption date to June 15, 2004 is
less than one year, the weekly average yield on actually traded direct
obligations of the Republic of Germany adjusted to a constant maturity of one
year. If the Bund Rate is not available, then the Bund Rate will be calculated
by interpolation of comparable rates selected by an independent investment
banking institution.
"CAPITAL STOCK" means, with respect to any person, any and all shares,
interests, participations or other equivalents, however designated, whether
voting or non-voting, in the equity of such person, whether outstanding on
July 26, 2000 or issued thereafter, including, without limitation, all common
stock and preferred stock.
"CAPITALIZED LEASE" means, as applied to any person, any lease of any
property, whether real, personal or mixed, which, in conformity with GAAP, is
required to be capitalized on the balance sheet of such person.
"CAPITALIZED LEASE OBLIGATIONS" means, with respect to any person on any
date of determination, the amount of such person's liabilities under Capitalized
Leases, determined in accordance with GAAP.
"CHANGE OF CONTROL" means such time as:
(1) with respect to the issuer, JLL ceases to be the ultimate
"beneficial owner," as defined in Rule 13d-3 under the Exchange Act, of 99%
of the total voting power of the Voting Stock of the issuer; or
(2) with respect to JLL, after July 26, 2000,
(A) a "person" or "group," within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act, becomes the ultimate "beneficial owner," as
defined in Rule 13d-3 under the Exchange Act, of more than 35% of the
total voting power of the Voting Stock of JLL on a fully diluted basis;
or
(B) individuals who on July 26, 2000 constitute the Board of
Directors, together with any new directors whose election by the Board of
Directors or whose nomination by the Board of Directors for election by
JLL's stockholders was approved by a vote of at least two-thirds of the
members of the Board of Directors then in office who either were members
of the Board of Directors on July 26, 2000 or whose election or
nomination for election was previously so approved, cease for any reason
to constitute a majority of the members of the Board of Directors then in
office.
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"CO-INVESTMENT" means direct or indirect investments in real estate or real
estate related assets, including securities, in order to attract or retain
investments from clients or prospective clients with respect to those assets.
"COMPASS ACQUISITION" means the acquisition by JLL and its Subsidiaries of
Compass Management and Leasing, Inc. and companies from Lend Lease Corporation
and its affiliates and all transactions in connection therewith.
"CONSOLIDATED EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income:
(1) Consolidated Interest Expense;
(2) income taxes;
(3) depreciation expense;
(4) amortization expense;
(5) all other non-cash items reducing Adjusted Consolidated Net Income,
other than items that will require cash payments and for which an accrual or
reserve is, or is required by GAAP to be, made; and
(6) non-recurring charges, costs and expenses incurred by JLL and its
Restricted Subsidiaries in connection with the Compass Acquisition and the
JLW Acquisition, less all non-cash items increasing Adjusted Consolidated
Net Income, other than items that represent the reversal of any accrual or
reserve for anticipated cash charges in any prior period, all as determined
on a consolidated basis for JLL and its Restricted Subsidiaries in
conformity with GAAP; PROVIDED that, if any Restricted Subsidiary is not a
Wholly Owned Restricted Subsidiary, Consolidated EBITDA shall be reduced, to
the extent not otherwise reduced in accordance with GAAP, by an amount equal
to:
(A) the amount of the Adjusted Consolidated Net Income attributable
to such Restricted Subsidiary multiplied, by
(B) the percentage ownership interest in the income of such
Restricted Subsidiary not owned on the last day of such period by JLL or
any of its Restricted Subsidiaries.
"CONSOLIDATED FREE CASH FLOW" means, for any period, the Consolidated
EBITDA for such period less, to the extent such amount was included in
calculating such Consolidated EBITDA:
(1) Consolidated Interest Expense; and
(2) income taxes,
less capital expenditures made during such period, all as determined on a
consolidated basis for JLL and its Restricted Subsidiaries in conformity with
GAAP; PROVIDED that, if any Restricted Subsidiary is not a Wholly Owned
Restricted Subsidiary, Consolidated Free Cash Flow shall be reduced, to the
extent not otherwise reduced in accordance with GAAP, by an amount equal to:
(A) the amount of the Adjusted Consolidated Net Income attributable
to such Restricted Subsidiary multiplied, by
(B) the percentage ownership interest in the income of such
Restricted Subsidiary not owned on the last day of such period by JLL or
any of its Restricted Subsidiaries.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the aggregate amount
of interest in respect of Indebtedness, including, without limitation,
amortization of original issue discount on any
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Indebtedness and the interest portion of any deferred payment obligation,
calculated in accordance with the effective interest method of accounting; all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing; the net costs associated with
Interest Rate Agreements; and Indebtedness that is Guaranteed or secured by JLL
or any of its Restricted Subsidiaries, and all but the principal component of
rentals in respect of Capitalized Lease Obligations paid, accrued or scheduled
to be paid or to be accrued by JLL and its Restricted Subsidiaries during such
period; EXCLUDING, however:
- any amount of such interest of any Restricted Subsidiary if the net income
of such Restricted Subsidiary is excluded in the calculation of "Adjusted
Consolidated Net Income" pursuant to clause (3) of the definition thereof
at page 70, but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted
Consolidated Net Income; and
- any premiums, fees and expenses, and any amortization thereof, payable in
connection with the offering of the notes,
all as determined on a consolidated basis, without taking into account
Unrestricted Subsidiaries, in conformity with GAAP.
"CONSOLIDATED NET WORTH" means, at any date of determination, stockholders'
equity as set forth on the most recently available quarterly or annual
consolidated balance sheet of JLL and its Restricted Subsidiaries, which shall
be as of a date not more than 90 days prior to the date of such computation, and
which shall not take into account Unrestricted Subsidiaries, less any amounts
attributable to Disqualified Stock, any equity security convertible into or
exchangeable for Indebtedness, the cost of treasury stock and the principal
amount of any promissory notes receivable from the sale of the Capital Stock of
JLL or any of its Restricted Subsidiaries, each item to be determined in
conformity with GAAP, excluding the effects of foreign currency exchange
adjustments under Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 52.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"DEFAULT" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"DISQUALIFIED STOCK" means any class or series of Capital Stock of any
person that by its terms or otherwise is:
(1) required to be redeemed prior to the Stated Maturity of the notes;
(2) redeemable at the option of the holder of such class or series of
Capital Stock at any time prior to the Stated Maturity of the notes; or
(3) convertible into or exchangeable for Capital Stock referred to in
clause (1) or (2) above or Indebtedness having a scheduled maturity prior to
the Stated Maturity of the notes;
PROVIDED that any Capital Stock that would not constitute Disqualified Stock but
for provisions thereof giving holders thereof the right to require such person
to repurchase or redeem such Capital Stock upon the occurrence of an "Asset
Sale" as defined on page 71 or "Change of Control" as defined on page 72
occurring prior to the Stated Maturity of the notes shall not constitute
Disqualified Stock if the "Asset Sale" or "Change of Control" provisions
applicable to such Capital Stock are not materially more favorable to the
holders of such Capital Stock than the provisions contained in the "Limitation
on Asset Sales" and "Repurchase of Notes upon a Change of Control" covenants
described on pages 96 and 98, respectively, and such Capital Stock specifically
provides that such person will not repurchase or redeem any such stock pursuant
to such provision prior to the issuer's repurchase of such
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notes as are required to be repurchased pursuant to the "Limitation on Asset
Sales" and "Repurchase of Notes upon a Change of Control" covenants described on
pages 96 and 98, respectively.
"FAIR MARKET VALUE" means the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined in
good faith, in the case of any valuation of $1 million or less, by an executive
officer of JLL and evidenced by an officers' certificate, or, in the case of any
valuation of more than $1 million, by the Board of Directors and evidenced by a
board resolution, in either such case whose determination shall be conclusive.
"FOREIGN SUBSIDIARY" means any Subsidiary of JLL that is organized under
the laws of a jurisdiction other than the United States or any state thereof.
"GAAP" means generally accepted accounting principles in the United States
of America as applied by JLL as of July 26, 2000, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations contained or referred to in
the indenture shall be computed in conformity with GAAP applied on a consistent
basis, except that calculations made for purposes of determining compliance with
the terms of the covenants and with other provisions of the indenture shall be
made without giving effect to the amortization of any expenses incurred in
connection with the offering of the notes and, except as otherwise provided, the
amortization of any amounts required or permitted by Accounting Principles Board
Opinion Nos. 16 and 17.
"GOVERNMENT OBLIGATIONS" means securities that are direct and unconditional
obligations of a European Union member country on the date of the indenture,
other than Greece, Portugal or Spain, and are not callable or redeemable at the
option of the issuer thereof.
"GUARANTEE" means any obligation, contingent or otherwise, of any person
directly or indirectly guaranteeing any Indebtedness of any other person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such person:
(1) to purchase or pay, or advance or supply funds for the purchase or
payment of, such Indebtedness of such other person, whether arising by
virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services, unless such purchase
arrangements are on arm's-length terms and are entered into in the ordinary
course of business, to take-or-pay, or to maintain financial statement
conditions or otherwise; or
(2) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof, in whole or in part;
PROVIDED that the term "Guarantee" shall not include endorsements for collection
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"INCUR" means, with respect to any Indebtedness, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Indebtedness,
including an "Incurrence" of Acquired Indebtedness; PROVIDED that neither the
accrual of interest nor the accretion of original issue discount shall be
considered an Incurrence of Indebtedness.
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"INDEBTEDNESS" means, with respect to any person at any date of
determination, without duplication:
(1) all indebtedness of such person for borrowed money;
(2) all obligations of such person evidenced by bonds, debentures, notes
or other similar instruments;
(3) all obligations of such person in respect of letters of credit or
other similar instruments, including reimbursement obligations with respect
thereto, but excluding obligations with respect to letters of credit,
including trade letters of credit, securing obligations, other than
obligations described in (1) or (2) above or (5), (6) or (7) below, entered
into in the ordinary course of business of such person to the extent such
letters of credit are not drawn upon or, if drawn upon, to the extent such
drawing is reimbursed no later than the third business day following receipt
by such person of a demand for reimbursement;
(4) all obligations of such person to pay the deferred and unpaid
purchase price of property or services, except Trade Payables, which
purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion
of such services;
(5) all Capitalized Lease Obligations;
(6) all Indebtedness of other persons secured by a Lien on any asset of
the person with respect to which a determination is being made, whether or
not such Indebtedness is assumed by such person; PROVIDED that the amount of
such Indebtedness shall be the lesser of:
(A) the fair market value of such asset at such date of
determination; and
(B) the amount of such Indebtedness;
(7) all Indebtedness of other persons Guaranteed by the person with
respect to which a determination is being made to the extent such
Indebtedness is Guaranteed by such person; and
(8) to the extent not otherwise included in this definition, obligations
under Currency Agreements and Interest Rate Agreements.
The amount of Indebtedness of any person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation; PROVIDED THAT
(A) the amount outstanding at any time of any Indebtedness issued
with original issue discount is the face amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP;
(B) money borrowed and set aside at the time of the Incurrence of any
Indebtedness in order to prefund the payment of the interest on such
Indebtedness shall not be deemed to be "Indebtedness" so long as such
money is held to secure the payment of such interest; and
(C) Indebtedness shall not include any liability for federal, state,
local or other taxes.
"INTEREST COVERAGE RATIO" means, on any Transaction Date, the ratio of:
(1) the aggregate amount of Consolidated EBITDA for the then most recent
four fiscal quarters prior to such Transaction Date for which reports have
been provided to the trustee (the "Four Quarter Period"), to
(2) the aggregate Consolidated Interest Expense during such Four Quarter
Period.
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In making the foregoing calculation:
(A) PRO FORMA effect shall be given to any Indebtedness Incurred or
repaid during the period (the "Reference Period") commencing on the first
day of the Four Quarter Period and ending on the Transaction Date, other
than Indebtedness Incurred under a revolving credit or similar
arrangement, or under any predecessor revolving credit or similar
arrangement, in effect on the last day of such Four Quarter Period unless
any portion of such Indebtedness is projected, in the reasonable judgment
of the senior management of JLL, to remain outstanding for a period in
excess of 12 months from the date of the Incurrence thereof, in each case
as if such Indebtedness had been Incurred or repaid on the first day of
such Reference Period;
(B) Consolidated Interest Expense attributable to interest on any
Indebtedness, whether existing or being Incurred, computed on a PRO FORMA
basis and bearing a floating interest rate shall be computed as if the
rate in effect on the Transaction Date, taking into account any Interest
Rate Agreement applicable to such Indebtedness if such Interest Rate
Agreement has a remaining term in excess of 12 months or, if shorter, at
least equal to the remaining term of such Indebtedness, had been the
applicable rate for the entire period;
(C) PRO FORMA effect shall be given to Asset Dispositions and Asset
Acquisitions, including giving PRO FORMA effect to the application of
proceeds of any Asset Disposition, that occur during such Reference
Period as if they had occurred and such proceeds had been applied on the
first day of such Reference Period; and
(D) PRO FORMA effect shall be given to asset dispositions and asset
acquisitions, including giving PRO FORMA effect to the application of
proceeds of any asset disposition, that have been made by any person that
has become a Restricted Subsidiary or has been merged with or into JLL or
any Restricted Subsidiary during such Reference Period and that would
have constituted Asset Dispositions or Asset Acquisitions had such
transactions occurred when such person was a Restricted Subsidiary as if
such asset dispositions or asset acquisitions were Asset Dispositions or
Asset Acquisitions that occurred on the first day of such Reference
Period;
PROVIDED that to the extent that clause (C) or (D) above requires that PRO FORMA
effect be given to an Asset Acquisition or Asset Disposition, such PRO FORMA
calculation shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the person, or division or line of business of
the person, that is acquired or disposed of for which financial information is
available.
"INTEREST RATE AGREEMENT" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"INVESTMENT" in any person means:
(1) any direct or indirect advance, loan or other extension of credit to
such person, including, without limitation, by way of Guarantee or similar
arrangement, but excluding advances to customers in the ordinary course of
business that are, in conformity with GAAP, recorded as accounts receivable
on the balance sheet of JLL or its Restricted Subsidiaries;
(2) any capital contribution to such person, by means of any transfer of
cash or other property to others or any payment for property or services for
the account or use of others; or
(3) any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by such person. "Investment"
shall include:
(A) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary; and
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(B) the retention of the Capital Stock or any other Investment by JLL
or any of its Restricted Subsidiaries, of or in any person that has
ceased to be a Subsidiary, including without limitation, by reason of any
transaction permitted by clause (3) of the "Limitation on the Issuance
and Sale of Capital Stock of Restricted Subsidiaries" covenant described
on page 93.
For purposes of the definition of "Unrestricted Subsidiary" and the "Limitation
on Restricted Payments" covenant described at page 89, the amount of an
Investment made or a reduction in an Investment shall be equal to the fair
market value thereof at the time such Investment is made or reduced,
respectively. A change in the form of an Investment shall not be regarded as a
further Investment except to the extent JLL or any of its Subsidiaries invests
any amounts in addition to any existing Investments.
"JLW ACQUISITION" means the acquisition by JLL and its Subsidiaries of the
entities conducting business worldwide under the names "Jones Lang Wootton" and
"JLW" prior to such acquisition and all transactions in connection therewith.
"LIEN" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind, including, without limitation, any conditional sale or other
title retention agreement or lease in the nature thereof or any agreement to
give any security interest.
"MOODY'S" means Moody's Investors Service, Inc. and its successors.
"NET CASH PROCEEDS" means:
(1) with respect to any Asset Sale, the proceeds of such Asset Sale
received by JLL or any Restricted Subsidiary, excluding any amount received
by other minority interest holders, in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations, to the extent
corresponding to the principal, but not interest, component thereof, when
received in the form of cash or cash equivalents and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of:
(A) brokerage commissions and other fees and expenses, including fees
and expenses of accountants, counsel, consultants and investment bankers,
related to such Asset Sale;
(B) provisions for all taxes, whether or not such taxes will actually
be paid or are payable, as a result of such Asset Sale without regard to
the consolidated results of operations of JLL and its Restricted
Subsidiaries, taken as a whole;
(C) payments made to repay Indebtedness or any other obligation
outstanding at the time of such Asset Sale that either is secured by a
Lien on the property or assets sold or is required to be paid as a result
of such sale; and
(D) appropriate amounts to be provided by JLL or any Restricted
Subsidiary as a reserve against any liabilities associated with such
Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated
with such Asset Sale, all as determined in conformity with GAAP; and
(2) with respect to any issuance or sale of Capital Stock, the proceeds
of such issuance or sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations, to the extent
corresponding to the principal, but not interest, component thereof, when
received in the form of cash or cash equivalents and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of attorney's fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant
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and other fees incurred in connection with such issuance or sale and net of
taxes paid or payable as a result thereof.
"OFFER TO PURCHASE" means an offer to purchase notes by the issuer from the
holders thereof commenced by mailing a notice to the trustee and each holder
stating:
(1) the covenant pursuant to which the offer is being made and that all
notes validly tendered will be accepted for payment on a pro rata basis;
(2) the purchase price and the date of purchase, which shall be a
business day no earlier than 30 days nor later than 60 days from the date
such notice is mailed (the "Payment Date");
(3) that any note not tendered will continue to accrue interest pursuant
to its terms;
(4) that, unless the issuer defaults in the payment of the purchase
price, any note accepted for payment pursuant to the Offer to Purchase shall
cease to accrue interest on and after the Payment Date;
(5) that holders electing to have a note purchased pursuant to the Offer
to Purchase will be required to surrender the note, together with the form
entitled "Option of the Holder to Elect Purchase" on the reverse side of the
note completed, to the paying agent at the address specified in the notice
prior to the close of business on the business day immediately preceding the
Payment Date;
(6) that holders will be entitled to withdraw their election if the
paying agent receives, not later than the close of business on the third
business day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such holder, the principal
amount of notes delivered for purchase and a statement that such holder is
withdrawing his election to have such notes purchased; and
(7) that holders whose notes are being purchased only in part will be
issued new notes equal in principal amount to the unpurchased portion of the
notes surrendered; PROVIDED that each note purchased and each new note
issued shall be in a principal amount of [EURO]1,000 or integral multiples
thereof.
On the Payment Date, the issuer shall:
(1) accept for payment on a pro rata basis notes or portions thereof
tendered pursuant to an Offer to Purchase;
(2) deposit with the paying agent money sufficient to pay the purchase
price of all notes or portions thereof so accepted; and
(3) deliver, or cause to be delivered, to the trustee all notes or
portions thereof so accepted together with an officers' certificate
specifying the notes or portions thereof accepted for payment by the issuer.
The paying agent shall promptly mail to the holders of notes so accepted payment
in an amount equal to the purchase price, and the trustee shall promptly
authenticate and mail to such holders a new note equal in principal amount to
any unpurchased portion of the note surrendered; PROVIDED that each note
purchased and each new note issued shall be in a principal amount of [EURO]1,000
or integral multiples thereof. The issuer will publicly announce the results of
an Offer to Purchase as soon as practicable after the Payment Date. The trustee
shall act as the paying agent for an Offer to Purchase. The issuer will comply
with Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable,
in the event that the issuer is required to repurchase notes pursuant to an
Offer to Purchase.
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"PERMITTED INVESTMENT" means:
(1) an Investment in JLL or a Restricted Subsidiary or a person which
will, upon the making of such Investment, become a Restricted Subsidiary or
be merged or consolidated with or into or transfer or convey all or
substantially all its assets to, JLL or a Restricted Subsidiary; PROVIDED
that such person's primary business is related, ancillary or complementary
to the businesses of JLL and its Restricted Subsidiaries on the date of such
Investment;
(2) Temporary Cash Investments;
(3) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
in accordance with GAAP;
(4) stock, obligations or securities received in satisfaction of
judgments or received in settlements of debts created in the ordinary course
of business;
(5) an Investment in an Unrestricted Subsidiary consisting solely of an
Investment in another Unrestricted Subsidiary;
(6) Interest Rate Agreements and Currency Agreements designed solely to
protect JLL or its Restricted Subsidiaries against fluctuations in interest
rates or foreign currency exchange rates;
(7) Co-Investments; PROVIDED that at the time of, and after giving
effect to, such Co-Investment, the aggregate amount of all Co-Investments
under this clause (7), the amount, if other than in cash, to be determined
in good faith by the Board of Directors, whose determination shall be
conclusive and evidenced by a board resolution, made after July 26, 2000
shall not exceed:
(A) $40 million, PLUS
(B) on or after January 1, 2001, an additional $40 million, PLUS
(C) if greater than zero, the sum of:
(I) 35% of the aggregate amount of Consolidated Free Cash Flow,
or, if Consolidated Free Cash Flow is negative, minus 100%
of the amount of such loss, determined by excluding income
resulting from transfers of assets by JLL or any Restricted
Subsidiary to an Unrestricted Subsidiary, accrued on a
cumulative basis during the period taken as one accounting
period beginning on the first day of the fiscal quarter
immediately following July 26, 2000, and ending on the last
day of the last fiscal quarter preceding the Transaction
Date for which reports have been filed with the SEC or
provided to the trustee; and
(II) an amount equal to the net reduction in Co-Investments that
constitute Investments, including Investments in an
Unrestricted Subsidiary, resulting from payments of interest
on Indebtedness, dividends, repayments of loans or advances,
or other transfers of assets, in any case to JLL, the issuer
or any Restricted Subsidiary or from the net cash proceeds
from the sale of any Co-Investment to the extent the gain is
not included by the issuer in the calculation under
clause (C)(I) of the "Limitation on Restricted Payments"
covenant described at page 89 or redesignations of
Unrestricted Subsidiaries as Restricted Subsidiaries except
to the extent that such redesignation is used in the
calculation under clause (C)(III) of the "Limitation on
Restricted Payments" covenant described at page 89, valued
in each case as provided in the definition of "Investment"
at page 77;
(8) receivables owing to JLL or any Restricted Subsidiary if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade
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terms; PROVIDED that such trade terms may include such concessionary trade
terms as JLL or any such Restricted Subsidiary deems reasonable under the
circumstances;
(9) Investments in any person, including in the form of bonds, notes,
debentures and other securities, to the extent such Investments represent
the non-cash portion of the consideration received from an Asset Sale that
was made pursuant to and in compliance with the " -- Limitation on Asset
Sales" covenant described at page 96;
(10) Investments deemed to have been made as a result of the acquisition
of a person that at the time of such acquisition held instruments
constituting Investments that were not acquired in contemplation of the
acquisition of such person;
(11) loans or advances to directors, officers and employees made in the
ordinary course of business in an aggregate not to exceed $10 million at any
time outstanding;
(12) Investments in prepaid expenses and lease, utility and workers'
compensation performance and other similar deposits;
(13) Investments consisting of intercompany indebtedness not prohibited
under the indenture;
(14) Investments consisting of Guarantees of Indebtedness of JLL or any
Restricted Subsidiary not otherwise prohibited by the indenture; and
(15) any Investment existing as of July 26, 2000, and any amendment,
modification, extension or renewal thereof to the extent such amendment,
modification, extension or renewal does not require JLL or any Restricted
Subsidiary to make any additional cash or non-cash payments.
"PERMITTED LIENS" means:
(1) Liens for taxes, assessments, governmental charges or claims that
are not yet due and payable, that are not subject to penalties or interest
for non-payment or that are being contested in good faith by appropriate
proceedings and for which, if required by GAAP, a reserve or other
appropriate provision in conformity with GAAP shall have been made;
(2) statutory and common law Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or other similar
Liens arising in the ordinary course of business and deposits made to obtain
the release of such Liens and with respect to amounts not yet delinquent or
being contested in good faith by appropriate proceedings and for which, if
required by GAAP, a reserve or other appropriate provision in conformity
with GAAP shall have been made;
(3) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security;
(4) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations, bankers'
acceptances, surety and appeal bonds, contracts, import duties, payment of
rent, performance, letters of credit and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of business,
exclusive of obligations for the payment of borrowed money;
(5) easements, reservations, rights-of-way, zoning ordinances and
similar charges, restrictions, exceptions, encumbrances, title defects or
other irregularities that do not materially interfere with the ordinary
course of business of JLL or any of its Restricted Subsidiaries;
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(6) Liens, including extensions, renewals and replacements thereof, upon
real or personal property acquired, constructed, leased, repaired or
improved after July 26, 2000; PROVIDED that:
(A) such Lien is created solely for the purpose of securing Purchase
Money Indebtedness Incurred in accordance with the "Limitation on
Indebtedness" covenant described at page 86;
(B) such Lien is created prior to, at the time of or within six
months after the later of the acquisition, the completion of
construction, improvement or repair or the commencement of full operation
of such property; and
(C) such Lien shall not extend to or cover any property or assets
other than such item of property or assets and any improvements thereon;
(7) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of JLL and its Restricted
Subsidiaries, taken as a whole;
(8) Liens encumbering property or assets under construction arising from
progress or partial payments by a customer of JLL or its Restricted
Subsidiaries relating to such property or assets;
(9) any interest or title of a lessor in the property subject to any
Capitalized Lease or operating lease;
(10) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(11) Liens on assets or property of, shares of Capital Stock of or
Indebtedness owed to, any person existing at the time such assets or
property are acquired by JLL or any Restricted Subsidiary, or such person
becomes a Restricted Subsidiary, or such person becomes a part of JLL or any
Restricted Subsidiary; PROVIDED that such Liens do not extend to or cover
any property or assets of JLL or any Restricted Subsidiary other than the
property or assets so acquired;
(12) Liens in favor of JLL or any Restricted Subsidiary;
(13) Liens arising from the rendering of a judgment that is not a final
judgment or order against JLL or any Restricted Subsidiary with respect to
which JLL or such Restricted Subsidiary is then proceeding with an appeal or
other proceeding for review or in connection with surety or appeal bonds in
connection with such attachment or judgment, and Liens arising from the
rendering of a final judgment or order against JLL or any Restricted
Subsidiary that does not give rise to an Event of Default;
(14) Liens securing reimbursement obligations with respect to letters of
credit that encumber documents and other property relating to such letters
of credit and the products and proceeds thereof;
(15) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(16) Liens encumbering customary initial deposits and margin deposits,
and other Liens that are customary in the industry and incurred in the
ordinary course of business, in each case, securing Indebtedness under
Interest Rate Agreements and Currency Agreements and forward contracts,
options, future contracts, futures options or similar agreements or
arrangements designed solely to protect JLL or any of its Restricted
Subsidiaries from fluctuations in interest rates, currencies or the price of
commodities;
(17) Liens arising out of conditional sale, title retention, consignment
or similar arrangements for the sale of goods entered into by JLL or any of
its Restricted Subsidiaries in the ordinary course of business in accordance
with the past practices of JLL and its Restricted Subsidiaries;
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(18) Liens on shares of Capital Stock of any Unrestricted Subsidiary to
secure Indebtedness of such Unrestricted Subsidiary;
(19) Liens on or sales of receivables;
(20) Liens not otherwise permitted under the "Limitation on Liens"
covenant described at page 96 on property or assets securing Indebtedness
and Liens on property or assets securing any Indebtedness Incurred in
connection with any refinancing, replacement, renewal or refunding of such
Indebtedness in an aggregate principal amount not exceeding $5 million at
any time outstanding;
(21) Liens to secure any refinancing, or successive refinancings, as a
whole, or in part, of any Indebtedness secured by any Lien referred to in
clauses (11), (12) and (23) herein; PROVIDED that:
(A) such new Lien shall be limited to all or part of the same
property or assets that secured the original Lien, plus repairs of, or
improvements to or on, such property; and
(B) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of:
(I) the outstanding principal amount or, if greater, committed
amount of the Indebtedness secured by Liens described under
clauses (11), (12) and (23) herein at the time the original
Lien became a Permitted Lien, PLUS
(II) an amount necessary to pay any fees and expenses, including
premiums and prepayment penalties, related to such
refinancings;
(22) Liens existing on July 26, 2000;
(23) Liens granted after July 26, 2000 on any assets or Capital Stock of
JLL or its Restricted Subsidiaries created in favor of the holders of the
notes;
(24) Liens securing Indebtedness which is Incurred to refinance, extend
or renew secured Indebtedness which is permitted to be Incurred under
clause (2)(C) of the "Limitation on Indebtedness" covenant described at page
86; PROVIDED that such Liens do not extend to or cover any property or
assets of JLL or any Restricted Subsidiary other than the property or assets
securing the Indebtedness being refinanced; and
(25) Liens on any property or assets of a Restricted Subsidiary, other
than the issuer or a Guarantor, securing Indebtedness of such Restricted
Subsidiary permitted under the " -- Limitation on Indebtedness" covenant
described at page 86.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness Incurred to finance,
refinance or refund the cost, including the cost of improvement, construction or
repair, of property or assets; PROVIDED that:
- such Indebtedness is Incurred prior to, at the time of or within six
months after the later of the acquisition, the completion of construction,
improvement or repair or the commencement of full operation of such
property or assets; and
- the principal amount of such Indebtedness does not exceed 100% of the cost
of such property or assets.
"RESTRICTED SUBSIDIARY" means any guarantor of the notes other than JLL and
each other Subsidiary of JLL, other than an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw-Hill
Companies, and its successors.
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"SIGNIFICANT SUBSIDIARY" means, at any date of determination, the issuer,
any guarantor of the notes other than JLL and any Restricted Subsidiary that,
together with its Subsidiaries:
(1) for the most recent fiscal year of JLL, accounted for more than 10%
of the consolidated revenues of JLL and its Restricted Subsidiaries; or
(2) as of the end of such fiscal year, was the owner of more than 10% of
the consolidated assets of JLL and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of
JLL for such fiscal year.
"STATED MATURITY" means:
(1) with respect to any debt security, the date specified in such debt
security as the fixed date on which the final installment of principal of
such debt security is due and payable; and
(2) with respect to any scheduled installment of principal of or
interest on any debt security, the date specified in such debt security as
the fixed date on which such installment is due and payable.
"SUBSIDIARY" means, with respect to any person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such person
and one or more other Subsidiaries of such person.
"TEMPORARY CASH INVESTMENT" means any of the following:
(1) direct obligations of the United States of America or any agency or
instrumentality thereof or obligations fully and unconditionally guaranteed
by the United States of America or any agency or instrumentality thereof
maturing within one year, provided that obligations purchased in connection
with a defeasance of the notes as provided under " -- Defeasance" at page
104 may have maturities of longer than one year;
(2) time deposit accounts, certificates of deposit and money market
deposits maturing within one year of the date of acquisition thereof issued
by a bank or trust company, and which bank or trust company has capital,
surplus and undivided profits aggregating not less than $50 million or the
foreign currency equivalent thereof and has outstanding debt which is rated
"A" or such similar equivalent rating or higher by at least one nationally
recognized statistical rating organization, as defined in Rule 436 under the
Securities Act, or any money-market fund sponsored by a registered broker
dealer or mutual fund distributor;
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above entered
into with a bank or trust company meeting the qualifications described in
clause (2) above;
(4) commercial paper maturing not more than one year after the date of
acquisition issued by a person, other than an Affiliate of JLL, with a
rating at the time as of which any investment therein is made of "P-1" or
higher according to Moody's or "A-1" or higher according to S&P;
(5) securities with maturities of one year or less from the date of
acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
S&P or Moody's;
(6) Government Obligations;
(7) demand deposit accounts maintained in the ordinary course of
business; and
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(8) investments in money market funds that invest solely, and which are
restricted by their respective charters to invest solely, in investments of
the type described in the immediately preceding clauses (1), (2), (4) and
(6) above.
"TRADE PAYABLES" means, with respect to any person, any accounts payable or
any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"TRANSACTION DATE" means, with respect to the Incurrence of any
Indebtedness by JLL or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"UNRESTRICTED SUBSIDIARY" means:
(1) any Subsidiary of JLL that at the time of determination shall be
designated an Unrestricted Subsidiary by the Board of Directors in the
manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Restricted Subsidiary, including any
newly acquired or newly formed Subsidiary of JLL, other than the issuer or any
guarantor of the notes, to be an Unrestricted Subsidiary unless such Subsidiary
owns any Capital Stock of, or owns or holds any Lien on any property of, JLL or
any Restricted Subsidiary; PROVIDED that:
(A) any Guarantee by JLL or any Restricted Subsidiary of any
Indebtedness of the Subsidiary being so designated shall be deemed an
"Incurrence" of such Indebtedness and an "Investment" by JLL or such
Restricted Subsidiary, or both, if applicable, at the time of such
designation;
(B) either the Subsidiary to be so designated has total assets of
$1,000 or less or, if such Subsidiary has assets greater than $1,000,
such designation would be permitted under the "Limitation on Restricted
Payments" covenant described at page 89; and
(C) if applicable, the Incurrence of Indebtedness and the Investment
referred to in clause (A) of this proviso would be permitted under the
"Limitation on Indebtedness" and "Limitation on Restricted Payments"
covenants described at pages 86 and 89, respectively.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; PROVIDED that:
(1) no Default or Event of Default shall have occurred and be continuing
at the time of or after giving effect to such designation; and
(2) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation would, if Incurred at such
time, have been permitted to be Incurred, and shall be deemed to have been
Incurred, for all purposes of the indenture. Any such designation by the
Board of Directors shall be evidenced to the trustee by promptly filing with
the trustee a copy of the board resolution giving effect to such designation
and an officers' certificate certifying that such designation complied with
the foregoing provisions.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are:
(1) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged; or
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(2) obligations of a person controlled or supervised by and acting as an
agency or instrumentality of the United States of America, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by
the United States of America,
which, in either case, are not callable or redeemable at the option of the
issuer thereof or its successor at any time prior to the Stated Maturity of the
notes, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt; PROVIDED that, except as required by law, such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
"VOTING STOCK" means with respect to any person, Capital Stock of any class
or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such person.
"WHOLLY OWNED" means, with respect to any Subsidiary of any person, the
ownership of all of the outstanding Capital Stock of such Subsidiary, other than
any director's qualifying shares or Capital Stock held by foreign nationals or
employees to the extent required by applicable law in order to conduct business
as conducted at the time of issuance of such shares, by such person or one or
more Wholly Owned Subsidiaries of such person.
COVENANTS
LIMITATION ON INDEBTEDNESS
(1) JLL will not, and will not permit any of its Restricted Subsidiaries
to, Incur any Indebtedness, other than the notes, the guarantees of the
notes and Indebtedness existing on July 26, 2000; PROVIDED that the issuer
or any guarantor of the notes may Incur Indebtedness if, after giving effect
to the Incurrence of such Indebtedness and the receipt and application of
the proceeds therefrom, the Interest Coverage Ratio would be greater than
3.0:1.
(2) Notwithstanding the foregoing, JLL and any Restricted Subsidiary,
except as specified below, may Incur each and all of the following:
(A) Indebtedness of the issuer or any guarantor of the notes under the
Credit Agreement in an aggregate principal amount, together with
refinancings thereof, not to exceed $275 million, less any amount of such
Indebtedness permanently repaid as provided under the "Limitation on
Asset Sales" covenant described at page 96;
(B) Indebtedness owed to JLL evidenced by an unsubordinated
promissory note or to any Restricted Subsidiary; PROVIDED that any event
which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any subsequent transfer of such Indebtedness,
other than to JLL, the issuer or any Restricted Subsidiary, shall be
deemed, in each case, to constitute an Incurrence of such Indebtedness
not permitted by this clause (B);
(C) Indebtedness issued in exchange for, or the net proceeds of which
are used to refinance, replace, renew or refund then outstanding
Indebtedness, other than Indebtedness outstanding under clause (I) or
(J) below, and any refinancings thereof in an amount not to exceed the
amount so refinanced, replaced, renewed or refunded, plus premiums,
accrued interest, prepayment penalties, fees and expenses; PROVIDED that
Indebtedness the proceeds of which are used to refinance or refund the
notes or Indebtedness that is ranked equally with,
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or subordinated in right of payment to, the notes or any guarantee of the
notes shall only be permitted under this clause (C) if:
(I) in case the notes and any guarantees of the notes are
refinanced in part or the Indebtedness to be refinanced is ranked
equally with the notes or any guarantee of the notes, such new
Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is outstanding, is
expressly made equal to, or subordinate in right of payment to, the
remaining notes and guarantees of the notes;
(II) in case the Indebtedness to be refinanced is subordinated in
right of payment to the notes or any guarantee of the notes, such new
Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is issued or
remains outstanding, is expressly made subordinate in right of
payment to the notes and guarantees of the notes at least to the
extent that the Indebtedness to be refinanced is subordinated to the
notes or such guarantee of the notes; and
(III) such new Indebtedness, determined as of the date of
Incurrence of such new Indebtedness, does not mature prior to the
Stated Maturity of the Indebtedness to be refinanced, replaced,
renewed or refunded, and the Average Life of such new Indebtedness is
at least equal to the remaining Average Life of the Indebtedness to
be refinanced or refunded; and PROVIDED FURTHER that in no event may
Indebtedness of JLL or the issuer be refinanced by means of any
Indebtedness of any Restricted Subsidiary that is not a guarantor of
the notes pursuant to this clause (C);
(D) Indebtedness:
(I) in respect of performance, bid, surety or appeal bonds and
completion guarantees provided in the ordinary course of business;
(II) under Currency Agreements and Interest Rate Agreements;
PROVIDED that such agreements:
- are designed solely to protect JLL or its Restricted
Subsidiaries against fluctuations in foreign currency exchange
rates or interest rates; and
- do not increase the Indebtedness of the obligor outstanding at
any time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder; and
(III) arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, or from
Guarantees or letters of credit, surety bonds or performance bonds
securing any obligations of JLL or any of its Restricted Subsidiaries
pursuant to such agreements, in any case Incurred in connection with
the disposition of any business, assets or Subsidiary, other than
Guarantees of Indebtedness Incurred by any person acquiring all or
any portion of such business, assets or Subsidiary for the purpose of
financing such acquisition, in a principal amount not to exceed the
gross proceeds actually received by JLL or any Restricted Subsidiary
in connection with such disposition;
(E) Indebtedness of JLL or any Restricted Subsidiary, to the extent
the net proceeds thereof are promptly:
(I) used to purchase notes tendered in an Offer to Purchase made
as a result of a Change in Control; or
(II) deposited to defease the notes as described below under " --
Defeasance" at page 104;
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(F) guarantees of the notes and Guarantees of Indebtedness of JLL or
any Restricted Subsidiary by any Restricted Subsidiary provided the
Guarantee of such Indebtedness is permitted by and made in accordance
with the "Limitation on Issuances of Guarantees by Restricted
Subsidiaries" covenant described at page 94;
(G) any Guarantee by JLL of Indebtedness or other obligations of any
of its Restricted Subsidiaries so long as the incurrence of such
Indebtedness by such Restricted Subsidiary is not prohibited by the terms
of the indenture;
(H) the Incurrence by JLL and its Restricted Subsidiaries of
Indebtedness constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business, including
without limitation letters of credit in respect of workers' compensation
claims, health, disability or other employee benefits or property,
casualty or liability insurance or self-insurance, or with respect to an
agreement to provide services, or other claims; PROVIDED that upon the
drawing of such letters of credit or Incurrence of such Indebtedness,
such obligations are reimbursed within 30 days following such drawing or
Incurrence;
(I) Capitalized Lease Obligations or Purchase Money Indebtedness in
an aggregate principal amount outstanding not to exceed $20 million on
any date of determination; and
(J) Indebtedness of JLL or any Restricted Subsidiary, in addition to
Indebtedness permitted under clauses (A) through (I) above, in an
aggregate principal amount outstanding at any time, together with
refinancings thereof, not to exceed $40 million, less any amount of such
Indebtedness permanently repaid as provided under the "Limitation on
Asset Sales" covenant described at page 96.
(3) Notwithstanding any other provision of this "Limitation on
Indebtedness" covenant, the maximum amount of Indebtedness that JLL or a
Restricted Subsidiary may Incur pursuant to this "Limitation on
Indebtedness" covenant shall not be deemed to be exceeded, with respect to
any outstanding Indebtedness due solely to the result of fluctuations in the
exchange rates of currencies.
(4) For purposes of determining any particular amount of Indebtedness
under this "Limitation on Indebtedness" covenant:
(A) Indebtedness Incurred under the Credit Agreement on or prior to
July 26, 2000 shall be treated as Incurred pursuant to clause (2)(A) of
this "Limitation on Indebtedness" covenant;
(B) Guarantees, Liens or obligations with respect to letters of
credit supporting Indebtedness otherwise included in the determination of
such particular amount shall not be included; and
(C) any Liens granted pursuant to the equal and ratable provisions
referred to in the "Limitation on Liens" covenant described at page 96
shall not be treated as Indebtedness.
(5) For purposes of determining compliance with this "Limitation on
Indebtedness" covenant, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in the
above clauses, JLL, in its sole discretion, shall classify, and from time to
time may reclassify, such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of such clauses.
Accrual of interest, accretion of accreted value and payment of interest in
the form of additional Indebtedness will not be deemed an Incurrence of
Indebtedness.
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LIMITATION ON RESTRICTED PAYMENTS
JLL will not, and will not permit any Restricted Subsidiary to, directly or
indirectly:
(1) declare or pay any dividend or make any distribution on or with
respect to its Capital Stock, other than dividends or distributions payable
solely in shares of its Capital Stock, other than Disqualified Stock, or in
options, warrants or other rights to acquire shares of such Capital Stock
and pro rata dividends or distributions on Capital Stock of Restricted
Subsidiaries held by minority stockholders, held by persons other than JLL
or any of its Restricted Subsidiaries;
(2) purchase, redeem, retire or otherwise acquire for value any shares
of Capital Stock of:
(A) JLL, the issuer or any guarantor of the notes, including options,
warrants or other rights to acquire such shares of Capital Stock, held by
any person other than the issuer or any guarantor of the notes; or
(B) a Restricted Subsidiary, other than a guarantor of the notes,
including options, warrants or other rights to acquire such shares of
Capital Stock, held by any Affiliate of JLL, other than a Wholly Owned
Restricted Subsidiary, or any holder of more than 5% of the Capital Stock
of JLL;
(3) make any voluntary or optional principal payment, or voluntary or
optional redemption, repurchase, defeasance or other acquisition or
retirement for value, of Indebtedness of any guarantor of the notes that is
subordinated in right of payment to its guarantee of the notes or
Indebtedness of the issuer that is subordinate in right of payment to the
notes; or
(4) make any Investment, other than a Permitted Investment, in any
person;
such payments or any other actions described in clauses (1) through (4) above
being collectively "Restricted Payments,"
if, at the time of, and after giving effect to, the proposed Restricted
Payment:
(A) a Default or Event of Default shall have occurred and be
continuing;
(B) JLL could not Incur at least $1.00 of Indebtedness under the
first paragraph of the "Limitation on Indebtedness" covenant described at
page 86: or
(C) the aggregate amount of all Restricted Payments, the amount, if
other than in cash, to be determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a
board resolution, made after July 26, 2000, shall exceed the sum of:
(I) 50% of the aggregate amount of Adjusted Consolidated Net
Income or, if Adjusted Consolidated Net Income is a loss, minus 100%
of the amount of such loss, determined by excluding income resulting
from transfers of assets by JLL or a Restricted Subsidiary to an
Unrestricted Subsidiary, accrued on a cumulative basis during the
period, taken as one accounting period, beginning on the first day of
the fiscal quarter immediately following July 26, 2000, and ending on
the last day of the last fiscal quarter preceding the Transaction
Date for which reports have been filed with the SEC or provided to
the trustee, PLUS
(II) the aggregate Net Cash Proceeds received by the Issuer or JLL
after July 26, 2000, from a capital contribution or the issuance and
sale permitted by the indenture of its Capital Stock, other than
Disqualified Stock, from or to a person other than JLL or any
Restricted Subsidiary, including an issuance or sale permitted by the
indenture of Indebtedness or Disqualified Stock of JLL or the issuer
for cash subsequent to July 26, 2000, upon the conversion of such
Indebtedness or Disqualified Stock into Capital Stock,
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other than Disqualified Stock, of JLL or the issuer, or from the
issuance to a person other than JLL or any Restricted Subsidiary of
JLL of any options, warrants or other rights to acquire Capital Stock
of JLL or the issuer, in each case, exclusive of any Disqualified
Stock or any options, warrants or other rights that are redeemable at
the option of the holder, or are required to be redeemed, prior to
the Stated Maturity of the notes, PLUS
(III) an amount equal to the net reduction in Investments, other
than reductions in Permitted Investments, in any person, including
Investments in an Unrestricted Subsidiary, resulting from payments of
interest on Indebtedness, dividends, repayments of loans or advances
or other transfers of assets, in each case to JLL, the issuer or any
Restricted Subsidiary or from the net cash proceeds from the sale of
any such Investment, or from redesignations of Unrestricted
Subsidiaries as Restricted Subsidiaries, other than redesignations of
Unrestricted Subsidiaries holding Co-Investments to the extent that
any such redesignation is used to increase Permitted Investments
pursuant to clause (7)(C)(II) of the definition of "Permitted
Investment" set forth at page 80 valued in each case as provided in
the definition of "Investment" at page 77.
The foregoing provision shall not be violated by reason of:
(1) the payment of any dividend within 60 days after the date of
declaration thereof if, at said date of declaration, such payment would
comply with the foregoing paragraph;
(2) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of
payment to any guarantee of the notes or the notes, including premium, if
any, and accrued and unpaid interest thereon, with the proceeds of, or in
exchange for, Indebtedness Incurred under clause (2)(C) of the "Limitation
on Indebtedness" covenant described at page 86;
(3) the repurchase, redemption or other acquisition of Capital Stock of
any guarantor of the notes, the issuer or an Unrestricted Subsidiary, or
options, warrants or other rights to acquire such Capital Stock, in exchange
for, or out of the proceeds of a substantially concurrent offering of,
shares of Capital Stock, other than Disqualified Stock, of JLL or options,
warrants or other rights to acquire such Capital Stock;
(4) the making of any principal payment or the repurchase, redemption,
retirement, defeasance or other acquisition for value of Indebtedness which
is subordinated in right of payment to the notes or any guarantee of the
notes in exchange for, or out of the proceeds of, a substantially concurrent
offering of, shares of the Capital Stock, other than Disqualified Stock, of
JLL or options, warrants or other rights to acquire such Capital Stock;
(5) payments or distributions, to dissenting stockholders pursuant to
applicable law, pursuant to or in connection with a consolidation, merger or
transfer of assets that complies with the provisions of the indenture
applicable to mergers, consolidations and transfers of all or substantially
all property and assets;
(6) Investments acquired in exchange for, or out of the proceeds of a
substantially concurrent issuance of, Capital Stock, other than Disqualified
Stock, of JLL;
(7) purchases of outstanding Capital Stock, other than Disqualified
Stock, or options, warrants or other rights to acquire such Capital Stock:
(A) in an amount equivalent to the number of shares to be delivered
after July 26, 2000, under JLL's Stock Compensation Program, Employee
Stock Purchase Plan, Stock Award and Incentive Plan and any similar
programs or plans approved by the Board of Directors; and
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(B) in connection with the satisfaction of taxes or other obligations
relating to the shares being allocated and distributed under the Employee
Stock Ownership Trust established in connection with the JLW Acquisition
in an aggregate amount not to exceed $10 million;
(8) endorsements of negotiable instruments for collection in the
ordinary course of business;
(9) any purchase, repurchase, redemption, retirement or other
acquisition for value of Disqualified Stock of JLL or a Restricted
Subsidiary made by exchange for, or out of the proceeds of the substantially
concurrent offering of, Disqualified Stock of JLL or a Restricted Subsidiary
which is permitted to be issued pursuant to the indenture; PROVIDED that:
(A) in the case of a Change of Control, the issuer shall first comply
with its obligations described under " -- Repurchase of Notes upon a
Change of Control" described at page 98; and
(B) in the case of an Asset Sale, the issuer shall comply with its
obligations under the "Limitation on Asset Sales" covenant described at
page 96;
(10) any purchase, repurchase, redemption, retirement, defeasance or
other acquisition for value of Indebtedness that is subordinated in right of
payment to any guarantee of the notes, or the notes, including premium, if
any, and accrued and unpaid interest, upon a Change of Control or Asset Sale
to the extent required by the agreements or instruments governing such
Indebtedness; PROVIDED that:
(A) in the case of a Change of Control, the issuer shall first comply
with its obligations described under " -- Repurchase of Notes upon a
Change of Control" described at page 98; and
(B) in the case of an Asset Sale, the issuer shall comply with its
obligations under the "Limitation on Asset Sales" covenant described at
page 96;
(11) any repurchase of Capital Stock deemed to occur upon the exercise of
stock options if such Capital Stock represents a portion of the exercise
price of such stock options; or
(12) other Restricted Payments not exceeding $20 million in the
aggregate;
PROVIDED that, except in the case of clauses (1) and (3), no Default or Event of
Default shall have occurred and be continuing or occur as a consequence of the
actions or payments set forth therein.
In determining whether any Restricted Payment is permitted by the covenant
described above, JLL may allocate or reallocate all or any portion of such
Restricted Payment among clauses (1) through (12) of the immediately preceding
paragraph or among such clauses and the first paragraph of this section above;
PROVIDED that at the time of such allocation or reallocation, all such
Restricted Payments, or allocated or reallocated portions thereof, would be
permitted under the various provisions of the covenant described above.
Each Restricted Payment permitted pursuant to the second preceding paragraph
(other than the Restricted Payment referred to in clause (2) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (3) or (4) thereof, an Investment acquired as a capital contribution or
in exchange for Capital Stock referred to in clause (6) thereof or any purchase,
repurchase, redemption, retirement or other acquisition for value of
Disqualified Stock of JLL or a Restricted Subsidiary made for Disqualified Stock
of JLL or a Restricted Subsidiary pursuant to clause (9) thereof, and the Net
Cash Proceeds from any issuance of Capital Stock or Disqualified Stock referred
to in clauses (3), (4) and (9)), shall be included in calculating whether the
conditions of clause (C) of the first paragraph of this "Limitation on
Restricted Payments" covenant have been met with respect to any subsequent
Restricted Payments. In the event the proceeds of an issuance of Capital Stock
of JLL are used for the redemption, repurchase or other acquisition of the
notes, or Indebtedness that ranks
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equally with the notes or any guarantee of the notes, then the Net Cash Proceeds
of such issuance shall be included in clause (C) of the first paragraph of this
"Limitation on Restricted Payments" covenant only to the extent such proceeds
are not used for such redemption, repurchase or other acquisition of
Indebtedness.
LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES
JLL will not, and will not permit any Restricted Subsidiary to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Restricted
Subsidiary to:
(1) pay dividends or make any other distributions permitted by
applicable law on any Capital Stock of such Restricted Subsidiary owned by
JLL or any other Restricted Subsidiary;
(2) pay any Indebtedness owed to JLL or any other Restricted Subsidiary;
(3) make loans or advances to JLL or any other Restricted Subsidiary; or
(4) transfer any of its property or assets to JLL or any other
Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions:
(1) existing on July 26, 2000 in the Credit Agreement, the indenture or
any other agreements in effect on July 26, 2000, and any extensions,
refinancings, renewals or replacements of such agreements; PROVIDED that the
encumbrances and restrictions in any such extensions, refinancings, renewals
or replacements are no less favorable in any material respect to the holders
of the notes than those encumbrances or restrictions that are then in effect
and that are being extended, refinanced, renewed or replaced;
(2) existing under or by reason of applicable law or government
regulation;
(3) existing with respect to any person or the property or assets of
such person acquired by JLL or any Restricted Subsidiary, existing at the
time of such acquisition or at the time such person becomes a Restricted
Subsidiary and not incurred in contemplation thereof, which encumbrances or
restrictions are not applicable to any person or the property or assets of
any person other than such person or the property or assets of such person
so acquired or that becomes a Restricted Subsidiary;
(4) in the case of clause (4) of the first paragraph of this "Limitation
on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries" covenant:
(A) that restrict in a customary manner the subletting, assignment or
transfer of any property or asset that is a lease, license, conveyance or
contract or similar property or asset;
(B) existing by virtue of any transfer of, agreement to transfer,
option or right with respect to, or Lien on, any property or assets of
JLL or any Restricted Subsidiary not otherwise prohibited by the
indenture; or
(C) arising or agreed to in the ordinary course of business, not
relating to any Indebtedness, and that do not, individually or in the
aggregate, detract from the value of property or assets of JLL or any
Restricted Subsidiary in any manner material to JLL or any Restricted
Subsidiary;
(5) with respect to a Restricted Subsidiary and imposed pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or property and assets of, such
Restricted Subsidiary;
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(6) any restriction on cash, other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
(7) contained in the terms of any Indebtedness or any agreement pursuant
to which such Indebtedness was issued if:
(A) the encumbrance or restriction applies only in the event of a
payment default or a default with respect to a financial covenant
contained in such Indebtedness or agreement;
(B) the encumbrance or restriction is not materially more
disadvantageous to the holders of the notes than is customary in
comparable financings, as determined by JLL in good faith; and
(C) JLL determines that any such encumbrance or restriction will not
materially affect the issuer's ability to make principal or interest
payments on the notes; or
(8) any encumbrance or restriction of the type referred to in clauses
(1) through (4) of the first paragraph above imposed by any amendment,
modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing of a contract, instrument or obligation referred
to in clauses (1) through (7) above that is no more restrictive in any
material respect than the encumbrance or restriction imposed by the
applicable predecessor contract, instrument or obligation as determined in
good faith by an executive officer of JLL.
Nothing contained in this "Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries" covenant shall prevent JLL or
any Restricted Subsidiary from:
- creating, incurring, assuming or suffering to exist any Liens otherwise
permitted in the "Limitation on Liens" covenant described at page 96; or
- restricting the sale or other disposition of property or assets of JLL or
any of its Restricted Subsidiaries that secure Indebtedness of JLL or any
of its Restricted Subsidiaries.
LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES
JLL will not sell, and will not permit any Restricted Subsidiary, directly
or indirectly, to issue or sell, any shares of Capital Stock of a Restricted
Subsidiary other than the issuer, including options, warrants or other rights to
purchase shares of such Capital Stock, except:
(1) to JLL or any Restricted Subsidiary of which JLL directly or
indirectly holds at least the same percentage equity ownership as the
ownership interest which JLL held, directly or indirectly, in such
Restricted Subsidiary prior to such sale of Capital Stock;
(2) issuances of director's qualifying shares or issuances of Capital
Stock to foreign nationals or employees to the extent required by applicable
law in order to conduct business as conducted at the time of issuance of
such shares;
(3) if, immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary and
any Investment in such person remaining after giving effect to such issuance
or sale would have been permitted to be made under the "Limitation on
Restricted Payments" covenant described at page 89 if made on the date of
such issuance or sale;
(4) sales of Capital Stock, including options, warrants or other rights
to purchase shares of Capital Stock, of a Restricted Subsidiary by JLL, the
issuer or a Restricted Subsidiary; PROVIDED that JLL, the issuer or such
Restricted Subsidiary applies the Net Cash Proceeds of any such sale in
accordance with clause (1) of the third paragraph of the "Limitation on
Asset Sales" covenant described at page 96; or
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(5) issuances and sales of Capital Stock, including options, warrants or
other rights to purchase shares of Capital Stock, of a special purpose
Restricted Subsidiary holding no assets other than Co-Investments, including
any proceeds thereof.
LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED SUBSIDIARIES
JLL will not permit any Restricted Subsidiary, other than the issuer or
another guarantor of the notes, directly or indirectly, to Guarantee any
Indebtedness of JLL or any other Restricted Subsidiary which ranks equally with
or subordinate in right of payment to the notes or the guarantees of the notes
("Guaranteed Indebtedness"), unless and to the extent such Restricted Subsidiary
could incur Indebtedness under the "Limitation of Indebtedness" covenant
described at page 86, unless:
(1) such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture providing for a Guarantee (a "Subsidiary Guarantee")
of payment of the notes by such Restricted Subsidiary; and
(2) such Restricted Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against JLL or
any other Restricted Subsidiary as a result of any payment by such
Restricted Subsidiary under its Subsidiary Guarantee;
PROVIDED that this paragraph will not apply to any Guarantee of any Restricted
Subsidiary that existed at the time such person became a Restricted Subsidiary
and was not Incurred in connection with, or in contemplation of, such person
becoming a Restricted Subsidiary or to any Guarantee issued in connection with
the refinancing of any such obligation. If the Guaranteed Indebtedness:
- ranks equally with any Guarantees of the notes or the notes, then the
Guarantee of such Guaranteed Indebtedness shall rank equally with, or be
subordinated to, the Subsidiary Guarantee; or
- is subordinated to any Guarantee of the notes or the notes, then the
Guarantee of such Guaranteed Indebtedness shall be subordinated to the
Subsidiary Guarantee at least to the extent that the Guaranteed
Indebtedness is subordinated to such Guarantee of the notes or the notes.
Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon:
- any sale, exchange or transfer, to any person not an Affiliate of JLL, of
all of JLL's and each Restricted Subsidiary's Capital Stock in, or all or
substantially all the assets of, such Restricted Subsidiary, which sale,
exchange or transfer is not prohibited by the indenture; or
- the release or discharge of the Guarantee which resulted in the creation
of such Subsidiary Guarantee, except a discharge or release by or as a
result of payment under such Guarantee.
If any Restricted Subsidiary provides a Subsidiary Guarantee pursuant to the
provisions described above, notice thereof will be published as described under
" -- Notices" at page 98.
LIMITATION ON TRANSACTIONS WITH AFFILIATES
JLL will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into, renew or extend any transaction, including, without
limitation, the purchase, sale, lease or exchange of property or assets, or the
rendering of any service, with any Affiliate of JLL or any Restricted
Subsidiary, except upon fair and reasonable terms no less favorable to JLL or
such Restricted Subsidiary than could be obtained, at the time of such
transaction or, if such transaction is pursuant to
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a written agreement, at the time of the execution of the agreement providing
therefor, in a comparable arm's-length transaction with a person that is not
such an Affiliate.
The foregoing limitation does not limit, and shall not apply to:
(1) transactions:
(A) approved by a majority of the disinterested members of the Board
of Directors; or
(B) for which JLL or a Restricted Subsidiary delivers to the trustee
a written opinion of a nationally recognized investment banking firm
stating that the transaction is fair to JLL or such Restricted Subsidiary
from a financial point of view;
(2) any transaction solely between JLL and any of its Restricted
Subsidiaries or solely between Restricted Subsidiaries;
(3) the payment of reasonable and customary fees, compensation and
benefits, indemnities provided for the benefit of, or other compensation to
directors of JLL who are not employees of JLL and the payment of reasonable
employee compensation and benefits taken in the aggregate;
(4) any payments or other transactions pursuant to any tax-sharing
agreement between JLL and any other person with which JLL files a
consolidated tax return or with which JLL is part of a consolidated group
for tax purposes;
(5) any sale of shares of Capital Stock, other than Disqualified Stock,
of JLL and its Restricted Subsidiaries or the issuer;
(6) any Permitted Investment or Restricted Payments not prohibited by
the "Limitation on Restricted Payments" covenant described at page 89;
(7) any issuance of securities subordinate in right of payment to the
notes pursuant to, or the funding of, employment arrangements, stock options
and stock ownership plans approved by the Board of Directors;
(8) the grant of stock options or similar rights to officers, employees,
consultants and directors of JLL and, to the extent otherwise permitted
under the indenture, to any Restricted Subsidiary, pursuant to plans
approved by the Board of Directors and the issuance of securities pursuant
thereto; or
(9) transactions undertaken under any arrangement in existence on
July 26, 2000, as such arrangement may be amended or restated, renewed,
extended, refinanced, refunded or replaced from time to time, PROVIDED that
any such amendment or restatement, renewal, extension, refinancing, refund
or replacement is on terms and conditions not more disadvantageous to the
holders of the notes in any material respect, based on the good faith
determination of the Board of Directors, to JLL or its Restricted
Subsidiaries than the arrangement in existence on July 26, 2000.
Notwithstanding the foregoing, any transaction or series of related
transactions covered by the first paragraph of this "Limitation on Transactions
with Affiliates" covenant and not covered by clauses (2) through (9) of this
paragraph:
(A) the aggregate amount of which is $5 million or less in value, must
be approved or determined to be fair by an executive officer of JLL
evidenced in an officers' certificate or in the manner provided for in
clause (1)(A) or (B) above;
(B) the aggregate amount of which exceeds $5 million in value, must
be approved or determined to be fair in the manner provided for in
clause (1)(A) or (B) above; and
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(C) the aggregate amount of which exceeds $10 million in value, must
be determined to be fair in the manner provided for in clause (1)(B)
above.
LIMITATION ON LIENS
JLL will not, and will not permit any Restricted Subsidiary to, create,
incur, assume or suffer to exist any Lien, other than Permitted Liens, on any of
its assets or properties of any character, or any shares of Capital Stock or
assets securing Indebtedness of any Restricted Subsidiary, without making
effective provision for all of the notes and all other amounts due under the
indenture to be directly secured equally and ratably with, or, if the obligation
or liability to be secured by such Lien is subordinated in right of payment to
the notes, prior to, the obligation or liability secured by such Lien until such
time as such obligation or liability is no longer secured by such Lien.
LIMITATION ON SALE-LEASEBACK TRANSACTIONS
JLL will not, and will not permit any Restricted Subsidiary to, enter into
any sale-leaseback transaction involving any of its assets or properties whether
now owned or hereafter acquired, whereby JLL or a Restricted Subsidiary sells or
transfers such assets or properties and then or thereafter leases such assets or
properties or any part thereof or any other assets or properties which JLL or
such Restricted Subsidiary, as the case may be, intends to use for substantially
the same purpose or purposes as the assets or properties sold or transferred.
The foregoing restriction does not apply to any sale-leaseback transaction:
(1) if the lease is for a period, including renewal rights, of not in
excess of three years;
(2) if the lease secures or relates to industrial revenue or pollution
control bonds;
(3) if the transaction is solely between JLL and any Restricted
Subsidiary or solely between Restricted Subsidiaries;
(4) if JLL or such Restricted Subsidiary, within 12 months after the
sale or transfer of any assets or properties is completed, applies an amount
not less than the net proceeds received from such sale in accordance with
clause (1) or (2) of the third paragraph of the "Limitation on Asset Sales"
covenant described on page 96; or
(5) to the extent the aggregate principal amount of Capitalized Lease
Obligations under such leases plus the outstanding principal amount of
Indebtedness secured by Liens permitted by clause (20) of the definition of
Permitted Liens set forth on page 81, and not separately permitted by other
provisions of the "Limitation on Liens" covenant described on page 96, does
not exceed $10 million at any time outstanding.
LIMITATION ON ASSET SALES
JLL will not, and will not permit any Restricted Subsidiary to, consummate
any Asset Sale, unless:
(1) the consideration received by JLL or such Restricted Subsidiary,
including by way of any person other than JLL or another Restricted
Subsidiary assuming sole responsibility or retiring any liabilities,
contingent or otherwise, is at least equal to the fair market value of the
assets sold or disposed of; and
(2) at least 80% of the consideration received consists of cash or
Temporary Cash Investments or the assumption of Indebtedness of JLL or any
Restricted Subsidiary, other than Indebtedness to JLL or any Restricted
Subsidiary; PROVIDED that JLL or such Restricted Subsidiary is irrevocably
and unconditionally released from all liability under such Indebtedness.
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For purposes of clause (2) above, the following are deemed to be cash:
- the assumption of any liabilities of JLL or of any Restricted Subsidiary,
other than contingent liabilities and liabilities that are by their terms
subordinate to the notes or any Note Guarantee, and the release of JLL or
any such Restricted Subsidiary from liability in connection with such
Asset Sale; and
- any securities or other obligations received by JLL or any Restricted
Subsidiary from the transferee that are converted within 90 days of
receipt by JLL or such Restricted Subsidiary, but only to the extent of
the amount of cash actually received by JLL or such Restricted Subsidiary
as a result of such conversion.
In the event and to the extent that the Net Cash Proceeds received by JLL or
any of its Restricted Subsidiaries from one or more Asset Sales occurring on or
after July 26, 2000 in any period of 12 consecutive months exceed $20 million,
determined as of the date closest to the commencement of such 12-month period
for which a consolidated balance sheet of JLL and its Subsidiaries has been
filed with the SEC or provided to the trustee, then JLL shall or shall cause the
relevant Restricted Subsidiary to:
(1) within 12 months after the date Net Cash Proceeds so received exceed
$20 million:
(A) apply an amount equal to such excess Net Cash Proceeds to
permanently repay unsubordinated Indebtedness of JLL, the issuer or any
Restricted Subsidiary providing a Subsidiary Guarantee pursuant to the
"Limitation on Issuances of Guarantees by Restricted Subsidiaries"
covenant described at page 94 or Indebtedness of any other Restricted
Subsidiary, in each case owing to a person other than JLL or any of its
Restricted Subsidiaries; or
(B) invest an equal amount, or the amount not so applied pursuant to
clause (A), or enter into a definitive agreement committing to so invest
within 12 months after the date of such agreement, in property or assets,
other than current assets, of a nature or type or that are used in a
business, or in a company having property and assets of a nature or type,
or engaged in a business, similar or related to the nature or type of the
property and assets of, or the business of, JLL and its Restricted
Subsidiaries existing on the date of such investment; and
(2) apply, no later than the end of the 12-month period referred to in
clause (1), such excess Net Cash Proceeds, to the extent not applied
pursuant to clause (1), as provided in the following paragraph of this
"Limitation on Asset Sales" covenant.
The amount of such excess Net Cash Proceeds required to be applied, or to be
committed to be applied, during such 12-month period as set forth in clause (1)
of the preceding paragraph and not applied as so required by the end of such
period shall constitute "Excess Proceeds." If, as of the first day of any
calendar month, the aggregate amount of Excess Proceeds not previously subject
to an Offer to Purchase pursuant to this "Limitation on Asset Sales" covenant
totals at least $20 million, the issuer must commence, not later than the
fifteenth business day of such month but at any time prior to such date, and
consummate an Offer to Purchase from the holders, and if required by the terms
of any Indebtedness that ranks equally with the notes or any guarantee of the
notes ("Pari Passu Indebtedness"), from the holders of such Pari Passu
Indebtedness, on a pro rata basis an aggregate principal amount of notes and
Pari Passu Indebtedness equal to the Excess Proceeds on such date, at a purchase
price equal to 100% of the principal amount thereof, plus, in each case, accrued
interest, if any, to the Payment Date. To the extent that the aggregate
principal amount of notes and Pari Passu Indebtedness so tendered, together with
accrued interest, if any, to the Payment Date is less than the aggregate Excess
Proceeds available, JLL may use such remaining Excess Proceeds for general
corporate purposes, subject to the other limitations in the indenture.
The procedures that will be followed by the issuer in consummating an Offer
to Purchase are set forth in the definition of Offer to Purchase under " --
Certain Definitions" at page 79. In the event an Offer to Purchase is required
pursuant to this "Limitation on Asset Sales" covenant, notice thereof will be
published as described under " -- Notices" at page 98.
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Prior to the application of any Net Cash Proceeds as required under clauses
(1) and (2) above, JLL or the relevant Restricted Subsidiary may invest such Net
Cash Proceeds in Temporary Cash Investments or use such Net Cash Proceeds to
repay outstanding Indebtedness of JLL or any Restricted Subsidiary under an
existing revolving credit facility.
The foregoing covenant will not apply to the sale or other disposition of:
- all or any portion of the Capital Stock of a Restricted Subsidiary
permitted to be issued or sold under clause (5) of the "Limitation on the
Issuance and Sale of Capital Stock of Restricted Subsidiaries" covenant
described on page 93; and
- an asset consisting only of Co-Investments or interest in a person, other
than Capital Stock of a Restricted Subsidiary, consisting only of
Co-Investments.
REPURCHASE OF NOTES UPON A CHANGE OF CONTROL
The issuer must commence, within 30 days of the occurrence of a Change of
Control, and consummate an Offer to Purchase for all notes then outstanding, at
a purchase price equal to 101% of the principal amount thereof, plus accrued
interest, if any, to the Payment Date. The procedures that will be followed by
the issuer in consummating an Offer to Purchase are set forth in the definition
of Offer to Purchase under " -- Certain Definitions" at page 79. In the event a
Change of Control occurs, notice of thereof will be published as described under
" -- Notices" at page 98.
There can be no assurance that the issuer will have sufficient funds
available at the time of any Change of Control to make any debt payment,
including repurchases of notes, required by the foregoing covenant, as well as
may be contained in other securities of JLL or any or its Subsidiaries which
might be outstanding at the time. The above covenant requiring the repurchase
the notes will, unless consents are obtained, require the issuer to repay all
Indebtedness then outstanding which by its terms would prohibit such note
repurchase, either prior to or concurrently with such note repurchase.
In addition, our ability to purchase the notes may be limited by the Credit
Agreement so that a Change of Control could cause a default under the Credit
Agreement. Our failure to purchase the notes when required by a Change of
Control would result in an Event of Default with respect to the notes.
SEC REPORTS AND REPORTS TO HOLDERS
Whether or not JLL and the issuer are then required to file reports with the
SEC, JLL and the issuer shall file with the SEC all such reports and other
information (collectively, "SEC Reports") as they would be required to file with
the SEC by Sections 13(a) or 15(d) under the Exchange Act if they were subject
thereto; PROVIDED that JLL and the issuer will not be required to make any
filings not permitted by the SEC. JLL and the issuer shall supply the trustee
and each holder or shall supply to the trustee for forwarding to each such
holder, without cost to such holder, copies of the SEC Reports. Copies of the
SEC Reports will also be available at the offices of the Luxembourg paying and
transfer agent.
NOTICES
All notices to holders of the notes may be delivered in person or sent by
mail or facsimile transmission or telex to them at their respective registered
addresses, registered facsimile numbers or registered telex numbers. Any such
notice shall be deemed to have been given:
- in the case of a letter delivered by hand, at the time of delivery;
- in the case of a letter sent by mail; on the fourth business day after the
date of mailing;
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- in the case of a facsimile transmission, at the time of dispatch; and
- in the case of a telex, on receipt of any answerback confirmation by the
sender.
In addition, as long as the notes are listed on the Luxembourg Stock
Exchange, notices will be published in a leading newspaper having general
circulation in Luxembourg, which is expected to be the LUXEMBURGER WORT. Any
such notice shall be deemed to be given on the date of such publication or, if
published more than once on different dates, on the first date on which
publication is made.
EVENTS OF DEFAULT
The following events will be defined as "Events of Default" in the
indenture:
(1) default in the payment of principal of, or premium, if any, on any
note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise;
(2) default in the payment of interest on any note when the same becomes
due and payable, and such default continues for a period of 30 days;
(3) default in the performance or breach of the provisions of the
indenture described under "Consolidation, Merger and Sale of Assets" at page
101 or the failure to make or consummate an Offer to Purchase in accordance
with the "Limitation on Asset Sales" or "Repurchase of Notes upon a Change
of Control" covenants described at pages 96 and 98, respectively;
(4) the issuer or any guarantor of the notes defaults in the performance
of or breaches any other covenant or agreement of the issuer or such
guarantor in the indenture or under the notes, other than a default
specified in clause (1), (2) or (3) above, and such default or breach
continues for a period of 30 consecutive days after written notice by the
trustee or the holders of 25% or more in aggregate principal amount of the
notes;
(5) there occurs with respect to any issue or issues of Indebtedness of
the issuer, any guarantor of the notes or any Significant Subsidiary having
an outstanding principal amount of $10 million or more in the aggregate for
all such issues of all such persons, whether such Indebtedness now exists or
shall hereafter be created:
(A) an event of default that has caused the holder thereof to declare
such Indebtedness to be due and payable prior to its Stated Maturity and
such Indebtedness has not been discharged in full or such acceleration
has not been rescinded or annulled within 30 days of such acceleration;
and/or
(B) the failure to make a principal payment at the final, but not any
interim, fixed maturity and such defaulted payment shall not have been
made, waived or extended within 30 days of such payment default;
(6) any final judgment or order not covered by insurance for the payment
of money in excess of $10 million in the aggregate for all such final
judgments or orders against all such persons, treating any deductibles,
self-insurance or retention as not so covered, shall be rendered against the
issuer, any guarantor of the notes or any Significant Subsidiary and shall
not be paid or discharged, and there shall be any period of 60 consecutive
days following entry of the final judgment or order that causes the
aggregate amount for all such final judgments or orders outstanding and not
paid or discharged against all such persons to exceed $10 million during
which a stay of enforcement of such final judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect;
(7) a court having jurisdiction in the premises enters a decree or order
for:
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(A) relief in respect of the issuer, any guarantor of the notes or any
Significant Subsidiary in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect;
(B) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the issuer, any guarantor of
the notes or any Significant Subsidiary or for all or substantially all
of the property and assets of the issuer, any guarantor of the notes or
any Significant Subsidiary; or
(C) the winding up or liquidation of the affairs of the issuer, any
guarantor of the notes or any Significant Subsidiary and, in each case,
such decree or order shall remain unstayed and in effect for a period of
60 consecutive days;
(8) the issuer, any guarantor of the notes or any Significant
Subsidiary:
(A) commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents
to the entry of an order for relief in an involuntary case under any such
law;
(B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the issuer, any guarantor of the notes or any
Significant Subsidiary or for all or substantially all of the property
and assets of the issuer, any guarantor of the notes or any Significant
Subsidiary; or
(C) effects any general assignment for the benefit of creditors; or
(9) any guarantee of the notes or any Subsidiary Guarantee, other than
any Subsidiary Guarantee with respect to a guarantor of the notes all of the
Capital Stock of which is sold in accordance with the provisions of the
"Limitation on the Issuance and Sale of Capital Stock of Restricted
Subsidiaries" covenant set forth at page 93, ceases to be in full force and
effect, except as contemplated by the terms thereof, or any guarantor of the
notes denies or disaffirms its obligations under the indenture or its
guarantee of the notes.
If an Event of Default, other than an Event of Default specified in
clause (7) or (8) above that occurs with respect to the issuer or any guarantor
of the notes, occurs and is continuing under the indenture, the trustee or the
holders of at least 25% in aggregate principal amount of the notes then
outstanding, by written notice to the issuer, and to the trustee if such notice
is given by the holders, may, and the trustee at the request of such holders
shall, declare the principal of, premium, if any, and accrued interest on the
notes to be immediately due and payable; PROVIDED that, in the event of a
default with respect to a guarantor of the notes, JLL may elect to substitute
another guarantor or guarantors acceptable to at least one nationally-recognized
rating agency, in which case neither the trustee nor the requisite percentage of
holders shall have any right to declare the principal, premium, if any, or
interest on the notes to be immediately due and payable.
Upon a declaration of acceleration, such principal of, premium, if any, and
accrued interest shall be immediately due and payable.
In the event of a declaration of acceleration because an Event of Default
set forth in clause (5) above has occurred and is continuing, such declaration
of acceleration shall be automatically rescinded and annulled if the event of
default triggering such Event of Default pursuant to clause (5) shall be
remedied or cured by the issuer, any guarantor of the notes or the relevant
Significant Subsidiary or waived by the holders of the relevant Indebtedness
within 60 days after the declaration of acceleration with respect thereto.
If an Event of Default specified in clause (7) or (8) above occurs with
respect to the issuer or a guarantor of the notes, the principal of, premium, if
any, and accrued interest on the notes then
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outstanding shall IPSO FACTO become and be immediately due and payable without
any declaration or other act on the part of the trustee or any holder.
The holders of at least a majority in principal amount of the outstanding
notes by written notice to the issuer and to the trustee may waive all past
defaults and rescind and annul a declaration of acceleration and its
consequences if:
(1) all existing Events of Default, other than the nonpayment of the
principal of, premium, if any, and interest on the notes that have become
due solely by such declaration of acceleration, have been cured or waived;
and
(2) the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction. For information as to the waiver of
defaults, see " -- Modification and Waiver" at page 106.
The holders of at least a majority in aggregate principal amount of the
outstanding notes may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee. However, the trustee may refuse to follow any
direction that conflicts with law or the indenture, that may involve the trustee
in personal liability or that the trustee determines in good faith may be unduly
prejudicial to the rights of holders of notes not joining in the giving of such
direction and may take any other action it deems proper that is not inconsistent
with any such direction received from holders of notes.
A holder may not pursue any remedy with respect to the indenture or the
notes unless:
(1) the holder gives the trustee written notice of a continuing Event of
Default;
(2) the holders of at least 25% in aggregate principal amount of
outstanding notes make a written request to the trustee to pursue the
remedy;
(3) such holder or holders offer the trustee indemnity satisfactory to
the trustee against any costs, liability or expense;
(4) the trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during such 60-day period, the holders of a majority in aggregate
principal amount of the outstanding notes do not give the trustee a
direction that is inconsistent with the request.
However, the above limitations do not apply to the right of any holder of a
note to receive payment of the principal of, premium, if any, or interest on,
such note or to bring suit for the enforcement of any such payment, on or after
the due date expressed in the notes, which right shall not be impaired or
affected without the consent of the holder.
The indenture requires certain officers of JLL and the issuer to certify, on
or before a date not more than 90 days after the end of each fiscal year, that a
review has been conducted of the activities of the issuer, each guarantor of the
notes and the Restricted Subsidiaries and the issuer's, each guarantor's and
each Restricted Subsidiary's performance under the indenture and that each has
fulfilled its obligations thereunder, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default and the nature
and status thereof. JLL and the issuer will also be obligated to notify the
trustee of any default or defaults in the performance of any covenants or
agreements under the indenture.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Neither the issuer nor JLL will consolidate with, merge with or into, or
sell, convey, transfer, lease or otherwise dispose of all or substantially all
of its property and assets, as an entirety or substantially
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an entirety in one transaction or a series of related transactions, to, any
person or permit any person to merge with or into it unless:
(1) the issuer or JLL shall be the continuing person, or the person, if
other than the issuer or JLL, formed by such consolidation or into which the
issuer or JLL is merged or that acquired or leased such property and assets
of the issuer or JLL shall be a corporation organized and validly existing
under the laws of the United States of America or any jurisdiction thereof
or under the laws of the European Union or any member country thereof on the
date of the indenture, other than Greece, Portugal or Spain, and shall
expressly assume, by a supplemental indenture, executed and delivered to the
trustee, all of the obligations of the issuer or JLL on all of the notes or
its guarantee of the notes, as the case may be, and under the indenture;
(2) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction on a pro forma
basis, the issuer, JLL or any person becoming the successor obligor of the
notes or respective guarantee of the notes, as the case may be, shall have a
Consolidated Net Worth equal to or greater than the Consolidated Net Worth
immediately prior to such transaction;
(4) immediately after giving effect to such transaction on a PRO FORMA
basis, the issuer or any person becoming the successor obligor of the notes
or the respective guarantee of the notes, as the case may be, could Incur at
least $1.00 of Indebtedness under the first paragraph of the "Limitation on
Indebtedness" covenant described at page 86; PROVIDED that this clause (4)
shall not apply to a consolidation, merger or sale of all, but not less than
all, of the assets of the issuer or JLL if all Liens and Indebtedness of the
issuer, JLL or any person becoming the successor obligor on the notes or the
respective guarantee of the notes, as the case may be, and the Restricted
Subsidiaries outstanding immediately after such transaction would have been
permitted, and all such Liens and Indebtedness, other than Liens and
Indebtedness of JLL and its Restricted Subsidiaries outstanding immediately
prior to the transaction, shall be deemed to have been Incurred, for all
purposes of the indenture;
(5) the issuer or JLL, as applicable, delivers to the trustee an
officers' certificate, attaching the arithmetic computations to demonstrate
compliance with clauses (3) and (4), and Opinion of Counsel, in each case
stating that such consolidation, merger or transfer and such supplemental
indenture complies with this provision and that all conditions precedent
provided for herein relating to such transaction have been complied with;
and
(6) each guarantor of the notes, unless such guarantor is the person
with which the issuer or JLL has entered into a transaction under this
"Consolidation, Merger and Sale of Assets" section, shall have by amendment
to its guarantee of the notes confirmed that its guarantee of the notes
shall apply to the obligations of the issuer, JLL or the surviving person,
as the case may be, in accordance with the notes and the indenture;
PROVIDED, HOWEVER, that clauses (3) and (4) above do not apply if, in the good
faith determination of the Board of Directors, whose determination shall be
evidenced by a board resolution, the principal purpose of such transaction is to
change the state of incorporation of the issuer or such guarantor and any such
transaction shall not have as one of its purposes the evasion of the foregoing
limitations.
The foregoing provisions will not apply to the sale or other disposition of:
- all or any portion of the Capital Stock of a Restricted Subsidiary
permitted to be issued or sold under clause (5) of the "Limitation on the
Issuance and Sale of Capital Stock of Restricted Subsidiaries" covenant
described at page 93; and
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- an asset consisting only of Co-Investments or interest in a person, other
than Capital Stock of a Restricted Subsidiary, consisting only of
Co-Investments.
PAYMENT OF ADDITIONAL AMOUNTS
All payments made by the issuer under or with respect to the notes will be
made free and clear of and without withholding or deduction for or on account of
any present or future tax, duty, levy, impost, assessment or other governmental
charge, including penalties, interest and other liabilities related to any such
tax, duty, levy, impost, assessment or other governmental charge (collectively,
"Taxes"), imposed or levied by or on behalf of the Netherlands or any other
jurisdiction in which the issuer is organized or is a resident for tax purposes
or by any government authority or political subdivision or territory or
possession or agency therein or thereof having the power to tax (each, a "Taxing
Authority"), unless the issuer is required to withhold or deduct Taxes by law or
by an interpretation or administration of law.
If the issuer is required to withhold or deduct any amount for or on account
of Taxes imposed by a Taxing Authority within the Netherlands or within any
other jurisdiction in which the issuer is organized or is a resident for tax
purposes, from any payment made under or with respect to the notes, the issuer
will pay such additional amounts ("Additional Amounts") as may be necessary so
that the net amount received by each holder of notes after such withholding or
deduction will not be less than the amount the holder and beneficial owner would
have received if such Taxes had not been withheld or deducted.
However, no Additional Amounts will be payable with respect to a payment
made to a holder of notes or to a third party on behalf of a holder with respect
to:
(1) any Taxes that would not have been imposed but for the existence of
any present or former connection between that holder and the jurisdiction
imposing such tax, other than the mere receipt of payment or the ownership
or holding outside of the Netherlands of such note;
(2) any estate, inheritance, wealth, gift, sales, excise, transfer,
personal property tax or similar tax, assessment or governmental charge;
(3) any Taxes payable otherwise than by deduction or withholding from
payments of principal of, premium, if any, or interest on such note; or
(4) Taxes that would not have been imposed but for the failure of the
holder or beneficial owner of a note to comply with any certification,
identification, information, or other documentation requirement under law,
regulation, administrative practice or an applicable treaty that is a
precondition to exemption from, or reduction in the rate of the imposition,
deduction or withholding of Taxes.
Nor will Additional Amounts be paid:
(1) if the payment under or with respect to the notes could have been
made by another paying agent without such deduction or withholding;
(2) if the payment under or with respect to the notes could have been
made without such deduction or withholding if the beneficiary of the payment
had presented the note for payment within 15 days after the date on which
such payment or such note became due and payable or the date on which
payment thereof is duly provided for, whichever is later, except to the
extent that the holder would have been entitled to Additional Amounts had
the note been presented on the last day of such 15-day period; or
(3) with respect to any payment under or with respect to the notes to
any holder who is a fiduciary or partnership or any person other than the
sole beneficial owner of such payment, to the extent that a beneficiary or
settlor with respect to such fiduciary, a member of such a partnership or
the beneficial owner of such payment would not have been entitled to the
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the actual holder of such note.
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The issuer will also make such withholding or deduction and remit the full
amount deducted or withheld to the relevant authority in accordance with
applicable law. The issuer will use its reasonable efforts to obtain certified
copies of tax receipts evidencing the payment of any Taxes so deducted or
withheld from each Taxing Authority imposing such Taxes. The issuer will supply
to the trustee for forwarding to all holders, without cost to such holders,
within 60 days after the date the payment of any Taxes so deducted or withheld
is due pursuant to applicable law, certified copies of tax receipts evidencing
such payment by the issuer or if, notwithstanding the issuer's efforts to obtain
such receipts, the same are not obtainable, other evidence of such payments by
the issuer.
At least 30 days prior to each date on which any payment under or with
respect to the notes is due and payable, if the issuer will be obligated to pay
Additional Amounts with respect to such payment, the issuer will deliver to the
trustee an officers' certificate stating the fact that such Additional Amounts
will be payable and the amounts so payable, and will set forth such other
information as is necessary to enable such Trustee to pay such Additional
Amounts to holders of notes on the payment date.
The provisions under this " -- Payment of Additional Amounts" will survive
any termination or the discharge of the indenture and shall apply MUTATIS
MUTANDIS to any jurisdiction in which any successor person to the issuer is
organized or is engaged in business for tax purposes or any political
subdivision or taxing authority or agency thereof or therein.
In addition, the issuer will pay any stamp, issue, registration, documentary
or other similar taxes and duties, including interest and penalties, payable in
the Netherlands or any political subdivision of or in the Netherlands in respect
of the creation, issue and offering of the notes.
Whenever in the indenture, the notes or this prospectus there is mentioned
in any context, the payment of amounts based upon principal of, premium, if any,
or interest or of any other amount payable under or with respect to any of the
notes, such mention will be deemed to include mention of the payment of
Additional Amounts to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof.
DEFEASANCE
DEFEASANCE AND DISCHARGE. The indenture provides that the issuer and the
guarantors of the notes will be deemed to have paid and will be discharged from
any and all obligations in respect of the notes on the 123rd day after the
deposit referred to below, and the provisions of the indenture will no longer be
in effect with respect to the notes except for, among other matters, certain
obligations to register the transfer or exchange of the notes, to replace
stolen, lost or mutilated notes, to maintain paying agencies and to hold monies
for payment in trust, if, among other things:
(1) the issuer has deposited with the trustee, in trust, money,
Government Obligations and/or U.S. Government Obligations that through the
payment of interest and principal in respect thereof in accordance with
their terms will provide money in an amount sufficient to pay the principal
of, premium, if any, and accrued interest on the notes on the Stated
Maturity of such payments in accordance with the terms of the indenture and
the notes;
(2) the issuer has delivered to the trustee:
(A) either:
- an Opinion of Counsel to the effect that holders will not
recognize income, gain or loss for federal income tax purposes
as a result of the issuer's exercise of its option under this
"Defeasance" provision and will be subject to federal income
tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit, defeasance
and discharge had not occurred, which
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Opinion of Counsel must be based upon, and accompanied by a
copy of, a ruling of the Internal Revenue Service to the same
effect unless there has been a change in applicable federal
income tax law after July 26, 2000 such that a ruling is no
longer required; or
- a ruling directed to the trustee received from the Internal
Revenue Service to the same effect as the aforementioned
Opinion of Counsel; and
(B) an Opinion of Counsel to the effect that the creation of the
defeasance trust does not violate the Investment Company Act of 1940 and
after the passage of 123 days following the deposit, the trust fund will
not be subject to the effect of Section 547 of the United States
Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law;
and
(3) immediately after giving effect to such deposit on a PRO FORMA
basis, no Event of Default, or event that after the giving of notice or
lapse of time or both would become an Event of Default, shall have occurred
and be continuing on the date of such deposit or during the period ending on
the 123rd day after the date of such deposit, and such deposit shall not
result in a breach or violation of, or constitute a default under, any other
agreement or instrument to which JLL or any of its Subsidiaries is a party
or by which JLL or any of its Subsidiaries is bound.
DEFEASANCE OF CERTAIN COVENANTS AND CERTAIN EVENTS OF DEFAULT. The
indenture further provides that:
(1) the provisions of the indenture will no longer be in effect with
respect to:
- clauses (3) and (4) under "Consolidation, Merger and Sale of
Assets" at page 101;
- all the covenants described herein under "Covenants" beginning at
page 58;
- clause (3) under "Events of Default" at page 99 with respect to
clauses (3) and (4) under "Consolidation, Merger and Sale of
Assets" at page 101; and
- clause (4) under "Events of Default" at page 99 with respect to
other covenants; and
(2) clauses (5) and (6) under "Events of Default" at page 99 shall be
deemed not to be Events of Default, upon, among other things,
(1) the deposit with the trustee, in trust, of money, Government
Obligations and/or U.S. Government Obligations that through the payment
of interest and principal in respect thereof in accordance with their
terms will provide money in an amount sufficient to pay the principal of,
premium, if any, and accrued interest on the notes; on the Stated
Maturity of such payments in accordance with the terms of the indenture
and the notes;
(2) the satisfaction of the provisions described in clauses (2)(B)
and (3) of the preceding paragraph; and
(3) the delivery by the issuer to the trustee of an Opinion of
Counsel to the effect that, among other things, the holders will not
recognize income, gain or loss for federal income tax purposes as a
result of such deposit and defeasance of certain covenants and Events of
Default and will be subject to federal income tax on the same amount and
in the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred.
DEFEASANCE AND CERTAIN OTHER EVENTS OF DEFAULT. In the event the issuer
exercises its option to omit compliance with certain covenants and provisions of
the indenture with respect to the notes as described in the immediately
preceding paragraph and the notes are declared due and payable because of the
occurrence of an Event of Default that remains applicable, the amount of money,
Government Obligations and/or U.S. Government Obligations on deposit with the
trustee will be sufficient to pay
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amounts due on the notes at the time of their Stated Maturity but may not be
sufficient to pay amounts due on the notes at the time of the acceleration
resulting from such Event of Default. However, the issuer will remain liable for
such payments and the Note Guarantees with respect to such payments will remain
in effect.
MODIFICATION AND WAIVER
JLL, the issuer and the trustee may amend the indenture, without the consent
of any holder, to:
- cure any ambiguity, defect or inconsistency in the indenture; PROVIDED
that such amendments do not adversely affect the interests of the holders
in any material respect;
- comply with the provisions described under "Consolidation, Merger and Sale
of Assets" at page 101;
- comply with any requirements of the SEC in connection with the
qualification of the indenture under the Trust Indenture Act;
- evidence and provide for the acceptance of appointment by a successor
trustee; or
- make any change that, in the good faith opinion of the Board of Directors,
does not materially and adversely affect the rights of any holder.
Modifications, waivers and amendments of the indenture may be made by JLL,
the issuer and the trustee with the consent of the holders of not less than a
majority in aggregate principal amount of the outstanding notes; PROVIDED,
HOWEVER, that no such modification, waiver or amendment may, without the consent
of each holder affected thereby:
- change the Stated Maturity of the principal of, or any installment of
interest on, any note;
- reduce the principal amount of, or premium, if any, or interest on, any
note;
- change the place or currency of payment of principal of, or premium, if
any, or interest on, any note;
- impair the right to institute suit for the enforcement of any payment on
or after the Stated Maturity, or, in the case of a redemption, on or after
the redemption date, of any note;
- waive a default in the payment of principal of, premium, if any, or
interest on the notes, other than as a result of acceleration;
- modify any guarantee of the notes in a manner adverse to the holders; or
- reduce the percentage or aggregate principal amount of outstanding notes
the consent of whose holders is necessary for waiver of compliance with
certain provisions of the indenture or for waiver of certain defaults.
NO PERSONAL LIABILITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS, OR
EMPLOYEES
The indenture provides that no recourse for the payment of the principal of,
premium, if any, or interest on any of the notes or for any claim based thereon
or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the issuer or any guarantor of the notes in the
indenture, or in any of the notes or the guarantees of the notes or because of
the creation of any Indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer, director, employee or controlling person of
the issuer or any guarantor of the notes or of any successor person thereof.
Each holder, by accepting the notes, waives and releases all such liability.
CONCERNING THE TRUSTEE
The indenture provides that, except during the continuance of a Default, the
trustee will not be liable, except for the performance of such duties as are
specifically set forth in such indenture. If an
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Event of Default has occurred and is continuing, the trustee will use the same
degree of care and skill in its exercise of the rights and powers vested in it
under the indenture as a prudent person would exercise under the circumstances
in the conduct of such person's own affairs.
The indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the trustee, should it
become a creditor of the issuer or any guarantor of the notes, to obtain payment
of claims in certain cases or to realize on certain property received by it in
respect of any such claims, as security or otherwise. The trustee is permitted
to engage in other transactions; PROVIDED, HOWEVER, that if it acquires any
conflicting interest, it must eliminate such conflict or resign.
BOOK-ENTRY; DELIVERY AND FORM FOR NEW NOTES
GENERAL
The new notes will be represented by one or more notes in registered global
form, without interest coupons attached.
On the date of closing of the exchange offer, one global note (the "U.S.
Global Note") will be deposited with the trustee as custodian for DTC and
registered in the name of Cede & Co., as nominee of DTC, and one global note
(the "International Global Note" and, together with the U.S. Global Note, the
"New Global Notes") will be deposited with, and registered in the name of the
nominee of, the trustee in London as common depositary for Euroclear and/or
Clearstream. The new notes will initially be represented by the New Global
Notes.
Ownership of interests in the New Global Notes ("Book-Entry Interests") will
be limited to persons that have accounts with DTC, Euroclear and/or Clearstream,
or persons that hold interests through such participants. Except under the
limited circumstances described below, beneficial owners of Book-Entry Interests
will not be entitled to physical delivery of new notes in definitive form.
Book-Entry Interests will be shown on, and transfers thereof will be
effected only through, records maintained in book-entry form by DTC, Euroclear
and/or Clearstream, or their respective nominees, and their participants. The
laws of some jurisdictions, including certain states of the United States, may
require that certain purchasers of securities take physical delivery of such
securities in definitive form. The foregoing limitations may impair your ability
to own, transfer or pledge Book-Entry Interests. In addition while the new notes
are in global form, holders of Book-Entry Interests will not be considered the
owners or "holders" of new notes for any purpose. So long as the new notes are
held in global form, DTC, Euroclear and/or Clearstream, as applicable, or their
respective nominees, will be considered the sole holders of the New Global Notes
for all purposes under the indenture. In addition, participants must rely on the
procedures of DTC, Euroclear and Clearstream and indirect participants must rely
on the procedures of DTC, Euroclear, Clearstream and the participants through
which they own Book-Entry Interests to transfer their interests or to exercise
any rights of holders under the indenture.
Neither the issuer, the guarantors of the notes nor the trustee will have
any responsibility or be liable for any aspect of the records relating to the
Book-Entry Interests.
REDEMPTION OF THE NEW GLOBAL NOTES
In the event any New Global Note, or any portion thereof, is redeemed, DTC,
Euroclear and/or Clearstream, as applicable, will redeem an equal amount of the
Book-Entry Interests in such New Global Note from the amount received by it in
respect of the redemption of such New Global Note. The redemption price payable
in connection with the redemption of such Book-Entry Interests will be equal to
the amount received by DTC, Euroclear and/or Clearstream, as applicable, in
connection with the redemption of such New Global Note, or any portion thereof.
The issuer understands that, under existing practices of DTC, Euroclear and
Clearstream, if fewer than all of the new notes are to be redeemed at any time,
DTC, Euroclear and Clearstream will credit their respective participants'
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accounts on a proportionate basis, with adjustments to prevent fractions, or by
lot or on such other basis as they deem fair and appropriate; PROVIDED, HOWEVER,
that no Book-Entry Interest of ?1,000 principal amount or less may be redeemed
in part.
PAYMENTS ON NEW GLOBAL NOTES
Payments of any amounts owing in respect of the New Global Notes, including
principal, premium, if any, and interest, will be made by the issuer to DTC or
its nominee in the case of the U.S. Global Note and to the common depositary or
its nominee on behalf of Euroclear and Clearstream in the case of the
International Global Note, as the registered holders of such New Global Notes
under the indenture, which will distribute such payments to their respective
participants in accordance with their procedures. Payments of all such amounts
will be made without deduction or withholding for or on account of any present
or future taxes, duties, assessments or governmental charges of whatever nature
except as may be required by law, and if any such deduction or withholding is
required to be made by any law or regulation of the Netherlands, then, to the
extent described under "-Payment of Additional Amounts" at page 103, Additional
Amounts will be paid as may be necessary in order that the net amounts received
by any holder of the New Global Notes or owner of Book-Entry Interests after
such deduction or withholding will equal the net amounts that such holder or
owner would have otherwise received in respect of such New Global Note or
Book-Entry Interest, as the case may be, absent such withholding or deduction.
The issuer expects that payments by participants to owners of Book-Entry
Interests held through such participants will be governed by standing customer
instructions and customary practices.
Under the terms of the indenture, the issuer and the trustee will treat the
registered holder of the New Global Notes (e.g., DTC, Euroclear or Clearstream
or their respective nominees) as the owner thereof for the purpose of receiving
payments and for all other purposes. Consequently, none of the issuer, the
trustee or any agent of the issuer or the trustee has or will have any
responsibility or liability for:
(1) any aspect of the records of DTC, Euroclear, Clearstream or any
participant or indirect participant relating to or payments made on account
of a Book-Entry Interest or for maintaining, supervising or reviewing the
records of DTC, Euroclear, Clearstream or any participant or indirect
participant relating to or payments made on account of a Book-Entry
Interest, or
(2) DTC, Euroclear, Clearstream or any participant or indirect
participant.
CURRENCY OF PAYMENT FOR THE NEW GLOBAL NOTES
The principal of, premium, if any, and interest on, and all other amounts
payable in respect of, the International Global Note will be paid in euros to
the holders of interests in such notes (the "Euroclear/Clearstream Holders").
The principal of, premium, if any, and interest on, and all other amounts
payable in respect of, the U.S. Global Note will be paid in dollars to the
holders of interests in such notes (the "DTC Holders").
At present, DTC can only accept payment in dollars. As a result, DTC Holders
will receive payments in dollars as described above, unless they elect to
receive payments in euros as described below.
Notwithstanding the payment provisions described above,
Euroclear/Clearstream Holders may elect to receive payments in respect of the
International Global Note in dollars and DTC Holders may elect to receive
payments in respect of the U.S. Global Note in euros.
A Euroclear/Clearstream Holder may receive payments of amounts payable in
respect of its interest in the International Global Note in dollars in
accordance with Euroclear's and Clearstream's customary procedures, which
include, among other things, giving to Euroclear or Clearstream, as appropriate,
a notice of such holder's election to receive such payments in dollars. All
costs of conversion resulting from any such election will be borne by such
holder.
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A DTC Holder may receive payments of amounts payable in respect of its
interest in the U.S. Global Note in euros in accordance with DTC's customary
procedures, which include, among other things, giving to DTC a notice of such
holder's election to receive such payments in euros. All costs of conversion
resulting from any such election will be borne by such holder.
ACTION BY OWNERS OF BOOK-ENTRY INTERESTS
DTC, Euroclear and Clearstream have advised the issuer that they will take
any action permitted to be taken by a holder of notes, including the
presentation of notes for exchange as described above, only at the direction of
one or more participants to whose account the Book-Entry Interests in the New
Global Notes are credited and only in respect of such portion of the aggregate
principal amount of notes as to which such participant or participants has or
have given such direction. DTC, Euroclear and Clearstream will not exercise any
discretion in the granting of consents, waivers or the taking of any other
action in respect of the New Global Notes. However, if there is an Event of
Default under the notes, each of DTC, Euroclear and Clearstream reserve the
right to exchange the New Global Notes for definitive registered notes in
certificated form, and to distribute such definitive registered notes to its
participants.
DEFINITIVE REGISTERED NOTES
Under the terms of the indenture, owners of the Book-Entry Interests will
receive definitive registered notes:
- if DTC, Euroclear or Clearstream notifies the issuer that it is unwilling
or unable to continue to act as depositary and a successor depositary is
not appointed by the issuer within 120 days;
- if DTC, Euroclear or Clearstream so requests following an Event of Default
under the indenture; or
- if the owner of a Book-Entry Interest requests such exchange in writing
delivered through either DTC, Euroclear, Clearstream or the issuer
following an Event of Default under the indenture.
In the case of the issuance of definitive registered notes, the holder of a
definitive registered note may transfer such note by surrendering it to the
registrar or a transfer agent. In the event of a partial transfer or a partial
redemption of a holding of definitive registered notes represented by one
definitive registered note, a definitive registered note shall be issued to the
transferee in respect of the part transferred and a new definitive registered
note in respect of the balance of the holding not transferred or redeemed shall
be issued to the transferor or the holder, as applicable; PROVIDED,that no
definitive registered note in a denomination less than ?1,000 shall be issued.
The cost of preparing, printing, packaging and delivery the definitive
registered notes shall be borne by the issuer.
The issuer shall not be required to register the transfer or exchange of
definitive registered notes for a period of 15 calendar days preceding:
- the record date for any payment of interest on the notes;
- any date fixed for redemption of the notes; or
- the date fixed for selection of the notes to be redeemed in part.
Also, the issuer is not required to register the transfer or exchange of any
notes selected for redemption. In the event of the transfer of any definitive
registered note, the trustee may require a holder, among other things, to
furnish appropriate endorsements and transfer documents as described in the
indenture. The issuer may require a holder to pay any taxes and fees required by
law and permitted by the indenture and the notes.
If definitive registered notes are issued and a holder thereof claims that
such definitive registered notes have been lost, destroyed or wrongfully taken
or if such definitive registered notes are mutilated and is surrendered to the
Registrar or at the office of a transfer agent, the issuer shall issue and the
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trustee shall authenticate a replacement definitive registered note if the
trustee's and the issuer's requirements are met. The trustee or the issuer may
require a holder requesting replacement of a definitive registered note to
furnish an indemnity bond sufficient in the judgment of both to protect the
issuer, the trustee or the paying agent appointed pursuant to the indenture from
any loss which any of them may suffer if a definitive registered note is
replaced. The issuer may charge for its expenses in replacing a definitive
registered note.
In case any such mutilated, destroyed, lost or stolen definitive registered
note has become or is about to become due and payable, or is about to be
redeemed or purchased by the issuer pursuant to the provisions of the indenture,
the issuer in its discretion may, instead of issuing a new definitive registered
note, pay, redeem or purchase such definitive registered note, as the case may
be.
Definitive registered notes may be transferred and exchanged for Book-Entry
Interests in a New Global Note only in accordance with the indenture and, if
required in the case of old notes, only after the transferor first delivers to
the trustee a written certification (in the form provided in the indenture) to
the effect that such transfer will comply with the transfer restrictions
applicable to such old notes.
INFORMATION CONCERNING DTC, EUROCLEAR AND CLEARSTREAM
The issuer understands as follows with respect to DTC, Euroclear and
Clearstream:
DTC. DTC is a limited purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the Uniform Commercial Code and a "Clearing Agency"
registered pursuant to the provisions of Section 17A of the Exchange Act.
DTC was created to hold securities for its participants and to facilitate
the clearance and settlement of transactions among its participants. It does
this through electronic book-entry changes in the accounts of securities
participants, eliminating the need for physical movement of securities
certificates. DTC participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. DTC is
owned by a number of its direct participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a direct
participant also have access to the DTC system and are known as indirect
participants.
Because DTC can only act on behalf of participants, who in turn act on
behalf of indirect participants and certain banks, the ability of an owner of a
beneficial interest to pledge such interest to persons or entities that do not
participate in the DTC system or otherwise take actions in respect of such
interest, may be limited by the lack of a definitive certificate for that
interest. The laws of some states require that certain persons take physical
delivery of securities in definitive form. Consequently, the ability to transfer
beneficial interests to such persons may be limited. In addition, owners of
beneficial interests through the DTC system will receive distributions
attributable to the U.S. Global Note only through DTC participants.
EUROCLEAR AND CLEARSTREAM. Like DTC, Euroclear and Clearstream hold
securities for participating organizations. They also facilitate the clearance
and settlement of securities transactions between their respective participants
through electronic book-entry changes in accounts of such participants.
Euroclear and Clearstream provide various services to their participants,
including the safekeeping, administration, clearance, settlement, lending and
borrowing of internationally traded securities. Euroclear and Clearstream
interface with domestic securities markets. Euroclear and Clearstream
participants are financial institutions such as underwriters, securities brokers
and dealers, banks, trust companies and certain other organizations. Indirect
access to Euroclear or Clearstream is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodian
relationship with a Euroclear or Clearstream participant, either directly or
indirectly. A
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participant's overall contractual relations with either Euroclear or Clearstream
are governed by the respective rules and operating procedures of Euroclear or
Clearstream and any applicable laws. Both Euroclear and Clearstream act under
such rules and operating procedures only on behalf of their respective
participants, and have no record of or relationship with any persons who are not
direct participants.
TRANSFERS OF NEW NOTES; GLOBAL CLEARANCE AND SETTLEMENT UNDER THE BOOK-ENTRY
SYSTEM
Unless definitive new notes are issued, the U.S. Global Note may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee, and the International Global Note may be
transferred, in whole and not in part, only by Euroclear and Clearstream to the
common depositary, as the case may be, or by the common depositary to Euroclear
and Clearstream, respectively, or to another nominee or successor of such
parties or a nominee of such successor.
Transfers of interests in the U.S. Global Note will be subject to the
applicable rules and procedures of DTC and its direct and indirect participants
including, if applicable, those of Euroclear and Clearstream, which are subject
to change from time to time. Transfers of interests in the International Global
Note will be subject to the applicable rules and procedures of Euroclear and
Clearstream, as the case may be, and their respective participants (account
holders and intermediaries). Any secondary market trading in interests in the
New Global Notes is expected to occur through the participants of DTC, Euroclear
and Clearstream, and the securities custody accounts of investors will be
credited with their holdings against payment in same-day funds on the settlement
date.
No service charge will be made for any registration or transfer or exchange
of new notes, but the trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The new notes represented by the New Global Notes are expected to be listed
on the Luxembourg Stock Exchange. The new notes represented by the U.S. Global
Note are expected to trade (except for trades involving only Euroclear and
Clearstream participants) in DTC's Same-Day Funds Settlement System, and any
permitted secondary market trading activity in such new notes will, therefore,
be required by DTC to be settled in immediately available funds. Transfers of
interests in the International Global Note will be effected in the ordinary way
in accordance with the rules of Euroclear or Clearstream, as the case may be.
The issuer expects that secondary trading in any certificated new notes will be
settled in immediately available funds.
Cross-market transfers of interests in the U.S. Global Note between
participants in DTC, on the one hand, and Euroclear or Clearstream participants,
on the other hand, will be effected through DTC in accordance with DTC's rules
on behalf of each of Euroclear or Clearstream by its common depositary; however,
such cross-market transactions will require delivery of instructions to
Euroclear or Clearstream by the counterparty in such system in accordance with
the rules and procedures and within the established deadlines (Brussels time) of
such system. Euroclear or Clearstream will, if the transaction meets its
settlement requirements, deliver instructions to the common depositary to take
action to effect final settlement on its behalf by delivering or receiving
interests in the U.S. Global Note in DTC, and making or receiving payment in
accordance with normal procedures for same-day funds settlement applicable to
DTC. Euroclear participants and Clearstream participants may not deliver
instructions directly to the common depositary.
Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in the New Global Notes from a
participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or Clearstream participant, during the securities
settlement processing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC. Cash received in
Euroclear and Clearstream as a result of sales of an interest in the U.S. Global
Note by or through a Euroclear or Clearstream participant to a participant in
DTC will be received with value on the settlement date of DTC but will
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be available in the relevant Euroclear or Clearstream cash account only as of
the business day for Euroclear or Clearstream following DTC's settlement date.
Although DTC, Euroclear and Clearstream are expected to follow the foregoing
procedures in order to facilitate transfers of interests in a New Global Note
among participants of DTC, Euroclear and Clearstream, they are under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither the issuer, the Guarantors,
the trustee or any agent of the foregoing will have any responsibility for the
performance by DTC, Euroclear or Clearstream or their respective participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.
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MATERIAL UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of material U.S. federal income tax
consequences relevant to (i) the exchange of the old notes for the new notes
pursuant to the exchange offer and (ii) the ownership and disposition of the new
notes as of the date hereof. This summary is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury regulations, court decisions,
published positions of the Internal Revenue Service (the "IRS") and other
applicable authorities, all as in effect on the date hereof and all of which are
subject to change or differing interpretation (possibly on a retroactive basis).
This summary does not address all of the tax consequences that may be relevant
to a particular investor or to investors subject to special treatment under U.S.
federal income tax law (such as financial institutions, tax-exempt
organizations, real estate investment companies, regulated investment companies,
insurance companies, dealers in securities or currencies or non-U.S. persons).
This summary is limited to persons who will hold the new notes as capital assets
within the meaning of Section 1221 of the Code. No ruling has been or will be
sought from the IRS regarding any matter discussed herein. Counsel to the issuer
and the guarantors has not rendered any legal opinion regarding any U.S. federal
income tax consequences relating to the issuer, the guarantors or an investment
in the new notes. No assurance can be given that the IRS would not assert, or
that a court would not sustain, a position contrary to any of the tax aspects
set forth below. PROSPECTIVE INVESTORS MUST CONSULT THEIR OWN TAX ADVISORS AS TO
THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF
THE NEW NOTES, AS WELL AS THE EFFECTS OF STATE, LOCAL, AND NON-U.S. TAX LAWS.
As used herein, the term "U.S. Holder" means a beneficial owner of an old
note and new note that is for U.S. federal income tax purposes (i) a citizen or
individual resident of the U.S., (ii) a corporation created or organized in the
U.S. or under the laws of the U.S. or of any state or the District of Columbia,
(iii) an estate all of the income of which is includable in gross income for
U.S. federal income tax purposes regardless of its source, or (iv) a trust if
(1) a court within the U.S. is able to exercise primary supervision over the
administration of the trust, and one or more U.S. persons have the authority to
control all substantial decisions of the trust or (2) the trust was in existence
on August 10, 1996 and properly elected to continue to be treated as a U.S.
person. As used herein, the term "Non-U.S. Holder" means a holder of a new note
or old note that is not a U.S. Holder.
U.S. HOLDERS
EXCHANGE OFFER
A U.S. holder will not recognize any taxable gain or loss on the exchange of
the old notes for the new notes pursuant to the exchange offer, and a U.S.
Holder will have the same tax basis and holding period in, and federal income
tax consequences with respect to, the new notes as the old notes surrendered in
exchange therefor.
INTEREST
Payments of interest on the new notes generally will be taxable to a U.S.
Holder as ordinary income at the time accrued or received in accordance with the
U.S. Holder's method of accounting for U.S. federal income tax purposes. It is
expected that interest income on the new notes will constitute foreign source
income and generally will be considered "passive" income or "financial services"
income for U.S. foreign tax credit purposes. It is possible, however, that the
IRS might seek to characterize interest income on the new notes as income from
sources within the U.S.
The amount of interest required to be included in income by a U.S. Holder
will include the amount of foreign taxes, if any, withheld in respect thereof. A
U.S. Holder will be eligible, subject to certain limitations, to claim such
withholding taxes as a credit or deduction for purposes of computing
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the amount of its U.S. federal income tax liability. The rules relating to
foreign tax credits and the timing thereof are complex. Thus, U.S. Holders
should consult with their own tax advisors with regard to the availability of a
foreign tax credit and the application of the foreign tax credit limitations to
their particular situations.
A cash basis U.S. Holder receiving an interest payment in euros on a new
note will be required to include in income the U.S. dollar value of such payment
(determined using the spot rate in effect on the date such payment is received)
regardless of whether such payment is subsequently converted into U.S. dollars.
No ordinary gain or loss will be recognized by such holder if the euros are
converted to U.S. dollars on the date received. The U.S. federal income tax
consequences of the conversion of euros into U.S. dollars is described below.
See " -- Transactions in Euros" at page 115.
An accrual basis U.S. Holder will be required to include in income the U.S.
dollar value of the amount of U.S. interest income that has accrued on a new
note in a taxable year, determined by translating such income at the average
rate of exchange for the relevant interest accrual period or, with respect to an
interest accrual period that spans two taxable years, at the average rate for
the portion of such interest accrual period within the taxable year. The average
rate of exchange for an interest accrual period (or portion thereof) is the
simple average of the exchange rates for each business day of such period (or
such other average that is reasonably derived and consistently applied). An
accrual basis holder may elect to translate interest income on a new note using
the spot rate in effect on the last day of an interest accrual period (or the
last day of the taxable year for the portion of such period within the taxable
year). In addition, a U.S. Holder may elect to use the spot rate in effect on
the date of receipt (or payment) for such purpose if such date is within five
business days of the last date of an interest accrual period. The election must
be made in a statement filed with the taxpayer's return and is applicable to all
debt instruments for such year and thereafter unless changed with the consent of
the IRS.
Upon receipt of an interest payment on a new note, an accrual basis U.S.
Holder will recognize ordinary gain or loss with respect to accrued interest
income in an amount equal to the difference between the U.S. dollar value of the
payment received (determined using the spot rate in effect on the date such
payment is received) in respect of such interest accrual period and the U.S.
dollar value of the interest income that has accrued during such interest
accrual period (as determined in the preceding paragraph). Any such ordinary
gain or loss will generally not be treated as interest income or expense, except
to the extent provided by future regulations or administrative pronouncements of
the IRS. The U.S. federal income tax consequences of the conversion of euros
into U.S. dollars is described below. See "-- Transactions in Euros" at page
115.
DISPOSITIONS
Upon the sale or other disposition of a new note, a U.S. Holder generally
will recognize gain or loss equal to the difference between the amount realized
on the sale or other disposition (or, if it is realized in other than U.S.
dollars, the U.S. dollar value of the amount using the spot rate in effect on
the date of such sale or other disposition) and the holder's adjusted tax basis
in such new note. A U.S. Holder's tax basis in such new note generally will be
the tax basis of the old note surrendered in exchange therefor. For these
purposes, the amount realized on the sale or other disposition of a new note
does not include any amount attributable to accrued but unpaid interest, which
will be taxable as ordinary income unless previously taken into account. Except
with respect to gains or losses attributable to changes in currency exchange
rates, as described below, such gain or loss will be capital gain or loss. Such
gain will generally be treated as U.S. source gain and, under recently issued
Treasury Regulations, a loss on such a disposition also would be allocated to
reduce U.S. source income, subject to applicable limitations.
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Gain or loss recognized by a U.S. Holder on the sale or other disposition of
a new note that is attributable to changes in the rate of exchange between the
U.S. dollar and the euro will be treated as ordinary income or loss and
generally will not be treated as interest income or expense except to the extent
provided by future regulations or administrative pronouncements of the IRS. Such
foreign currency gain or loss is recognized on the sale or other disposition of
a new note only to the extent of total gain or loss recognized on such sale or
other disposition.
TRANSACTIONS IN EUROS
Euros received as interest on, or on the sale or other disposition of, a new
note will have a tax basis equal to their U.S. dollar value at the spot rate at
the time such interest is received or at the time payment is received in
consideration of such sale or other disposition. The amount of gain or loss
recognized on a sale or other disposition of such euros will be equal to the
difference between (i) the amount of U.S. dollars, or the fair market value in
U.S. dollars of the other currency or property received in such sale or other
disposition and (ii) the tax basis of such euros.
NON-U.S. HOLDERS
Subject to the discussion below concerning information reporting and backup
withholding, generally a Non-U.S. Holder will not be subject to U.S. federal
income tax on payments of interest on, or on any gain on the sale of, a new
note, unless such Non-U.S. Holder held the new note in connection with a U.S.
trade or business carried on by such Non-U.S. Holder, or in the case of the sale
of the new notes by a non-U.S. Holder who is an individual, such individual was
present in the U.S. for 183 days or more during the taxable year in which such
gain is realized and certain other requirements are met.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Payments made with respect to the new notes and the proceeds upon the sale
or other disposition of the new notes may be subject to information reporting
and possible U.S. backup withholding at a 31% rate. Backup withholding will not
apply to U.S. Holders who furnish a correct taxpayer identification number and
provide other certification or who are otherwise exempt from backup withholding.
Copies of those information returns may also be made available, under the
provisions of a specific treaty or agreement, to the tax authorities of the
country in which the Non-U.S. Holder resides. The regulations provide that
backup withholding and information reporting will not apply to payments made in
respect of the new notes by the issuer to a Non-U.S. Holder, if the Non-U.S.
Holder certifies as to its non-U.S. status under penalties of perjury or
otherwise establishes an exemption (provided that neither the issuer nor its
paying agent has actual knowledge that the Non-U.S. Holder is a U.S. person or
that the conditions of any other exemption are not, in fact, satisfied).
Generally, U.S. Holders will provide such certification on IRS Form W-9 (Request
for Taxpayer Identification Number and Certification) and Non-U.S. Holders will
provide such certification on the IRS Form W-8 appropriate for the Holder.
The payment of the proceeds from the disposition of new notes to or through
the U.S. office of any broker, U.S. or foreign, will be subject to information
reporting and possible backup withholding unless the owner certifies as to its
non-U.S. status under penalty of perjury or otherwise establishes an exemption,
provided that the broker does not have actual knowledge that the Non-U.S. Holder
is a U.S. person or that the conditions of any other exemption are not, in fact,
satisfied. The payment of the proceeds from the disposition of a new note to or
through a non-U.S. office of a non-U.S. broker will not be subject to
information reporting or backup withholding.
In the case of the payment of proceeds from the disposition of new notes to
or through a non-U.S. office of a U.S. broker or a non-U.S. broker with certain
types of relationships to the United States,
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the regulations require information reporting, but not backup withholding, on
the payment unless the broker has documentary evidence in its files that the
owner is a Non-U.S. Holder and the broker has no knowledge to the contrary.
Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder will be allowed as a refund or a credit against such Non-U.S.
Holders' federal income tax liability, provided that the requisite procedures
are followed.
The U.S. Treasury Department has promulgated final regulations regarding the
withholding and information reporting rules discussed above applicable to
Non-U.S. Holders and generally effective for payments made after December 31,
2000. Under these Treasury regulations, Non-U.S. Holders may be required to
furnish new certification of their foreign status at any time after that date
and before the expiration of any prior certification. Non-U.S. Holders should
consult their own tax advisors with respect to the impact, if any, of the final
regulations.
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DUTCH TAXATION
INTRODUCTION
This summary describes the principal tax consequences that will generally
apply in case of an investment in the notes under Dutch tax laws in force and in
effect as of the date hereof, and is subject to changes in Dutch law, including
changes that could have retroactive effect. Not every potential tax consequence
of such investment under the laws of the Netherlands will be addressed.
Prospective investors should consult their professional tax advisors regarding
their particular personal tax consequences of acquiring, owning and disposing of
the notes.
PROPOSED EUROPEAN UNION TAX DIRECTIVE ON INTEREST FROM SAVINGS
In May 1998, the European Commission presented to the Council of Ministers
of the European Union a proposal to oblige Member States to adopt either a
"withholding tax system" or an "information reporting system" in relation to
interest, discounts and premiums. It is unclear whether this proposal will be
adopted, and if it is adopted, whether it will be adopted in its current form.
The "withholding tax system" would require a paying agent established in a
Member State to withhold tax at a minimum rate of 20 percent from any interest,
discount or premium paid to an individual resident in another Member State
unless such an individual presents a certificate obtained from the tax
authorities of the Member State in which he is resident confirming that those
authorities are aware of the payment due to that individual. The "information
reporting system" would require a Member State to supply, to other Member
States, details of any payment of interest, discount or premium made by paying
agents within its jurisdiction to an individual resident in another Member
State. For these purposes, the term "paying agent" is widely defined and
includes an agent who collects interest, discounts or premium on behalf of an
individual beneficially entitled thereto. If this proposal is adopted, it will
not apply to payments of interest, discounts or premiums made before January 1,
2001. In the description of the taxation below, the withholding tax consequences
of the adoption of the proposal have not been reflected.
TAX REFORM 2001
Recently, the Individual Income Tax Act 2001 (WET INKOMSTENBELASTING 2001)
was enacted (Act of May 11, 2000, STAATSBLAD 215), to replace the Individual
Income Tax Act 1964 (WET OP DE INKOMSTENBELASTING 1964). In a separate Act,
certain transitional provisions were enacted and a number of changes were made
to other tax acts (INVOERINGSWET WET INKOMSTENBELASTING 2001, Act of May 11,
2000, STAATSBLAD 216). The new legislation will become effective as of
January 1, 2001. Amendments may still be made before that date, through
supplemental Acts. The new legislation will substantially change the Dutch
taxation. The effect of the new legislation becoming effective is not taken into
account in the summary of Dutch taxation below, with the exception of the
abolition of the net wealth tax.
THE NETHERLANDS
WITHHOLDING TAX
All payments under the notes may be made free of withholding or deduction
of, for or on account of any taxes of whatever nature imposed, levied, withheld
or assessed by the Netherlands or any political subdivision or taxing authority
thereof or therein.
TAXES ON INCOME AND CAPITAL GAINS
A holder of notes will not be subject to any Dutch taxes on income or
capital gains in respect of any payment under the notes or in respect of any
gain realized on the disposal of the notes, including
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any gain realized on the disposal of old notes for new notes pursuant to the
exchange offer, provided that:
- such holder is neither resident nor deemed to be resident in the
Netherlands;
- such holder does not have an enterprise or an interest in an enterprise
that is, in whole or in part, carried on through a permanent establishment
or a permanent representative in the Netherlands and to which enterprise
or part of an enterprise, as the case may be, the notes are attributable;
and
- such holder does not have a substantial interest or a deemed substantial
interest in the issuer or, if such holder does have such an interest, it
forms part of the assets of an enterprise.
Generally, a holder of notes will not have a substantial interest if he, his
spouse, certain other relatives (including foster children) or certain persons
sharing his household, do not hold, alone or together, whether directly or
indirectly, the ownership of, or certain other rights over, shares representing
five percent or more of the total issued and outstanding capital (or the issued
and outstanding capital of any class of shares) of the issuer, or rights to
acquire shares, whether or not already issued, that represent at any time (and
from time to time) five percent or more of the total issued and outstanding
capital (or the issued and outstanding capital of any class of shares) of the
issuer or the ownership of certain profit participating certificates that relate
to five percent or more of the annual profit of the issuer and/or to five
percent or more of the liquidation proceeds of the issuer. A deemed substantial
interest is present if (part of) a substantial interest has been disposed of, or
is deemed to have been disposed of, on a non-recognition basis.
A holder of notes will not be subject to income taxation in the Netherlands
by reason only of the issue of the notes or the performance by the issuer of its
obligations or under the notes.
GIFT AND INHERITANCE TAXES
No gift or inheritance taxes will arise in the Netherlands with respect to
an acquisition of notes by way of a gift by, or on the death of, a holder of
notes who is neither resident nor deemed to be resident in the Netherlands,
unless:
- such holder at the time of the gift has or at the time of his death had an
enterprise or an interest in an enterprise that is or was, in whole or in
part, carried on through a permanent establishment or a permanent
representative in the Netherlands and to which enterprise or part of an
enterprise, as the case may be, the notes are or were attributable; or
- in the case of a gift of notes by an individual who at the date of the
gift was neither resident nor deemed to be resident in the Netherlands,
such individual dies within 180 days after the date of the gift, while
being resident or deemed to be resident in the Netherlands.
TURNOVER TAX
No Dutch turnover tax will arise in respect of any payment in consideration
for the issue of the notes or with respect to any payment by the issuer of
principal or interest on the notes.
CAPITAL TAX
No Dutch capital tax will be payable in respect of or in connection with the
performance of the issuer of its obligations under the notes, with the exception
of capital tax that may be due by the issuer on capital contributions made or
deemed to be made to the issuer under the indenture and/or under the
capitalization and keepwell agreement.
OTHER TAXES AND DUTIES
No Dutch registration tax, custom duty, transfer tax, stamp duty or any
other similar documentary tax or duty, other than court fees, will be payable in
the Netherlands in respect of or in connection with the performance by the
issuer of its obligations under the notes.
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PLAN OF DISTRIBUTION AND SELLING RESTRICTIONS
The exchange offer is not being made to, nor will the issuer accept
surrenders of old notes for exchange from, holders of old notes in any
jurisdiction in which the exchange offer or the acceptance thereof would not be
in compliance with the securities or blue sky laws of such jurisdiction.
The offer of the old notes was made in reliance upon Section 6 of the Dutch
Exemption Regulation under the Supervision of Securities Trade Act of 1995,
known as the "Euro Securities Exemption." Accordingly, neither the issuer nor
any holder of new notes may engage in a general advertising or sales campaign
(ALGEMENE RECLAMECAMPAGNE OF COLPORTAGECAMPAGNE), within the meaning of the
Dutch Exemption Regulation under the Supervision of Securities Trade Act of
1995, worldwide with respect to the new notes.
New notes will only be available for exchange for the old notes in the
United Kingdom pursuant to the exchange offer by 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 that do not constitute an offer to the public in the
United Kingdom for purposes of the Public Offers of Securities Regulations 1995.
No document issued in connection with the exchange offer, including this
prospectus, may be passed on to any person in the United Kingdom unless that
person is as described in Article 11(3) of the Financial Services Act of 1986
(Investment Advertisements) (Exemptions) Order 1996, or is a person to whom the
document may otherwise lawfully be issued or passed on. Accordingly, by
accepting delivery of this prospectus, the recipient warrants and acknowledges
that it is such a person.
In reliance on interpretations of the staff of the SEC set forth in
no-action letters issued to third parties in similar transactions, we believe
that the new notes issued in the exchange offer in exchange for the old notes
may be offered for resale, resold and otherwise transferred by holders without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that the new notes are acquired in the ordinary course
of such holders' business and the holders are not engaged in and do not intend
to engage in and have no arrangement or understanding with any person to
participate in a distribution of new notes. This position does not apply to any
holder that is
- an "affiliate" of the issuer, Jones Lang LaSalle Incorporated or any
subsidiary guarantor within the meaning of Rule 405 under the Securities
Act;
- a broker-dealer who acquired notes directly from the issuer; or
- a broker-dealer who acquired notes as a result of market-making or other
trading activities.
All participating broker-dealers receiving new notes in the exchange offer
are subject to a prospectus delivery requirement with respect to resales of the
new notes. To date, the SEC has taken the position that participating
broker-dealers may fulfill their prospectus delivery requirements with respect
to transactions involving an exchange of securities such as the exchange
pursuant to the exchange offer, other than a resale of an unsold allotment from
the sale of the old notes to the placement agents, with this prospectus.
Each broker-dealer receiving new notes for its own account in the exchange
offer must acknowledge that it will deliver a prospectus in any resale of the
new notes. Participating broker-dealers may use this prospectus in reselling new
notes if the old notes were acquired for their own accounts as a result of
market-making activities or other trading activities. The issuer, Jones Lang
LaSalle Incorporated and the subsidiary guarantors have agreed that a
participating broker-dealer may use this prospectus in reselling new notes for a
period ending 180 days after the expiration date of the exchange offer subject
to extension under limited circumstances. A participating broker-dealer
intending to use this prospectus in the resale of new notes must notify the
issuer, on or before the expiration date, that it is a participating
broker-dealer. This notice may be given in the space provided for in the letter
of
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transmittal or may be delivered to the exchange agent. The issuer, Jones Lang
LaSalle Incorporated and the subsidiary guarantors have agreed that, for a
period of 180 days after the expiration date subject to extension under limited
circumstances, they will make this prospectus, and any amendment or supplement
to this prospectus, available to any participating broker-dealer that requests
these documents in the letter of transmittal.
In addition, until March 27, 2001 all dealers that effect transactions in
the new notes, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
We will not receive any proceeds from any sale of the new notes by
broker-dealers. Broker-dealers acquiring new notes for their own accounts may
sell the notes in one or more transactions in the over-the-counter market, in
negotiated transactions, through writing options on the new notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of such new notes.
Any broker-dealer reselling new notes that it received in the exchange offer
and any broker or dealer that participates in a distribution of new notes may be
deemed to be an "underwriter" within the meaning of the Securities Act. Any
profit on any resale of new notes and any commissions or concessions received by
any persons may be deemed to be underwriting compensation under the Securities
Act. The letter of transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not admit that it is an
"underwriter" within the meaning of the Securities Act.
LEGAL MATTERS
The validity of the new notes registered pursuant to the registration
statement of which this prospectus forms a part will be passed upon for us by
Skadden, Arps, Slate, Meagher & Flom (Illinois) and affiliates. Certain matters
of Maryland law will be passed upon for us by Piper Marbury Rudnick & Wolfe LLP,
Baltimore, Maryland, and certain matters of Dutch law will be passed upon for us
by Loyens & Loeff, Amsterdam, the Netherlands.
EXPERTS
The consolidated financial statements and schedule of Jones Lang LaSalle
Incorporated and subsidiaries and their predecessors, appearing in Jones Lang
LaSalle Incorporated's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, as amended, and in Jones Lang LaSalle Incorporated's Current
Report on Form 8-K, dated August 11, 2000, have been incorporated by reference
herein in reliance upon the reports of KPMG LLP, independent certified
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
In connection with the exchange offer, the issuer and the guarantors have
filed with the SEC a registration statement relating to the new notes on forms
F-4 and S-4 under the Securities Act. This prospectus constitutes a part of the
registration statement. As permitted under SEC rules, the prospectus does not
include all of the information contained in the registration statement. We refer
you to the registration statement, including all amendments, supplements,
schedules and exhibits thereto, for further information about the issuer, the
guarantors and the new notes. Statements in this prospectus concerning the
provisions of documents are not necessarily summaries of all provisions of those
documents. If we have filed any document as an exhibit to the registration
statement, you should read the exhibit for a more complete understanding of that
document.
Jones Lang LaSalle Incorporated files annual, quarterly and current reports,
proxy statements and other information with the SEC. You may inspect and copy
such material at the public reference facilities maintained by the SEC at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as
well as at the SEC's regional offices at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center,
Suite 1300, New York, New York 10048. You may also obtain copies of such
material from the SEC at prescribed rates by writing to the Public Reference
Section of the Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference rooms. You can also find our SEC filings at
the SEC web site HTTP://WWW.SEC.GOV. The indenture governing the notes requires
us to file with the SEC, and to provide to you upon request, reports and other
information called for under Exchange Act rules, regardless of whether we are
subject to the reporting requirements of the Exchange Act.
Reports, proxy statements and other information concerning Jones Lang
LaSalle can also be inspected at the New York Stock Exchange, 20 Broad Street,
New York, New York 10005, where Jones Lang LaSalle Incorporated's common stock
is listed. In addition, so long as the notes are listed on the Luxembourg Stock
Exchange and the rules of the exchange so require, copies of the most recent
consolidated financial statements for the preceding financial year and any
interim quarterly financial statements published by us, as well as copies of the
reports, proxy statements and other publicly-available information filed by
Jones Lang LaSalle Incorporated with the SEC, will be available at the specified
office of the paying and transfer agent in Luxembourg.
INFORMATION INCORPORATED BY REFERENCE
Rather than include certain information in this prospectus that we have
already included in reports filed with the SEC, we are incorporating this
information by reference, which means that we can disclose important information
to you by referring to those publicly filed documents that contain the
information. The information incorporated by reference is considered to be part
of this prospectus, and information that we file later with the SEC will
automatically update and supersede the information in this prospectus.
Accordingly, we incorporate by reference the following documents filed by Jones
Lang LaSalle Incorporated:
- Annual Report on Forms 10-K and 10-K/A for the fiscal year ended
December 31, 1999;
- Proxy Statement for the 2000 Annual Meeting of Stockholders;
- Quarterly Reports on Form 10-Q for the quarterly periods ended March 31,
June 30, and September 30, 2000 and on Form 10-Q/A for the quarterly
period ended September 30, 2000; and
- Current Reports on Form 8-K dated June 30, 2000 and August 11, 2000 (filed
July 24 and August 11, 2000, respectively).
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In addition, all reports and other documents we subsequently file pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
prospectus will be deemed to be incorporated by reference in this prospectus and
to be part of this prospectus from the date of the filing of such reports and
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for the purposes of this prospectus to the extent that a statement
contained in any subsequently filed document which is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
We will provide without charge to each person to whom this prospectus is
delivered, upon request of such person, a copy of any or all documents that are
incorporated into this prospectus by reference, other than exhibits to any such
document unless such exhibits are specifically incorporated by reference into
the document to which this prospectus refers. You should direct such requests to
Jones Lang LaSalle Incorporated, 200 East Randolph Drive, Chicago, Illinois
60601, Attention: Investor Relations (312) 782-5800. In addition, copies of all
documents that are incorporated into this prospectus by reference may be
obtained at the office of the Luxembourg paying and transfer agent.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement to this prospectus. We have not
authorized anyone to provide you with different or additional information. The
issuer and the guarantors are not making an offer to sell any notes in any
jurisdiction where the exchange offer is not permitted. You should not assume
that the information in this prospectus or any prospectus supplement is accurate
as of any date other than the date on the front of this document.
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No dealer, sales representative or other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by Jones Lang LaSalle Incorporated,
Jones Lang LaSalle Finance B.V. or any other subsidiary of Jones Lang LaSalle
Incorporated. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the securities to
which it relates, nor does it constitute an offer to sell or the solicitation of
an offer to buy such securities, in any jurisdiction in which such offer or
solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such an offer or solicitation. Neither the delivery of this prospectus
nor any sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of Jones Lang LaSalle
Incorporated and its subsidiaries since the date hereof or that information
contained in this prospectus is correct as of any time subsequent to its date.
Until March 27, 2001, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) Netherlands law does not prohibit indemnification of directors,
employees and agents of private limited liability companies incorporated under
the laws of the Netherlands. Under Netherlands law, the legal reasonableness and
fairness test means that such indemnity cannot be relied on where the individual
has been grossly negligent, fraudulent or dishonest.
There is no provision of the articles of association of Jones Lang LaSalle
Finance B.V. under which any managing director of Jones Lang LaSalle Finance
B.V. is insured or indemnified in any manner against any liability that he or
she may incur in his or her capacity as such.
(b) The charters of each of Jones Lang LaSalle Incorporated, Jones Lang
LaSalle Americas, Inc., LaSalle Investment Management, Inc., Jones Lang LaSalle
Co-Investment, Inc. and LaSalle Hotel Advisors, Inc. contain provisions which
eliminate the personal liability of a director or officer of such corporation to
the corporation and its stockholders for breaches of fiduciary duty to the
fullest extent provided by law. Under the Maryland General Corporation Law (the
"MGCL"), however, these provisions do not eliminate or limit the personal
liability of a director or officer (i) to the extent that it is proved that the
director or officer actually received an improper benefit or profit or (ii) if a
judgment or other final adjudication is entered in a proceeding based on a
finding that the director's or officer's action, or failure to act, was the
result of active and deliberate dishonesty and was material to the cause of
action adjudicated in such proceeding.
The charters of Jones Lang LaSalle Incorporated, Jones Lang LaSalle
Americas, Inc., LaSalle Investment Management, Inc., Jones Lang LaSalle
Co-Investment, Inc. and LaSalle Hotel Advisors, Inc. provide that each such
corporation shall indemnify its directors and officers to the fullest extent
permitted by MGCL and, subject to limitations currently required by statute, to
pay their expenses in advance. The MGCL provides that a corporation may
indemnify any director made a party to any proceeding by reason of service in
that capacity unless it is established that (i) the act or omission of the
director was material to the matter giving rise to the proceeding and (a) was
committed in bad faith or (b) was the result of active and deliberate
dishonesty, or (ii) the director actually received an improper personal benefit
in money, property or services, or (iii) in the case of any criminal proceeding,
the director had reasonable cause to believe that the act or omission was
unlawful. The statute permits a Maryland corporation to indemnify its officers,
employees or agents to the same extent as its directors and to such further
extent as is consistent with law.
Jones Lang LaSalle Incorporated has obtained directors' and officers'
liability insurance ("D&O Insurance"). In addition, Jones Lang LaSalle
Incorporated has entered into an indemnification agreement with each of its
directors and certain of its officers. The D&O Insurance and the indemnification
agreements insure Jones Lang LaSalle Incorporated's officers and directors
against certain liabilities, including liabilities under the securities laws.
The indemnification agreements indemnify and advance expenses to Jones Lang
LaSalle Incorporated's directors and officers to the fullest extent permitted by
the MGCL.
The foregoing statements are subject to the detailed provisions of
Section 2-418 and Section 2-405.2 of the MGCL; articles Sixth and Seventh of
Jones Lang LaSalle Incorporated.'s articles of incorporation; paragraphs three
and four of Article Seventh of the articles of incorporation of each of Jones
Lang LaSalle Americas, Inc., LaSalle Investment Management, Inc., Jones Lang
LaSalle Co-Investment, Inc. and LaSalle Hotel Advisors, Inc.; and Article VIII
of the bylaws of each of Jones Lang LaSalle Incorporated, Jones Lang LaSalle
Americas, Inc., LaSalle Investment Management, Inc., Jones Lang LaSalle
Co-Investment, Inc. and LaSalle Hotel Advisors, Inc., as applicable.
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The foregoing discussion is qualified in its entirety by reference to the
charters and bylaws of each of Jones Lang LaSalle Incorporated, Jones Lang
LaSalle Americas, Inc., LaSalle Investment Management, Inc., Jones Lang LaSalle
Co-Investment, Inc. and LaSalle Hotel Advisors, Inc., included as exhibits to
this registration statement, and to the MGCL.
(c) As permitted by Section 102 of the Delaware General Corporation Law, as
amended (the "DGCL"), the certificate of incorporation of Jones Lang LaSalle
International, Inc. provides that a director of the corporation shall not be
personally liable to Jones Lang LaSalle International, Inc. or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
authorizing the payment of a dividend or approving a stock repurchase or
redemption in violation of the DGCL or (iv) for any transaction from which the
director derived an improper personal benefit. The certificate of incorporation
provides further that, if the DGCL is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of
the directors of Jones Lang LaSalle International, Inc. shall be eliminated or
limited to the full extent authorized by the DGCL as so amended.
Section 145 of the DGCL provides, among other things, that a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding (other than
an action by or in the right of the corporation) by reason of the fact that the
person is or was a director, officer, agent or employee of the corporation or is
or was serving at the corporation's request as a director, officer, agent, or
employee of another corporation, partnership, joint venture, trust or other
enterprise (including an employee benefit plan) against expenses, including
attorneys' fees, judgment, fines and amounts paid in settlement actually and
reasonably incurred by the person in connection with such action, suit or
proceeding. The power to indemnify applies (a) if such person is successful on
the merits or otherwise in defense of any action, suit or proceeding, or (b) if
such person acted in good faith and in a manner he reasonably believed to be in
the best interest, or not opposed to the best interest, of the corporation, and
with respect to any criminal action or proceeding had no reasonable cause to
believe his conduct was unlawful. The power to indemnify such person also
applies to actions brought by or in the right of the corporation, but only to
the extent of defense expenses (including attorneys' fees but excluding amounts
paid in settlement) actually and reasonably incurred and not to any satisfaction
of judgment or settlement of the claim itself, and with the further limitation
that in such actions no indemnification shall be made in the event of any
adjudication of negligence or misconduct in the performance of such person's
duties to the corporation, unless the court believes that in light of all the
circumstances indemnification should apply.
Jones Lang LaSalle International Inc.'s bylaws provide that the corporation
shall provide indemnification to its directors and officers to the extent and
under those circumstances described in the preceding paragraph. Jones Lang
LaSalle International Inc.'s bylaws also provide that the corporation shall
indemnify any director or officer who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding
against expenses (including attorneys' fees), judgments, fines, penalties, taxes
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding (i) by reason of such person's
service with respect to an employee benefit plan covering employees of the
corporation or a subsidiary or (ii) in connection with any matter arising under
revenue or taxation laws, by reason of the fact that such person is or was a
director or officer of the corporation or related enterprise and had
responsibility for or participated in activities relating to compliance with
such revenue or taxation laws and regulations; provided, in the case of each of
the foregoing clauses (i) and (ii), that such person did not act dishonestly or
in willful or reckless violation of the law or regulation under which the suit
or proceeding arises.
II-2
<PAGE>
As permitted under Section 145 of the DGCL, the indemnification provisions
of Jones Lang LaSalle International, Inc.'s bylaws permit payment of expenses
incurred in defending an action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding if certain conditions are
satisfied.
The indemnification provisions contained in Jones Lang LaSalle
International, Inc.'s bylaws are not exclusive of any other rights to which a
person may be entitled.
The foregoing statements are subject to the detailed provisions of sections
102(b)(7) and 145 of the DGCL, Article Eighth of Jones Lang LaSalle
International, Inc.'s certificate of incorporation and Article VI of Jones Lang
LaSalle International, Inc.'s bylaws, as applicable.
The foregoing discussion is qualified in its entirety by reference to Jones
Lang LaSalle International, Inc.'s certificate of incorporation and bylaws,
included as exhibits to this registration statement, and to the DGCL.
(d) Jones Lang LaSalle Limited's memorandum and articles of association do
not contain any provision under which any director or officer of Jones Lang
LaSalle Limited is insured or indemnified in any manner against any liability
that he or she may incur in his or her capacity as such.
Section 310 of the Companies Act 1985 (as amended by the Companies Act 1989)
(the "Companies Act") provides as follows:
310. PROVISIONS EXEMPTING OFFICERS AND AUDITORS FROM LIABILITY
This section applies to any provision, whether contained in a company's
articles or in any contract with the Company or otherwise, for exempting any
officer of the Company or any person (whether an officer or not) employed by
the Company as auditor from, or indemnifying him against any liability which
by virtue of any rule of law would otherwise attach to him in respect of any
negligence, default, breach of duty or breach of trust of which he may be
guilty in relation to the Company.
I. Except as provided by the following subsection, any such provision
is void.
II. This section does not prevent a company--
A. from purchasing and maintaining for any such officer or auditor
insurance against any such liability, or
B. from indemnifying any such officer or auditor against any
liability incurred by him--
1. in defending any proceedings (whether civil or criminal) in
which judgment is given in his favor or he is acquitted, or
2. in connection with any application under Section 144(3) or
(4) (acquisition of shares by innocent nominee) or
Section 727 (general power to grant relief in case of honest
and reasonable conduct) in which relief is granted to him by
the court.
SECTION 727 OF THE COMPANIES ACT PROVIDES:
(1) If in any proceedings for negligence, default, breach of duty or
breach of trust against an officer of a company or a person employed by a
company as auditor (whether he is or is not an officer of the company) it
appears to the court hearing the case that that officer or person is or may
be liable in respect of the negligence, default, breach of duty or breach of
trust, but that he has acted honestly and reasonably, and that having regard
to all the circumstances of the case (including those connected with his
appointment) he ought fairly to be excused for the negligence,
II-3
<PAGE>
default, breach of duty or breach of trust, that court may relieve him,
either wholly or partly, from his liability on such terms as it thinks fit.
(2) If any such officer or person as above-mentioned has reason to
apprehend that any claim will or might be made against him in respect of any
negligence, default, breach of duty or breach of trust, he may apply to the
court for relief; and the court on the application has the same power to
relieve him as under this section it would have had if it had been a court
before which proceedings against that person for negligence, default, breach
of duty or breach of trust had been brought.
(3) Where a case to which subsection (1) applies is being tried by a
judge with a jury, the judge, after hearing the evidence, may, if he is
satisfied that the defendant or defender ought in pursuance of that
subsection to be relieved either in whole or in part from the liability
sought to be enforced against him, withdraw the case in whole or in part
from the jury and forthwith direct judgment to be entered for the defendant
or defender on such terms as to costs or otherwise as the judge may think
proper.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
2.1 Subscription Agreement (incorporated by reference to Exhibit
2.01 to Jones Lang LaSalle Incorporated's Registration
Statement on Form S-1 (File No. 333-25741)).
2.2 Purchase and Sale Agreement, dated as of October 21, 1998,
as amended, with respect to the acquisition by Jones Lang
LaSalle Incorporated of the JLW Parent Companies operating
in Europe and the U.S.A. (the "Europe/USA Agreement")
(incorporated by reference to Exhibit 10.1 to Jones Lang
LaSalle Incorporated's Current Report on Form 8-K dated
October 22, 1998 (filed December 9, 1998)).
2.3 Purchase and Sale Agreement, dated as of October 21, 1998,
as amended, with respect to the acquisition by Jones Lang
LaSalle Incorporated of the JLW Parent Companies operating
in Australia and New Zealand (the "Australasia Agreement")
(incorporated by reference to Exhibit 10.2 to Jones Lang
LaSalle Incorporated's Current Report on Form 8-K dated
October 22, 1998 (filed December 9, 1998)).
2.4 Purchase and Sale Agreement, dated as of October 21, 1998,
as amended, with respect to the acquisition by Jones Lang
LaSalle Incorporated of the JLW Parent Companies operating
in Asia (the "Asia Agreement") (incorporated by reference
to Exhibit 10.3 to Jones Lang LaSalle Incorporated's
Current Report on Form 8-K dated October 22, 1998 (filed
December 9, 1998)).
2.5 Form of Purchase and Sale Joinder Agreement, dated as of
October 21, 1998, by and among Jones Lang LaSalle
Incorporated and each of the shareholders selling equity
interests in the JLW Parent Companies under the Europe/USA
Agreement (incorporated by reference to Exhibit 10.4 to
Jones Lang LaSalle Incorporated's Current Report on Form
8-K dated October 22, 1998 (filed December 9, 1998)).
2.6 Form of Purchase and Sale Joinder Agreement, dated as of
October 21, 1998, by and among Jones Lang LaSalle
Incorporated and each of the shareholders selling equity
interests in the JLW Parent Companies under the
Australasia Agreement (incorporated by reference to
Exhibit 10.5 to Jones Lang LaSalle Incorporated's Current
Report on Form 8-K dated October 22, 1998 (filed December
9, 1998)).
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
2.7 Form of Purchase and Sale Joinder Agreement, dated as of
October 21, 1998, by and among Jones Lang LaSalle
Incorporated and each of the shareholders selling equity
interests in the JLW Parent Companies under the Asia
Agreement (incorporated by reference to Exhibit 10.6 to
Jones Lang LaSalle Incorporated's Current Report on Form
8-K dated October 22, 1998 (filed December 9, 1998)).
2.8 Form of Indemnity and Escrow Agreement, dated as of October
21, 1998, by and among Jones Lang LaSalle Incorporated,
certain subsidiaries of Jones Lang LaSalle Incorporated
and each of the shareholders selling equity interests in
the JLW Parent Companies under the Europe/USA Agreement,
the Australasia Agreement and the Asia Agreement
(incorporated by reference to Exhibit 10.7 to Jones Lang
LaSalle Incorporated's Current Report on Form 8-K dated
October 22, 1998 (filed December 9, 1998)).
2.9 Form of Stockholder Agreement, dated as of October 21, 1998,
by and among Jones Lang LaSalle Incorporated and each of
the persons receiving shares of common stock under the
Europe/USA Agreement, the Australasia Agreement and the
Asia Agreement (incorporated by reference to Exhibit 10.8
to Jones Lang LaSalle Incorporated's Current Report on
Form 8-K dated October 22, 1998 (filed December 9, 1998)).
2.10 Form of Stockholder Agreement, dated as of October 21, 1998,
by and among Jones Lang LaSalle Incorporated and each of
the partners of DEL-LPL Limited Partnership and DEL-LPAML
Limited Partnership who was an employee of Jones Lang
LaSalle Incorporated in October 1998 and who received
shares of Common Stock in connection with the dissolution
of DEL-LPL Limited Partnership and DEL-LPAML Limited
Partnership (incorporated by reference to Exhibit 10.9 to
Jones Lang LaSalle Incorporated's Current Report on From
8-K dated October 22, 1998 (filed December 9, 1998)).
3.1 Charter of Jones Lang LaSalle Incorporated.*
3.2 Second Amended and Restated Bylaws of Jones Lang LaSalle
Incorporated (incorporated by reference to Exhibit 4.2 to
Jones Lang LaSalle Incorporated's Current Report on Form
8-K dated March 11, 1999 (filed March 24, 1999)).
3.3 Articles of Association of Jones Lang LaSalle Finance B.V.
(English Translation of Dutch Original).*
3.4 Charter of Jones Lang LaSalle Americas, Inc.*
3.5 Bylaws of Jones Lang LaSalle Americas, Inc.*
3.6 Charter of LaSalle Investment Management, Inc.*
3.7 Bylaws of LaSalle Investment Management, Inc.*
3.8 Certificate of Incorporation of Jones Lang LaSalle
International, Inc.*
3.9 Bylaws of Jones Lang LaSalle International, Inc.*
3.10 Charter of Jones Lang LaSalle Co-Investment, Inc.*
3.11 Bylaws of Jones Lang LaSalle Co-Investment, Inc.*
3.12 Articles of Incorporation of LaSalle Hotel Advisors, Inc.*
3.13 Bylaws of LaSalle Hotel Advisors, Inc.*
3.14 Memorandum of Association of Jones Lang LaSalle Limited.*
3.15 Articles of Association of Jones Lang LaSalle Limited.*
4.1 Form of certificate representing shares of Jones Lang
LaSalle Incorporated common stock (incorporated by
reference to Exhibit 4.3 to Jones Lang LaSalle
Incorporated's Current Report on Form 8-K dated March 11,
1999 (filed March 24, 1999)).
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
4.2 Indenture, dated July 26, 2000, among Jones Lang LaSalle
Finance B.V., Jones Lang LaSalle Incorporated, as parent
Guarantor, Jones Lang LaSalle Americas, Inc., LaSalle
Investment Management, Inc., Jones Lang LaSalle
International, Inc., Jones Lang LaSalle Co-Investment,
Inc., LaSalle Hotel Advisors, Inc. and Jones Lang LaSalle
Limited, as Guarantors, and The Bank of New York, as
trustee (incorporated by reference to Exhibit 4.1 to Jones
Lang LaSalle Incorporated's Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 2000).
4.3 Form of Note (included in Exhibit 4.2).
4.4 Registration Rights Agreement, dated July 19, 2000, among
Jones Lang LaSalle Finance B.V., Jones Lang LaSalle
Incorporated, Jones Lang LaSalle Americas, Inc., LaSalle
Investment Management, Inc., Jones Lang LaSalle
International, Inc., Jones Lang LaSalle Co-Investment,
Inc., LaSalle Hotel Advisors, Inc., Jones Lang LaSalle
Limited, Morgan Stanley & Co. International Limited, Bank
of America International Limited, BMO Nesbitt Burns Corp.,
and Chase Manhattan International Limited (incorporated by
reference to Exhibit 4.1 to Jones Lang LaSalle
Incorporated's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2000).
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois).*
5.2 Opinion of Piper Marbury Rudnick & Wolfe LLP.*
5.3 Opinion of Loyens & Loeff.*
5.4 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.*
10.1 Second Amended and Restated Multicurrency Credit Agreement,
dated as of July 26, 2000 (incorporated by reference to
Exhibit 10.1 to Jones Lang LaSalle Incorporated's
Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2000).
10.2 Contribution and Exchange Agreement, dated as of April 21,
1997, by and among DEL-LPL Limited Partnership, DEL-LPAML
Limited Partnership, LaSalle Partners Limited Partnership,
LaSalle Partners Management Limited Partnership, The
Galbreath Company, The Galbreath Company of California,
Inc., Galbreath Holdings, LLC and the Stockholders of The
Galbreath Company (incorporated by reference to Exhibit
10.08 to Jones Lang LaSalle Incorporated's Registration
Statement on Form S-1 (File No. 333-25741)).
10.3 Asset Purchase Agreement, dated as of December 31, 1996, by
and among LaSalle Construction Limited Partnership,
LaSalle Partners Limited Partnership, Clune Construction
Company, L.P. and Michael T. Clune (incorporated by
reference to Exhibit 10.10 to Jones Lang LaSalle
Incorporated's Registration Statement on Form S-1 (File
No. 333-25741)).
10.4 1997 Stock Award and Incentive Plan (incorporated by
reference to Exhibit 99.2 to Jones Lang LaSalle
Incorporated's Registration Statement on Form S-8 (File
No. 333-42193)).
10.5 Amendment to Jones Lang LaSalle Incorporated's 1997 Stock
Award and Incentive Plan (incorporated by reference to
Exhibit 10.1 to Jones Lang LaSalle Incorporated's
Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1998).
10.6 Second Amendment to the 1997 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.1 to Jones Lang
LaSalle Incorporated's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1999).
10.7 Third Amendment to the 1997 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.2 to Jones Lang
LaSalle Incorporated's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1999).
10.8 Employee Stock Purchase Plan (incorporated by reference to
Exhibit 99.1 to Jones Lang LaSalle Incorporated's
Registration Statement on Form S-8 (File No. 333-42193)).
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
10.9 First Amendment to the Employee Stock Purchase Plan
(incorporated by reference to Exhibit 10.2 to Jones Lang
LaSalle Incorporated's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 1998).
10.10 Second Amendment to the Employee Stock Purchase Plan
(incorporated by reference to Exhibit 10.3 to Jones Lang
LaSalle Incorporated's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1998).
10.11 Third Amendment to the Employee Stock Purchase Plan
(incorporated by reference to Exhibit 10.2 to Jones Lang
LaSalle Incorporated's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2000).
10.12 Amended and Restated Stock Compensation Program
(incorporated by reference to Exhibit 10.11 to Jones Lang
LaSalle Incorporated's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999).
10.13 Description of Management Incentive Plan (incorporated by
reference to Exhibit 10.8 to Jones Lang LaSalle
Incorporated's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997).
10.14 Registration Rights Agreement, dated as of April 22, 1997,
by and among Jones Lang LaSalle Incorporated, DEL-LPL
Limited Partnership, DEL-LPAML Limited Partnership,
DSA-LSPL, Inc., DSA-LSAM, Inc. and Galbreath Holdings, LLC
(incorporated by reference to Exhibit 10.14 to Jones Lang
LaSalle Incorporated's Registration Statement on Form S-1
(File No. 333-25741)).
10.15 Form of Indemnification Agreement with Executive Officers
and Directors (incorporated by Reference to Exhibit 10.14
to the Annual Report on Form 10-K for the year ended
December 31, 1998).
10.16 Severance Pay Plan (incorporated by reference to Exhibit
10.15 to Jones Lang LaSalle Incorporated's Annual Report
on Form 10-K for the fiscal year ended December 31, 1999).
10.17 Senior Executive Service Agreement with Christopher A.
Peacock (incorporated by reference to Exhibit 10.16 to
Jones Lang LaSalle Incorporated's Annual Report on Form
10-K for the fiscal year ended December 31, 1999).
10.18 Senior Executive Service Agreement with Robert Orr
(incorporated by reference to Exhibit 10.17 to Jones Lang
LaSalle Incorporated's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999).
10.19 Consent Agreement, dated as of April 15, 1997, by and among
DSA-LSPL, Inc., DSA-LSAM, Inc., DEL-LPL Limited
Partnership, DEL-LPAML Limited Partnership, DEL/LaSalle
Finance Company, L.L.C., LaSalle Partners Limited
Partnership and LaSalle Partners Management Limited
Partnership (incorporated by reference to Exhibit 10.16 to
Jones Lang LaSalle Incorporated's Registration Statement
on Form S-1 (File No. 333-25741)).
10.20 Consent Agreement, dated as of April 22, 1997, by and among
the Stockholders of The Galbreath Company and The
Galbreath Company of California, Inc., Galbreath Holdings,
LLC, DEL-LPL Limited Partnership, DEL-LPAML Limited
Partnership, DEL/LaSalle Finance Company, L.L.C., LaSalle
Partners Limited Partnership and LaSalle Partners
Management Limited Partnership (incorporated by reference
to Exhibit 10.17 to Jones Lang LaSalle Incorporated's
Registration Statement on Form S-1 (File No. 333-25741)).
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
10.21 Purchase Agreement by and among Jones Lang LaSalle
Incorporated and Lend Lease Corporation Limited, and the
subsidiaries of Lend Lease Corporation Limited named
herein dated August 31, 1998 (incorporated by reference to
Exhibit 2(a) to Jones Lang LaSalle Incorporated's Current
Report on Form 8-K dated October 1, 1998 (filed October
15, 1998)).
12 Computation of Ratio of Earnings to Fixed Charges.*
21 List of Subsidiaries.*
23.1 Consent of KPMG LLP.**
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois)
(included in Exhibit 5.1).
23.3 Consent of Piper Marbury Rudnick & Wolfe LLP (included in
Exhibit 5.2).
23.4 Consent of Loyens & Loeff (included in Exhibit 5.3).
23.5 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.4).
24 Powers of Attorney.*
25 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the indenture.*
99.1 Form of Letter of Transmittal.*
99.2 Form of Notice of Guaranteed Delivery.*
99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
99.4 Form of Letter to Clients.*
</TABLE>
---------
* Previously filed.
** Filed herewith.
(b) Financial Statement Schedules:
Financial statement schedules have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto incorporated herein by reference.
ITEM 22. UNDERTAKINGS
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
Each of Jones Lang LaSalle Incorporated, Jones Lang LaSalle Americas, Inc.,
LaSalle Investment Management, Inc., Jones Lang LaSalle International, Inc.,
Jones Lang LaSalle Co-Investment, Inc. and LaSalle Hotel Advisors, Inc. hereby
undertakes to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
Each of Jones Lang LaSalle Finance B.V. and Jones Lang LaSalle Limited
hereby undertakes:
(i) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of
II-8
<PAGE>
such request, and to send the incorporated documents by first class mail or
other equally prompt means; and
(ii) to arrange or provide for a facility in the U.S. for the purpose of
responding to such requests. The undertaking in subparagraph (i) above
includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described in Item 20 above, or otherwise,
the registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrants will, unless in
the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by them is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang LaSalle
Finance B.V. has duly caused this Amendment No. 2 to the registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
city of Chicago, state of Illinois, on December 22, 2000.
<TABLE>
<S> <C> <C>
JONES LANG LASALLE FINANCE B.V.
By: *
-----------------------------------------
Brian P. Hake
TITLE: MANAGING DIRECTOR
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the registration statement has been signed by the following persons in
the capacities indicated on this 22nd day of December, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S> <C>
*
------------------------------------------- Managing Director
Brian P. Hake
*
------------------------------------------- Managing Director
Henricus T.M. Teeuwisse
JONES LANG LASALLE Authorized Representative
INCORPORATED in the United States
</TABLE>
<TABLE>
<S> <C> <C> <C>
By: *
--------------------------------------
William E. Sullivan
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND
SECRETARY
*By: /s/ FRITZ E. FREIDINGER
--------------------------------------
Fritz E. Freidinger
ATTORNEY-IN-FACT
</TABLE>
II-10
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S> <C>
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang LaSalle
Incorporated has duly caused this Amendment No. 2 to the registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
city of Chicago, state of Illinois, on December 22, 2000.
<TABLE>
<S> <C> <C>
JONES LANG LASALLE INCORPORATED
By: *
-----------------------------------------
Stuart L. Scott
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the registration statement has been signed by the following persons in
the capacities indicated on this 22nd day of December, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S> <C>
Chairman of the Board and
* Chief Executive Officer
------------------------------------------- and Director (Principal
Stuart L. Scott Executive Officer)
President, Deputy Chief
* Executive Officer, Chief
------------------------------------------- Operating Officer and
Christopher A. Peacock Director
Executive Vice President,
* Chief Financial Officer
------------------------------------------- and Secretary (Principal
William E. Sullivan Financial Officer)
*
------------------------------------------- Senior Vice President and
Nicholas J. Willmott Global Controller
*
------------------------------------------- Director
Christopher M.G. Brown
*
------------------------------------------- Director
Henri-Claude de Bettignies
*
------------------------------------------- Director
Darryl Hartley-Leonard
</TABLE>
II-11
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S> <C>
*
------------------------------------------- Director
Derek A. Higgs
*
------------------------------------------- Director
David K.P. Li
*
------------------------------------------- Director
Clive J. Pickford
*
------------------------------------------- Vice Chairman and Director
M.G. Rose
*
------------------------------------------- Vice Chairman and Director
Michael J. Smith
*
------------------------------------------- Director
Thomas C. Theobald
*
------------------------------------------- Director
Lynn C. Thurber
*
------------------------------------------- Director
John R Walter
*
------------------------------------------- Director
Earl E. Webb
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ FRITZ E. FREIDINGER
--------------------------------------
Fritz E. Freidinger
ATTORNEY-IN-FACT
</TABLE>
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang LaSalle
Americas, Inc. has duly caused this Amendment No. 2 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Chicago, state of Illinois, on December 22, 2000.
<TABLE>
<S> <C> <C>
JONES LANG LASALLE AMERICAS, INC.
By: *
-----------------------------------------
William E. Sullivan
EXECUTIVE VICE PRESIDENT AND SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the registration statement has been signed by the following persons in
the capacities indicated on this 22nd day of December, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* President, Chief Executive Officer and
------------------------------------------- Director
Earl E. Webb (Principal Executive Officer)
* Senior Vice President, Chief Financial Officer
------------------------------------------- and Director
Vivian I. Mumaw (Principal Financial and Accounting Officer)
*
------------------------------------------- Executive Vice President and Director
Peyton H. Owen
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ FRITZ E. FREIDINGER
--------------------------------------
Fritz E. Freidinger
ATTORNEY-IN-FACT
</TABLE>
II-13
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act, LaSalle Investment
Management, Inc. has duly caused this Amendment No. 2 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Chicago, state of Illinois, on December 22, 2000.
<TABLE>
<S> <C> <C>
LASALLE INVESTMENT MANAGEMENT, INC.
By: *
-----------------------------------------
William E. Sullivan
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL
OFFICER AND SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the registration statement has been signed by the following persons in
the capacities indicated on this 22nd day of December, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
*
------------------------------------------- Chief Executive Officer and Director
Lynn C. Thurber (Principal Executive Officer)
* Executive Vice President, Chief Financial
------------------------------------------- Officer and Secretary
William E. Sullivan (Principal Financial and Accounting Officer)
*
------------------------------------------- Managing Director and Director
Stephen A. Smith
*
------------------------------------------- Managing Director and Director
Kimball C. Woodrow
</TABLE>
<TABLE>
<S> <C> <C>
*By: /s/ FRITZ E. FREIDINGER
--------------------------------------
Fritz E. Freidinger
ATTORNEY-IN-FACT
</TABLE>
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang LaSalle
International, Inc. has duly caused this Amendment No. 2 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Chicago, state of Illinois, on December 22, 2000.
<TABLE>
<S> <C> <C>
JONES LANG LASALLE INTERNATIONAL, INC.
By: *
-----------------------------------------
William E. Sullivan
EXECUTIVE VICE PRESIDENT AND SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the registration statement has been signed by the following persons in
the capacities indicated on this 22nd day of December, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
*
------------------------------------------- Chairman and Director
Stuart L. Scott (Principal Executive Officer)
* Executive Vice President, Secretary and
------------------------------------------- Director
William E. Sullivan (Principal Financial and Accounting Officer)
</TABLE>
<TABLE>
<S> <C> <C>
*By: /s/ FRITZ E. FREIDINGER
--------------------------------------
Fritz E. Freidinger
ATTORNEY-IN-FACT
</TABLE>
II-15
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang LaSalle
Co-Investment, Inc. has duly caused this Amendment No. 2 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Chicago, state of Illinois, on December 22, 2000.
<TABLE>
<S> <C> <C>
JONES LANG LASALLE CO-INVESTMENT, INC.
By: *
-----------------------------------------
William E. Sullivan
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL
OFFICER AND SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the registration statement has been signed by the following persons in
the capacities indicated on this 22nd day of December, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
*
------------------------------------------- Chairman and Director
Stuart L. Scott (Principal Executive Officer)
* Executive Vice President, Chief Financial
------------------------------------------- Officer, Secretary and Director
William E. Sullivan (Principal Financial and Accounting Officer)
*
------------------------------------------- Director
Lynn C. Thurber
</TABLE>
<TABLE>
<S> <C> <C>
*By: /s/ FRITZ E. FREIDINGER
--------------------------------------
Fritz E. Freidinger
ATTORNEY-IN-FACT
</TABLE>
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, LaSalle Hotel
Advisors, Inc. has duly caused this Amendment No. 2 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Chicago, state of Illinois, on December 22, 2000.
<TABLE>
<S> <C> <C>
LASALLE HOTEL ADVISORS, INC.
By: *
-----------------------------------------
William E. Sullivan
EXECUTIVE VICE PRESIDENT
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the registration statement has been signed by the following persons in
the capacities indicated on this 22nd day of December, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S> <C>
Chairman and Chief
* Executive Officer and
------------------------------------------- Director (Principal
Jonathan E. Bortz Executive Officer)
Executive Vice President
* and Director (Principal
------------------------------------------- Financial and Accounting
William E. Sullivan Officer)
*
------------------------------------------- Director
Stuart L. Scott
*
------------------------------------------- Director
Michael D. Barnello
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ FRITZ E. FREIDINGER
--------------------------------------
Fritz E. Freidinger
ATTORNEY-IN-FACT
</TABLE>
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang LaSalle
Limited has duly caused this Amendment No. 2 to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of London, England, on December 22, 2000.
<TABLE>
<S> <C> <C>
JONES LANG LASALLE LIMITED
By: /s/ ANTONY H. JONES
-----------------------------------------
Antony H. Jones
COMPANY SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the registration statement has been signed by the following persons in
the capacities indicated on this 22nd day of December, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S> <C>
*
------------------------------------------- Director
J. Andrew Jenkins
*
------------------------------------------- Director
Robert S. Orr
*
------------------------------------------- Director
Thomas R, Whittaker
*
------------------------------------------- Director
Alastair Hughes
JONES LANG LASALLE Authorized Representative
INCORPORATED in the United States
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ WILLIAM E. SULLIVAN
--------------------------------------
William E. Sullivan
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND
SECRETARY
*By: /s/ FRITZ E. FREIDINGER
--------------------------------------
Fritz E. Freidinger
ATTORNEY-IN-FACT
</TABLE>
II-18
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
2.1 Subscription Agreement (incorporated by reference to Exhibit
2.01 to Jones Lang LaSalle Incorporated's Registration
Statement on Form S-1 (File No. 333-25741)).
2.2 Purchase and Sale Agreement, dated as of October 21, 1998,
as amended, with respect to the acquisition by Jones Lang
LaSalle Incorporated of the JLW Parent Companies operating
in Europe and the U.S.A. (the "Europe/USA Agreement")
(incorporated by reference to Exhibit 10.1 to Jones Lang
LaSalle Incorporated's Current Report on Form 8-K dated
October 22, 1998 (filed December 9, 1998)).
2.3 Purchase and Sale Agreement, dated as of October 21, 1998,
as amended, with respect to the acquisition by Jones Lang
LaSalle Incorporated of the JLW Parent Companies operating
in Australia and New Zealand (the "Australasia Agreement")
(incorporated by reference to Exhibit 10.2 to Jones Lang
LaSalle Incorporated's Current Report on Form 8-K dated
October 22, 1998 (filed December 9, 1998)).
2.4 Purchase and Sale Agreement, dated as of October 21, 1998,
as amended, with respect to the acquisition by Jones Lang
LaSalle Incorporated of the JLW Parent Companies operating
in Asia (the "Asia Agreement") (incorporated by reference
to Exhibit 10.3 to Jones Lang LaSalle Incorporated's
Current Report on Form 8-K dated October 22, 1998 (filed
December 9, 1998)).
2.5 Form of Purchase and Sale Joinder Agreement, dated as of
October 21, 1998, by and among Jones Lang LaSalle
Incorporated and each of the shareholders selling equity
interests in the JLW Parent Companies under the Europe/USA
Agreement (incorporated by reference to Exhibit 10.4 to
Jones Lang LaSalle Incorporated's Current Report on Form
8-K dated October 22, 1998 (filed December 9, 1998)).
2.6 Form of Purchase and Sale Joinder Agreement, dated as of
October 21, 1998, by and among Jones Lang LaSalle
Incorporated and each of the shareholders selling equity
interests in the JLW Parent Companies under the
Australasia Agreement (incorporated by reference to
Exhibit 10.5 to Jones Lang LaSalle Incorporated's Current
Report on Form 8-K dated October 22, 1998 (filed December
9, 1998)).
2.7 Form of Purchase and Sale Joinder Agreement, dated as of
October 21, 1998, by and among Jones Lang LaSalle
Incorporated and each of the shareholders selling equity
interests in the JLW Parent Companies under the Asia
Agreement (incorporated by reference to Exhibit 10.6 to
Jones Lang LaSalle Incorporated's Current Report on Form
8-K dated October 22, 1998 (filed December 9, 1998)).
2.8 Form of Indemnity and Escrow Agreement, dated as of October
21, 1998, by and among Jones Lang LaSalle Incorporated,
certain subsidiaries of Jones Lang LaSalle Incorporated
and each of the shareholders selling equity interests in
the JLW Parent Companies under the Europe/USA Agreement,
the Australasia Agreement and the Asia Agreement
(incorporated by reference to Exhibit 10.7 to Jones Lang
LaSalle Incorporated's Current Report on Form 8-K dated
October 22, 1998 (filed December 9, 1998)).
2.9 Form of Stockholder Agreement, dated as of October 21, 1998,
by and among Jones Lang LaSalle Incorporated and each of
the persons receiving shares of common stock under the
Europe/USA Agreement, the Australasia Agreement and the
Asia Agreement (incorporated by reference to Exhibit 10.8
to Jones Lang LaSalle Incorporated's Current Report on
Form 8-K dated October 22, 1998 (filed December 9, 1998)).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
2.10 Form of Stockholder Agreement, dated as of October 21, 1998,
by and among Jones Lang LaSalle Incorporated and each of
the partners of DEL-LPL Limited Partnership and DEL-LPAML
Limited Partnership who was an employee of Jones Lang
LaSalle Incorporated in October 1998 and who received
shares of Common Stock in connection with the dissolution
of DEL-LPL Limited Partnership and DEL-LPAML Limited
Partnership (incorporated by reference to Exhibit 10.9 to
Jones Lang LaSalle Incorporated's Current Report on From
8-K dated October 22, 1998 (filed December 9, 1998)).
3.1 Charter of Jones Lang LaSalle Incorporated.*
3.2 Second Amended and Restated Bylaws of Jones Lang LaSalle
Incorporated (incorporated by reference to Exhibit 4.2 to
Jones Lang LaSalle Incorporated's Current Report on Form
8-K dated March 11, 1999 (filed March 24, 1999)).
3.3 Articles of Association of Jones Lang LaSalle Finance B.V.
(English Translation of Dutch Original).*
3.4 Charter of Jones Lang LaSalle Americas, Inc.*
3.5 Bylaws of Jones Lang LaSalle Americas, Inc.*
3.6 Charter of LaSalle Investment Management, Inc.*
3.7 Bylaws of LaSalle Investment Management, Inc.*
3.8 Certificate of Incorporation of Jones Lang LaSalle
International, Inc.*
3.9 Bylaws of Jones Lang LaSalle International, Inc.*
3.10 Charter of Jones Lang LaSalle Co-Investment, Inc.*
3.11 Bylaws of Jones Lang LaSalle Co-Investment, Inc.*
3.12 Articles of Incorporation of LaSalle Hotel Advisors, Inc.*
3.13 Bylaws of LaSalle Hotel Advisors, Inc.*
3.14 Memorandum of Association of Jones Lang LaSalle Limited.*
3.15 Articles of Association of Jones Lang LaSalle Limited.*
4.1 Form of certificate representing shares of Jones Lang
LaSalle Incorporated common stock (incorporated by
reference to Exhibit 4.3 to Jones Lang LaSalle
Incorporated's Current Report on Form 8-K dated March 11,
1999 (filed March 24, 1999)).
4.2 Indenture, dated July 26, 2000, among Jones Lang LaSalle
Finance B.V., Jones Lang LaSalle Incorporated, as parent
Guarantor, Jones Lang LaSalle Americas, Inc., LaSalle
Investment Management, Inc., Jones Lang LaSalle
International, Inc., Jones Lang LaSalle Co-Investment,
Inc., LaSalle Hotel Advisors, Inc. and Jones Lang LaSalle
Limited, as Guarantors, and The Bank of New York, as
trustee (incorporated by reference to Exhibit 4.1 to Jones
Lang LaSalle Incorporated's Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 2000).
4.3 Form of Note (included in Exhibit 4.2).
4.4 Registration Rights Agreement, dated July 19, 2000, among
Jones Lang LaSalle Finance B.V., Jones Lang LaSalle
Incorporated, Jones Lang LaSalle Americas, Inc., LaSalle
Investment Management, Inc., Jones Lang LaSalle
International, Inc., Jones Lang LaSalle Co-Investment,
Inc., LaSalle Hotel Advisors, Inc., Jones Lang LaSalle
Limited, Morgan Stanley & Co. International Limited, Bank
of America International Limited, BMO Nesbitt Burns Corp.,
and Chase Manhattan International Limited (incorporated by
reference to Exhibit 4.1 to Jones Lang LaSalle
Incorporated's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2000).
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois).*
5.2 Opinion of Piper Marbury Rudnick & Wolfe LLP.*
5.3 Opinion of Loyens & Loeff.*
5.4 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.*
10.1 Second Amended and Restated Multicurrency Credit Agreement,
dated as of July 26, 2000 (incorporated by reference to
Exhibit 10.1 to Jones Lang LaSalle Incorporated's
Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2000).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
10.2 Contribution and Exchange Agreement, dated as of April 21,
1997, by and among DEL-LPL Limited Partnership, DEL-LPAML
Limited Partnership, LaSalle Partners Limited Partnership,
LaSalle Partners Management Limited Partnership, The
Galbreath Company, The Galbreath Company of California,
Inc., Galbreath Holdings, LLC and the Stockholders of The
Galbreath Company (incorporated by reference to Exhibit
10.08 to Jones Lang LaSalle Incorporated's Registration
Statement on Form S-1 (File No. 333-25741)).
10.3 Asset Purchase Agreement, dated as of December 31, 1996, by
and among LaSalle Construction Limited Partnership,
LaSalle Partners Limited Partnership, Clune Construction
Company, L.P. and Michael T. Clune (incorporated by
reference to Exhibit 10.10 to Jones Lang LaSalle
Incorporated's Registration Statement on Form S-1 (File
No. 333-25741)).
10.4 1997 Stock Award and Incentive Plan (incorporated by
reference to Exhibit 99.2 to Jones Lang LaSalle
Incorporated's Registration Statement on Form S-8 (File
No. 333-42193)).
10.5 Amendment to Jones Lang LaSalle Incorporated's 1997 Stock
Award and Incentive Plan (incorporated by reference to
Exhibit 10.1 to Jones Lang LaSalle Incorporated's
Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1998).
10.6 Second Amendment to the 1997 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.1 to Jones Lang
LaSalle Incorporated's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1999).
10.7 Third Amendment to the 1997 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.2 to Jones Lang
LaSalle Incorporated's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1999).
10.8 Employee Stock Purchase Plan (incorporated by reference to
Exhibit 99.1 to Jones Lang LaSalle Incorporated's
Registration Statement on Form S-8 (File No. 333-42193)).
10.9 First Amendment to the Employee Stock Purchase Plan
(incorporated by reference to Exhibit 10.2 to Jones Lang
LaSalle Incorporated's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 1998).
10.10 Second Amendment to the Employee Stock Purchase Plan
(incorporated by reference to Exhibit 10.3 to Jones Lang
LaSalle Incorporated's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1998).
10.11 Third Amendment to the Employee Stock Purchase Plan
(incorporated by reference to Exhibit 10.2 to Jones Lang
LaSalle Incorporated's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2000).
10.12 Amended and Restated Stock Compensation Program
(incorporated by reference to Exhibit 10.11 to Jones Lang
LaSalle Incorporated's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999).
10.13 Description of Management Incentive Plan (incorporated by
reference to Exhibit 10.8 to Jones Lang LaSalle
Incorporated's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997).
10.14 Registration Rights Agreement, dated as of April 22, 1997,
by and among Jones Lang LaSalle Incorporated, DEL-LPL
Limited Partnership, DEL-LPAML Limited Partnership,
DSA-LSPL, Inc., DSA-LSAM, Inc. and Galbreath Holdings, LLC
(incorporated by reference to Exhibit 10.14 to Jones Lang
LaSalle Incorporated's Registration Statement on Form S-1
(File No. 333-25741)).
10.15 Form of Indemnification Agreement with Executive Officers
and Directors (incorporated by Reference to Exhibit 10.14
to the Annual Report on Form 10-K for the year ended
December 31, 1998).
10.16 Severance Pay Plan (incorporated by reference to Exhibit
10.15 to Jones Lang LaSalle Incorporated's Annual Report
on Form 10-K for the fiscal year ended December 31, 1999).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
10.17 Senior Executive Service Agreement with Christopher A.
Peacock (incorporated by reference to Exhibit 10.16 to
Jones Lang LaSalle Incorporated's Annual Report on Form
10-K for the fiscal year ended December 31, 1999).
10.18 Senior Executive Service Agreement with Robert Orr
(incorporated by reference to Exhibit 10.17 to Jones Lang
LaSalle Incorporated's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999).
10.19 Consent Agreement, dated as of April 15, 1997, by and among
DSA-LSPL, Inc., DSA-LSAM, Inc., DEL-LPL Limited
Partnership, DEL-LPAML Limited Partnership, DEL/LaSalle
Finance Company, L.L.C., LaSalle Partners Limited
Partnership and LaSalle Partners Management Limited
Partnership (incorporated by reference to Exhibit 10.16 to
Jones Lang LaSalle Incorporated's Registration Statement
on Form S-1 (File No. 333-25741)).
10.20 Consent Agreement, dated as of April 22, 1997, by and among
the Stockholders of The Galbreath Company and The
Galbreath Company of California, Inc., Galbreath Holdings,
LLC, DEL-LPL Limited Partnership, DEL-LPAML Limited
Partnership, DEL/LaSalle Finance Company, L.L.C., LaSalle
Partners Limited Partnership and LaSalle Partners
Management Limited Partnership (incorporated by reference
to Exhibit 10.17 to Jones Lang LaSalle Incorporated's
Registration Statement on Form S-1 (File No. 333-25741)).
10.21 Purchase Agreement by and among Jones Lang LaSalle
Incorporated and Lend Lease Corporation Limited, and the
subsidiaries of Lend Lease Corporation Limited named
herein dated August 31, 1998 (incorporated by reference to
Exhibit 2(a) to Jones Lang LaSalle Incorporated's Current
Report on Form 8-K dated October 1, 1998 (filed October
15, 1998)).
12 Computation of Ratio of Earnings to Fixed Charges.*
21 List of Subsidiaries.*
23.1 Consent of KPMG LLP.**
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois)
(included in Exhibit 5.1).
23.3 Consent of Piper Marbury Rudnick & Wolfe LLP (included in
Exhibit 5.2).
23.4 Consent of Loyens & Loeff (included in Exhibit 5.3).
23.5 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.4).
24 Powers of Attorney.*
25 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the indenture.*
99.1 Form of Letter of Transmittal.*
99.2 Form of Notice of Guaranteed Delivery.*
99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
99.4 Form of Letter to Clients.*
</TABLE>
---------
* Previously filed.
** Filed herewith.
