AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 1, 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. 1
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)
THE NETHERLANDS 6531 NOT APPLICABLE
(State or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation or IndustrialClassification Identification
Organization) Code Number) Number)
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:
ROBERT K. HAGAN RODD M. SCHREIBER, ESQ.
FRITZ E. FREIDINGER SKADDEN, ARPS, SLATE, MEAGHER &
HAGAN & ASSOCIATES FLOM (ILLINOIS)
200 EAST RANDOLPH DRIVE, SUITE 4322 333 WEST WACKER DRIVE, SUITE 2100
CHICAGO, ILLINOIS 60601 CHICAGO, ILLINOIS 60606
(312) 228-2050 (312) 407-0700
-----------------
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.
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
State or other Primary standard
jurisdiction of industrial I.R.S. Employer
Exact name of registrant incorporation classification Identification
as specified in its charter or formation code number 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.
The information in this prospectus is not complete and may be changed. We
may not sell these securities or accept an offer to buy these securities
until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 1, 2000
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:
o will have been registered under the Securities Act;
o will not bear restrictive legends restricting their transfer under the
Securities Act;
o will not be entitled to the registration rights that apply to the old
notes; and
o 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 [o], 2000, 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.
----------------
The date of this prospectus is [o], 2000.
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 [o].
--------------
TABLE OF CONTENTS
PAGE
Summary......................................................................1
Risk Factors................................................................12
Information Regarding Forward-Looking Statements............................22
The Issuer..................................................................23
Use of Proceeds.............................................................24
Capitalization..............................................................24
The Exchange Offer..........................................................25
Selected Financial and Other Data...........................................35
Business....................................................................38
Description of Other Indebtedness...........................................52
Corporate Structure--Issuer and Guarantors..................................58
Description of the Notes....................................................59
Material United States Federal Income Tax Consequences.....................106
Dutch Taxation.............................................................109
Plan of Distribution and Selling Restrictions..............................111
Legal Matters..............................................................112
Experts....................................................................112
Where You Can Find More Information........................................113
Information Incorporated by Reference......................................113
In this prospectus, unless the context requires otherwise:
o "issuer" refers to Jones Lang LaSalle Finance B.V., the issuer of
the old notes and the new notes;
o "Jones Lang LaSalle Incorporated" refers only to Jones Lang
LaSalle Incorporated;
o "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;
o "guarantors" refers to Jones Lang LaSalle Incorporated and the
subsidiary guarantors; and
o "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, 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 November 24, 2000 was $0.8380
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
111.
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 111.
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.
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 52.
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."
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:
o acquire the new notes in the ordinary
course of your business;
o 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
o 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.
Expiration Date................... The exchange offer will expire at 5:00
p.m., London time, on [o], 2000, 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
o 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
o 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
o you beneficially own old notes;
o those notes are registered in the name
of a broker, dealer, commercial bank,
trust company or other nominee; and
o 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
o your old notes are not immediately
available;
o time will not permit you to deliver
the required documents to the exchange
agent by the expiration date; or
o 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 29.
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:
o the holder is neither resident nor
deemed to be resident in the
Netherlands;
o 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
o 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.
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 31 and in
the letter of transmittal.
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:
o will have been registered under the Securities Act;
o will not bear restrictive legends restricting their transfer under
the Securities Act;
o will not be entitled to the registration rights that apply to the old
notes; and
o 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.
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.
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 60.
Change of Control................. A change of control occurs under the
indenture if:
o Jones Lang LaSalle Incorporated ceases
to beneficially own 99% of the voting
power of the issuer;
o 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
o 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.
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 52.
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:
o the issuer had $146.5 million of
outstanding senior indebtedness,
excluding the old notes, but including
indebtedness under the multicurrency
credit facility;
o 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
o 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.
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:
o if, after giving effect to such
incurrence, the interest coverage
ratio would exceed 3-to-1;
o under the multicurrency credit
agreement, so long as the principal
amount of all indebtedness under the
multicurrency credit agreement does
not exceed $275 million;
o 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
o 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 80 and "Description
of Other Indebtedness-Multicurrency
Credit Facility-Covenants" at page 54.
Certain Covenants................. The terms of the new notes restrict the
ability of Jones Lang LaSalle
Incorporated and its restricted
subsidiaries, including the issuer, to:
o incur additional indebtedness;
o engage in sale-leaseback transactions;
o grant liens on their assets;
o pay dividends or make distributions in
respect of capital stock;
o redeem capital stock;
o make investments or certain other
restricted payments;
o sell assets;
o issue or sell stock of restricted
subsidiaries;
o enter into transactions with
affiliates; and
o effect a consolidation or merger.
See "Description of the Notes-Covenants"
beginning at page 80.
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 96.
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 60.
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.
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.
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; 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, each of which is incorporated herein by
reference. See "Information Incorporated by Reference" and "Where You Can
Find More Information" at page 113.
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)
STATEMENT OF OPERATIONS DATA: (IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
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
-----------
(footnotes on following page)
</TABLE>
SEPTEMBER 30, 2000
(IN THOUSANDS)
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
-----------
(1) Adjusted net earnings (loss) represents operating income (loss) excluding
o after-tax non-recurring transition and integration costs associated
with the JLW merger and the acquisition of Compass and
o 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
o net earnings determined in accordance with GAAP,
o operating cash flow determined in accordance with GAAP or
o 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 52. 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
o 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
o 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.
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:
o difficulties and costs of staffing and managing international
operations;
o 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;
o unexpected changes in regulatory requirements;
o potentially adverse tax and tariff consequences;
o the burden of complying with multiple and potentially conflicting
laws;
o the impact of regional or country-specific business cycles and
economic instability;
o the geographic, time zone, language and cultural differences
between personnel in different areas of the world;
o 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;
o 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
o 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 a number of effects
which could have a material adverse impact on certain segments of our
business, including the following:
o a decline in acquisition, disposition and leasing activity;
o a decline in the supply of capital invested in commercial real
estate;
o 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,
such as occurred in Southeast and East Asia during 1997 and 1998, 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. In the past, we have
been materially affected by translation exposure. For example, our
consolidated revenue for the three months ended September 30, 2000 was
negatively affected by the continuing weakness of the pound sterling, the
euro and the Australian dollar relative to 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 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:
o our ability to attract and retain creditworthy tenants;
o our ability to manage operating expenses, which in some cases we
cannot control;
o financial and economic conditions generally and in the specific
areas where properties are located; and
o 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 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:
o loss of our investments;
o 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
o 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.
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:
o we may be unable to obtain additional financing for working
capital, capital expenditures, acquisitions and general corporate
purposes;
o 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;
o we may be disadvantaged as compared to our competitors as a result
of the significant amount of debt we owe; and
o 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
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:
o engage in new lines of business;
o encumber our assets;
o enter into sale and leaseback transactions;
o merge, consolidate or dispose of a substantial part of our assets;
o dispose of stock in our subsidiaries or have our subsidiaries
issue stock;
o engage in acquisitions, make loans, extend guarantees or enter
into other investments;
o incur indebtedness;
o pay dividends and make other distributions to our shareholders;
and
o 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 52 and "Description of the Notes" at page 59 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 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.
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 102. 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:
o 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
o 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:
o 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
o 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:
o was not insolvent nor rendered insolvent as a result of the
issuance thereof;
o possessed sufficient capital to run its business effectively;
o was incurring debts within its ability to pay as they matured or
became due; and
o 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:
o the value of the obligation of the issuer materially exceeds the
value of the obligation of the purchasers of the notes;
o the issuer pays or grants security for notes which are not yet
due;
o 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
o 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 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.
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; 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's Incorporated's Quarterly
Reports on Form 10-Q for the quarters ended September 30, 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.
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 58 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):
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
=========
----------
(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.
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.
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. The proceeds from the issuance of the old
notes were 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 35,
"Description of Other Indebtedness" at page 52 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; 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, each of which is incorporated herein by
reference.
AS OF SEPTEMBER 30, 2000
(UNAUDITED)
(IN THOUSANDS)
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
=========
(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 52.
(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.
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 113.
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 [o], 2000, 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:
o will have been registered under the Securities Act;
o will not bear restrictive legends restricting their transfer under
the Securities Act;
o will not be entitled to the registration rights that apply to the
old notes; and
o 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:
o to extend the expiration date;
o to delay accepting any old notes;
o 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
o 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:
o disclose the amendment by means of a prospectus supplement; and
o 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:
o 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 31; or
o 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 31.
In addition, on or prior to the expiration date, either:
o the exchange agent must receive the certificates for the old notes
and the letter of transmittal;
o 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
o 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:
o 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
o 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:
o reject any and all tenders of any old note improperly tendered;
o 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
o 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.
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:
o may not rely on the applicable interpretations of the staff of the
SEC; and
o 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'* 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 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 31 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:
o the old notes are in certificated form or are represented by the
global note held by the trustee as custodian for DTC;
o the holder tenders the old notes through an eligible institution;
o 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
o 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.
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'* 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:
o 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;
o a properly completed and duly executed letter of transmittal or an
agent's message; and
o 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.'* Any such notice of withdrawal must:
o specify the name of the person having tendered the old notes to be
withdrawn;
o identify the old notes to be withdrawn, including the principal
amount of such old notes; and
o 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 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 25.
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 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:
o in relation to old notes represented by the global note deposited
with the trustee as custodian for DTC:
By Registered Mail or By Hand Delivery: For Information Call:
Overnight Carrier: The Bank of New York (212) 815-6331
The Bank of New York 101 Barclay Street
Reorganization Section Corporate Trust Services Facsimile Transmission
101 Barclay Street, Window Number:
Floor 7 East Ground Level (212) 815-6339
New York, New York 10286 New York, New York 10286
Attention: [o] Attention: [o] Confirm by Telephone:
Reorganization Section (212) 815-6331
o in relation to old notes represented by the global notes deposited
with the common depositary for Euroclear and Clearstream:
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
o 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
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 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.
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 interpretive letters to third
parties in other similar transactions. 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
o an "affiliate" of the issuer, Jones Lang LaSalle Incorporated or
any subsidiary guarantor;
o a broker-dealer who acquired notes directly from the issuer; or
o 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:
o cannot rely on the staff's interpretations in the above mentioned
interpretive letters;
o cannot tender old notes in the exchange offer; and
o 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:
o 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;
o are acquiring the new notes in the ordinary course of your
business;
o have no arrangement or understanding with any person to
participate in a distribution of the new notes, within the meaning
of the Securities Act;
o are not a broker-dealer; and
o 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 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 111 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.
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; 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, each of which is incorporated herein by
reference. See "Information Incorporated by Reference" and "Where You Can
Find More Information" at page 113.
<TABLE>
<CAPTION>
Nine Months Ended September 30,
---------------------------------------
2000 2000 1999
Adjusted Actual Actual
---------------------------------------
(in thousands, except share and per share data)
STATEMENT OF OPERATIONS DATA:
<S> <C> <C> <C>
Total revenue(1) $637,270 $637,270 $474,737
-------- -------- --------
Operating income (loss) (13,380) (13,380) (117,787)
Interest expense, net of
interest income 21,565 21,565 12,312
------ ------ ------
Earnings (loss) before
provision (benefit) for
income taxes and minority
interest (34,945) (34,945) (130,099)
Net provision (benefit) for
income taxes 6,795 6,795 (20,043)
Minority interests in earnings
of subsidiaries 60 60 -
Net earnings (loss) $(41,800) $(41,800) $(110,056)
========= ========= ==========
Basic earnings (loss) per
common share $(1.69) $(1.69) $(4.98)
======= ======= =======
Basic weighted average shares
outstanding 24,701,106 24,701,106 122,109,143
========== ========== ===========
Diluted earnings (loss) per
common share $(1.69) $(1.69) $(4.98)
======= ======= =======
Diluted weighted average shares
outstanding 24,701,106 24,701,106 122,109,143
========== ========== ===========
OTHER DATA:
Adjustments(3)(4):
Merger related nonrecurring
charges(3) $55,382
Tax benefit associated with
merger related nonrecurring
charges (971)
--------
Adjusted net earnings
(loss)(5) $12,611
========
Adjusted net earnings per
common share $0.41
========
Adjusted weighted average
shares outstanding 30,679,303
----------
Adjusted EBITDA(6) $73,731 $73,731 $24,311
Ratio of earnings to fixed
charges(7) 1.60x -
Cash flows provided by (used in):
Operating activities 35,479 35,479 (64,928)
Investing activities (31,711) (31,711) (47,927)
Financing activities (9,609) (9,609) 117,507
Investments under management(8) $22,700,000 $22,700,000 $21,200,000
Square feet under management-
corporate property services(9) 200,000 200,000 230,000
Total square feet under
management(10) 700,000 700,000 700,000
CONTINUATION OF TABLE ABOVE
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
Adjusted Actual Actual Actual Actual Actual
Pro Forma
----------------------------------------------------------------------------
(in thousands, except share and per share data)
STATEMENT OF OPERATIONS DATA:
<S> <C> <C> <C> <C> <C> <C>
Total revenue(1) $813,899 $755,439 $304,464 $224,773 $159,453 $138,618
-------- -------- -------- -------- -------- --------
Operating income (loss) (88,087) (71,303) 37,842 35,114 26,901 20,116
Interest expense, net of
interest income 18,118 18,211 4,153 3,995 5,730 3,806
------ ------ ----- ----- ----- -----
Earnings (loss) before
provision (benefit) for
income taxes and minority
interest (106,205) (89,514) 33,689 31,119 21,171 16,310
Net provision (benefit) for
income taxes 2,048 5,328 13,224 5,279 1,207 505
Minority interests in earnings
of subsidiaries - - - - - -
Net earnings (loss) $(108,253) $(94,842) $20,465 $25,840 $19,964 $15,805
========== ========= ======= ======= ======= =======
Basic earnings (loss) per
common share $(4.50) $(4.20) $1.26 $1.50(2)
======= ======= ===== =====
Basic weighted average shares
outstanding 24,067,363 22,607,350 16,215,478 16,200,000
========== ========== ========== ==========
Diluted earnings (loss) per
common share $(4.50) $(4.20) $1.25 $1.49(2)
======= ======= ===== =====
Diluted weighted average shares
outstanding 24,067,363 22,607,350 16,387,721 16,329,613
========== ========== ========== ==========
OTHER DATA:
Adjustments(3)(4):
Merger related nonrecurring
charges(3) $160,528
Tax benefit associated with
merger related nonrecurring
charges (20,004)
-------
Adjusted net earnings
(loss)(5) $32,271
=======
Adjusted net earnings per
common share $1.07
=======
Adjusted weighted average shares
outstanding 30,298,332
----------
Adjusted EBITDA(6) $112,164 $116,774 $61,318 $44,207 $32,317 $24,356
Ratio of earnings to fixed
charges(7) 2.47x - 5.54x 5.88x 3.73x 3.88x
Cash flows provided by (used in):
Operating activities 29,114 (32,766) 19,238 40,577 13,964 13,553
Investing activities (108,463) (67,143) (235,365) (14,126) (32,478) (5,706)
Financing activities 110,051 106,717 202,377 (3,128) 17,189 (12,365)
Investments under management(8) $21,500,000 $21,500,000 $14,200,000 $14,700,000 $15,200,000 $11,500,000
Square feet under management-
corporate property services(9) 250,000 250,000 188,000 98,900 66,700 66,700
Total square feet under
management(10) 700,000 700,000 400,500 202,700 131,600 125,700
</TABLE>
-----------------
(footnotes on following page)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------- ----------------------------------------------------
2000 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ----
(IN THOUSANDS)
BALANCE SHEET DATA:
<S> <C> <C> <C> <C> <C> <C>
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) 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.
(2) 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.
(3) Adjusted 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%. 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.
(4) Excludes compensation expense associated with the issuance of shares
to former employees of JLW in connection with the JLW merger.
(5) Adjusted net earnings (loss) is not determined in accordance with GAAP
and may not be comparable to other companies' reported net earnings
(loss).
(6) 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.
(7) For purposes of computing the ratio of earnings to fixed charges,
earnings represents net earnings (loss) (or, for the nine months ended
September 30, 2000 (adjusted) and the years ended December 31, 1999
(adjusted 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 $35.0 million for the nine months ended September 30, 2000 (actual)
and $89.5 million for the year ended December 31, 1999 (actual).
(8) 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.
(9) Represents the square footage of properties for which we provided
corporate property services as of the end of the periods reflected.
(10) 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.
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.
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, JLW was ranked as one of the largest international real estate
organizations, with approximately 4,000 employees in 32 countries. 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, 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.
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. These advantages 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 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 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:
o 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.
o 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.
o 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.
o 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 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.
o 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 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.
IMPLEMENTATION SERVICES MANAGEMENT SERVICES
o Tenant Representation o Property Management Services
o Agency Leasing o Corporate Property Services
o Capital Markets Services o Development Services
o Valuation Services o Project Management Services
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.
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
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 for office, industrial, retail and
specialty properties, leveraging their 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.
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 corporations
and institutions 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.
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 facility build-out and conversion management, move management and
strategic 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 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:
o developing and executing tailored investment strategies to meet a
variety of client objectives;
o providing superior performance for its clients; and
o 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 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 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
o the skills of our professionals;
o the quality and cost of the services we provide;
o the ability to meet the needs of our clients;
o the breadth and depth of our product and service offerings;
o the geographic scope of our service delivery capabilities; and
o the quality of our infrastructure, including our technology.
Although competition in our industry is intense, we believe we compete
favorably by these standards.
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.
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:
o 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
o 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 113.
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:
o loans denominated in U.S. dollars are designated, at our election,
as either Domestic Rate Loans or Eurocurrency Loans; and
o 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
o a base rate, plus
o 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 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
o the applicable prime commercial rate; and
o 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:
MARGIN
-----------------------------
RATIO OF DEBT TO EUROCURRENCY DOMESTIC RATE
ADJUSTED EBITDA LOANS LOANS
---------------- ------------ -------------
(BASIS POINTS)
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
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. 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:
o 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.
o 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:
DEBT TO ADJUSTED
EBITDA
FROM AND TO AND RATIO SHALL NOT BE
INCLUDING INCLUDING GREATER THAN
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
o 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:
SENIOR DEBT TO ADJUSTED
EBITDA
FROM AND TO AND RATIO SHALL NOT BE
INCLUDING INCLUDING GREATER THAN
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
o 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.
o 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:
LIQUIDITY RATIO
FROM AND TO AND SHALL NOT BE
INCLUDING INCLUDING LESS THAN
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
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:
o 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.
o 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.
o 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.
o 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.
o 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.
o 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
o no default or event of default exists under the multicurrency
credit agreement;
o 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;
o the portion of the purchase price for acquisitions paid in
cash, including assumed liabilities, may not exceed $20
million in any calendar year;
o 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;
o 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
o 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.
o 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.
o 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.
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.
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]
* Operating subsidiary.
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 62 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:
o will have been registered under the Securities Act;
o will not bear restrictive legends restricting their transfer
under the Securities Act;
o will not be entitled to the registration rights that apply to
the old notes; and
o 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 113 and "Information Incorporated by Reference" at
page 113.
For definitions of certain capitalized terms used in the following
summary, see "--Certain Definitions" at page 64.
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 102.
The paying agents for the notes will initially be:
o in The City of New York, The Bank of New York located at 101
Barclay Street, New York, New York 10286;
o in London, The Bank of New York, London Branch, located at One
Canada Square, 48th Floor, London E14 5AL, United Kingdom; and
o 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.
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:
o 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
o 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 100. 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
80 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:
YEAR REDEMPTION PRICE
2004 104.500%
2005 102.250%
2006 and thereafter 100.000%
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:
o at least 65% of the aggregate principal amount of notes, including
additional notes, if any, originally issued remains outstanding
after each such redemption; and
o notice of any such redemption is mailed within 90 days of each
such sale of Capital Stock.
In the event that:
o 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 96; and
o 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.
In the case of any partial redemption, selection of the notes for
redemption will be made by the trustee:
o in compliance with the requirements of the principal national
securities exchange, if any, on which the notes are listed; or
o 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 92. 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:
o JLL;
o Jones Lang LaSalle Americas, Inc., a Maryland corporation;
o LaSalle Investment Management, Inc., a Maryland corporation;
o Jones Lang LaSalle International, Inc., a Delaware corporation;
o Jones Lang LaSalle Co-Investment, Inc., a Maryland corporation;
o LaSalle Hotel Advisors, Inc., a Maryland corporation; and
o 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 87. If any Subsidiary of Jones Lang LaSalle Incorporated becomes a
guarantor of the notes, notice will be published as described under
"--Notices" at page 92.
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.
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 92.
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 52 for a summary
of the material terms of the Credit Agreement.
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:
o 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;
o 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;
o 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;
o 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;
o 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
o 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:
o if, after giving effect to such incurrence, the Interest Coverage
Ratio would exceed 3.00:1.0;
o under the Credit Agreement so long as the principal amount of
indebtedness under the Credit Agreement does not exceed $275
million;
o 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
o in an aggregate principal amount not to exceed $40 million at any
time.
See "--Covenants--Limitation on Indebtedness" at page 80 for a
description of the limitation and the permitted exceptions and
qualifications to the limitation.
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 83:
(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 83;
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 74; and
(8) the cumulative effect of a change in accounting principles.
"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 83;
(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 90;
(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 92; or
(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.
"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 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:
o 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 64, 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
o 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 66 or "Change of Control"
as defined on page 67 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 90 and 92, 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 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 90 and 92, 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.
"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.
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
(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 87.
For purposes of the definition of "Unrestricted Subsidiary" and the
"Limitation on Restricted Payments" covenant described at page 83, 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 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.
"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 83 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 83, valued in
each case as provided in the definition of
"Investment" at page 72;
(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 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 90;
(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;
(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 80;
(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;
(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 89 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 80; 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 80.
"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:
o 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
o 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.
"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 98 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
(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 83; 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 80 and 83,
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
(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 90;
(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, 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:
o are designed solely to protect JLL or its
Restricted Subsidiaries against fluctuations in
foreign currency exchange rates or interest
rates; and
o 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 98;
(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 88;
(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 90.
(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 89 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.
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 80: 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, 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 74 valued in each case
as provided in the definition of "Investment" at page 72.
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
80;
(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
(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 92; 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 90;
(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 92; 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 90;
(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 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;
(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:
o creating, incurring, assuming or suffering to exist any Liens
otherwise permitted in the "Limitation on Liens" covenant
described at page 89; or
o 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 83 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 90; or
(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 80, 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:
o 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
o 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:
o 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
o 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 92.
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 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 83;
(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
(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 90; 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 75, and not
separately permitted by other provisions of the "Limitation on Liens"
covenant described on page 89, 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.
For purposes of clause (2) above, the following are deemed to be
cash:
o 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
o 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 88 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 73. 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 92.
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:
o 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 87; and
o 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 73. In the event a Change of Control occurs, notice of
thereof will be published as described under "--Notices" at page 92.
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:
o in the case of a letter delivered by hand, at the time of
delivery;
o in the case of a letter sent by mail; on the fourth business day
after the date of mailing;
o in the case of a facsimile transmission, at the time of dispatch;
and
o 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 95 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 90 and
92, 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:
(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 87,
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 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 99.
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 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 80; 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 :
o 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 87; and
o 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.
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:
o 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 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
o 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:
o clauses (3) and (4) under "Consolidation, Merger and Sale of
Assets" at page 95;
o all the covenants described herein under "Covenants" beginning at
page 54;
o clause (3) under "Events of Default" at page 92 with respect to
clauses (3) and (4) under "Consolidation, Merger and Sale of
Assets" at page 95; and
o clause (4) under "Events of Default" at page 92 with respect to
other covenants;
and
(2) clauses (5) and (6) under "Events of Default" at page 92 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 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:
o 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;
o comply with the provisions described under "Consolidation, Merger
and Sale of Assets" at page 95;
o comply with any requirements of the SEC in connection with the
qualification of the indenture under the Trust Indenture Act;
o evidence and provide for the acceptance of appointment by a
successor trustee; or
o 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:
o change the Stated Maturity of the principal of, or any installment
of interest on, any note;
o reduce the principal amount of, or premium, if any, or interest
on, any note;
o change the place or currency of payment of principal of, or
premium, if any, or interest on, any note;
o 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;
o waive a default in the payment of principal of, premium, if any,
or interest on the notes, other than as a result of acceleration;
o modify any guarantee of the notes in a manner adverse to the
holders; or
o 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 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' 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 [EURO]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 96, 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.
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:
o 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;
o if DTC, Euroclear or Clearstream so requests following an Event of
Default under the indenture; or
o 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 [EURO]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:
o the record date for any payment of interest on the notes;
o any date fixed for redemption of the notes; or
o 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 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
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 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.
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 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 107.
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 107.
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.
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, 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.
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 any gain realized
on the disposal of old notes for new notes pursuant to the exchange offer,
provided that:
o such holder is neither resident nor deemed to be resident in the
Netherlands;
o 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
o 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:
o 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
o 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.
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
o an "affiliate" of the issuer, Jones Lang LaSalle Incorporated or
any subsidiary guarantor within the meaning of Rule 405 under the
Securities Act;
o a broker-dealer who acquired notes directly from the issuer; or
o 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 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 [o], 2000 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 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.
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:
o Annual Report on Form 10-K for the fiscal year ended December 31,
1999;
o Proxy Statement for the 2000 Annual Meeting of Stockholders;
o Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, June 30, and September 30, 2000; and
o Current Reports on Form 8-K dated June 30, 2000 and August 11,
2000 (filed July 24 and August 11, 2000, respectively).
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.
------------------------------------------------------------------------------
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 [o], 2000, 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.
------------------------------------------------------------------------------
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.
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.
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, 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.
EXHIBIT
NO. DESCRIPTION
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)).
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).
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).
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.*
--------------------
* 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 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.
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang
LaSalle Finance B.V. has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
city of Chicago, state of Illinois, on December 1, 2000.
JONES LANG LASALLE FINANCE B.V.
By: *
--------------------------------
Name: Brian P. Hake
Title: Managing Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this first day of December, 2000.
SIGNATURE TITLE
* Managing Director
--------------------------
Brian P. Hake
* Managing Director
---------------------------
Henricus T.M. Teeuwisse
JONES LANG LASALLE Authorized Representative
INCORPORATED in the United States
By *
--------------------------
Name: William E. Sullivan
Title: Executive Vice President,
Chief Financial Officer and
Secretary
* By:/s/ Fritz E. Freidinger
-------------------------------
Fritz E. Freidinger
Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang
LaSalle Incorporated has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
city of Chicago, state of Illinois, on December 1, 2000.
JONES LANG LASALLE INCORPORATED
By: *
----------------------------------
Name: Stuart L. Scott
Title: Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this first day of December, 2000.
SIGNATURE TITLE
* Chairman of the Board and
------------------------------ Chief Executive Officer and Director
Stuart L. Scott (Principal Executive Officer)
* President, Deputy Chief
------------------------------ Executive Officer, Chief
Christopher A. Peacock Operating Officer and Director
* Executive Vice President, Chief
------------------------------ Financial Officer and Secretary
William E. Sullivan (Principal Financial Officer)
* Senior Vice President and
------------------------------ Global Controller
Nicholas J. Willmott
* Director
------------------------------
Christopher M.G. Brown
* Director
------------------------------
Henri-Claude de Bettignies
* Director
------------------------------
Darryl Hartley-Leonard
* 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
* By: /s/ Fritz E. Freidinger
-------------------------
Fritz E. Freidinger
Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang
LaSalle Americas, Inc. has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
city of Chicago, state of Illinois, on December 1, 2000.
JONES LANG LASALLE AMERICAS, INC.
By: *
--------------------------------------
Name: William E. Sullivan
Title: Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this first day of December, 2000.
SIGNATURE TITLE
* 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
* By: /s/ Fritz E. Freidinger
----------------------------------
Fritz E. Freidinger
Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act, LaSalle
Investment Management, Inc. has duly caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
the city of Chicago, state of Illinois, on December 1, 2000.
LASALLE INVESTMENT MANAGEMENT, INC.
By: *
----------------------------------------
Name: William E. Sullivan
Title: Executive Vice President, Chief
Financial Officer and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this first day of December, 2000.
SIGNATURE TITLE
* Chief Executive Officer and Director
----------------------- (Principal Executive Officer)
Lynn C. Thurber
* 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
* By: /s/ Fritz E. Freidinger
----------------------------------
Fritz E. Freidinger
Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang
LaSalle International, Inc. has duly caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
the city of Chicago, state of Illinois, on December 1, 2000.
JONES LANG LASALLE INTERNATIONAL, INC.
By: *
-----------------------------------
Name: William E. Sullivan
Title: Executive Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this first day of December, 2000.
SIGNATURE TITLE
* Chairman and Director
------------------------------ (Principal Executive Officer)
Stuart L. Scott
* Executive Vice President, Secretary
----------------------------- and Director
William E. Sullivan (Principal Financial and
Accounting Officer)
* By: /s/ Fritz E. Freidinger
--------------------------------
Fritz E. Freidinger
Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang
LaSalle Co-Investment, Inc. has duly caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
the city of Chicago, state of Illinois, on December 1, 2000.
JONES LANG LASALLE CO-INVESTMENT, INC.
By: *
------------------------------------
Name: William E. Sullivan
Title: Executive Vice President,
Chief Financial Officer and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this first day of December, 2000.
SIGNATURE TITLE
* Chairman and Director
----------------------------- (Principal Executive Officer)
Stuart L. Scott
* Executive Vice President, Chief Financial
---------------------------- Officer, Secretary and Director
William E. Sullivan (Principal Financial and
Accounting Officer)
* Director
------------------------------
Lynn C. Thurber
* By: /s/ Fritz E. Freidinger
------------------------------
Fritz E. Freidinger
Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act, LaSalle Hotel
Advisors, Inc. has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the city of
Chicago, state of Illinois, on December 1, 2000.
LASALLE HOTEL ADVISORS, INC.
By: *
------------------------------------
Name: William E. Sullivan
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this first day of December, 2000.
SIGNATURE TITLE
* Chairman and Chief Executive
-------------------------- Officer and Director
Jonathan E. Bortz (Principal Executive Officer)
* Executive Vice President
--------------------------- and Director (Principal Financial
William E. Sullivan and Accounting Officer)
* Director
-----------------------------
Stuart L. Scott
* Director
----------------------------
Michael D. Barnello
* By: /s/ Fritz E. Freidinger
----------------------------
Fritz E. Freidinger
Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act, Jones Lang
LaSalle Limited has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the city of
London, England, on December 1, 2000.
JONES LANG LASALLE LIMITED
By: /s/ Antony H. Jones
---------------------------------
Name: Antony H. Jones
Title: Company Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this first day of December, 2000.
SIGNATURE TITLE
By: * Director
------------------------
J. Andrew Jenkins
By: * Director
-----------------------
Robert S. Orr
By: * Director
------------------------
Thomas R. Whittaker
By: * Director
------------------------
Alastair Hughes
JONES LANG LASALLE Authorized Representative
INCORPORATED in the United States
By: *
--------------------------
Name: William E. Sullivan
Title: Executive Vice President,
Chief Financial Officer and
Secretary
* By: /s/ Fritz E. Freidinger
------------------------------
Fritz E. Freidinger
Attorney-in-Fact
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
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)).
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).
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).
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.*
* Previously filed.
** Filed herewith.
