Document:

exv10w5

 

Exhibit 10.5

 

FORM OF

SALE AND MERGER AGREEMENT

Among

HFF HOLDINGS LLC,

HOLLIDAY GP CORP.,

HFF LP ACQUISITION LLC,

HFF, INC.,

GP ACQUISITION CORP.

and

HFF PARTNERSHIP HOLDINGS LLC

Dated As Of

[•], 2007

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE 1 CERTAIN DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	1.1. Defined Terms
	 	 	2	 
	1.2. Other Definitional Provisions
	 	 	4	 
	 
	 	 	 	 
	ARTICLE 2 THE TRANSACTIONS
	 	 	5	 
	 
	 	 	 	 
	2.1. Sale and Merger Transactions
	 	 	5	 
	2.2. Closing
	 	 	7	 
	2.3. Other Deliveries and Proceedings at Closing
	 	 	7	 
	2.4. Initial Public Offering
	 	 	8	 
	2.5. Post-Closing Transactions
	 	 	8	 
	 
	 	 	 	 
	ARTICLE 3 REPRESENTATIONS AND WARRANTIES
	 	 	8	 
	 
	 	 	 	 
	3.1. Representations and Warranties of HFF Holdings, Holliday GP and Holdings Sub
	 	 	8	 
	3.2. Representations and Warranties of HoldCo LLC, GP Acquisition Corp. and the Company
	 	 	10	 
	 
	 	 	 	 
	ARTICLE 4 CONDITIONS PRECEDENT TO CLOSING
	 	 	12	 
	 
	 	 	 	 
	4.1. Conditions Precedent to Obligations of HoldCo LLC, GP Acquisition Corp. and the Company
	 	 	12	 
	4.2. Conditions Precedent to Obligations of HFF Holdings, Holliday GP and Holdings Sub
	 	 	12	 
	4.3. Additional Conditions Precedent.
	 	 	13	 
	 
	 	 	 	 
	ARTICLE 5 INDEMNIFICATION
	 	 	13	 
	 
	 	 	 	 
	5.1. Indemnification Obligation of HFF Holdings
	 	 	13	 
	5.2. Indemnification Obligation of HoldCo LLC
	 	 	14	 
	5.3. Other Rights and Remedies
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 6 MISCELLANEOUS
	 	 	14	 
	 
	 	 	 	 
	6.1. Termination
	 	 	14	 
	6.2. No Liabilities in Event of Termination
	 	 	14	 
	6.3. Further Assurances
	 	 	14	 
	6.4. Contents of Agreement
	 	 	15	 
	6.5. Assignment and Binding Effect
	 	 	15	 
	6.6. Waiver
	 	 	15	 

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TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	 	Page	 
	6.7.
	 	Notices	 	 	15	 
	6.8.
	 	Applicable Law; Consent to Jurisdiction	 	 	16	 
	6.9.
	 	No Benefit to Others	 	 	16	 
	6.10.
	 	Headings	 	 	17	 
	6.11.
	 	Severability	 	 	17	 
	6.12.
	 	Counterparts	 	 	17	 

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EXHIBITS:

	 	 	 
	Exhibit A

	 	Company Bylaws
	Exhibit B

	 	Company Certificate of Incorporation
	Exhibit C

	 	Amended and Restated Texas Limited Partnership Agreement of
Holliday Fenoglio Fowler, L.P.
	Exhibit D

	 	Amended and Restated Limited Partnership Agreement of HFF
Securities L.P.
	Exhibit E

	 	Tax Receivable Agreement
	Exhibit F

	 	Registration Rights Agreement

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FORM OF

SALE AND MERGER AGREEMENT

          THIS SALE AND MERGER AGREEMENT (this “Agreement”), dated as of [•], 2007, is entered
into by and among HFF Holdings LLC, a limited liability company organized under the laws of
Delaware (“HFF Holdings”), Holliday GP Corp., a corporation organized under the laws of
Delaware (“Holliday GP”), HFF LP Acquisition LLC, a limited liability company organized
under the laws of Delaware (“Holdings Sub” and together with HFF Holdings, the
“Sellers”), HFF, Inc., a corporation organized under the laws of Delaware (the
“Company”), HFF Partnership Holdings LLC, a limited liability company organized under the
laws of Delaware (“HoldCo LLC”), and GP Acquisition Corp., a corporation organized under
the laws of Delaware (“GP Acquisition Corp.”).

R E C I T A L S

          WHEREAS, the Company has formed HoldCo LLC;

          WHEREAS, HoldCo LLC has formed GP Acquisition Corp.;

          WHEREAS, the Company is expected to issue shares of Class A Common Stock to the public in an
initial public primary offering and contribute the net proceeds of that issuance to HoldCo LLC;

          WHEREAS, HFF Holdings owns 100% of the outstanding equity interests of Holliday GP, which is
the general partner of each of Holliday Fenoglio Fowler, L.P. (“HFF LP”) and HFF Securities
L.P. (“HFF Securities” and together with HFF LP, the “Operating Partnerships”);

          WHEREAS, Holdings Sub and Holliday GP own 99% and 1%, respectively, of the outstanding
partnership interests of each of HFF LP and HFF Securities;

          WHEREAS, on the terms and subject to the conditions set forth herein, HoldCo LLC will purchase
outstanding partnership interests of each of HFF LP and HFF Securities from the Sellers;

          WHEREAS, on the terms and subject to the conditions set forth herein, GP Acquisition Corp.
will merge with and into Holliday GP (the “Merger”) and Holliday GP, as the surviving
corporation of the Merger, will become a wholly-owned subsidiary of HoldCo LLC; and

          WHEREAS, the Managing Member of HoldCo LLC, the Boards of Directors of GP Acquisition Corp.
and Holliday GP, and the sole stockholder of each of Holliday GP and GP Acquisition Corp. has
approved the Merger whereby Holliday GP’s outstanding stock held by HFF Holdings will be converted
into the right to receive the merger consideration provided for herein.

 

 

          NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants, agreements and conditions herein contained, and intending to be legally bound, the
Parties hereto agree as follows:

ARTICLE 1

CERTAIN DEFINITIONS

     1.1. Defined Terms. For purposes of this Agreement, the terms defined in this
Agreement shall have the respective meanings specified herein, and, in addition, the following
terms shall have the following meanings:

          “Action” means any claim, action, suit, litigation, arbitration, inquiry,
investigation or other proceeding.

          “Affiliate” means, as to any Person, any other Person, which, directly or indirectly,
is in control of, is controlled by, or is under common control with, such Person. The term
“control” (including, with correlative meanings, the terms “controlled by” and
“under common control with”), as applied to any Person, means the possession, direct or
indirect, of the power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or other ownership interest, by contract
or otherwise.

          “Agreement” means this Sale and Merger Agreement, and all Exhibits hereto, as amended,
modified or supplemented from time to time in accordance with the terms hereof.

          “Authorizations” means, as to any Person, all licenses, permits, franchises, orders,
approvals, concessions, registrations, qualifications and other authorizations with or under all
federal, state, local or foreign laws and Governmental Authorities and all industry or other
non-governmental regulatory organizations that are issued to such Person.

          “Business Day” means any day other than a Saturday, a Sunday or a day on which banks
in the City of New York are authorized or required to close.

          “Class A Common Stock” means Class A common stock, par value $0.01 per share, of the
Company, which Class A common stock shall have the rights, preferences and terms contained in the
Company Certificate of Incorporation and the Company Bylaws.

          “Class B Common Stock” means Class B common stock, par value $0.01 per share, of the
Company, which Class B common stock shall have the rights, preferences and terms contained in the
Company Certificate of Incorporation and the Company Bylaws.

          “Closing” and “Closing Date” is defined in Section 2.2.

          “Code” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder, in each case as in effect from time to time, with any

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references to specific sections of the Code construed also to refer to any predecessor or
successor sections thereof.

          “Company” is defined in the preamble.

          “Company Bylaws” means the Bylaws of the Company substantially in the form attached
hereto as Exhibit A.

          “Company Certificate of Incorporation” means the Certificate of Incorporation of the
Company substantially in the form attached hereto as Exhibit B.

          “DGCL” is defined in Section 2.1(b).

          “Effective Time” is defined in Section 2.1(c).

          “Exchange Act” means the U.S. Securities and Exchange Act of 1934, and the rules and
regulations promulgated thereunder, as amended.

          “Exchange Right” is defined in Section 2.1(a).

          “Governmental Authority” means any branch of power (whether executive, legislative or
judicial) of any nation or government, any state or other political subdivision thereof or any
entity (including a court) exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

          “Governmental Order” means, as to any Person, any judgment, injunction, decree, order
or determination of a Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property or assets is subject.

          “GP Acquisition Corp.” is defined in the preamble.

          “HFF Holdings” is defined in the preamble.

          “HFF LP” is defined in the Recitals.

          “HFF Securities” is defined in the Recitals.

          “HoldCo LLC” is defined in the preamble.

          “Holdings Sub” is defined in the preamble.

          “Holliday GP” is defined in the preamble.

          “IPO” is defined in Section 2.4.

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          “Lien” means any mortgage, pledge, hypothecation, assignment, encumbrance, lien
(statutory or other), charge or other security interest, preemptive right, existing or claimed
right of first refusal, right of first offer, right of consent, put right, default or similar right
or other adverse claim of any kind or nature whatsoever (including any conditional sale or other
title retention agreement and any financing lease having substantially the same economic effect as
any of the foregoing).

          “Losses” is defined in Section 5.1.

          “Merger” is defined in the Recitals.

          “Merger Consideration” is defined in Section 2.1(e).

          “Operating Partnerships” is defined in the Recitals.

          “Partnership Agreements” means collectively, the Amended and Restated Texas Limited
Partnership Agreement of HFF LP and the Amended and Restated Limited Partnership Agreement of HFF
Securities substantially in the forms attached hereto as Exhibits C and D.

          “Party” or “party” means a party to this Agreement.

          “Person” means an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity or enterprise of whatever nature.

          “Registration Rights Agreement” is defined in Section 2.3(a)(iii).

          “Requirement of Law” means, as to any Person, any permit, license, judgment, order,
decree, statute, law, ordinance, code, rule, regulation or arbitration award in each case
applicable to or binding upon such Person or any of its property or assets or to which such Person
or any of its property or assets is subject.

          “Sale and Merger Transactions” is defined in Section 2.1.

          “SEC” means the U.S. Securities and Exchange Commission.

          “Securities Act” means the U.S. Securities Act of 1933, and the rules and regulations
promulgated thereunder, as amended.

          “Sellers” is defined in the preamble.

          “Surviving Corporation” is defined in Section 2.1(b).

          “Tax Receivable Agreement” is defined in Section 2.1(a).

     1.2. Other Definitional Provisions.

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     (a) The words “hereof,” “herein” and “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement, and Section and Exhibit references are to
this Agreement unless otherwise specified.

     (b) Unless the context otherwise requires, the words “include,”
“includes” and “including” and words of similar import when used in this
Agreement shall be deemed to be followed by the phrase “without limitation.”

     (c) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

     (d) The terms “Dollars” and “$” shall mean United States dollars.

ARTICLE 2

THE TRANSACTIONS

     2.1. Sale and Merger Transactions. Subject to the terms and conditions hereinafter
set forth and on the basis of and in reliance upon the representations, warranties, covenants,
agreements and conditions set forth herein, the Parties hereto will take each of the actions
described in this Section 2.1 (collectively, the “Sale and Merger Transactions”).

     (a) Contribution and Sale. The Company shall contribute the net cash proceeds
of the IPO to HoldCo LLC. HoldCo LLC shall use such proceeds to (i) purchase [•]
partnership units of each of the Operating Partnerships from the Sellers and (ii) acquire
all of the outstanding stock of Holliday GP held by HFF Holdings pursuant to the Merger. In
addition to such cash proceeds, HFF Holdings shall also receive (i) an exchange right that
shall permit HFF Holdings to exchange one partnership unit in each of the Operating
Partnerships for one share of Class A Common Stock as set forth in the Company Certificate
of Incorporation (the “Exchange Right”) and (ii) rights under a tax receivable
agreement by and between the Company and HFF Holdings (the “Tax Receivable
Agreement”) substantially in the form attached hereto as Exhibit E.

     (b) Merger. In accordance with the General Corporation Law of the State of
Delaware (the “DGCL”), GP Acquisition Corp. shall be merged with and into Holliday
GP at the Effective Time. Following the Effective Time, the separate corporate existence of
GP Acquisition Corp. shall cease and Holliday GP shall continue as the surviving corporation
and a wholly-owned subsidiary of HoldCo LLC (the “Surviving Corporation”).

     (c) Effective Time. GP Acquisition Corp. and Holliday GP shall file a
Certificate of Merger executed in accordance with the relevant provisions of the DGCL and
shall make all other filings or recordings required under the DGCL to effect the Merger as
soon as practicable on the Closing Date. The Merger shall become effective at

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such time as the Certificate of Merger is duly filed with the Secretary of State of the
State of Delaware or at such later time as may be specified in the Certificate of Merger
(the “Effective Time”).

     (d) Effect of the Merger. The Merger shall have the effect set forth in this
Agreement and in the applicable provisions of the DGCL. Without limiting the generality of
the foregoing, and subject thereto and any other applicable laws, at the Effective Time, all
the properties, rights, privileges, powers and franchises of GP Acquisition Corp. and
Holliday GP shall vest in the Surviving Corporation, and all debts, liabilities,
restrictions, disabilities and duties of GP Acquisition Corp. and Holliday GP shall become
the debts, liabilities, restrictions, disabilities and duties of the Surviving Corporation.

     (e) Conversion of Shares. At the Effective Time, by virtue of the Merger and
without any further action on the part of HFF Holdings, GP Acquisition Corp., Holliday GP or
HoldCo LLC: (i) each share of Holliday GP’s outstanding stock held by HFF Holdings as of
the Effective Time shall be cancelled and extinguished and be converted into the right to
receive total consideration consisting of one (1) share of Class B Common Stock and
$[•] in cash (the “Merger Consideration”); (ii) each share of Holliday GP’s
stock held in the treasury of Holliday GP shall be cancelled and extinguished and no payment
or other consideration shall be made with respect thereto; and (iii) each then issued and
outstanding share, and each share held in the treasury, of the stock of GP Acquisition Corp.
shall be surrendered and converted into one (1) validly issued, fully paid and
non-assessable share of the Surviving Corporation.

     (f) Certificate of Incorporation. Effective upon and as part of the Merger,
the Certificate of Incorporation of Holliday GP shall be the Certificate of Incorporation of
the Surviving Corporation until thereafter altered, amended or repealed.

     (g) Bylaws. The Bylaws of Holliday GP in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation from and after the Effective
Time until thereafter altered, amended or repealed.

     (h) Directors and Officers. The directors of Holliday GP immediately prior to
the Effective Time shall be the directors of the Surviving Corporation, and the officers of
Holliday GP immediately prior to the Effective Time shall be the officers of the Surviving
Corporation, each to hold office in accordance with the Certificate of Incorporation and
Bylaws of the Surviving Corporation.

     (i) Sale Treatment. It is the intention of the Parties that the purchase of
partnership units of each of the Operating Partnerships from the Sellers pursuant to Section
2.1(a) shall be a transaction in which gain or loss is recognized by the Sellers on the sale
of partnership interests pursuant to Sections 741 and 1001 of the Code. Each of the Parties
hereby agrees to treat such transaction in such manner for all relevant income

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tax purposes, to file their respective tax returns accordingly and to take no positions
that are inconsistent with such treatment.

     2.2. Closing. Unless this Agreement shall have been earlier terminated in accordance
with the terms of this Agreement, the closing of the Sale and Merger Transactions (the
“Closing”) shall take place (a) at the offices of Dechert LLP in New York City at 10:00
a.m., on the date and contemporaneously with the closing of the IPO (defined below) so long as the
conditions precedent set forth herein have been satisfied or waived (other than conditions with
respect to actions the respective Parties will take at the Closing itself, but subject to the
satisfaction or waiver of those conditions) or (b) on such other date as may be mutually agreed
upon in writing by the Parties. The date of the Closing is referred to herein as the “Closing
Date.”

     2.3. Other Deliveries and Proceedings at Closing. At the Closing and subject to the
terms and conditions herein contained:

     (a) Deliveries by HoldCo LLC. HoldCo LLC shall deliver (or cause to be
delivered) to the Sellers:

     (i) cash, as consideration for the purchase of [•] partnership units of each of
the Operating Partnerships, in the amount of $[•];

     (ii) the Tax Receivable Agreement, duly executed by the Company;

     (iii) a registration rights agreement by and between the Company and HFF
Holdings (the “Registration Rights Agreement”) substantially in the form
attached hereto as Exhibit F, duly executed by the Company;

     (iv) the Merger Consideration, consisting of a certificate evidencing one (1)
share of Class B Common Stock in the name of HFF Holdings and cash of $[•]; and

     (v) a certificate duly executed by HoldCo LLC, dated as of the Closing Date,
certifying as set forth in Section 4.2.3.

     (b) Deliveries by the Sellers. The Sellers shall deliver (or cause to be
delivered) to HoldCo LLC:

     (i) [•] partnership units of each of the Operating Partnerships;

     (ii) the Tax Receivable Agreement, duly executed by HFF Holdings;

     (iii) the Registration Rights Agreement, duly executed by HFF Holdings;

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     (iv) certificates evidencing 100% of the equity interests of Holliday GP;

     (v) a certificate duly executed by HFF Holdings, dated as of the Closing Date,
certifying as set forth in Section 4.1.3; and

     (vi) a pay-off letter or other reasonably satisfactory evidence of the
repayment of outstanding indebtedness under that certain Credit Agreement dated as
of March 29, 2006 by and among HFF LP, HFF Holdings and Bank of America, N.A. (the
“Credit Agreement”).

     (c) Repayment of Debt. HFF Holdings shall use a portion of the cash proceeds
received pursuant hereto to repay all the outstanding indebtedness under the Credit
Agreement.

     (d) Other Deliveries. The Parties hereto shall also deliver to each other any
other agreements, closing certificates and other documents and instruments required to be
delivered pursuant to this Agreement.

     2.4. Initial Public Offering. Each of the Parties intends that the Company shall
consummate an initial public offering (the “IPO”) of shares of Class A Common Stock
contemporaneously with the Closing.

     2.5. Post-Closing Transactions.

     (a) Pursuant to the provisions of the limited liability company agreement of HFF
Holdings, the Exchange Right may be exercised at HFF Holdings’ election and for the benefit
of individual members of HFF Holdings.

     (b) Shares of Class A Common Stock issued in accordance with Section 2.5(a) shall be
evidenced by one or more duly authorized stock certificates (or through mutually agreed upon
electronic means) representing such shares of Class A Common Stock, delivered to HFF
Holdings and in the name designated by HFF Holdings.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

     3.1. Representations and Warranties of HFF Holdings, Holliday GP and Holdings Sub.
Each of HFF Holdings, Holliday GP and Holdings Sub hereby represents and warrants to HoldCo LLC, GP
Acquisition Corp. and the Company, as of the date hereof, as set forth below:

          3.1.1. Existence, Qualification and Authority.

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     (a) Each of HFF Holdings and Holdings Sub is a limited liability company, duly
organized, validly existing and in good standing under the laws of Delaware. Holliday GP is
a corporation, duly organized, validly existing and in good standing under the laws of
Delaware. The execution, delivery and performance by each of HFF Holdings, Holliday GP and
Holdings Sub of this Agreement has been duly authorized by all necessary action.

     (b) Each of HFF Holdings, Holliday GP and Holdings Sub has the requisite power,
authority and legal right to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.

     (c) This Agreement has been duly executed and delivered by each of HFF Holdings,
Holliday GP and Holdings Sub and constitutes the legal, valid and binding obligation of HFF
Holdings, Holliday GP and Holdings Sub, enforceable against them in accordance with its
terms, except to the extent such enforcement may be limited by applicable bankruptcy laws
and other similar laws affecting creditors’ rights generally.

          3.1.2. Validity of Contemplated Transactions, Etc.

     (a) Neither the execution, delivery and performance by HFF Holdings, Holliday GP or
Holdings Sub of this Agreement, nor the consummation by HFF Holdings, Holliday GP or
Holdings Sub of the transactions contemplated hereby, nor compliance by HFF Holdings,
Holliday GP or Holdings Sub with the terms and provisions hereof, will, directly or
indirectly (with or without notice or lapse of time or both), (i) contravene or conflict
with, or result in a breach or termination of, or constitute a default under (or with notice
or lapse of time or both, result in the breach or termination of or constitute a default
under) or result in the termination or suspension of, or accelerate the performance required
by the terms, conditions or provisions of, or cause any payments to be due under, any
contracts of HFF Holdings, Holliday GP or Holdings Sub, (ii) constitute a violation by HFF
Holdings, Holliday GP or Holdings Sub of any existing Requirement of Law or Governmental
Order applicable to HFF Holdings, Holliday GP, Holdings Sub or any of their respective
properties, rights or assets or (iii) result in the creation of any Lien upon any equity
interests, properties, rights or assets of HFF Holdings, Holliday GP or Holdings Sub,
except, in the case of clauses (i), (ii) and (iii), as would not reasonably be expected to
result in, individually or in the aggregate, a material adverse effect on the ability of HFF
Holdings, Holliday GP or Holdings Sub to consummate the transactions contemplated by this
Agreement.

     (b) Except for the Certificate of Merger, no Authorization and no filing or
notification with any Governmental Authority, any counterparty to any of the contracts of
HFF Holdings, Holliday GP, Holdings Sub or any other Person is required to be made or
obtained by HFF Holdings, Holliday GP or Holdings Sub in connection with the execution,
delivery or performance by HFF Holdings, Holliday GP and Holdings Sub of this Agreement, or
the consummation of the transactions contemplated hereby by HFF Holdings, Holliday GP and
Holdings Sub, except for any such Authorization, filing or

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notification the failure of which to make or obtain would not reasonably be expected to
result in, individually or in the aggregate, a material adverse effect on the ability of HFF
Holdings, Holliday GP or Holdings Sub to consummate the transactions contemplated by this
Agreement.

          3.1.3. Holliday GP Shares. HFF Holdings owns beneficially and of record 100% of the
outstanding equity interests of Holliday GP, free and clear of any Liens.

          3.1.4. Provisions Relating to Securities Laws.

     (a) HFF Holdings acknowledges that the shares of Class A Common Stock received pursuant
to the Exchange Right have not been registered under the Securities Act or under any
applicable state securities laws, and are being offered and sold in reliance on exemptions
from the registration requirements of the Securities Act and all such laws.

     (b) The Class A Common Stock is being acquired by HFF Holdings for its own account for
the purpose of investment for the benefit of its members and not with a view to distribute
(other than to its members), it being understood that the right to dispose of Class A Common
Stock shall be entirely within HFF Holdings’ discretion subject to the transfer restrictions
under the Securities Act. HFF Holdings will refrain from transferring or otherwise
disposing of the Class A Common Stock (other than to its members) or any interest therein in
such manner as to cause the Company to violate the registration requirements of the
Securities Act or any applicable state securities or blue sky laws.

     (c) HFF Holdings has received, reviewed and analyzed information concerning the Company
necessary to enable it to evaluate the merits and risks of an investment in the Class A
Common Stock.

     3.2. Representations and Warranties of HoldCo LLC, GP Acquisition Corp. and the
Company. Each of HoldCo LLC, GP Acquisition Corp. and the Company hereby represents and
warrants to HFF Holdings, Holliday GP and Holdings Sub, as of the date hereof, as set forth below:

          3.2.1. Existence, Qualification and Authority.

     (a) HoldCo LLC is a limited liability company duly organized, validly existing and in
good standing under the laws of Delaware and each of GP Acquisition Corp. and the Company is
a corporation duly organized, validly existing and in good standing under the laws of
Delaware, and each of HoldCo LLC, GP Acquisition Corp. and the Company has all requisite
power and authority to own and operate its assets and carry on its business as currently
conducted, except where any such failure to be so organized or existing or to have such
power and authority has not had, and would not reasonably be expected to result in,
individually or in the aggregate, a material adverse

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effect on the ability of HoldCo LLC, GP Acquisition Corp. or the Company to consummate
the transactions contemplated by this Agreement. Each of HoldCo LLC, GP Acquisition Corp.
and the Company has the requisite power, authority and legal right to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance by each of HoldCo LLC, GP Acquisition Corp. and the Company of this
Agreement has been duly authorized by all necessary action.

     (b) This Agreement has been duly executed and delivered by each of HoldCo LLC, GP
Acquisition Corp. and the Company and constitutes the legal, valid and binding obligation of
HoldCo LLC, GP Acquisition Corp. and the Company, enforceable against them in accordance
with its terms, except to the extent such enforcement may be limited by applicable
bankruptcy laws and other similar laws affecting creditors’ rights generally.

          3.2.2. Validity of Contemplated Transactions, Etc.

     (a) Neither the execution, delivery and performance by HoldCo LLC, GP Acquisition Corp.
or the Company of this Agreement, nor the consummation by them of the transactions
contemplated hereby, nor compliance by them with the terms and provisions hereof, will,
directly or indirectly (with or without notice or lapse of time or both), (i) contravene or
conflict with the organizational documents of HoldCo LLC, GP Acquisition Corp. or the
Company, (ii) contravene or conflict with, or result in a breach or termination of, or
constitute a default under (or with notice or lapse of time or both, result in a breach or
termination of, or constitute a default under) or result in the termination or suspension
of, or accelerate the performance required by the terms, conditions or provisions of, or
cause any payments to be due under, any contracts to which HoldCo LLC, GP Acquisition Corp.
or the Company is a party or any Authorizations held by HoldCo LLC, GP Acquisition Corp. or
the Company, (iii) constitute a violation by HoldCo LLC, GP Acquisition Corp. or the Company
of any existing Requirement of Law or Governmental Order applicable to HoldCo LLC, GP
Acquisition Corp., the Company or any of their respective properties, rights or assets or
(iv) result in the creation of any Lien upon any equity interests, properties, rights or
assets of HoldCo LLC, GP Acquisition Corp. or the Company, except, in the case of clauses
(ii), (iii) and (iv), as would not reasonably be expected to result in, individually or in
the aggregate, a material adverse effect on the ability of HoldCo LLC, GP Acquisition Corp.
or the Company to consummate the transactions contemplated by this Agreement.

     (b) Other than the Certificate of Merger, no Authorization and no filing or
notification with any Governmental Authority, any counterparty to any of the contracts to
which HoldCo LLC, GP Acquisition Corp. or the Company is a party or any other Person is
required to be made or obtained by HoldCo LLC, GP Acquisition Corp. or the Company in
connection with the execution, delivery or performance by HoldCo LLC, GP Acquisition Corp.
or the Company of this Agreement, or the consummation of the transactions contemplated
hereby by HoldCo LLC, GP Acquisition Corp. or the

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Company, except for any such Authorization, filing or notification the failure of which
to make or obtain would not reasonably be expected to result in, individually or in the
aggregate, a material adverse effect on the ability of HoldCo LLC, GP Acquisition Corp. or
the Company to consummate the transactions contemplated by this Agreement.

          3.2.3. Class A Stock. The Class A Common Stock to be transferred to HFF Holdings
pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and
nonassessable.

ARTICLE 4

CONDITIONS PRECEDENT TO CLOSING

     4.1. Conditions Precedent to Obligations of HoldCo LLC, GP Acquisition Corp. and the
Company. The obligations of HoldCo LLC, GP Acquisition Corp. and the Company under Article 2
are subject to the fulfillment or satisfaction, prior to or at the Closing, of each of the
following conditions precedent, which may be waived in writing in whole or in part by HoldCo LLC:

          4.1.1. Representations and Warranties True as of Closing. Each of the representations
and warranties of HFF Holdings, Holliday GP and Holdings Sub contained in this Agreement shall have
been true and correct in all material respects (without duplicating any materiality qualifications
included in such representations and warranties for all purposes of this Section 4.1.1) as of the
date of this Agreement and shall be true and correct in all material respects (without duplicating
any materiality qualifications included in such representations and warranties for all purposes of
this Section 4.1.1) as of the Closing Date (provided that the representations and warranties
contained in Section 3.1.3 shall be true and correct in all respects as of the date of this
Agreement and as of the Closing Date), with the same effect as though each of such representations
and warranties had been made on and as of the Closing Date.

          4.1.2. Compliance with this Agreement. HFF Holdings, Holliday GP and Holdings Sub
shall have performed and complied in all material respects with each of the agreements and
covenants required by this Agreement to have been performed or complied with by it prior to or at
the Closing.

          4.1.3. Closing Certificates. HoldCo LLC shall have received a certificate executed by
HFF Holdings certifying as set forth in Sections 4.1.1 and 4.1.2.

     4.2. Conditions Precedent to Obligations of HFF Holdings, Holliday GP and Holdings
Sub. The obligations of HFF Holdings, Holliday GP and Holdings Sub under Article 2 are subject
to the fulfillment or satisfaction, prior to or at the Closing, of each of the following conditions
precedent, which may be waived in writing in whole or in part by HFF Holdings:

          4.2.1. Representations and Warranties True as of Closing. Each of the representations
and warranties of HoldCo LLC, GP Acquisition Corp. and the Company

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contained in this Agreement shall have been true and correct in all material respects (without
duplicating any materiality qualifications included in such representations and warranties for all
purposes of this Section 4.2.1) as of the date of this Agreement and shall be true and correct in
all material respects (without duplicating any materiality qualifications included in such
representations and warranties for all purposes of this Section 4.2.1) as of the Closing Date
(provided that the representations and warranties contained in Section 3.2.3 shall be true and
correct in all respects as of the date of this Agreement and as of the Closing Date), with the same
effect as though each of such representations and warranties had been made on and as of the Closing
Date.

          4.2.2. Compliance with this Agreement. HoldCo LLC, GP Acquisition Corp. and the
Company shall have performed and complied in all material respects with each of the agreements and
covenants required by this Agreement to have been performed or complied with by it prior to or at
the Closing.

          4.2.3. Closing Certificates. HFF Holdings shall have received a certificate executed
by HoldCo LLC certifying as set forth in Sections 4.2.1 and 4.2.2.

     4.3. Additional Conditions Precedent. All obligations of the Parties under this
Agreement are subject to the fulfillment or satisfaction, prior to or at the Closing, of each of
the following conditions precedent, each of which may be waived in whole or in part by the mutual
agreement of HFF Holdings and HoldCo LLC:

          4.3.1. No Pending Governmental Litigation. On the Closing Date, no suit, Action or
other proceeding brought by any Governmental Authority shall be pending in which it is sought to
restrain or prohibit the consummation of the transactions contemplated hereby.

          4.3.2. IPO Closing. The closing of the transactions contemplated by the IPO shall
have occurred contemporaneously with the Closing.

ARTICLE 5

INDEMNIFICATION

     5.1. Indemnification Obligation of HFF Holdings. From and after the Closing, HFF
Holdings shall indemnify and hold harmless HoldCo LLC, GP Acquisition Corp. and the Company, and
their respective directors, managers, officers, members, partners, employees, agents, Affiliates,
successors and assigns, against and in respect of any and all damages, losses, deficiencies,
liabilities, costs and expenses (collectively, “Losses”) incurred or suffered by any such
Person that result from, relate to or arise out of, and any and all Actions, suits, claims,
proceedings, investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including reasonable fees and expenses of attorneys, accountants and other professional
advisors) incident to, any breaches of this Agreement by HFF Holdings, Holliday GP or Holdings Sub.

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     5.2. Other Rights and Remedies. Following the Closing, the sole and exclusive remedy
at law (other than with respect to claims involving intentional misrepresentation or fraud) for
HoldCo LLC, GP Acquisition Corp. and the Company for any claim (whether such claim is framed in
tort, contract or otherwise) arising out of a breach of any representation, warranty, covenant or
other agreement in this Agreement shall be a claim by HoldCo LLC, GP Acquisition Corp. and the
Company for indemnification pursuant to this Article 5, which claims are independent of and in
addition to any equitable rights or remedies that HoldCo LLC, GP Acquisition Corp. and the Company
may seek in connection with this Agreement or the transactions contemplated hereby.

ARTICLE 6

MISCELLANEOUS

     6.1. Termination. Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated (and the transactions contemplated herein may be abandoned) at any time
before the Closing Date (a) by mutual written consent of HFF Holdings, on the one hand, and HoldCo
LLC, on the other hand; and (b) by HFF Holdings, on the one hand, or HoldCo LLC, on the other hand,
upon notice given to the other, if any Governmental Authority shall have issued an order, decree or
ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement.

     6.2. No Liabilities in Event of Termination. In the event of any termination of this
Agreement as provided in Section 6.1, (a) written notice thereof shall promptly be given to the
other Parties hereto and this Agreement shall forthwith become wholly void and terminate and of no
further force and effect except for Sections 6.2, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11 and
6.12, and (b) there shall be no liability on the part of any of the Parties hereto, except that
such termination shall not preclude any party from pursuing judicial remedies for damages and/or
other relief as a result of the breach by the other party of any representation, warranty, covenant
or agreement contained herein prior to such termination.

     6.3. Further Assurances. Each of the Parties shall from time to time after the
Closing Date, at the request of any other Party, execute, acknowledge and deliver to such other
Party such other instruments of conveyance and transfer or assumption and will take such other
actions and execute and deliver such other documents, certifications and further assurances as such
other party may reasonably require in order to effect the transactions contemplated hereby and will
use Commercially Reasonable Efforts to cooperate with the other Parties and execute and deliver to
the other Parties such other instruments and documents and take such other actions as may be
reasonably requested from time to time by such other party as necessary to carry out, evidence and
confirm the intended purposes of this Agreement. Each of the Parties will cause their respective
Affiliates to comply with this Section 6.3 to the extent necessary or desirable to fulfill the
purposes thereof.

     6.4. Contents of Agreement. This Agreement, including the Exhibits hereto, sets forth
the entire understanding of the Parties hereto with respect to the transactions contemplated

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hereby and supersede any and all previous agreements and understandings, oral or written,
between or among the Parties regarding the transactions contemplated hereby. This Agreement shall
not be amended or modified except by written instrument duly executed by each of the Parties
hereto.

     6.5. Assignment and Binding Effect. This Agreement may not be assigned by any party
without the prior written consent of the other Parties.

     6.6. Waiver. No waiver of any term or provision of this Agreement shall be effective
unless in writing, signed by the Party against whom enforcement of the same is sought. The grant
of a waiver in one instance does not constitute a continuing waiver in all similar instances. No
failure to exercise, and no delay in exercising, by any Party, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof.

     6.7. Notices. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted hereunder shall be in writing and shall be deemed
given only if delivered personally or sent by registered or certified mail or by Federal Express or
other overnight mail service, postage prepaid, by e-mail or by facsimile, with written confirmation
to follow, as follows:

          If to HoldCo LLC, GP Acquisition Corp. or the Company, to:

c/o HFF, Inc.

429 Fourth Avenue

Suite 200

Pittsburgh, PA 15219

Attention: Chief Executive Officer

Facsimile No.: [ • ]

          With a required copy to (which shall not itself constitute notice):

Dechert LLP

90 State House Square, 12th Floor

Hartford, CT 06103-3702

Attention: John J. Gillies, Esq.

Facsimile No.: (860) 524-3930

          If to HFF Holdings, Holliday GP or Holdings Sub, to:

c/o HFF Holdings LLC

429 Fourth Avenue

Suite 200

Pittsburgh, PA 15219

Attention: Managing Member

Facsimile No.: [ • ]

-15-

 

          With a required copy, to (which shall not itself constitute notice):

Dechert LLP

90 State House Square, 12th Floor

Hartford, CT 06103-3702

Attention: John J. Gillies, Esq.

Facsimile No.: (860) 524-3930

or to such other address or facsimile numbers as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver, consent, approval or
other communication will be deemed to have been given as of the date so delivered or, if such date
is not a Business Day, on the next Business Day.

     6.8. Applicable Law; Consent to Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving effect to such
State’s laws and principles regarding the conflict of laws. Each of the Parties hereto (a)
consents to submit itself to the personal jurisdiction of any federal court located in the State of
New York or any New York state court in connection with any dispute that arises out of this
Agreement or any of the transactions contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any
such court, (c) agrees that it will not bring any Action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than a federal court sitting in the
State of New York or a New York state court unless venue would not be proper under rules applicable
in such courts and (d) waives any right to which it may be entitled, on account of place of
residence or domicile.

     6.9. No Benefit to Others. The representations, warranties, covenants and agreements
contained in this Agreement are for the sole benefit of the Parties hereto and, in the case of
Article 5, the other indemnitees, and their respective heirs, executors, administrators, legal
representatives, successors and permitted assigns, and they shall not be construed as conferring
any rights on any other Persons.

     6.10. Headings. All section headings contained in this Agreement are for convenience
of reference only, do not form a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.

     6.11. Severability. Any provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining provisions hereof, and such
invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provisions in any other jurisdiction.

     6.12. Counterparts. This Agreement may be executed in any number of counterparts and
any party hereto may execute any such counterpart, each of which when executed and delivered shall
be deemed to be an original and all of which counterparts taken together shall

-16-

 

constitute but one and the same instrument. This Agreement shall become binding when one or
more counterparts taken together shall have been executed and delivered by all of the Parties.

[Remainder of this page intentionally left blank.]

-17-

 

          IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 
	 	 	HFF HOLDINGS LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HFF LP ACQUISITION LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HFF, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HFF PARTNERSHIP HOLDINGS LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	HOLLIDAY GP CORP.	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

 

 

	 	 	 	 	 	 	 
	 	 	GP ACQUISITION CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

-2-exv10w6

 

Exhibit 10.6

FORM OF

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as
of                     , 2006 (the “Restated Effective Date”), by and between
John H. Pelusi, Jr. (“Employee”) and Holliday Fenoglio Fowler, LP, a Texas limited
partnership (“HFF”).

RECITALS

     WHEREAS, Employee is a member (“Member”) of HFF Holdings LLC, a Delaware limited liability
company (“HFF Holdings”), pursuant to that certain Second Amended and Restated Limited Liability
Company Agreement of HFF Holdings LLC, dated as of                     , 2007;

     WHEREAS, Employee previously entered into an employment agreement with HFF (the “Original
Employment Agreement”), dated March 29, 2006 (the “Original Effective Date”);

     WHEREAS, HFF Holdings previously owned 100% of the equity of Holliday GP Corp. (the “General
Partner”);

     WHEREAS, HFF Holdings is party to that certain Sale and Merger Agreement, dated as of
                    , 2007, among HFF Holdings, HFF Inc. (“Publico”), and the other parties thereto (the
“Sale and Merger Agreement”), pursuant to which Publico (through its wholly-owned subsidiary, HFF
Partnership Holdings LLC, a Delaware limited liability company (“Holdco”)) will own 100% of the
General Partner;

     WHEREAS, in connection with the transactions contemplated by the Contribution and Sale and
Merger Agreement, it is necessary to amend and restate the Original Employment Agreement; and,

     WHEREAS, HFF desires to continue the employ of Employee, and Employee desires to continue to
be employed by HFF, under the terms specified in this Agreement.

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants, agreements, acknowledgments,
representations, and warranties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Employee and HFF, intending to be legally
bound, agree as follows:

     1. Term. The term of Employee’s employment hereunder shall commence on the Restated
Effective Date and shall end on the date (the “Termination Date”) that Employee’s employment is
terminated by HFF or Employee for any reason, including, but not limited to death, disability, with
or without Cause (as defined below), or for no reason. Notwithstanding

 

 

the foregoing but subject to Sections 4(e) and 6(d), the provisions contained in Section 4
(Non-Competition), Section 5 (Non-Disclosure), Section 6 (Non-Solicitation of Client), Section 7
(Non-Solicitation of Employees), Section 8 (Non-Disparagement) and Section 9 (Enforcement; Remedies
and Forfeitures) shall survive and continue after the term of this Agreement.

     2. Responsibilities. Employee’s primary duties and obligations hereunder shall be as
directed from time to time by the General Partner of HFF as directed by the board of directors of
Publico (the “Board”) after considering the recommendations and advice of the Operating Committee
of Holdco and the managing member of the operating committee of Holdco (the “Holdco Managing
Member”). During the period of Employee’s employment, he shall devote his full business time,
energy and best efforts to the business and affairs of HFF.

     3. Compensation and Benefits. In consideration for the foregoing and for the
covenants described below, HFF agrees to provide to Employee the following compensation and
benefits:

     (a) Commission and Other Income. Policies and allocations with respect to commission
sharing, draws against commissions, bonuses and other income allocation will be established from
time to time by the General Partner of HFF as directed by the Board after consideration of the
recommendations and advice of the Holdco Operating Committee and Holdco Managing Member, and
Employee shall be paid in accordance with such policies and allocations.

     (b) Benefits. Employee shall be provided with the welfare benefits and other fringe
benefits to the same extent and on the same terms as those benefits are provided by HFF from time
to time to HFF’s other similar employees. Employee shall be entitled to elect to participate in
any of HFF’s standard benefit plans according to their terms. These plans may be modified or
terminated from time-to-time by HFF in accordance with the terms thereof. The written plan
documents shall govern any questions of eligibility, coverage, duration of coverage, or other
details of the plans.

     (c) Expense Reimbursement. HFF agrees to reimburse Employee for all reasonable,
ordinary, necessary and documented business expenses incurred in the performance of services
hereunder in accordance with the policies of HFF as from time to time in effect. Employee, as a
condition precedent to obtaining such payment or reimbursement, shall provide to HFF any and all
statements, bills or receipts evidencing the travel or out-of-pocket expenses for which Employee
seeks payment or reimbursement, and any other information or materials, as HFF may from time to
time reasonably request.

     (d) No Mitigation. Subject to Sections 4, 5, 6 and 7, in no event shall Employee be
obligated to seek other employment or be obligated to mitigate any of the amounts payable to
Employee under any of the provisions of this Agreement.

2

 

     4. Non-Compete.

     (a) Employee acknowledges that HFF, the General Partner, Holdco, Publico and their affiliates
and their related entities (the “Company Entities”) are engaged in a highly competitive business on
a nationwide basis, and that the Company Entities intend to expand the business by entering into
new business lines and by increasing the geographic scope domestically and potentially
internationally, and that the relationships with their Clients (as defined below), goodwill, and
Confidential Information (defined below) are extremely valuable, provide them with competitive
business advantages and are critical to their success. Employee further acknowledges and agrees
that the Company Entities have expended considerable time, money and effort to build a competitive
business which is national in scope and to develop such Client relationships, goodwill and
Confidential Information. Employee further acknowledges that, as an Employee and by virtue of his
or her employment with HFF, Employee has had and will have close contact with such Clients, has
developed and will develop relationships with such Clients and goodwill on behalf of the Company
Entities, has and will have access to, possesses and will possess and has developed and will
develop Confidential Information of and on behalf of the Company Entities. Employee therefore
understands and agrees that both the nature and scope of the covenants contained in this Section 4
as well as the covenants set forth in Sections 5, 6, 7 and 8 are reasonable and necessary for the
protection of HFF and the other Company Entities, including, without limitation, its and/or their
Client relationships, goodwill and Confidential Information, as defined and limited below.

     (b) Employee understands that as an employee of HFF, Employee’s competition with any of the
Company Entities would result in irreparable harm to HFF and the other Company Entities.
Therefore, until the earlier of (i) five years from the Original Effective Date, or (ii) the second
anniversary of the Termination Date (the “Restrictive Period”), Employee agrees that he or she will
not, without the prior written consent of HFF, Compete (as defined below) with HFF or any of the
other Company Entities anywhere in or with respect to the United States where HFF or any of the
other Company Entities engages in a Competitive Business (as defined below).

     (c) As used herein, except as modified below, “Compete” means to directly or indirectly own,
operate, manage, control, engage in, participate in, invest in, permit his or her name to be used
by, act as a consultant or advisor to, render services for (alone or in association with any
individual or entity, and the heirs, executors, administrators, legal representatives, successors
and assign of such individual or entity (a “Person”), or otherwise assist any Person that engages
in or owns, invests in, operates, manages or controls any venture or enterprise which, directly or
indirectly, wholly or partly, engages in the business that provides services or performs functions
that are the same as, substantially similar to, or substitute for the services or functions
provided or performed by HFF and/or the other Company Entities, or in any new lines of business
considered by (meaning that a comprehensive business plan and budget were prepared by or for HFF
for consideration) and not rejected by any of the Company Entities at any time during the six (6)
month period preceding the Termination Date, in each case whether domestically or in such
international markets as considered by any of the Company Entities during such six (6) month period
(the “Competitive Business”). “Compete” shall also mean to directly or indirectly engage in any
activity or perform, develop, provide or offer any services,

3

 

functions or duties (in any capacity for the benefit of Employee or any other Person) which
involves or requires, or which would inevitably involve or require, the use or disclosure (partly
or wholly, intentionally or unintentionally) of any Confidential Information (as defined and
limited below) of HFF or the Company Entities. Notwithstanding the foregoing, Employee will not be
deemed to “Compete”:

          (i) Solely by reason of the performance of his duties as a full time employee or part time
employee of a commercial bank, savings and loan, savings bank, insurance company, pension fund,
investment bank or any other entity (including any Commercial Mortgage Backed Securities (CMBS)
entities) making or acquiring commercial real estate loans or acquiring commercial real estate if,
(A) Employee’s duties for such entity are limited to the origination or acquisition of commercial
real estate loans or commercial real estate for such entity or (B) such entity originates such
loans or acquires such loans or real estate with the intent of holding the loans or real estate for
its own account, or in respect of loans, selling the loans in its capacity as a principal.

          (ii) If Employee shall either (A) be a principal in a business engaged in real estate
development, real estate securities or in the ownership of commercial real estate, or (B) work as a
full time or part time employee of a company or other entity engaged in real estate development,
investment in real estate securities or the ownership of commercial real estate or real estate
securities, even though in the course of Employee’s employment, Employee acquires loans, securities
and/or real estate (it being understood and agreed that in this capacity, Employee shall be
permitted to secure a loan or acquire commercial real estate from, or sell commercial real estate
to HFF’s lending relationships without violating the restrictions set forth herein).

          (iii) Solely by reason of Employee’s passive ownership of any stock, bond, note, debenture,
mortgage or other security issued by any other entity if such securities are actively traded on a
stock exchange or on NASDAQ and such securities constitute less than three percent (3%) of the
total voting securities issued by such entity;

          (iv) Solely by reason of Employee’s passive ownership of any stock, bond, note, debenture,
mortgage or other security that is owned by Employee as of the date hereof;

          (v) Solely by reason of activities undertaken during his employment by HFF which are on behalf
of, and for the benefit of, HFF or any of the Company Entities notwithstanding that such activities
may involve engaging in transactions with or for entities that would otherwise “Compete” as defined
above; or

          (vi) Solely by reason of Employee becoming employed by, or becoming a principal in, any entity
involved in residential home sales brokerage and mortgage banking, provided that none of the
Company Entities are engaged in such activities as of the Termination Date or considered (meaning
that a comprehensive business plan and budget were prepared for consideration) and did not reject
engaging in such activities at any time during the six (6) month period preceding the Termination
Date.

4

 

     (d) Nothing in this Agreement shall prevent Employee from owning less than 1% of the publicly
traded stock of any Person that Competes with HFF or any of the Company Entities; provided that
Employee shall have no special voting rights, board representation or other oversight or
information rights with respect to such Person (except as generally available to all stockholders
of such Person).

     (e) This Section 4 shall not apply in the event that Employee’s employment is terminated by
HFF without Cause. “Cause” shall mean: (i) gross misconduct or gross negligence in the performance
of Employee’s duties hereunder; (ii) conviction of a crime; (iii) significant nonperformance or
misperformance of Employee’s duties hereunder; (iv) material violation of policies and procedures
established by HFF (including, without limitation, material violations of policies concerning
disclosure of confidential information, sexual harassment, and travel and entertainment
reimbursement); and (v) material violation of the covenants of this Agreement. Cause shall be
determined by the Board after consideration of the recommendations and advice of the Holdco
Operating Committee and Holdco Managing Member; provided, however, that if Cause is being
determined with respect to any member of the Holdco Operating Committee or Holdco Managing Member,
then such member or Holdco Managing Member shall not participate in such determination.

     5. Non-Disclosure.

     (a) Employee acknowledges that, by reason of his or her employment with HFF, Employee has been
and will be given access to, has developed and will develop, and has and will become informed of,
confidential or proprietary information (whether or not in writing, and whether or not developed by
Employee) concerning HFF’s and other Company Entities’ prior, current or contemplated businesses,
products, services, plans and strategies, business relationships, employees, Clients, prospects and
financial affairs, which is not generally known to the public or in the trade, is a competitive
asset, constitutes trade secrets (as defined under applicable law) or the disclosure of which would
reasonably be expected to result in a competitive disadvantage to HFF or any of the Company
Entities (collectively “Confidential Information”). By way of illustration, but without
limitation, Confidential Information includes: (i) corporate information, including plans,
strategies, developments, policies, resolutions, negotiations or litigation; (ii) marketing
information, including strategies, methods, planning data, customers, clients, prospects, mailing
lists, customer and client lists, referral sources and information, vendor lists, suppliers,
supplier lists, market analyses or projections, financial information, reports or forecasts; (iii)
financial information, including cost and performance data, financial results and information about
the business condition of the Company Entities, debt arrangement, equity or financing structure,
investors and holdings, purchasing, sales data, and pricing or cost data and information; (iv)
operational and technological information, including plans, manuals, forms, templates, intellectual
property, inventions, software, software code, software-related documents, innovations,
improvements, designs, research, developments, procedures, formulas, and product specifications;
(v) personnel information, including personnel lists, reporting or organizational structure,
personnel data, contact information, and compensation structure; and (vi) Client information,
including contact information, Client confidential and investment or property related information,
pricing data, operations and conditions (financial or otherwise), data, investment methods,
strategies and preferences, need for and use of HFF’s or

5

 

other Company Entities’ products or services, the fact they are doing or have done business with
HFF or any of the Company Entities, the nature, extent and particulars of such business dealings,
and such other information provided to HFF or other Company Entities by its Clients under
obligations of confidentiality. Notwithstanding anything herein to the contrary, “Confidential
Information” shall not include (i) information that is or hereafter becomes generally available to
the public (other than by reason of violation of this Agreement), (ii) the general skills and
experience gained during Employee’s work with HFF or Company Entities which Employee could
reasonably have been expected to acquire in similar work with another company, or (iii) contact
information, lists (including but not limited to internal mailing lists) and other similar
materials related to customers, clients, suppliers, or prospects that either (A) Employee acquired
prior to employment by HFF or (B) Employee acquired or developed as a result of Employee’s own
business generation efforts.

     (b) Employee shall at all times during and after his or her employment hold all such
Confidential Information in trust and confidence for HFF and shall not, directly or indirectly, use
or disclose any such Confidential Information except as necessary for use in the regular course of
Employee’s duties for and business of HFF or the other Company Entities; provided that Employee
shall have the right to disclose Confidential Information in response to a governmental inquiry,
including a tax audit or a judicial subpoena.

     (c) Employee agrees that all written materials (including, without limitation, correspondence,
memoranda, manuals, notes and notebooks) and all computer software, computer files and data,
models, mechanisms, devices, drawings or plans to which Employee may have access (whether or not
written or prepared by Employee) constituting or containing Confidential Information (the “Company
Materials”) shall be and remain the sole property of HFF, and Employee will use all reasonable
precautions to assure that all such Company Materials are properly protected and kept from
unauthorized persons, use or disclosure due to any action or inaction of Employee. Notwithstanding
anything herein to the contrary, materials related to matters and information that was acquired or
developed prior to commencing employment with HFF shall not be Company Materials and shall not
constitute Confidential Information for any purpose hereunder. Employee further agrees to deliver
the same, including all copies, promptly to HFF on the Termination Date, or at any time that HFF
may request. In the event Employee is uncertain whether any given material or information is,
constitutes or contains Confidential Information, Employee agrees to consult the General Partner
for resolution.

     6. Non-Solicitation of Clients. Except as otherwise provide in Section 6(d), during
the Restrictive Period, Employee agrees that he or she will not, without the prior written consent
of HFF, directly or indirectly, individually or on behalf of other Person in an intermediate
brokerage capacity:

     (a) call upon solicit, divert, or take away (or attempt or assist others to call upon,
solicit, divert, or take away) the business or patronage of, or perform duties for, any Clients or
Prospective Clients (as defined below) in respect of real estate investment banking services,
capital solutions and/or services, including, without limitation, debt placement, investment sales,
structured finance, private equity, note sales and loan servicing; and/or other services or

6

 

functions that are the same as, similar to, or substitutes for those services or functions offered,
provided or performed by HFF and/or the other Company Entities; or

     (b) influence, encourage, persuade or induce (or attempt or assist others to influence,
encourage, persuade or induce) any Clients or Prospective Clients to cease or refrain from doing
business with HFF or the other Company Entities;

     (c) For purposes of this Agreement, “Client” shall mean any Person with which HFF and/or the
other Company Entities conduct business and “Prospective Clients” shall mean any Person with which
HFF and/or the other Company Entities was or were in active business discussions or negotiations at
any time during the six (6) month period preceding the Termination Date.

     (d) This Section 6 shall not apply in the event that Employee’s employment is terminated by
HFF without Cause.

     7. Non-Solicitation of Employees. During the Restrictive Period, Employee agrees that
he or she will not, without the prior written consent of HFF, directly or indirectly, individually
or on behalf of another Person, (a) call upon, solicit, influence, encourage, persuade or induce
(or attempt or assist others to call upon, solicit, influence, encourage, persuade or induce) any
employee, consultant, contractor or agent of HFF or the other Company Entities to give up, or not
to commence, employment or other material, business or remunerative relationship with HFF or the
other Company Entities, or (b) hire (or attempt or assist others to hire) any such employee,
consultant, contractor or agent of HFF or the other Company Entities.

     8. Non-Disparagement.

     (a) Except as compelled by law, judicial process or governmental inquiry or audit, Employee
agrees that he or she shall not disparage HFF or any of the Company Entities. For purposes of this
Section 8(a), the term “disparage” means knowingly making comments or statements to third parties,
including the press, media or to any Client, Prospective Client or any other Person with whom HFF
or any of the Company Entities has or, to the knowledge of Employee, is actively seeking a business
or professional relationship, that would have a material adverse impact on the business or business
reputation of HFF or any of the Company Entities, or, to the extent related to the business of HFF
or any of the Company Entities, any employees, officers, principals, owners, partners, members,
directors, agents, employees, consultants, contractors and/or trustees thereof.

     (b) Except as compelled by law, judicial process or governmental inquiry or audit, HFF and the
Company Entities (and any employees, officers, principals, owners, partners, members, directors,
agents, employees, consultants, contractors and/or trustees thereof) agree that each shall not
disparage Employee. For purposes of this Section 8(b), the term “disparage” means knowingly making
comments or statements to third parties, including the press, media or to any Client, Prospective
Client or any other Person with whom Employee has or, to the knowledge of HFF or the applicable
Company Entity, is seeking a business or professional

7

 

relationship, that would have a material adverse impact on the business or business reputation of
Employee.

     9. Enforcement; Remedies and Forfeitures.

     (a) Employee acknowledges and agrees that his or her breach of this Agreement will result in
immediate and irreparable harm to the Company Entities. Employee further acknowledges and agrees
that the remedy at law available for any such breach would be inadequate and that damages flowing
from such a breach may not readily be susceptible to being measured or ascertained in monetary
terms. Accordingly, Employee acknowledges, consents and agrees that, in addition to any other
rights or remedies which the Company Entities may have at law, in equity or under any agreement,
the Company Entities, without proof of actual damage, will be entitled to immediate injunctive
relief and may obtain a temporary or permanent injunction or order restraining any threatened or
further breach.

     (b) Employee acknowledges and agrees that the provisions of this Agreement are necessary and
reasonable to protect the Company Entities in the conduct of their business, their Client
relationships, their goodwill, and Confidential Information.

     (c) Employee also acknowledges and agrees that his or her experience, background and skills
are such that he or she is able to obtain employment on reasonable terms and conditions without
violation of the restrictive covenants contained herein and that such restrictive covenants will
not pose any undue hardship to Employee.

     (d) Employee and HFF expressly acknowledge and agree that the Company Entities are intended to
be beneficiaries of the rights of HFF and the obligations of Employee hereunder and shall be
entitled in its/their own name to bring actions at law or in equity to enforce the provisions of
this Agreement.

     10. Severability and Judicial Reformation/Partial Enforcement. Each term, provision,
covenant and restriction in this Agreement is intended to be severable. If a court of competent
jurisdiction shall determine that any term, provision, covenant or restriction of this Agreement is
overbroad, unreasonable, invalid, void, unenforceable or against public policy, then, (i) if such
term, provision, covenant or restriction is found to be overbroad, unreasonable, invalid, void,
unenforceable or against public policy because of the duration, scope of activities restricted, or
geographic scope set forth in this Agreement, or for any other reason, the parties hereto agree
that the duration, scope of activities restricted, or geographical scope, as the case may be, or
any other provision hereof, shall be reduced, reformed or modified (and enforced as so reduced,
reformed or modified) so that such term, provision, covenant and restriction is enforceable and
enforced to the maximum extent permitted by applicable law; and (ii) the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.

     11. Governing Law. This Agreement shall be governed by, construed under and enforced
in accordance with the internal laws of the State of New York, without regard to any conflict of
law principles.

8

 

     12. Consent to Jurisdiction; Waiver of Jury Trial. The parties agree that
jurisdiction and venue in any action brought by any party pursuant to this Agreement shall lie
exclusively in any federal or state court located in the city, state and county of New York. By
execution and delivery of this agreement, each party irrevocably submits to the exclusive
jurisdiction of such courts for itself and in respect of its property with respect to such action.
The parties irrevocably agree that venue would be proper in such court, and hereby waive any
objection that such court is an improper or inconvenient forum for the resolution of such action.
The parties further agree that the mailing by certified or registered mail, return receipt
requested, of any process required by any such court shall constitute valid and lawful service of
process against them, without necessity for service by any other means provided by statute or rule
of court.

EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
12.

     13. Successors and Assigns. This Agreement shall not be assignable by Employee.
This Agreement, and the rights of HFF and the other Company Entities hereunder, shall be freely
assignable by HFF to any successor entity or other Person that acquires in any manner (including,
but not limited to, by merger, acquisition, asset sale and/or public offering) all or substantially
all of the business, assets, or interests of HFF or any other Company Entity; and shall survive and
remain enforceable after any such transaction. Employee hereby expressly consents to any such
assignment and acknowledges that no further consent by him or her to such assignment shall be
necessary hereafter to effectuate such assignment. Employee further acknowledges that his or her
obligations and covenants under this Agreement and the rights of HFF or any other Company Entity
are for the benefit of, and protect the business interests of HFF and the other Company Entities,
and their respective successors and assigns.

     14. Acknowledgment; Knowing and Voluntary. Employee acknowledges and represents that
he or she has carefully read this Agreement; understands the terms and conditions set forth in this
Agreement and their binding effect; has had adequate time to consider whether to agree to them and
to consult with an attorney of his or her own choosing if he or she desired to do so; and is
signing this Agreement voluntarily and of his or her own free will with the intent to be bound
hereby.

     15. Notices. All notices to be given under this Agreement shall be in writing and
delivered personally, by registered or certified mail, return receipt requested, or by overnight
courier to the addresses set forth below:

9

 

	 	 	 	 	 
	Employee:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

[Address of Employee]
	 	 
	 

	 	[email address]	 	 
	 
	 	 	 	 
	HFF:

	 	8401 North Central Expressway	 	 
	 

	 	Suite 400	 	 
	 

	 	Dallas, TX 75225	 	 

     If delivered personally or by overnight courier, a notice shall be deemed communicated upon
receipt of the written notice. If mailed as provided in this Agreement, notice shall be deemed
communicated as of three (3) days after mailing. Any change of address by either Employee or HFF
must be promptly communicated to the other party in a manner prescribed hereinabove.

     16. Withholding. HFF will withhold from any amounts payable to Employee hereunder all
sums required by federal, state, and local laws, and all other sums upon which Employee and HFF
agree.

     17. Entire Agreement. This Agreement constitutes the entire agreement between HFF and
Employee and supersedes any prior, contemporaneous, or subsequent statements, representations,
warranties, understandings, or inducements of any kind, whether oral or written agreements,
including, but not limited to, the Original Employment Agreement, between HFF and Employee.

     18. Modification. No change, modification, or waiver of any term or condition in this
Agreement shall be valid or binding upon HFF or Employee unless such change, modification, or
waiver is in writing, signed by HFF and Employee, or, in the case of a waiver, by the party waiving
compliance, and specifically states that it modifies this Agreement. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any right, power or privilege hereunder, nor any
single or partial exercise of any right, power or privilege hereunder, preclude any other or
further exercise thereof or the exercise of any other right, power or privilege hereunder. The
failure to enforce, at any time, any of the provisions of this Agreement or to require, at any
time, the performance by the other party of any of the provisions hereof shall in no way be
construed to be a waiver of such provisions or to affect the validity of this Agreement, or any
part hereof, or the right of any party thereafter to enforce each and every such provision in
accordance with the terms of this Agreement.

     19. Execution. This Agreement may be executed in two or more counterparts, which
together shall constitute a single agreement.

10

 

     20. Headings. The headings contained herein are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.

* * * * *

11

 

     IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	EMPLOYEE	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	John H. Pelusi, Jr. 	 	 
	 
	 	 	 	 	 	 
	 	 	HOLLIDAY FENOGLIO FOWLER, LP:

By: Holliday GP Corp., its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	     By:	 	 	 	 
	 

	 	     Name:
	 	 

	 	 
	 

	 	     Title:

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