Exhibit 10.18
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered
into as of May 31, 2000, by and among HQ Global Holdings, Inc., a Delaware
corporation (the "Company") and the investors listed on Schedule A attached
hereto (the "Investors").
RECITALS
WHEREAS, the Company and FrontLine Capital Group ("FCG") have
executed and delivered an exchange agreement, dated May 31, 2000 (the
"Exchange Agreement"), pursuant to which FCG shall receive shares of preferred
stock and warrants to purchase common stock of the Company in exchange for
shares of common stock of the Company.
WHEREAS, FCG, the Company (in the case of the purchase agreement with
EOP Operating Limited Partnership) and the Investors have executed and
delivered those certain purchase agreements (the "Purchase Agreements")
pursuant to which the Investors have agreed to purchase an aggregate of
4,782,692 shares of Series A Convertible Preferred Stock of the Company (the
"Series A Shares") and warrants to purchase an aggregate of 2,143,332 shares
of voting common stock, par value $0.01 per share, of the Company (the
"Warrants") for an aggregate purchase price of $195,000,000;
WHEREAS, as an inducement to the Investors to consummate the
transactions contemplated by the Purchase Agreements, the Company desires to
grant to the Investors the registration rights set forth in this Agreement,
subject to the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained, the receipt and sufficiency of which is
hereby acknowledged, and subject to the terms and conditions set forth herein,
the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Affiliate(s)" shall have the meaning set forth in Rule 144 under the
Securities Act.
"Business Day" shall mean any day except Saturday, Sunday and any day
on which banks in The City of New York are required or permitted by law or
executive order to close.
"Commission" shall mean the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the voting common stock, $0.01 par value
per share, of the Company.
"Company" shall have the meaning set forth in the preamble to this
Agreement.
"Company Competitor" shall have the meaning set forth in the
Stockholders' Agreement.
"Demand Notice" shall have the meaning attributed to such term in
Section 2(a).
"Eligible Sellers" shall mean the Investors and Investor Transferees
at any applicable time owning beneficially or of record the Restricted Stock.
"EOP" shall mean Equity Office Properties Trust.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Exchange Agreement" shall have the meaning set forth in the recitals
to this Agreement.
"FCG" shall have the meaning set forth in the recitals to this
Agreement.
"FUR" shall mean First Union Real Estate Equity and Mortgage
Investments.
"Investors" shall have the meaning set forth in the preamble to this
Agreement.
"Investor Transferee" shall mean, with respect to any Investor, a
transferee of Restricted Stock of such Investor if such transferee (i) has
given the Company written notice at the time of or within a reasonable time
after such transfer stating the name and address of such transferee and (ii)
has executed and delivered to the Company an instrument in the form reasonably
prescribed by the Company agreeing to be bound by the terms thereof and of
this Agreement and the Stockholders' Agreement; provided, however, that the
rights of an Investor under this Agreement shall not be assignable to any
Company Competitor unless such assignment is in connection with the sale by an
Investor of a majority of the Series A Shares held by it.
"IPO" shall mean an initial public offering of securities of the
Company.
"Lock-Up Period" shall have the meaning set forth in Section 11 of
this Agreement.
"Mezzanine Security Holders" shall mean holders of mezzanine
indebtedness or bridge financing of the Company as contemplated on the date
hereof.
"Person" shall mean an individual, corporation, partnership, limited
liability company, joint venture, trust, or unincorporated organization, or a
government or any agency or political subdivision thereof.
"Preferred Stock" shall mean the Series A Shares of the Company and
any other convertible preferred stock issued by the Company from time to time.
"Prospectus" shall mean the prospectus included in a Registration
Statement at the time such Registration Statement is declared effective, as
amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
"register," "registered," and "registration" shall mean a
registration effected by preparing and filing one or more Registration
Statements in compliance with the Securities Act and, with respect to Section
4 hereof, pursuant to Rule 415 under the Securities Act or any successor rule
providing for offering securities on a continuous or delayed basis and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the Commission.
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with the Registration Provisions, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the Company,
fees and expenses (including counsel fees) incurred in connection with
complying with state securities or "blue sky" laws, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer
agents and registrars, and the reasonable fees and disbursements of one
counsel (selected by the holders of a majority of the shares to be included in
the registration) for the sellers of Restricted Stock, but excluding any
Selling Expenses.
"Registration Provisions" shall mean Sections 2, 3, and 4 of this
Agreement.
"Registration Statement" shall mean any registration statement of the
Company relating to the registration for resale of Restricted Stock that is
filed pursuant to the provisions of this Agreement and including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
"Restricted Stock" shall mean the Series A Shares, the Series A
Conversion Shares, the Warrants and the Warrant Conversion Shares, but
excluding in each case such securities which have been (i) registered under
the Securities Act pursuant to an effective Registration Statement filed
thereunder and disposed of in accordance with the Registration Statement
covering them or (ii) sold pursuant to Rule 144 or Rule 701 under the
Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Restricted Stock.
"Series A Shares" shall have the meaning set forth in the recitals to
this Agreement.
"Series A Conversion Shares" shall mean the shares of Common Stock or
other securities issued or issuable upon conversion of the Series A Shares.
"Stockholders' Agreement" shall mean the Stockholders' Agreement,
dated as of May 31, 2000 by and among FCG, the Company and certain holders of
Series A Shares of the Company named therein.
"Warrants" shall have the meaning set forth in the recitals to this
Agreement.
"Warrant Conversion Shares" shall mean the shares of Common Stock or
other securities issued or issuable upon exercise of the Warrants.
2. Required Registrations.
(a) Commencing upon the expiration of the lock-up period relating to
the IPO specified in the first sentence of Section 11, either of (i) EOP or
its Investor Transferees or (ii) the holders of at least 30% of the Restricted
Stock (on an "as converted" or "as if exercised" basis, as applicable) then
owned beneficially or of record by the Investors and Investor Transferees of
the Investors, other than EOP or its Investor Transferees, may request (the
"Demand Notice") the Company to register under the Securities Act all or any
portion of the shares of Restricted Stock held by such requesting holder or
holders for sale in the manner specified in such Demand Notice, provided that
the reasonably anticipated aggregate price to the public of such public
offering would be at least $35,000,000.
(b) Following receipt of a Demand Notice, the Company shall as soon
as practicable notify the Eligible Sellers from whom notice has not been
received and shall use its best efforts to register under the Securities Act,
for public sale in accordance with the method of disposition specified in such
Demand Notice from requesting holders, the number and type of shares of
Restricted Stock specified in (x) such Demand Notice and (y) all notices
received by the Company from other Eligible Sellers within 20 days after the
giving of such notice by the Company. The Company shall be obligated to
register Restricted Stock pursuant to this Section 2 on two occasions only;
provided that EOP or its Investor Transferees shall have the right to initiate
only one request pursuant to Section 2(a) and the holders of at least 30% of
the Restricted Stock then owned beneficially or of record by the Investors and
Investor Transferees of the Investors, other than EOP or its Investor
Transferees, shall have the right to initiate only one request pursuant to
Section 2(a); provided further, however, that such obligation shall be deemed
satisfied only when a Registration Statement covering all shares of Restricted
Stock specified in notices received as aforesaid, for sale in accordance with
the method of disposition specified by the requesting holders, shall have
become effective and shall have remained continuously effective during the
period of distribution (as specified in Section 5 hereof).
(c) If the method of disposition of Restricted Stock pursuant to this
Section 2 shall be an underwritten public offering, the lead underwriter
selected for such offering shall be (i) nationally recognized or (ii) mutually
acceptable to the Company and a majority of the Eligible Sellers participating
in the offering; provided, however, that any underwriting agreement the
Company enters into pursuant to such selection shall contain commercially
reasonable terms and fees.
(d) The Company shall be entitled to include in any Registration
Statement referred to in this Section 2, for sale in accordance with the
method of disposition specified by the requesting Eligible Sellers, shares of
Common Stock to be sold by the Company for its own account and shares of
Common Stock to be sold by other security holders with incidental registration
rights triggered by the receipt of a Demand Notice or filing of any
Registration Statement in response thereto, except as and to the extent that,
in the reasonable opinion of the lead underwriter (if such method of
disposition shall be an underwritten public offering), such inclusion would
materially adversely affect the marketing of the Restricted Stock to be sold,
then the number of shares that may be included in such underwritten public
offering shall be allocated: first, to the Eligible Sellers pro rata among
them in the proportion that the number of shares requested by each such
Eligible Seller to be registered bears to the aggregate number of shares
requested to be registered by all such Eligible Sellers; second, to the
Company and the Mezzanine Security Holders pro rata among them in the
proportion that the number of shares requested to be registered by the Company
and each such Mezzanine Security Holder bears to the aggregate number of
shares requested to be registered by the Company and all such Mezzanine
Security Holders, and third, to the other security holders pro rata among them
in the proportion that the number of shares requested to be registered by each
such other security holder bears to the aggregate number of shares requested
to be registered by all such other security holders. Subject to Section 2(b),
except for Registration Statements on Form X-0, X-0 or any successor thereto,
a shelf registration pursuant to Section 4 hereof or a shelf registration
effected in favor of CarrAmerica Realty Corporation, the Company will not file
with the Commission any other Registration Statement with respect to its
Common Stock, whether for its own account or that of other stockholders, from
the date of receipt of a notice from requesting holders pursuant to this
Section 2 until the completion of the period of distribution of the shares of
Restricted Stock registered thereby. For all purposes of calculating pro rata
or proportionate numbers of shares under this Agreement, such calculations
shall be made on the basis of the number of shares of common stock to which a
request relates (as determined on an "as converted" or "as if exchanged"
basis, as applicable).
(e) Following receipt of a notice from any holder of registration
rights other than a Eligible Seller requesting that the Company file with the
Commission a Registration Statement in respect of shares of capital stock of
the Company held by such holder, the Company shall immediately notify the
Eligible Sellers. The Eligible Sellers shall thereupon have the right to join
in the request for registration of shares of Restricted Stock held by them and
the terms and conditions applicable to such registration shall be the same as
those set forth in Section 3, including, without limitation, the allocation
procedure set forth in paragraph (b) of Section 3 (it being understood and
agreed that no registration under this clause (e) shall constitute a demand
for purposes of this Section 2).
3. Incidental Registrations.
(a) If the Company proposes to register any of its securities under
the Securities Act for sale to the public, whether for its own account or for
the account of other security holders or both (except with respect to
registration statements on Forms X-0, X-0 or any successor thereto, or another
form not available for registering the Restricted Stock for sale to the
public), each such time the Company will give written notice to all Eligible
Sellers of its intention so to do and of the proposed method of distribution
of such securities (the "Company Registration Notice"). Upon the written
request of any such Eligible Seller, received by the Company within 20 days
after the giving of any such notice by the Company, to register any of its
Restricted Stock, the Company will use its best efforts to cause the
Restricted Stock as to which registration shall have been so requested to be
included in the securities to be covered by the Registration Statement
proposed to be filed by the Company, all to the extent and under the
conditions such registration is permitted under the Securities Act.
(b) If the Registration Statement as to which the Company gives
notice under this Section 3 is for an underwritten offering, the Company shall
so advise the Eligible Sellers. In such event, the right of any Eligible
Seller to be included in a registration pursuant to this Section 3 shall be
conditioned upon such Eligible Seller's participation in such underwriting and
the inclusion of such Eligible Seller's Restricted Stock in the underwriting
to the extent provided herein. All Eligible Sellers participating in an
underwritten public offering pursuant to this Section 3 shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. An Eligible Seller may decline
to participate in any offering at any time prior to entering into the
underwriting agreement. Notwithstanding any other provision of the Agreement,
if the Company proposes to register any of its securities under the Securities
Act for its own account and the underwriter determines in good faith that
marketing factors require a limitation of the number of securities to be
underwritten, the number of shares that may be included in the underwriting
pursuant to this Section 3 shall be allocated: first, to the Company; and
second, on a pro rata basis among the Eligible Sellers and security holders
other than the Eligible Sellers with incidental registration rights
substantially equivalent to those set forth in this Section 3; provided,
however, that, if such registration is pursuant to an initial public offering
of Common Stock by the Company and none of FCG, CarrAmerica Realty
Corporation, senior executive officers of the Company or any of their
respective Affiliates is selling shares in such initial public offering, the
number of shares that may be included in the underwriting shall be limited
solely to shares of the Company. If the Company proposes to register for an
underwritten offering (without the inclusion of any securities for the account
of the Company in such underwritten offering) any of its securities under the
Securities Act for the account of security holders other than the Eligible
Sellers pursuant to required registration rights, and the Eligible Sellers
elect to participate in such offering and the underwriter determines in good
faith that marketing factors require a limitation of the number of shares to
be underwritten, the number of shares that may be included in the underwriting
shall be allocated: first, on a pro rata basis among such other security
holders in the proportion that the number of shares requested by each other
security holder to be registered bears to aggregate number of shares requested
to be registered by all such security holders; and second, on a pro rata basis
among any Eligible Sellers and other security holders who elect to participate
therein through such exercise of their incidental registration rights in the
proportion that the number of shares requested to be registered by each such
Eligible Seller or other security holder bears to the aggregate number of
shares requested to be registered by all such Eligible Sellers and other
security holders.
(c) Notwithstanding the foregoing provisions, the Company may
withdraw any Registration Statement referred to in this Section 3 which it
initially proposed to file to register newly-issued securities for sale in its
sole discretion without thereby incurring any liability to the holders of
Restricted Stock, and the Eligible Sellers holding Restricted Stock included
in the offering covered by such Registration Statement at the time of such
withdrawal shall thereupon continue to be entitled to the registration rights
under this Agreement in respect of such Restricted Stock.
4. Other Registrations. The Company shall file a separate "shelf"
Registration Statement providing for the sale by the Eligible Sellers of all
of their Restricted Stock within thirty (30) days after the consummation of
the IPO and shall use its best efforts to have such Registration Statement
declared effective by the SEC within 90 days after the consummation of the
IPO. No Eligible Seller of Restricted Stock shall be entitled to include any
of its Restricted Stock in any shelf Registration Statement pursuant to this
Agreement unless and until such Eligible Seller furnishes to the Company in
writing, within 5 Business Days after receipt of a request therefor, such
information as the Company may, after conferring with counsel with regard to
information relating to Eligible Sellers that would be required by the
Commission to be included in such shelf Registration Statement or Prospectus
included therein, reasonably request for inclusion in any shelf Registration
Statement or Prospectus included therein. Each Eligible Seller agrees to
furnish to the Company all information with respect to such Eligible Seller
necessary to make the information previously furnished to the Company by such
Eligible Seller not materially misleading.
The Company will not permit any security holder (other than an
Eligible Seller in accordance with the preceding paragraph or CarrAmerica
Realty Corporation pursuant to a shelf registration statement to be filed in
respect of CarrAmerica Realty Corporation) to make a demand for, or otherwise
exercise, registration rights prior to the expiration of the lock-up period
relating to the IPO specified in Section 11 except for incidental registration
rights in connection with the shelf registration statement contemplated in the
preceding paragraph of this Section 4. Except for registration statements on
Form X-0, X-0 or any successor thereto, the Company will not file with the
Commission any registration statement relating to its Common Stock other than
the shelf registration statement contemplated in the preceding paragraph of
this Section 4 and the shelf Registration Statement to be filed in respect of
CarrAmerica Realty Corporation, whether for its own account or that of other
stockholders, at any time prior to the date that is 85 days after the
expiration of the lock-up period relating to the IPO specified in Section 11.
Subject to Section 11(b), the Company agrees to use its best efforts
to keep the shelf Registration Statement continuously effective and the
Prospectus usable for resales until such time as the Restricted Stock may be
sold pursuant to Rule 144 without regard to volume or manner of sale
limitations; provided, however, that such obligation shall continue as to any
Eligible Seller for as long as such Eligible Seller owns 3% or more of the
Common Stock (on a fully diluted and "as converted" or "as if exercised"
basis) or 5 years after the date such Restricted Stock has become freely
transferable under Rule 144 without regard to volume or manner of sale
limitations.
The Company will, upon the effectiveness of a shelf Registration
Statement, provide to each holder of shares of Restricted Stock a reasonable
number of copies of the Prospectus which is a part of the shelf Registration
Statement, and, at that time, notify each such holder that the shelf
Registration Statement has become effective and take such other actions as are
required to permit unrestricted resales of the Restricted Stock. The Company
further agrees to supplement or amend the shelf Registration Statement if and
as required by the rules, regulations or instructions applicable to the
registration form used by the Company for such shelf Registration Statement or
by the Securities Act or by any other rules or regulations thereunder for
shelf registrations, and the Company agrees to furnish to the holders of
shares of Restricted Stock subject to the shelf registration copies of any
supplement or amendment to the Prospectus after its being used or filed with
the Commission.
A shelf Registration Statement will not be deemed to have become
effective unless it has been declared effective by the Commission; provided,
however, that if, after it has been declared effective, the offering of
Restricted Stock pursuant to such shelf Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the
Commission or any other governmental agency or court, such shelf Registration
Statement will be deemed not to have been effective during the period of such
interference, until the offering of Restricted Stock pursuant to such shelf
Registration Statement may legally resume. The Company will be deemed not to
have used its reasonable best efforts to cause a shelf Registration Statement
to become, or to remain, effective during the requisite period if it
voluntarily takes any action that would result in any such shelf Registration
Statement not being declared effective or that would result in the Eligible
Sellers covered thereby not being able to offer and sell such Restricted Stock
during that period, unless such action is required by applicable law. If the
Company has not used its best efforts to maintain the effectiveness of a shelf
Registration Statement and the offering of Registrable Stock pursuant to such
Shelf Registration Statement therefore is interfered with by any stop order,
injunction or other order or requirement of the Commission or any other
governmental agency or court, then each day that the effectiveness of a shelf
Registration Statement is suspended shall reduce on a day for day basis the 60
day period set forth in Section 11(b) applicable to the lock-up limitation in
Section 11.
In the event that (i) an Eligible Seller notifies the Company of its
intent to effect a sale pursuant to a shelf Registration Statement under this
Section 4 in an underwritten offering and one or more other security holders
of the Company (including an Eligible Seller) also notifies the Company of its
intent to effect a sale of securities pursuant to such shelf Registration
Statement in an underwritten offering or (ii) a security holder other than an
Eligible Seller provides notice of its intent to sell securities registered
pursuant to the shelf Registration Statement in an underwritten offering and
an Eligible Seller also notifies the Company of its intent to effect a sale of
securities pursuant to such shelf Registration Statement and, in the case of
either (i) or (ii), the underwriter, if any, determines in good faith that
marketing factors require a limitation of the number of securities to be held
in such offer, the number of shares that may be included in such offering
(treating all such shares proposed to be sold as a single offering) shall be
allocated: first, to the Eligible Sellers pro rata among them in the
proportion that the number of shares (or, in the event shares convertible
into, or exchangeable for, shares of Common Stock are proposed to be included
in such offer, the Common Stock equivalents of such other securities)
requested to be included in such offering by each such Eligible Seller bears
to the aggregate number of shares requested to be included in such offering by
all such Eligible Sellers; second, to the Company and the Mezzanine Security
Holders pro rata among them in the proportion that the number of shares
requested to be included in such offering by the Company and each such
Mezzanine Security Holder bears to the aggregate number of shares requested to
be included in such offering by the Company and all such Mezzanine Security
Holders; and third, to the other security holders pro rata among them in the
proportion that the number of shares requested to be included in such offering
by each such other security holder bears to the aggregate number of shares
requested to be included in such offering by all such other security holders.
5. Registration Procedures. If and whenever the Company is required by
any Registration Provisions to use its best efforts to effect the registration
of any shares of Restricted Stock under the Securities Act, the Company will,
as expeditiously as possible:
(a) use its best efforts to effect such registration to permit the
sale of the Restricted Stock being sold in accordance with the intended method
or methods of distribution thereof, and pursuant thereto prepare and file with
the Commission a Registration Statement on any appropriate form under the
Securities Act (which in the case of an underwritten public offering pursuant
to Section 2, shall be on Form S-1 or other form of general applicability
satisfactory to the underwriter selected as therein provided), which form
shall be available for the sale of the Restricted Stock in accordance with the
intended method or methods of distribution thereof for the period of the
distribution contemplated hereby (determined as hereinafter provided) and
otherwise in accordance with the provisions hereof;
(b) use its reasonable best efforts to keep such Registration
Statement continuously effective for the period of the distribution
contemplated hereby (determined as hereinafter provided). Upon the occurrence
of any event that would cause any such Registration Statement or the
Prospectus contained therein (i) to contain an untrue statement of material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (ii) not to be effective and usable for resale of the Restricted
Stock during the period required by this Agreement, the Company shall, subject
to Section 11, file promptly an appropriate amendment to such Registration
Statement or a supplement to the Prospectus, as applicable, curing such
defect, and, in the case of an amendment, use its reasonable best efforts to
cause such amendment to be declared effective as soon as practicable;
(c) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may be
necessary to keep such Registration Statement continuously effective for the
period of distribution as contemplated hereby (determined as hereinafter
provided); cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Securities Act in a timely manner; and comply with the
provisions of the Securities Act with respect to the disposition of all
Restricted Stock covered by such Registration Statement during the applicable
period in accordance with the participating Eligible Sellers' intended method
of disposition set forth in such Registration Statement for such period;
(d) advise the participating Eligible Sellers promptly and, if
requested by such Eligible Sellers, confirm such advice in writing, (i) when
the Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any applicable Registration Statement or any
post-effective amendment thereto, when the same has become effective, (ii) of
any request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the
Securities Act or of the suspension by any state securities commission of the
qualification of the Restricted Stock for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the preceding
purposes, and (iv) of the existence of any fact or the happening of any event
that makes any statement of a material fact made in the Registration
Statement, the Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Registration Statement in order to make the
statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Restricted
Stock under state securities or Blue Sky laws, the Company shall use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
(e) subject to Section 5(b) hereof, if any fact or event contemplated
by Section 5(d)(iv) hereof shall exist or have occurred, prepare a supplement
or post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of
Restricted Stock, the Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The Eligible Sellers agree, upon receipt of notice by
the Company of any fact or event contemplated by Section 5(d)(iv) hereof,
forthwith to cease making offers and sales of Restricted Stock pursuant to
such Registration Statement or deliveries of the Prospectus contained therein
for any purpose until the Company has prepared and furnished such amendment or
supplement to the Prospectus as may be necessary so that, as thereafter
delivered to purchasers of such Restricted Stock, such Prospectus shall not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing;
(f) furnish to each participating Eligible Seller and to each
underwriter,
before filing with the Commission, copies of any Registration Statement or any
Prospectus included therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents incorporated by
reference after the initial filing of such Registration Statement), which
sections of such documents that are applicable to the participating Eligible
Seller will be subject to the review and comment of such persons, if any, for
a period of at least five Business Days, and the Company will not file any
such Registration Statement or Prospectus or any amendment or supplement to
any such Registration Statement or Prospectus (including all such documents
incorporated by reference) to which a participating Eligible Seller shall
reasonably object within five Business Days after the receipt thereof;
(g) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, provide
copies of such document to each participating Eligible Seller and to each
underwriter, make the Company's representatives available for discussion of
such document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such participating
Eligible Seller may reasonably request;
(h) make available for inspection upon reasonable notice during the
Company's regular business hours by each participating Eligible Seller, any
underwriter participating in any distribution pursuant to such Registration
Statement, and any attorney, accountant or other agent retained by such
Eligible Seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably
requested by any such Eligible Seller, underwriter, attorney, accountant or
agent in connection with such Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness;
(i) if requested by the participating Eligible Sellers, promptly
include in the Registration Statement or Prospectus, pursuant to a supplement
or post-effective amendment if necessary, such corrective, supplementary or
like information as the participating Eligible Sellers may reasonably request
to have included therein; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(j) furnish to each participating Eligible Seller and to each
underwriter, without charge, such number of copies of the Registration
Statement and the Prospectus included therein (including each preliminary
prospectus) as such persons reasonably may request in order to facilitate the
public sale or other disposition of the Restricted Stock covered by such
Registration Statement;
(k) prior to any public offering of Restricted Stock, use its best
efforts to register or qualify the Restricted Stock covered by such
Registration Statement under the securities or "blue sky" laws of such
jurisdictions as the sellers of Restricted Stock or, in the case of an
underwritten public offering, the underwriter reasonably shall request and do
any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Restricted Stock covered by the
applicable Registration Statement; provided, however, that the Company shall
not for any such purpose be required to qualify generally to transact business
as a foreign corporation in any jurisdiction where it is not so qualified or
to consent to general service of process in any such jurisdiction other than
as to matters and transactions relating to the Registration Statement;
(l) use its best efforts to list the Restricted Stock covered by such
Registration Statement with any securities exchange on which the Common Stock
of the Company is then listed;
(m) use its best efforts to cause the disposition of the Restricted
Stock covered by the Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof to consummate the disposition of such
Restricted Stock, subject to the proviso contained in clause (k) above;
(n) in connection with any sale of Restricted Stock that will result
in such securities no longer being Restricted Stock, cooperate with the
Investors to facilitate the timely preparation and delivery of certificates
representing Restricted Stock to be sold and not bearing any restrictive
legends; and to register such Restricted Stock in such denominations and such
names as the selling Investors may request at least two Business Days prior to
such sale of Restricted Stock;
(o) if the offering is underwritten and at the request of any
participating Eligible Seller, enter into such agreements (including
underwriting agreements) and make such reasonable representations and
warranties and take all such other reasonable actions in connection therewith
in order to expedite or facilitate the disposition of the Restricted Stock
pursuant to any applicable Registration Statement contemplated by this
Agreement as may be reasonably requested by the participating Eligible Seller
in connection with any sale or resale pursuant to any applicable Registration
Statement; in such connection, the Company shall upon request of any
participating Eligible Seller, furnish (or in the case of clauses (ii) and
(iii), use its best efforts to cause to be furnished) to such Eligible Seller,
on the date that Restricted Stock is delivered to the underwriters for sale
pursuant to such registration: (i) such documents and certificates as may be
reasonably requested by the participating Eligible Sellers to evidence
compliance with the applicable matters covered in this Section 5, (ii) a
letter, dated such date, from the Company's independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering, and (iii) an opinion, dated as of such date, of counsel representing
the Company covering substantially the same matters with respect to such
Registration Statement as are customarily covered in opinions of issuer's
counsel delivered to underwriters with respect to similar registration
statements in underwritten public offerings, addressed to the participating
Eligible Sellers and the underwriters;
(p) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders with regard to any applicable Registration Statement, as soon
as practicable (but not sooner than the filing deadline of the last quarterly
report included therein), a consolidated earnings statement meeting the
requirements of Rule 158 of the Securities Act (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in Rule 158(c) under the
Securities Act); and
(q) provide promptly to the Investors, upon request, each document
filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act.
For purposes of Sections 2(b) and (e), Section 3(b) and Section 4,
the period of distribution of Restricted Stock in a firm commitment
underwritten public offering shall be deemed to extend from the first day of
the public offering until the earlier of (i) one hundred eighty (180) days or
(ii) the date on which each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Restricted Stock
in any other registration shall be deemed to extend from the first day of the
public offering until the earlier of (i) 180 days or (ii) the date upon which
the underwriter, if any, terminates the lock-up agreements applicable to such
distribution, except with respect to any Registration Statement filed pursuant
to Rule 415 under the Securities Act, in which case the Company shall use its
reasonable best efforts to keep such Registration Statement effective until
such time as the Restricted Stock may be sold pursuant to Rule 144 without
regard to volume or manner of sale limitations; provided, however, that such
obligation shall continue as to any Eligible Seller for as long as such
Eligible Seller owns 3% or more of the Common Stock (on a fully diluted and
"as converted" or "as if exercised" basis) or 5 years after the date such
Restricted Stock has become freely transferable under Rule 144 without regard
to volume or manner of sale limitations.
In connection with each registration hereunder, the Eligible Sellers
participating shall (a) provide such information and execute such documents as
may reasonably be required under the Securities Act in connection with such
registration, (b) agree to sell Restricted Stock on the basis provided in any
underwriting arrangements and (c) complete and execute all customary and
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements and documents required under the terms of such underwriting
arrangements, which arrangements shall not be inconsistent herewith.
In connection with each registration pursuant to any Registration
Provision covering an underwritten public offering, the Company and each
participating Eligible Seller agree to enter into a written agreement with the
lead underwriter in such form and containing such provisions as are customary
and reasonable in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
The Company may not withdraw any Registration Statement referred to
in Section 2 without the consent of the party or parties initiating the demand
thereunder or any Registration Statement filed under Section 4 without the
consent of EOP or its Investor Transferees and the holders of at least 30% of
the Restricted Stock (on an "as converted" or "as if exercised" basis, as
applicable) then owned beneficially or of record by the Investors and Investor
Transferees of the Investors other than EOP or its Investor Transferees, which
such consent shall not be unreasonably withheld, delayed or conditioned.
6. Securities Laws. Each participating Eligible Seller agrees to use
its best efforts to comply with all applicable provisions of the Securities
Act and the Exchange Act including, but not limited to, the prospectus
delivery requirements of the Securities Act, and to furnish to the Company
information about sales made in such public offering; and agrees, subject to
Section 11, that the participating Eligible Sellers, upon receipt of
telegraphic or written notice from the Company that the Company is required by
law to correct or update the registration statement or prospectus, are
prohibited from effecting sales of the Restricted Stock until the Company has
completed the necessary correction or updating.
7. Expenses. The Company will pay all Registration Expenses in
connection with each Registration Statement filed pursuant to Sections 2, 3
and 4 hereof. All Selling Expenses attributable to the sale of securities by
Eligible Sellers in connection with each Registration Statement under any
Registration Provision shall be borne by the participating Eligible Sellers in
proportion to the number of shares sold by each, or by such participating
Eligible Sellers as they may agree; and all Selling Expenses attributable to
the sale of securities by the Company in connection with any Registration
Provision shall be borne by the Company.
8. Indemnification and Contribution.
(a) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to any Registration Provision, the Company
will indemnify and hold harmless each Eligible Seller thereunder and each
underwriter of such Restricted Stock thereunder and each other Person, if any,
who controls such Eligible Seller or underwriter (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act), against
any losses, claims, damages, liabilities or judgments, joint or several,
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action
that could give rise to any such losses, claims, damages, liabilities or
judgments), to which such Eligible Seller, underwriter or controlling Person
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, preliminary
prospectus or Prospectus (or any amendment or supplement thereto) provided by
the Company to any Investor, underwriter, each other Person, if any, who
controls such Eligible Seller or underwriter within the meaning of the
Securities Act or any prospective purchaser of Restricted Stock, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(iii) any violation by the Company of the Securities Act, and will pay the
legal fees and other expenses of each such Eligible Seller, each such
underwriter and each such controlling Person incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action, provided, however, that the Company will not be liable to any such
Eligible Seller, such underwriter or such controlling person in any such case
if and to the extent that any such loss, claim, damage, liability or judgment
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission so made in reliance upon and in conformity
with information furnished by any such Eligible Seller, any such underwriter
or any such controlling Person, in each case, in writing specifically for use
in such Registration Statement or Prospectus; provided further, however, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Eligible Seller or underwriter, or any
person controlling such Eligible Seller or underwriter, from whom the person
asserting any such losses, claims, damages, liabilities or judgments purchased
shares in the offering, if a copy of the prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Eligible Seller or
underwriter to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of the shares to such person,
and if the prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability.
(b) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to any Registration Provision, each Eligible
Seller thereunder, severally and not jointly, will indemnify and hold harmless
the Company, its directors and officers, and each Person, if any, who controls
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) the Company, to the same extent as the foregoing indemnity from
the Company set forth in Section 8(a) hereof, but only with reference to
information relating to such Eligible Seller furnished in writing to the
Company by such Eligible Seller expressly for use in any Registration
Statement. In no event shall any Eligible Seller or its or their directors,
officers or any Person who controls such Eligible Seller be liable or
responsible for any amount in excess of the gross proceeds (after deducting
underwriting discounts and selling commissions) received by such Eligible
Seller with respect to its sale of Restricted Stock pursuant to a Registration
Statement.
(c) In case any action shall be commenced involving any Person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the Person
against whom such indemnity may be sought (the "indemnifying Person") in
writing; provided, however, that failure of an indemnified party to provide
such notice shall not relieve an indemnifying Person of its obligations under
this Section 8 if such failure does not materially and adversely affect the
rights of such indemnifying Person. The indemnifying party may assume the
defense of such action provided that the expenses of the indemnified party are
reimbursed as they are incurred (including, without limitation, the payment of
all fees and expenses of counsel to the indemnified party) and such
indemnifying party has not failed to comply with any such reimbursement
request. Any indemnified party shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but the reasonable
fees and expenses of such counsel shall be at the expense of the indemnified
party, unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or (iii) the named
parties to any such action (including any impleaded parties) include both the
indemnified party and the indemnifying party, and the indemnified party shall
have been reasonably advised by its counsel that the representation of the
indemnifying party and the indemnified party by the same counsel would be
inappropriate due to actual or potential differing interests between the
indemnifying party and the indemnified party or the availability of defenses
to the indemnified party that may conflict with or contradict those available
to the indemnifying party (in which case the indemnifying party shall not have
the right to assume the defense of such action on behalf of the indemnified
party). In any such case, the indemnifying party shall not, in connection with
any one action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
indemnified parties and all such reasonable fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by a
majority of the Eligible Sellers, in the case of the parties indemnified
pursuant to Section 8(a), and by the Company, in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall indemnify
and hold harmless the indemnified party from and against any and all losses,
claims, damages, liabilities and judgments by reason of any settlement of any
action effected with the indemnifying party's written consent. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement or compromise of, or consent to the entry of judgment
with respect to, any pending or threatened action in respect of which the
indemnified party is or could have been a party and indemnity or contribution
may be or could have been sought hereunder by the indemnified party, unless
such settlement, compromise or judgment (i) includes an unconditional release
of the indemnified party from all liability on claims that are or could have
been the subject matter of such action and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments in such proportion
as is appropriate to reflect the relative fault of the Company, on the one
hand, and of the Eligible Seller, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Eligible Seller, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or by the Eligible
Seller, on the other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or judgments referred to above shall
be deemed to include, subject to the limitations set forth in Section 8(c),
any legal or other fees or expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments.
The Company and each Eligible Seller agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Eligible Sellers were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 8, no
Eligible Seller, its or their directors or officers or any Person, if any, who
controls such Eligible Seller shall be required to contribute, in the
aggregate, any amount in excess of the gross proceeds (after deducting
underwriting discounts and selling commissions) received by such Eligible
Seller with respect to its sale of Restricted Stock pursuant to a Registration
Statement. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Eligible Sellers' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective shares of
Restricted Stock held by each Eligible Seller hereunder and not joint.
9. Changes in Common Stock or Preferred Stock. If, and as often as,
there is any change in the Common Stock or the Preferred Stock by way of a
stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that
the rights and privileges granted hereby shall continue with respect to the
Common Stock or the Preferred Stock as so changed.
10. Rule 144 Reporting and Rule 144A Information. With a view to
making available the benefits of certain rules and regulations of the
Commission that may at any time permit the resale of the Restricted Stock
without registration, the Company will:
(a) at all times after 90 days after any registration statement
covering a public offering of securities of the Company under the Securities
Act shall have become effective:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities
Act; and
(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act.
(b) at any time, at the request of any Eligible Seller, make
available to such Eligible Seller, and to any prospective transferee of
Preferred Stock or shares of Restricted Stock the information concerning the
Company described in Rule 144A(d)(4) under the Securities Act.
11. Lock-Up Period Agreements. (a) In connection with the IPO, the
Eligible Seller agrees, and the Eligible Seller shall secure the agreement of
any transferee therefrom, upon request of the lead underwriter, not to sell or
otherwise transfer or dispose of any Common Stock of the Company (other than
to an Affiliate of the Eligible Seller or another holder of Series A Preferred
Shares or, in the case of FUR, a liquidating trust) for a period following the
effective date of a registration statement of the Company filed under the
Securities Act with respect to such offering equal to the shortest of (i) the
lock-up period applicable to (a) FCG, (b) CarrAmerica Realty Corporation (so
long as it owns in excess of 9% of the outstanding shares of Common Stock),
(c) holders of Series A Preferred Shares, (d) senior executive officers of the
Company and (E) the Mezzanine Security Holders and (ii) six (6) months.
(b) The Company shall be permitted to suspend sales of Common Stock
for up to 60 consecutive days from the period commencing on the termination of
the period referred to in the preceding sentence and ending on the one year
anniversary of such initial public offering and thereafter for up to 60
consecutive days on not more than two occasions in any twelve month period if:
(i) the Registration Statement is no longer effective or the Prospectus is no
longer usable for resales due to a good faith determination by the Board of
Directors of the Company that the sale of Common Stock pursuant to the
Registration Statement would require disclosure of material non-public
information that the Company has a bona fide business purpose for preserving
as confidential (but which the Company agrees to publicly disclose at the
earliest time that the Company in its good faith judgment deems prudent), or
(ii) an event occurs and is continuing as a result of which the Registration
Statement, any related Prospectus or any document incorporated therein by
reference as then amended or supplemented would, in the good faith judgment of
the Company's Board of Directors based on the advice of counsel, contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that under
these circumstances the Company shall use its best efforts to cause the
Prospectus to amended, modified or supplemented as promptly as reasonably
practicable so as not to include such an untrue statement or omit such a
material fact and, provided, further that the maximum number of days that the
Company may suspend sales in any twelve month period under any suspension
right owing to circumstances set forth in this clause (ii) shall be 120 days.
No suspension may commence fewer than 90 days following (i) expiration of a
preceding suspension, or (ii) conclusion of the lock-up following the IPO and
the Eligible Sellers shall not be subject to any suspension of sales or lockup
period in connection with any public offering of securities other than the
lockup period relating to the IPO specified in this Section 11. No lock-up
period agreement shall apply under this Section 11 to any public offering
unless each senior executive officer of the Company shall enter into the same
lock-up period agreement or a lock-up period agreement more favorable to the
Company in respect of such public offering.
12. Miscellaneous.
(a) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including, without limitation, Investor Transferees; provided that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Restricted Stock in violation of the terms hereof or of the Exchange
Agreements or the Stockholders' Agreement; provided, further, that the rights
of the Investors hereunder shall not be assignable to any Company Competitor
unless such assignment is in connection with the sale by the Investors of a
majority of the Restricted Stock held by the Investors and notice of such
assignment and the identity of such transferee is provided to the Company. If
any transferee of any Investor shall acquire Restricted Stock in any manner,
whether by operation of law or otherwise, such Restricted Stock shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Restricted Stock such Person shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this Agreement,
including the restrictions on resale set forth in this Agreement and, if
applicable, the Purchase Agreements and Stockholders' Agreement, and such
Person shall be entitled to receive the benefits hereof.
(b) Remedies. Each party to this Agreement acknowledges and agrees
that any failure by such party to comply with such party's obligations
hereunder may result in material irreparable injury to the other parties
hereto for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the other parties may seek such relief as may be required
to specifically enforce the breaching party's obligations hereunder. Each
party further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier
with confirmation and followed promptly by hard copy in accordance with this
provision, or courier guaranteeing reasonably prompt delivery and recognized
for high quality service:
(i) if to the Company, at
HQ Global Holdings, Inc.
00000 X. Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: General Counsel
Tel: 000-000-0000
Fax: 000-000-0000
with copies to:
FrontLine Capital Group
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
General Counsel
Tel: 000-000-0000
Fax: 000-000-0000
Xxxxx & Wood LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
J. Xxxxxx Xxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
(ii) if to the Investors: at the addresses listed on Schedule A
attached hereto.
or, in any case, at such other address or addresses as shall have been
furnished in writing by one party to the other parties in accordance with the
provisions of this Section 12(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered, if delivered by hand, telex or by courier; five
(5) business days after being deposited in the mail, if mailed; and when
receipt acknowledged, if telecopied.
(d) Governing Law. This agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
conflict of law rules thereof, applicable to contracts made and to be
performed within such State.
(e) Submission to Jurisdiction. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of New York and of the United States
of America, in each case located in the County of New York, for any action,
proceeding or investigation in any court or before any governmental authority
("Litigation") arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to commence any Litigation
relating thereto except in such courts). Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any Litigation arising out of this Agreement or the transactions contemplated
hereby in the courts of the State of New York or the United States of America,
in each case located in the County of New York, and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in any such court
that any such Litigation brought in any such court has been brought in an
inconvenient forum.
(f) No Inconsistent Agreements. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Investors in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Investors hereunder do not conflict in any material respect
with and are not inconsistent with the rights granted to the holders of the
Company's securities under any agreement in effect on the date hereof.
(g) Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written
consent of the holders of a majority of the Restricted Stock (on an "as
converted" or "as if exercised" basis, as applicable), enter into any
agreement with any holder or prospective holder of any securities of the
Company that would allow such holder or prospective holder (a) to include such
securities in any registration filed under Section 2(a) or any underwritten
offering under Section 4, unless under the terms of such agreement, such
holder or prospective holder may include such securities in any such
registration or underwritten offer only to the extent that the inclusion of
such securities will not reduce the amount of Restricted Stock of the Eligible
Sellers that are included or (b) to demand registration of their securities,
prior to the Company's satisfaction of the Investors' rights under Section
2(a) of this Agreement. The Company shall not grant the Mezzanine Security
Holders any incidental registration rights with respect to any shelf
registration statement for CarrAmerica Realty Corporation that is declared
effective on or prior to the date that is 85 days after the expiration of the
lock-up period in respect of the IPO specified in Section 11.
(h) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given, unless (i) in the case of this
Section 12(h), the Company has obtained the written consent of each Eligible
Seller, and (ii) in the case of all other provisions hereof, the Company has
obtained the written consent of the Eligible Sellers holding at least 62.5% of
the outstanding shares of Restricted Stock (excluding Restricted Stock held by
the Company or any of its Affiliates).
(i) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. In proving this
Agreement it shall not be necessary to produce or account for more than one
such counterpart executed by the party against whom enforcement is sought.
(j) Expiration. The rights granted herein with respect to any
Eligible Seller shall continue with respect to each of the Series A Shares,
the Series A Conversion Shares, the Warrants and the Warrant Conversion Shares
until such time as all of each such type of Restricted Stock held by such
Eligible Seller may be sold pursuant to Rule 144 promulgated under the
Securities Act without regard to volume or manner of sale limitations;
provided, however, that such obligation shall continue as to any Eligible
Seller for as long as such Eligible Seller owns 3% or more of the Common Stock
(on a fully diluted and "as converted" or "as if exercised" basis) or 5 years
after the date such Restricted Stock has become freely transferable under Rule
144 without regard to volume or manner of sale limitations. The provisions of
Sections 7, 8 and 12 shall continue without limit.
(k) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(l) Severability. If any provision of this Agreement shall be held to
be illegal, invalid or unenforceable such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any
manner affect or render illegal, invalid or unenforceable any other provision
of this Agreement unless the effect thereof would be to alter materially the
effect of this Agreement, and this Agreement (if not so altered) shall be
carried out as if any such illegal, invalid or unenforceable provision were
not contained herein.
(m) Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy on the part of any party upon any breach
or default of any party to this Agreement shall impair any such right, power
or remedy, nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein, or of any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. It is further agreed that any waiver, permit, consent or approval
of any kind or character on any party of any breach or default under this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing and that all remedies either under this
Agreement, or by law otherwise afforded to any party, shall be cumulative and
not alternative.
(n) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred
to herein with respect to the registration rights granted with respect to the
Restricted Stock. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
HQ GLOBAL HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxx
---------------------------------------------
Name: Xxxx X. Louis
Title: Vice President, General Counsel
and Secretary
SERIES A HOLDERS
EOP OPERATING LIMITED PARTNERSHIP
By: Equity Office Properties Trust,
Its managing general partner
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Legal Counsel
FORTRESS HQ LLC
By: /s/ Xxxxxxxx Xxxxxx
---------------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
STICHTING PENSIOENFONDS ABP
By:
---------------------------------------------
Name:
Title:
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
CIBC WMC INC.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Managing Director
CIBC EMPLOYEE PRIVATE EQUITY FUND PARTNERS
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Managing Director
AEW TARGETED SECURITIES FUND, L.P.
By:
---------------------------------------------
By: AEW TSF, L.L.C., its General Partner
By: AEW TSF, Inc., its Managing Member
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
AEW TARGETED SECURITIES FUND II, L.P.
By:
---------------------------------------------
By: AEW TSF II, L.L.C., its General Partner
By: AEW TSF, Inc., its Managing Member
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
BLACKACRE CAPITAL PARTNERS, L.P.,
a Delaware limited partnership,
By: Old Stand Real Estate, LLC
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
or
Name: Xxxxxxx Xxxxxxxx
Title: Managing Member
or
Name: J. Xxxx Xxxxxx
Title: Managing Member
PARIBAS NORTH AMERICA, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
Schedule A
Name of Investor Address for Notices
EOP Operating Limited Partnership EOP Operating Limited Partnership
Suite 0000
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Legal Counsel
Fortress HQ LLC Fortress Investment Group LLC
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
with copies to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Israel
Xxxxxx X. Xxxxxxxx
Stichting Pensioenfonds ABP
First Union Real Estate First Union Real Estate Equity and
Equity and Mortgage Investments Mortgage Investments
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
Gotham Partners Management Co., LLC
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx
with copies to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Israel
Xxxxxx X. Xxxxxxxx
CIBC WMC Inc.
CIBC Employee Private Equity
Fund Partners
AEW Targeted Securities AEW Targeted Securities Fund, L.P.
Fund, L.P. c/o AEW Capital Management, LP
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
AEW Targeted Securities Fund II, L.P. AEW Targeted Securities Fund II, L.P.
c/o AEW Capital Management, LP
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Blackacre Capital Partners, L.P.,
Paribas North America, Inc.
