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Exhibit 10.6
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INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is entered into as of
October 9, 1996, by and between Equity Office Properties Trust ("EOP"), a
Maryland real estate investment trust, and Xxxxxx Xxxx (the "Indemnitee").
WHEREAS, the Indemnitee is an officer or a member of the Board of Trustees
of EOP and in such capacity is performing a valuable service for EOP;
WHEREAS, the law of EOP's state of organization permits EOP to enter into
contracts with its officers or members of its Board of Trustees with respect to
indemnification of such persons; and
WHEREAS, to induce the Indemnitee to continue to provide services to EOP as
an officer or a member of the Board of Trustees, and to provide the Indemnitee
with specific contractual assurance that indemnification will be available to
the Indemnitee regardless of, among other things, any amendment to or revocation
of EOP's Amended and Restated Declaration of Trust ("Declaration of Trust"), or
any acquisition transaction relating to EOP, EOP desires to provide the
Indemnitee with protection against personal liability.
NOW, THEREFORE, in consideration of the premises and the covenants contained
herein, EOP and the Indemnitee hereby agree as follows:
1. DEFINITIONS.
For purposes of this Agreement:
(A) "Change in Control" shall mean a change in the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of EOP, or any successor in interest thereto,
whether through the ownership of voting securities, by contract or
otherwise, including but not limited to a change which would be
required to be reported under Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934 as in effect
on the date hereof (the "Exchange Act") or as may otherwise be
determined pursuant to a resolution of the Board of Trustees. A
rebuttable presumption of a Change in Control shall be created by any
of the following which first occur after the date hereof and EOP shall
have the burden of proof to overcome such presumption:
i. the ability of any "Person" (as such term is defined in Sections
13(d) and 14(d) of the Exchange Act) together with an "Affiliate"
or "Associate" (as defined in Rule 12b-2 of the Exchange Act) or
"Group" (within the meaning of Section 13(d)(3) of the Exchange
Act) to exercise or direct the exercise of 20% or more of the
combined voting power of all outstanding shares of beneficial
interest of EOP in the election of its trustees ("Interested
Party") (provided, however, "Interested Party" shall not include
an agent, broker, nominee, custodian or trustee, solely in their
capacity as such, for one or more persons who do not individually
or as a group possess such power),
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ii. during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Trustees of
EOP cease for any reason to constitute at least a majority
thereof, unless the election of each trustee who was not a
trustee at the beginning of such period has been approved in
advance by the trustees representing two-thirds of the trustees
then in office who were the trustees at the beginning of the
period,
iii. the approval of the shareholders of EOP of:
(a) a merger or consolidation of EOP with any Interested Party,
(b) any sale, lease, exchange, mortgage, pledge, transfer, or
other disposition, to or with any Interested Party in any
transaction or series of transactions, of EOP's assets or
the assets of any subsidiary of EOP having a market value
equal to 10% or more of the aggregate market value of all
assets of EOP determined on a consolidated basis, all
outstanding shares of beneficial interest of EOP, or the
earning power or net income of EOP, determined on a
consolidated basis,
(c) the issuance or transfer by EOP, or any subsidiary thereof,
to any Interested Party in any transaction or a series of
transactions, of capital securities with a value equal to 5%
or more of the aggregate market value of the then
outstanding voting shares of beneficial interest of EOP
other than the issuance or transfer of such shares of
beneficial interest to all EOP shareholders on a pro rata
basis,
(d) the adoption of any plan or proposal for the partial or
complete liquidation or dissolution of EOP proposed by an
Interested Party or pursuant to any agreement, arrangement
or understanding, whether or not in writing, with any
Interested Party, or
(e) any reclassification of securities, including, without
limitation, any share split, share dividend, or other
distributions of shares, or any reverse share split,
recapitalization of EOP, or any merger or consolidation of
EOP with any subsidiary thereof, or any other transaction
proposed by, or pursuant to, any agreement, arrangement, or
understanding, whether or not in writing, with any
Interested Party which has the effect, directly or
indirectly, of increasing the proportionate voting shares of
beneficial interest of EOP directly or indirectly owned by
any such Interested Party, or
iv. any receipt by any Interested Party, directly or indirectly, of
any loans, advances, guarantees, pledges or other financial
assistance, or any tax credits or other tax advantages provided
by or through EOP other than the receipt of such advantages which
are provided to all EOP shareholders on a pro rata basis.
(B) "Corporate Status" describes the status of a person who is or was a
trustee, officer, employee, agent or fiduciary of EOP or of any other
corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise (whether conducted for profit or not for profit)
which such person is or was serving at the request of EOP.
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(C) "Disinterested Trustee" means a trustee of EOP who is not and was not a
party to the Proceeding (as hereinafter defined) in respect of which
indemnification is sought by the Indemnitee.
(D) "Effective Date" means the date of this Agreement as set forth above.
(E) "Expenses" shall include all attorneys and paralegals' fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a Proceeding.
(F) "Independent Counsel" means a law firm, or a member of a law firm, that
is experienced in matters of corporation law and neither presently is,
or in the past two (2) years has been, retained to represent (i) EOP or
the Indemnitee in any matter material to either such party, or (ii) any
other party to the Proceeding giving rise to a claim for
indemnification hereunder.
(G) "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing, or any
other proceeding, including appeals therefrom, whether civil, criminal,
administrative, or investigative, except one initiated by the
Indemnitee pursuant to paragraph 8 of this Agreement to enforce such
Indemnitee's rights under this Agreement.
2. INDEMNIFICATION--GENERAL
The Indemnitee shall be entitled to the rights of indemnification provided
in this paragraph 2 and under applicable law, the Amended and Restated
Declaration of Trust, EOP's Bylaws, any agreement, a vote of shareholders or
resolution of the Board of Trustees or otherwise if, by reason of such
Indemnitee's Corporate Status, such Indemnitee is, or is threatened to be
made, a party to any threatened, pending, or completed Proceeding, including
a Proceeding by or in the right of EOP. Unless prohibited by paragraph 13
hereof, the Indemnitee shall be indemnified against Expenses, judgments,
penalties, fines, and settlement amounts actually and reasonably incurred by
or on behalf of such Indemnitee in connection with such Proceeding or any
claim, issue or matter therein.
3. EXPENSES OF A SUCCESSFUL PARTY
Without limiting the effect of any other provision of this Agreement, to the
extent that the Indemnitee is, by reason of such Indemnitee's Corporate
Status, a party to and is successful, on the merits or otherwise, in any
Proceeding pursuant to a final non-appealable order, such Indemnitee shall
be indemnified against all Expenses actually and reasonably incurred by or
on behalf of such Indemnitee in connection therewith. If the Indemnitee is
not wholly successful in such Proceeding pursuant to a final non-appealable
order but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues, or matters in such Proceeding pursuant to a
final non-appealable order, EOP shall indemnify the Indemnitee against all
Expenses actually and reasonably incurred by or on behalf of
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such Indemnitee in connection with each successfully resolved claim, issue
or matter. For purposes of this paragraph and without limitation, the
termination of any claim, issue or matter in such Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to
such claim, issue or matter.
4. WITNESS EXPENSES
Notwithstanding any other provision of this Agreement, to the extent that
the Indemnitee is, by reason of such Indemnitee's Corporate Status, a
witness for any reason in any Proceeding to which such Indemnitee is not a
party, such Indemnitee shall be indemnified against all Expenses actually
and reasonably incurred by or on behalf of such Indemnitee in connection
therewith.
5. ADVANCES
EOP shall advance all reasonable Expenses incurred by or on behalf of the
Indemnitee in connection with any Proceeding within twenty (20) days after
the receipt by EOP of a statement from the Indemnitee requesting such
advance from time to time, whether prior to or after final disposition of
such Proceeding. Such statement shall reasonably evidence the Expenses
incurred by the Indemnitee and shall include or be preceded or accompanied
by an undertaking by or on behalf of the Indemnitee to repay any Expenses
advanced if it shall ultimately be determined that the Indemnitee is not
entitled to be indemnified against such Expenses.
6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION
(A) To obtain indemnification under this Agreement, the Indemnitee shall
submit to EOP a written request, including therewith such documentation
and information reasonably necessary to determine whether and to what
extent the Indemnitee is entitled to indemnification.
(B) Upon such written request pursuant to subparagraph 6(A), a
determination with respect to the Indemnitee's entitlement thereto
shall be made in the specific case: (i) if a Change in Control shall
have occurred, by Independent Counsel in a written opinion to the Board
of Trustees, a copy of which shall be delivered to the Indemnitee
(unless the Indemnitee shall request that such determination be made by
the Board of Trustees or the shareholders of EOP, in which case by the
person or persons or in the manner provided in clauses (ii) or (iii) of
this paragraph 6(B)); (ii) if a Change in Control shall not have
occurred, (A) by the Board of Trustees by a majority vote of a quorum
consisting of Disinterested Trustees, or (B) if a quorum of the Board
of Trustees consisting of Disinterested Trustees is not obtainable, or,
even if obtainable, if such quorum of Disinterested Trustees so
directs, by Independent Counsel in a written opinion to the Board of
Trustees, a copy of which shall be delivered to the Trustee, or (C) by
the shareholders of EOP; or (iii) as provided in paragraph 7(B) of this
Agreement. If it is so determined that the Indemnitee is entitled to
indemnification, payment to the Indemnitee shall be made within ten
(10) days after such determination.
(C) The Indemnitee shall cooperate with the person or entity making such
determination with respect to the Indemnitee's entitlement to
indemnification, including providing upon
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reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is
reasonably available to the Indemnitee and reasonably necessary to such
determination. Any costs or expenses (including attorneys' fees and
disbursements) incurred by the Indemnitee in so cooperating shall be
borne by EOP (irrespective of the determination as to the Indemnitee's
entitlement to indemnification) and EOP hereby indemnifies and agrees
to hold the Indemnitee's harmless therefrom.
(D) In the event the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to paragraph 6(B) hereof, the
Independent Counsel shall be selected as provided in this paragraph
6(D). If a Change in Control shall not have occurred, the Independent
Counsel shall be selected by the Board of Trustees, and EOP shall give
written notice to the Indemnitee advising such Indemnitee of the
identity of the Independent Counsel so selected. If a Change in Control
shall have occurred, the Independent Counsel shall be selected by the
Indemnitee (unless the Indemnitee shall request that such selection be
made by the Board of Trustees, in which event the preceding sentence
shall apply), and the Indemnitee shall give written notice to EOP
advising it of the identity of the Independent Counsel so selected. In
either event, the Indemnitee, or EOP, as the case may be, may, within
seven (7) days after such written notice of selection shall have been
given, deliver to EOP or to the Indemnitee, as the case may be, a
written objection to such selection. Such objection may be asserted
only on the grounds that the Independent Counsel so selected does not
meet the requirements of "Independent Counsel" as defined in paragraph
1 of this Agreement. If such written objection is made, the Independent
Counsel so selected may not serve as Independent Counsel until a court
has determined that such objection is without merit. If, within twenty
(20) days after submission by the Indemnitee of a written request for
indemnification pursuant to paragraph 6(A) hereof, no Independent
Counsel shall have been selected or, if selected, shall have been
objected to, either EOP or the Indemnitee may petition a court for
resolution of any objection which shall have been made by EOP or the
Indemnitee to the other's selection of Independent Counsel and/or for
the appointment as Independent Counsel of a person selected by the
court or by such other person as the court shall designate, and the
person with respect to whom an objection is so resolved or the person
so appointed shall act as Independent Counsel under paragraph 6(B)
hereof. EOP shall pay all reasonable fees and expenses of Independent
Counsel incurred in connection with acting pursuant to paragraph 6(B)
hereof, and all reasonable fees and expenses incident to the selection
of such Independent Counsel pursuant to this paragraph 6(D). In the
event that a determination of entitlement to indemnification is to be
made by Independent Counsel and such determination shall not have been
made and delivered in a written opinion within ninety (90) days after
the receipt by EOP of the Indemnitee's request in accordance with
paragraph 6(A), upon the due commencement of any judicial proceeding in
accordance with paragraph 8(A) of this Agreement, Independent Counsel
shall be discharged and relieved of any further responsibility in such
capacity.
7. PRESUMPTIONS
(A) In making a determination with respect to entitlement or
indemnification hereunder, the person or entity making such
determination shall presume that the Indemnitee is
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entitled to indemnification under this Agreement and EOP shall have the
burden of proof to overcome such presumption.
(B) If the person or entity making the determination whether the Indemnitee
is entitled to indemnification shall not have made a determination
within sixty (60) days after receipt by EOP of the request therefor,
the requisite determination of entitlement to indemnification shall be
deemed to have been made and the Indemnitee shall be entitled to such
indemnification, absent: (i) a misstatement by the Indemnitee of a
material fact, or an omission of a material fact necessary to make the
Indemnitee's statement not materially misleading, in connection with
the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law. Such sixty (60)-day period may be
extended for a reasonable time, not to exceed an additional thirty (30)
days, if the person or entity making said determination in good faith
requires additional time for the obtaining or evaluating of
documentation and/or information relating thereto. The foregoing
provisions of this paragraph 7(B) shall not apply: (i) if the
determination of entitlement to indemnification is to be made by the
shareholders and if within fifteen (15) days after receipt by EOP of
the request for such determination the Board of Trustees resolves to
submit such determination to the shareholders for consideration at an
annual or special meeting thereof to be held within seventy-five (75)
days after such receipt and such determination is made at such meeting,
or (ii) if the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to paragraph 6(B) of this
Agreement.
(C) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement, or conviction, or upon a plea
of nolo contendere or its equivalent, shall not (except as otherwise
expressly provided in this Agreement) of itself adversely affect the
right of the Indemnitee to indemnification.
8. REMEDIES
(A) In the event that: (i) a determination is made that the Indemnitee is
not entitled to indemnification under this Agreement, or (ii)
advancement of Expenses is not timely made pursuant to this Agreement,
or (iii) payment of indemnification due the Indemnitee under this
Agreement is not timely made, the Indemnitee shall be entitled to an
adjudication in an appropriate court of competent jurisdiction of such
Indemnitee's entitlement to such indemnification or advancement of
Expenses.
(B) In the event that a determination shall have been made pursuant to this
Agreement that the Indemnitee is not entitled to indemnification, any
judicial proceeding commenced pursuant to this paragraph 8 shall be
conducted in all respects as a de novo trial, on the merits and the
Indemnitee shall not be prejudiced by reason of that adverse
determination. In any judicial proceeding or arbitration commenced
pursuant to this paragraph 8, EOP shall have the burden of proving that
the Indemnitee is not entitled to indemnification or advancement of
Expenses, as the case may be.
(C) If a determination shall have been made or deemed to have been made
pursuant to this Agreement that the Indemnitee is entitled to
indemnification, EOP shall be bound by such determination in any
judicial proceeding commenced pursuant to this paragraph 8, absent: (i)
a misstatement by the Indemnitee of a material fact, or an
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omission of a material fact necessary to make the Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(D) EOP shall be precluded from asserting in any judicial proceeding
commenced pursuant to this paragraph 8 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable
and shall stipulate in any such court that EOP is bound by all the
provisions of this Agreement.
(E) In the event that the Indemnitee, pursuant to this paragraph 8, seeks a
judicial adjudication of such Indemnitee's rights under, or to recover
damages for breach of, this Agreement, if successful in whole or in
part, the Indemnitee shall be entitled to recover from EOP, and shall
be indemnified by EOP against, any and all Expenses actually and
reasonably incurred by such Indemnitee in such judicial adjudication.
9. ESTABLISHMENT OF TRUST
In the event of a Change in Control, EOP shall, upon written request by the
Indemnitee, create a trust for the benefit of the Indemnitee ("Trust") and
from time-to-time upon written request by the Indemnitee, shall fund such
Trust in an amount sufficient to satisfy any and all Expenses, judgments,
penalties, fines and settlement amounts actually and reasonably incurred by
or on behalf of such Indemnitee or claimed, reasonably anticipated or
proposed to be paid in accordance with the terms of this Agreement. The
amount to be deposited in the Trust pursuant to the foregoing funding
obligation shall be determined by Independent Counsel. The terms of the
Trust shall provide that upon a Change in Control: (i) the Trust shall not
be revoked or the principal thereof invaded, without the prior written
consent of the Indemnitee, (ii) the trustee of the Trust ("Trustee") shall
advance, within two business days of a request by the Indemnitee and in
accordance with paragraph 5 of this Agreement, any and all Expenses to the
Indemnitee, (iii) the Trust shall continue to be funded by EOP in accordance
with the funding obligation set forth above, (iv) the Trustee shall promptly
pay to the Indemnitee all amounts for which the Indemnitee shall be entitled
to indemnification pursuant to this Agreement or otherwise, and (v) all
unexpended funds in such Trust shall revert to EOP upon a final
determination by Independent Counsel that the Indemnitee has been fully
indemnified under the terms of this Agreement. The Trustee shall be chosen
by the Indemnitee and agreed to by EOP. Nothing in this Section 9 shall
relieve EOP of any of its obligations under this Agreement.
10. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE SUBROGATION
(A) The rights of indemnification and to receive advancement of Expenses as
provided by this Agreement shall not be deemed exclusive of any other
rights to which the Indemnitee may at any time be entitled under
applicable law, the Amended and Restated Declaration of Trust, EOP's
Bylaws, any agreement, a vote of shareholders or a resolution of the
Board of Trustees, or otherwise. No amendment, alteration or repeal of
this Agreement or any provision hereof shall be effective as to the
Indemnitee with respect to any action taken or omitted by the
Indemnitee as a member of the Board of Trustees prior to such
amendment, alteration or repeal.
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(B) To the extent that EOP maintains an insurance policy or policies
providing liability insurance for trustees of EOP, the Indemnitee shall
be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available and upon any
"Change in Control" EOP shall obtain continuation and/or "tail"
coverage for the Indemnitee to the maximum extent obtainable at such
time.
(C) In the event of any payment under this Agreement, EOP shall be
subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, who shall execute all papers required and
take all actions necessary to secure such rights, including execution
of such documents as are necessary to enable EOP to bring suit to
enforce such rights.
(D) EOP shall not be liable under this Agreement to make any payment of
amounts otherwise indemnifiable hereunder if and to the extent that the
Indemnitee has otherwise actually received such payment under any
insurance policy, contract, agreement, or otherwise.
11. CONTINUATION OF INDEMNITY
All agreements and obligations of EOP contained herein shall continue during
the period the Indemnitee is an officer or a member of the Board of Trustees of
EOP and shall continue thereafter so long as the Indemnitee shall be subject to
any threatened, pending or completed Proceeding by reason of such Indemnitee's
Corporate Status and during the period of statute of limitations for any act or
omission occurring during the Indemnitee's term of Corporate Status. No legal
action shall be brought and no cause of action shall be asserted by or on behalf
of EOP against the Indemnitee, the Indemnitee's spouse, heirs, executors or
personal or legal representatives after the expiration of two (2) years from the
date of accrual of such cause of action, and any claim or cause of action of EOP
shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such two (2) year period; provided, however, that if
any shorter period of limitations is otherwise applicable to any such cause of
action such shorter period shall govern. This Agreement shall be binding upon
EOP and its successors and assigns and shall inure to the benefit of the
Indemnitee and such Indemnitee's heirs, executors and administrators.
12. SEVERABILITY
If any provision or provisions of this Agreement shall be held to be
invalid, illegal, or unenforceable for any reason whatsoever, (i) the validity,
legality, and enforceability of the remaining provisions of this Agreement
(including, without limitation, each portion of any paragraph of this Agreement
containing any such provision held to be invalid, illegal, or unenforceable,
that is not itself invalid, illegal, or unenforceable) shall not in any way be
affected or impaired thereby, and (ii) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of any
paragraph of this Agreement containing any such provision held to be invalid,
illegal, or unenforceable, that is not itself invalid, illegal, or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provisions held invalid, illegal, or unenforceable.
13. EXCEPTIONS TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES
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Notwithstanding any other provisions of this Agreement, the Indemnitee shall
not be entitled to indemnification or advancement of Expenses under this
Agreement: (i) with respect to any Proceeding initiated by such Indemnitee
against EOP other than a proceeding commenced pursuant to paragraph 8, or (ii)
with respect to any Proceeding in which such Indemnitee's act or omission was
material to the cause of action adjudicated and was committed in bad faith or
was the result of active and deliberate dishonesty, or (iii) if the Indemnitee
actually received an improper personal benefit in money, property, or services.
14. HEADINGS
The headings of the paragraph of this Agreement are inserted for convenience
only and shall not be deemed to constitute part of this Agreement or to affect
the construction thereof.
15. MODIFICATION AND WAIVER
No supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
16. NOTICE BY THE INDEMNITEE
The Indemnitee agrees promptly to notify EOP in writing upon being served
with any summons, citation, subpoena, complaint, indictment, information, or
other document relating to any Proceeding or matter which may be subject to
indemnification or advancement of Expenses covered hereunder.
17. NOTICES
All notices, requests, demands, and other communications hereunder shall be
in writing and shall be deemed to have been duly given if (i) delivered by hand
and receipted for by the party to whom said notice or other communication shall
have been directed, or (ii) mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed, if
so delivered or mailed, as the case may be, to the following addresses:
If to the Indemnitee, to the address set forth in the records of EOP.
If to EOP, to: Equity Office Properties Trust
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn.: Chief Legal Counsel
or to such other address as may have been furnished to the Indemnitee by EOP or
to EOP by the Indemnitee, as the case may be.
18. GOVERNING LAW
The parties agree that this Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Maryland.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EQUITY OFFICE PROPERTIES TRUST,
a Maryland real estate investment trust
By: /s/ Xxxxxxx X. Xxxxxxx
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Its: Executive Vice President
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/s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, an individual
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